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The Situation Room

Herman Cain Heads Home; Interview With Texas Congressman Ron Paul; The State Of The GOP Primary; Paul Slams Gingrich "Serial Hypocrisy"; Gingrich Versus Huntsman Debate

Aired December 02, 2011 - 16:00   ET

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

WOLF BLITZER, CNN ANCHOR: Happening new: a surprise drop in unemployment. What's behind the dramatic decline in joblessness and why do the numbers only tell part of the story?

Also, Herman Cain promises an announcement tomorrow about the future of his campaign as he heads home to his wife for the first time since allegations of an affair surfaced. We're live outside his home.

And another GOP candidate is live with us this hour. I will talk to congressman Ron Paul about his campaign and his rivals. Plus, he will answer your questions from Facebook.

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

A sharp and sudden turnaround from months of grim unemployment news. The jobless rate in November dropped to its lowest level in almost three years, 8.6 percent, down from 9 percent in October. U.S. businesses added 140,000 jobs; 20,000 jobs, government jobs, though, were lost. It's a net gain bigger than a lot of experts were predicting and welcome news for a president trying to get reelected.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: My most pressing challenge is doing everything I can every single day to get this economy growing faster and create more jobs.

This morning, we learned that our economy added another 140,000 private sector jobs in November. The unemployment rate went down and despite some strong headwinds this year, the American economy has now created in the private sector, jobs for the past 21 months in a row. That's nearly three million new jobs in all and more than half a million over the last four months.

(END VIDEO CLIP)

BLITZER: Let's take a closer look at the numbers right now. Celebrations may be a premature.

Lisa Sylvester is digging deeper for us.

Lisa, what are we seeing?

LISA SYLVESTER, CNN CORRESPONDENT: Well, Wolf, first, we will go through the positive news here.

Take a look. At you mentioned, the unemployment did tick down from 9 percent to 8.6 percent. That's very good news. You also want to take a look. Will look at the numbers by the payrolls. These are the number of jobs that were created, 120,000 jobs in November. Not only that, but we can break this out for you, Wolf.

And you can see that going back to August, these numbers have actually been revised higher. So, August, they originally reported 57,000 numbers -- $57,000 jobs rather. It's 104,000. Also a bump up, increase, 158,000, they now revised that upward to 210,000 -- 80,000 jobs were originally reported in October. Now, we find out that number was 100,000 and that is on top of the 120,000 jobs that were created in November.

Now, 120,000 jobs -- and this is where we have to qualify things just a little bit -- 120,000 jobs, that might sound like a really big number. However, here's the context here. If you want to really lower unemployment, to bring us back down to the pre-recession levels, you really need to be much, much higher in terms of those monthly job growths, somewhere in the neighborhood of 300,000 to 400,000 jobs.

And we just are not hitting that target. There's something else I want to point out that is also pretty interesting. If you look at unemployment by race with the various ethnic groups, all of the ethnic groups except for one exception had what we saw, a decline in the unemployment rate. The one exception, African-Americans.

In fact, the unemployment for African-Americans, it actually went up from 15.1 percent in October to 15.5 percent. And that's going to be a little bit of a program for President Barack Obama and with his base.

One last thing I will say on all of this, Wolf, and that is that 8.6 percent, people will say this is a big improvement from the 9 percent we saw from the previous month, but if you look really closely at the number, one reason for that decline is that many people simply gave up and they simply left the work force, Wolf.

BLITZER: Yes, supposedly about 300,000. I see Hispanics, that unemployment number remained the same, 11.4 percent. Is that right?

SYLVESTER: That's right, 11.4. That held the same. African-Americans, it actually went up. For Asian Americans, it declined from 7.3 percent to 6.5 percent. And here, you see a decline from 8 percent to 7.6 percent for white workers.

BLITZER: Lisa, thank you.

Unemployment always steeped in politics, never more than during a presidential campaign.

Let's go that part of the story with our chief political correspondent, Candy Crowley, the host of "STATE OF THE UNION," which airs Sunday mornings 9:00 a.m.

So, is this drop from 9 percent, 8.6 percent really welcome news for a president seeking reelection?

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Yes, absolutely.

And I think, look, we just saw all the ins and outs and there's still huge trouble spots and there's a way you can look at this and say it's unchanged, but there is a psychological difference here in the political realm from a 9 percent unemployment rate to 8.6.

They can now legitimately claim it's in the 8.6 range, which just sounds so much better. It isn't to those who are still unemployed. It isn't to those who may have just dropped out of the work force. But from a purely symbolic, psychological point of view, this certainly helps.

I think the Obama campaign, which remember, has always said we don't think the economy's going to be that great in November, next November, when the election is, but what we have to prove is that it's getting better, and this certainly is one of those figures they can say, well, see, it's getting better.

BLITZER: It would be treacherous though to start overly raising expectations, because what goes down can certainly go back up, especially with what's going on in Europe right now.

(CROSSTALK)

BLITZER: How does this play with the Republicans?

CROWLEY: I think they have sort of the mirror image that Democrats have. You mentioned the president can't overplay and go, woo-Ohio, 8.6, because it's still pretty lousy, but yet he has to say, hey, we're showing improvement.

The Republicans almost pick up where that leaves off, going listen here, there's still a long way to go, but they can't look as though they're dancing on it in the sense of he's still a failure. So you have to welcome in some way that there might be some jobs out there for the taking as well as make your point. And for Republicans, it's that the jobless rate is still way too high.

BLITZER: Candy, thanks very much.

Candy, what you got coming up Sunday morning?

(CROSSTALK)

CROWLEY: Well, now there's John McCain and Ron Paul. We're going to talk, does this really boil down to Mitt v. Newt?

BLITZER: We will be watching at 9:00 a.m. and at noon on Sundays as well. Thank you, Candy.

The new unemployment numbers don't take into account the growing numbers of Americans who are finding jobs overseas, especially in Asia.

CNN's Mary Snow is working that part of the story for us.

All right, Mary, what are you finding out?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, you know, unlike jobless numbers, this isn't something that is tracked, so we don't have exact numbers, but recruiting firms will tell you, as the economy soured, they saw more Americans applying for jobs in Asia. And one young woman we met says right now, it's her best option.

(BEGIN VIDEOTAPE)

TINA SAWAYA, TEACHER MOVING TO CHINA: This is what I first saw.

SNOW (voice-over): Unlike most job seekers, it took only weeks for 27- year-old Tina Sawaya to find a teaching job. The catch? The job is in Shanghai. It's a move she's eager to make since she currently juggles a teaching job and waiting tables to make ends meet.

SAWAYA: In China, I will be making about $2,000 U.S. a month, but the cost of living is about $300 a month. They provide me with health insurance, which is huge right now also.

SNOW: Sawaya started teaching two years ago, something she always wanted to do. She had been working as an investment manager, but when the economy soured and her workload grew without more pay, she switched careers. Now she finds herself in a profession scaled back by budget cuts in cities and states across the U.S.

SAWAYA: Years ago when I first started thinking about teaching abroad, it was equal to the United States. It was like, OK, I'm doing well in the United States, and I can do the same thing in China.

SNOW (on camera): Now?

SAWAYA: Now it's a better opportunity to go abroad.

SNOW (voice-over): And she's not alone. The economy that hired Tina, English First, reports a 30 percent increase in applications. A similar recruiter, Reach to Teach, says it's seeing more applicants for positions in China, Taiwan and South Korea.

It's difficult to say just how many Americans are seeking work overseas since there are no hard numbers. Anecdotally, some recruiting firms report seeing an increase in executives and managers looking east, particularly towards China.

ROBERT DAMON, KORN/FERRY INTERNATIONAL: What's going on is really incredible when you think about it. Wouldn't anybody want to work in a country where GDP growth of 9 percent is considered slow?

SNOW: Robert Damon of Korn/Ferry International says there's been demand for infrastructure work, consumer and industrial products in China. Not all job seekers are out of work, but rather some are seeking adventure. Adventure is part of what Tina Sawaya is looking for. But she says concerns over the economy are dominating many people her age. SAWAYA: We believe in our government, that everything is going to pan out soon. We're just in a rough time. But at this point, it's like you got to do what's best for you to survive. And that's kind of what I'm doing.

(END VIDEOTAPE)

SNOW: And, Wolf, one of the executive recruiters we spoke with also pointed out that because English is the spoken language of business in Asia, it's easier for workers and executives to make the transition than countries like France or Germany.

BLITZER: Interesting story. Interesting development. Who would have thought?

Thanks very much, Mary, for that.

By the way, the Dow Jones ended sort of mixed right now. Take a look at these numbers, almost even, just above 12000, but for the week, we are now told this has been a best week since 2009 for Wall Street. The Dow was up this week 7.1 percent. The S&P jumped 7.5 percent. The Nasdaq gained 7.7 percent. A good week on Wall Street.

He says/she says, Herman Cain and the woman who claims a long-term affair with the Republican presidential candidate. We're going to hear their very different takes on the nature of their relationship.

And we're live outside Herman Cain's home in Atlanta, scene of his first meeting with his wife since the affair allegations surfaced last Monday.

(COMMERCIAL BREAK)

BLITZER: A pivotal weekend ahead for the Republican presidential campaign of Herman Cain.

He will be meeting tonight with his wife for the first time since allegations of an affair exploded on Monday. And he's hinting at making news tomorrow as we weighs the future of his embattled campaign.

(BEGIN VIDEO CLIP)

HERMAN CAIN (R), PRESIDENTIAL CANDIDATE: Tomorrow in Atlanta, I will be making an announcement, but nobody's going to get me to make that prematurely. That's all there is to that.

So, tomorrow, we're going to be opening our headquarters in Northwest Georgia, where we will also clarify -- there's that word again, clarify -- exactly what the next steps are.

(END VIDEO CLIP)

BLITZER: It's truly been a tumultuous week for Herman Cain.

And it all started when he made a bombshell announcement right here in THE SITUATION ROOM on Monday.

(BEGIN VIDEO CLIP)

BLITZER: We're just learning from Herman Cain himself that a third woman is about to come out and make some serious accusations against him.

We all know the first two women accusing you of sexual harassment. What can you tell us about this third woman who is about to go public and accuse you of what?

CAIN: This particular individual, which will be named in the story, as we understand it -- my attorney has talked with a reporter who's going to come out with this story. This individual's going to accuse me of an affair for an extended period of time.

GINGER WHITE, ALLEGES 13-YEAR AFFAIR WITH HERMAN CAIN: It was pretty simple. It wasn't complicated. And I was aware that he was married, and I was also aware that I was involved in a very inappropriate situation, relationship.

BLITZER: Did you have a 13-year affair with this woman?

CAIN: No, I did not.

BLITZER: There was no sex?

CAIN: No.

BLITZER: None?

CAIN: No.

BLITZER: And if this woman says there is, she's lying? Is that what you --

CAIN: Well, Wolf, let's see what the story's going to be. I don't want to get into being pinned down of some things until we see what the story's going to be.

REPORTER: Are you sticking by your original story that it was a sexual relationship?

WHITE: Absolutely.

BLITZER: Have you spoken to your wife and family about this?

CAIN: Yes, I am. I have spoken to my wife.

BLITZER: How did they react?

CAIN: My wife's reaction was similar to mine: "Here we go again."

WHITE: I've received gifts and money for the last two and a half years consistently. I went on several trips with Herman. We -- one particular trip was the Mike Tyson/Holyfield fight in Las Vegas. You know, I can't make this stuff up.

SEAN HANNITY, FOX NEWS: She's saying that you flew around the country. She's saying that you are meeting in hotels. Can we get plane tickets, confirmation?

CAIN: Sean, do her a favor. Let's not play detective.

WHITE: I know that travel was involved. I know that sex was involved.

CAIN: We are reevaluating and reassessing.

JIM ACOSTA, CNN POLITICAL CORRESPONDENT: How soon can we have a final answer on your future plans?

CAIN: We'll be making a decision in the next several days.

WHITE: We've never worked together and I can't imagine anyone phoning or texting me for the last two and a half years just because.

HANNITY: If all of these texts were released, some 60 that we know of or whatever, is there any flirting, any inappropriate talk? Is there anything that your wife would be mad at if she read, Herman?

CAIN: Absolutely not.

REPORTER: If your wife asks you to please get out, are you out?

CAIN: Yes.

REPORTER: OK.

CAIN: But my wife would ask me to get out. I would make the decision based on how all of this stuff is affecting her because I will put her first. She's not the type to say, you ought to get out.

(END VIDEOTAPE)

BLITZER: We just learned that Herman Cain is now -- has now arrived at his home in Atlanta for this first direct face to face meeting with his wife, Gloria Cain, since the affair allegations surfaced on Monday.

Our political reporter Shannon Travis is outside Herman Cain's home in suburban Atlanta. We see the cars just pulling in over there.

Set the scene for us, Shannon. What do you know, because he says himself there will be an announcement tomorrow?

SHANNON TRAVIS, CNN POLITICAL REPORTER: Yes, what we know -- setting the scene from right here -- just moments ago, the video you just played was Cain pulling into his subdivision here in the Atlanta suburban area. It's called Eagles Landing. There were Secret Service in tow, Wolf. A few police cars there as well.

They went straight into the gate. I tried to wave. Me and my camera man weren't expecting him at this time, tried to wave. I've spoken with him several times before, maybe see if he could possibly see me. There's no indication that he saw me or us or any of that.

They pulled directly into the gate. From what we understand, the house is not that far from this gate, but it will likely be a long drive even from this gate into the house because as you mentioned, Wolf, this will be the first time that Herman Cain will speak face to face with his wife Gloria Cain about these allegations, about this alleged affair. What we know for a fact is that according to Herman Cain, that his wife did not know about this alleged 13-year affair with this woman and that she didn't know about money that he says he gave to her.

But also we know that Gloria Cain has stood by Cain in the past with the sexual harassment allegations and he said to you in that interview that you just played that when she first learned about Ms. White that she went, "Here we go again."

So that's the scene right now. It will likely be a private meeting. But it's anyone's guess how painful this will be for this couple as they talk about for the first time these allegations -- Wolf.

BLITZER: Certainly, they deserve as much privacy and as much time as they want to review these details. I am confused like so many political reporters are, Shannon, I don't know about you. But on the one hand, he says he's going to have an announcement tomorrow. Some associates assume maybe he's going to drop out.

At the same time, he's going to announce the opening of the Herman Cain for president headquarters in the state of Georgia tomorrow. And his campaign is sending out e-mails, a new committee, Women for Cain just was set up today.

If you try to read all these tea leaves, you get totally confused. What he might announce tomorrow?

TRAVIS: Yes, if you read all these tea leaves, you're basically going in different directions, Wolf. As you just mentioned, he's going to open this headquarters here in Georgia. But on the other hand, he's inviting supporters, we'd learned, supporters and donors, our producer Kevin Bohn is reporting that, to this event tomorrow.

What kind of announcement will he make? He's going to make an announcement about the status or the conclusion of his reassessment of his campaign. I would think that anyone's guess would be a lot of what happens tomorrow will depend on what happens tonight with his wife. This conversation that he has with her.

Again, we know that she stood by him in the past. But what will she say now given these allegations of an affair since she did not know that he actually knew this woman and did not know of any money that he himself says that he gave to her. So, tomorrow, trying to read the tea leaves is really hard for us. I can tell you absolutely that everyone will be there standing by to see what Herman Cain has to say about the future of this presidential campaign.

BLITZER: Yes, they've been married for 43 years. We'll see what happens tomorrow.

Shannon, thanks very much. Shannon Travis is on the scene for us as he always is.

Up next, my one-on-one interview with Republican presidential candidate Ron Paul. I'll ask him what his problem is with the current front-runner -- the current front-runner being Newt Gingrich.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: All right. We're waiting for Ron Paul. He's about to come into THE SITUATION ROOM. We're going to be speaking with him live this hour, lots of questions to discuss in this race for the White House.

All of a sudden, all of a sudden, who would have thought, only a few weeks ago that Newt Gingrich, the former speaker of the House of Representatives is now at the top of the race? At least if you believe all the public opinion polls.

Let's discuss what's going on in the race for the White House in our strategy session. Joining us right now, the CNN political contributor, the Democratic strategist, Hilary Rosen, and Republican strategist and former Newt Gingrich press secretary, Rich Galen.

Guys, thanks very much for coming in.

Rich, no one is probably as surprised -- I'm surprised. I'm sure Hilary is. Are you as surprised as all of us?

RICH GALEN, REPUBLICAN STRATEGIST: Yes.

BLITZER: Last summer, he was nowhere, and all of a sudden, he's the front-runner.

GALEN: I'm one of the many, even look back at the column, it was May 22nd when I officially ex-ed him off the ballot and said this is over. And it wasn't over.

He -- but this is the point in Newt, this is -- when Newt is actually at his best, when there's not many people to manage. When he can just live off the land, when he can make minor change and just kind of follow the wave and sort of get in.

Now, if he's actually got to build an organization, build an infrastructure, actually, you know, have people that report to other people, he's not that good at that.

BLITZER: You know, for months and months -- and you know this, Hilary, better than I do -- a lot of inside Democrats were thinking Romney is going to be the nominee. They were gearing up for an Obama- Romney race. And all of a sudden, they're now taking a look and saying, you know what? I might be Newt Gingrich.

HILARY ROSEN, CNN CONTRIBUTOR: We're praying for Newt Gingrich. We're praying for Newt Gingrich.

GALEN: In 1982, we said the same about Bill Clinton. Guess what?

ROSEN: No, that was a mistake.

GALEN: Yes, of what we know now.

BLITZER: Be careful what you wish for, Hilary.

ROSEN: Fair point, but you know, the amazing thing is 33 days out that this race is as wide open as it is. I mean, Ron Paul, winning Iowa could Iowa could turn this into a tumble all over again. Jon Huntsman winning New Hampshire could turn this into a tumble all over again.

BLITZER: Are either of those likely?

ROSEN: It's possible.

GALEN: The whole prospect is more likely

BLITZER: That he can win Iowa?

GALEN: Oh, yes. He's got --

ROSEN: And you know, if H catches fire in New Hampshire, I think that we never would have predicted where we are and you know, so I'm not going to make any more predictions.

Here's the thing, though, Newt Gingrich, it's not just about what he does now. It's that this guy has a history that will, you know, make Democrats salivate, will repel independents and will make Republicans chill. So, you know, I think that we are -- when I say we pray for Newt Gingrich, I'm serious.

GALEN: But on that, it's never clear in advance. But let's go back four years ago. This is exactly the time when Mike Huckabee suddenly surged and ended up winning in Iowa. But with only 34 percent of the vote.

By the way, before we forget, in Iowa, on your side, Barack Obama had only about 37 percent of the vote, and the only reason he won is because Mrs. Clinton and Senator Edwards pretty much split the non- Obama vote evenly, in about 30 percent.

ROSEN: Well, and Hillary Clinton was 20 points ahead in the national polls.

GALEN: Yes.

BLITZER: Guys, I want you to stand by because I want to move on, but I'm going to come back to you. Now that he's at the front of the Republican pack, the presidential candidate Newt Gingrich is getting a lot of attention from his rivals and they're not pulling any punches.

Take a look at this ad from Congressman Ron Paul. An ad entitled serial hypocrisy.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D), CALIFORNIA: We don't always see eye to eye, do we, Newt?

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: No, but we do agree our country must take action to address climate change.

NARRATOR: Newt Gingrich has been on both sides of the long list of issues, sometimes in the same week.

GINGRICH: I don't think right wing social engineering is anymore desirable than left wing social engineering.

REP. PAUL RYAN (R), WISCONSIN: With allies like that, who needs the left?

RUSH LIMBAUGH, RADIO HOST: It cuts Paul Ryan off at the knee. It supports the Obama administration. There is no explanation for it.

(END VIDEO CLIP)

BLITZER: Congressman Ron Paul is joining us now from Manchester, New Hampshire. That's a pretty important state.

Congressman, thanks as usual for coming in.

REP. RON PAUL (R-TX), PRESIDENTIAL CANDIDATE: Yes, Wolf.

BLITZER: Let's talk a little bit about Newt Gingrich. That was a pretty tough ad. What is your basic problem with the former speaker of the House?

PAUL: Well, I think that my goal was to get information out, you know, and it wasn't so much that I was verbalizing or giving opinions as much we took and tried to do some reporting on what he has said in the past on where he stands now.

And it's something that contrasts him from where I stand because I usually get compliments because I haven't been charged with having changed my position and I've been around for a couple of years and have been saying things. But most people realize that I keep saying the same thing over again and it becomes more popular.

Where in his case, he tries to catch up and change his position to fit the particular time in which he's speaking.

So, I think it was to make that point, but it was also to show that other people were saying that, you know, and to dramatize it, to show that he does change his position and not -- and that's one of the issues of the campaign. People change in campaigns and not being able to rely on politicians. That's what this whole mess is about in government today.

Why there's a Tea Party movement and why there's a sit-in movement. And the people are just very frustrated with this and we were pointing this out that he has not been consistent on his position over the years.

BLITZER: What's the most important inconsistency as far as Newt Gingrich is concerned, that comes to your mind and causes you concern?

PAUL: The one that bothers me the most is probably getting a million and a half dollars from Fannie Mae and Freddie Mac. When I think about that, about an institution that I had been challenging for more than 10 years, I wanted to stop the financial bubble and the housing bubble from forming.

He really indirectly at least gets the money from the taxpayer because Fannie Mae and Freddie Mac had to be bailed out and we had to pay those debts that were run up and here he was getting a lot of money from them and it's not a conservative position.

It's a bailout position so he made money off the bailout. You know, if you add up the numbers and put it all together, so, that to me was rather annoying because it was something I worked so hard to prevent.

So it's sort of ironic to think that the American people now are seriously considering, you know, that he's supposed to come in and straighten things out. That sort of is bewildering to me.

BLITZER: We've reported he made between $1.6 million and $1.8 million from Freddie Mac, not from Fannie Mae. I don't know if that makes a difference to you.

But that's just a technicality. He also says he never ever lobbied in his life. I want your reaction when he says he was providing historical advice to them. He was giving them educational advice, but he never lobbied. Is that acceptable to you?

PAUL: That might be a legal description, but if he isn't, what is he being paid for is to influence or introduce people, so that's a technicality on what does lobbying mean. As a matter of fact, lobbying is perfectly illegal.

I mean, the First Amendment allows us to lobby and petition our government so that is not relevant. It's whether you're using your position to make a lot of money. So whether you're just going to give advice on history, I mean, I don't think a whole lot of people buy into that.

I think there is some -- he was important, because he was an important figure. He's very influential. He knew a lot of people and he could sell his advice. And if you don't want to call it lobbying, I mean, who's going to worry about the definition?

BLITZER: If he's the Republican nominee, could you support him?

PAUL: You know, Newt has come around on some of the positions that are important to me. Matter of fact, he's so different on these Freddie Mac business, but you know, he has talked about -- and he personally has told me I was right on that. If he would come around on those issues and he could convince me that it's just not flipping around for an advantage, I would look at it and try to look at it seriously and see if he really wants -- and these sorts of things.

But there's a lot that -- a lot of questions I'd have to ask because just think of the last debate how super supportive he was of the Patriot Act, which I think if we have had, the repeal the Fourth Amendment, probably wouldn't have passed.

But I see the Patriot Act as a repeal of the Fourth Amendment so we have a great deal of differences on civil liberties. I would have a great deal of difficulty, but I shouldn't be closed minded to it.

BLITZER: Who's a bigger problem as far as you're concerned? If he were to get the Republican nominee, in other words, who would be worse as a Republican nominee? Would it be Newt Gingrich or Mitt Romney?

PAUL: Worse in what way, position wise or as a candidate?

BLITZER: Worse from your perspective on the substantive issues most important to you.

PAUL: Do I have to choose? I'm not anxious to pick and choose between --

BLITZER: It's a free country. You don't have to if you don't want.

PAUL: But I have been challenged -- I think to be fair, you could probably find and I think the media has pointed out some of the flip- flops that Romney has made, but I think I was more energized to do something when I found these things he had said. I thought they were more meaningful.

BLITZER: We invited a lot of our viewers to send us questions. When you do that, you have a lot of fans as you well know on Facebook and Twitter.

We got some questions and I'm going to read some to you. Let me get your quick response. Steven Harris on Facebook sent in this question for you, Congressman.

I would like a vow from him that he will not run as a third party candidate. He has some good ideas, but if he were to run, he would hand the crown to Obama for four more years. Hope he isn't this selfish.

Congressman, what do you say to Steven Harris?

PAUL: Well, I don't plan to run. I'm not thinking about it. I'm in a good race. We're doing better. Second or third place in both states, but I don't make vows over television programs and like to talk in absolutes because none of us are ever absolutely right on anything we do or say so I'm not going to make a vow.

But I would take an oath of office very seriously like I would for Congress and I'll take my oath of office as a very serious issue, but not to take a vow on something like this, which I don't think is going to accomplish a whole lot.

There's no intention, no plan. I am absolutely encouraged by what's happening now in the campaign. And you're discussing that at this moment on your station and we are going exceptionally well in Iowa.

And we are in New Hampshire doing quite well here, too. This last month is very, very important so the last thing on my mind is wondering about doing something somewhere else afterwards. I have enough on my mind.

BLITZER: Got your hands full right now. Here's another question from Janet. Congressman, what does he think about all this Herman Cain mess?

PAUL: I'm tired of it. And I think this is one of the reasons that I wanted to talk about Newt Gingrich and get some news out on him. I think that's what the media should have been talking about is some of these positions, but I don't say that they shouldn't have covered Herman Cain, but I am pretty tired of it.

It's just on and on and on. There should be a limit. There should be statute of limitations. You know, after about two or three weeks, maybe we could ease off a little bit.

But I think these other issues on the positions of the candidates and whether they're not being consistent or not or what their positions really are and being challenged.

I mean, I'd like to see more challenging on this whole idea that I thrown out there is does the Patriot Act really repeal the fourth amendment. Are these things important? That to me is way more important than dwelling hour after hour and day after day on the personal life of Herman Cain.

BLITZER: One final question before I let you go, extending the payroll tax cut is a big issue. The Republicans have one idea of paying for it. The Democrats have another idea for paying for it.

How will you vote when the dust settles to extend the payroll tax cut, which could provide $1,000 for the average American family next year?

PAUL: I definitely would vote. I never vote to raise taxes and that would be voting to put the tax back on so I would definitely for extending it.

But I would insist that we pay for it and I would want to cut, all we'd have to do is cut about 10,000 or 15,000 people out of the embassy in Baghdad and bring them home and we could pay for it and do it.

Cut some overseas spending and make sure people get even more tax breaks and not think that you have to pay for it by raising taxes on somebody else. BLITZER: Ron Paul, the congressman, the Republican presidential candidate. Good luck on there in New Hampshire, in Iowa. We'll, of course, be watching.

PAUL: Thank you, Wolf.

BLITZER: Jon Huntsman says he will take on Newt Gingrich in a Lincoln- Douglas style debate later this month. Why would a frontrunner like Newt Gingrich agree to that? Our "Strategy Session" will continue after this.

(COMMERCIAL BREAK)

BLITZER: Let's continue our "Strategy Session." Once again, Hilary Rosen and Rich Galen are here. Hilary, did you notice that Jon Huntsman has agreed and Newt Gingrich has agreed.

The two of them will have what they call a Lincoln-Douglas style debate in New Hampshire just the two of them as Newt Gingrich did with Herman Cain a few weeks ago. What's going on here?

ROSEN: Well, you know, Jon Huntsman is smart because that's a good format for him. He's thoughtful. He's deep. You know, it only raises him. I'm not sure if I were Newt I would agree to that, but I know why Jon Huntsman wants to do it.

BLITZER: Why do you think Newt Gingrich --

GALEN: Because he wants to steal votes away from or --

BLITZER: If Huntsman goes up, those are votes presumably that could go to Romney.

GALEN: These things don't always work out the way we think they are. I mean, Huntsman is not Herman Cain. Huntsman actually knows what he's talking about. Herman Cain never has a clue. And it's not exactly clear to me as Hilary said that this is going to work out the way that I think Newt has planned it.

ROSEN: The key issue though, of course, is Mitt Romney, which is, you know, we've gone from inevitability to a really, really weakened candidate. I don't think it's only about -- is he conservative enough?

I think a lot of what the Obama campaign team has done to him over the last couple of months has had an impact in this regard. The Tea Party started out of economic populism. Remember, it was about the bailout vote and all that.

I think that people actually in the Republican Party, the base, is not that comfortable with the guy who made all his money on Wall Street and fired a lot of people.

GALEN: We're looking for Hilary to tell us. Let me say that on the other side, President Obama has been so much in the news that he did a major event in Scranton, Pennsylvania. That's great. And in order to get news today, he had to drag Bill Clinton into an empty building and then they couldn't get him out. But I think your guy needs to play in president or let Mrs. Clinton be president.

ROSEN: I wouldn't be trashing the president going to Pennsylvania.

GALEN: We'll see what happens when it pops back up.

BLITZER: Did you hear that Donald Trump announced today he's going to moderate a Republican presidential debate in Iowa at the end of the month?

GALEN: Has anybody said they're coming in?

BLITZER: I don't know if they've said they're coming, but I assume that they've all gone to his office at Trump Towers to pay their respects to Donald Trump. He's a player.

GALEN: You got it checked off.

BLITZER: Newt Gingrich will be there on Monday.

ROSEN: Donald Trump is no Wolf Blitzer, right?

BLITZER: Believe me, Donald Trump has got --

ROSEN: He does not know how to moderate a debate. This would be a debate about Donald Trump. It would not be a debate about the candidates.

GALEN: I would like to see Newt jump down Trumps throat for asking him bad questions.

BLITZER: I'll be watching. Guys, thanks very much. Here's a news item that we're watching, 900,000 cars recalled. We're going to tell you which major auto maker is expanding its recall on air bags.

Plus, horse slaughtering is legal once again right here in the United States. Why some agree with Congress's decision.

(COMMERCIAL BREAK)

BLITZER: A subpoena for the former New Jersey Governor Jon Corzine. Lisa Sylvester is monitoring that and some other top stories in THE SITUATION ROOM. What's going on?

SYLVESTER: Yes, this is huge, Wolf. The House Agriculture Committee has voted unanimously to subpoena Jon Corzine, the former CEO of MF Global. The trading firm is under federal investigation. It filed for bankruptcy last month after disclosing $6.3 billion in losses. Corzine resigned as CEO of MF Global last month.

Now Honda is expanding its previous recall for risky air bags to nearly 900,000 cars. The recall includes Accords, Civics, Odyssey, CRVs and some Acuras from model years 2001 through 2003. The auto maker originally said it needed to replace the driver's air bag inflator. Honda says owners should bring in their cars for inspection.

And Verizon Wireless is paying $3.6 billion for more air waves. The company bought wireless Spectrum licenses covering 259 million Americans from a group of cable companies including Comcast, Time Warner Cable and Breakhouse Networks.

This means Verizon will have much more bandwidths to provide data to their customers. Mobile devices like smart phones and tablets. There is of course a real concern we're going to run out of the bandwidths when everybody has iPads, iPhones, everything else, Blackberries, Androids.

BLITZER: There's a finite amount.

SYLVESTER: Yes, there is.

BLITZER: We've got a lot of it, but it's finite.

SYLVESTER: Yes, it is.

BLITZER: Thanks very much. Horses sent to slaughter in the United States and their meat shipped overseas. Why a 5-year-old ban is being lifted.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I don't want to see horses slaughtered on American soil and I'd like to not see them exported for slaughter either.

(END VIDEO CLIP

(COMMERCIAL BREAK)

BLITZER: Deep Republican divisions in the Senate are being exposed after lawmakers voted down two measures to extend the payroll tax cut, but in a twist, the Republican proposal didn't win a majority of support from the Republicans themselves.

Here's our congressional correspondent, Kate Bolduan.

(BEGIN VIDEOTAPE)

KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT (voice-over): While Democratic and Republican leaders now agree the payroll tax cut must be extended before it expires at the end of the year.

SENATOR MITCH MCCONNELL (R), MINORITY LEADER: Like Democrats, we think struggling American workers should continue to get this relief for another year.

BOLDUAN: Sharp divisions are emerging among Republicans. Not just over how to pay for the tax extension, but whether to extend the tax break at all.

SENATOR JERRY MORAN (R), KANSAS: Wouldn't we be better using the proceeds of these reductions in spending to reduce the debt and deficit rather than a short-term change that reduces the revenues going to the Social Security and Medicare trust fund.

BOLDUAN: Many Republicans like Kansas Senator Jerry Moran, oppose the tax break because they argue it hasn't helped stimulate the economy and drains money from Social Security.

The split comes after GOP leaders had worked hard to get members on board with their plan. Sensing Democrats were gaining the upper hand in the political fight.

The backlash now reverberating on both sides of the Capitol with House Republicans challenging their leadership on the issue as well.

REP. JEFF FLAKE (R), ARIZONA: I just think they're wrong. I think they're wrong. I think they're wrong. I think that unless we have the courage right now to address entitlement reform, we shouldn't be extending the payroll tax holiday. We don't have the courage right now to do that.

BOLDUAN: Meanwhile, Democrats including President Obama were quick to capitalize on the Republican divide.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: That's why it's so disappointing last night by the way that Senate Republicans voted to block that payroll tax cut.

That effectively would raise taxes on nearly 160 million hard working Americans because they didn't want to ask a few hundred thousand of the wealthiest Americans to pay their fair share.

(END VIDEOTAPE)

BOLDUAN: House Republican leaders are now floating a plan that would among other things be offering one year extension of the payroll tax cut and combine them with an extension of unemployment assistance, but would require reforms to the program.

Despite it's clearly going to extend into next week and beyond as we inch closer, Wolf, to the time when this tax cut runs out and of course, the congressional holiday begins.

BLITZER: We just heard Ron Paul say here in THE SITUATION ROOM, Kate, that he's a member of Congress. He'll vote to extend the payroll tax cut and pay for it by removing thousands of American diplomats who are going to be staying in Baghdad over the coming years.

BOLDUAN: It's going to continue.

BLITZER: Certainly will. All right, Kate, thanks very much.

A controversial move by Congress that could send hundreds of thousands of horses in the United States to their death.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: A horse meat is very tender. It's very similar to beef. Darker red with a slightly sweet taste.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: Horse slaughtering is once again legal in the United States. CNN's Brian Todd is joining us from Maryland with more on this story. We want to warn you that Brian's piece contains some graphic material that might not be suitable for children -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, this is Texas. One of 53 horses here at the Gentle Giants Draft Horse Rescue Facility in Maryland.

Texas and his friends are safe for the foreseeable future, but because of a not very well publicized move by Congress recently, thousands of other horses in the U.S. may soon be targeted for slaughter.

(BEGIN VIDEOTAPE)

TODD (voice-over): Listen to how Christine Hajek describes one of her priced beasts, an 18 hand tall Clydesdale named Chance.

UNIDENTIFIED FEMALE: This would be a kill buyer's dream.

TODD (on camera): A kill buyer's dream?

UNIDENTIFIED FEMALE: Yes.

TODD: Why you say that?

CHRISTINE HAJEK, HORSE RESCUER: A kill buyers is a man who are contracted to buy horses for the slaughter plants.

TODD (voice-over): Hajek runs the Gentle Giants Draft Horse Rescue Facility in Maryland. It has made it her business to rescue horses at auction just before they're sent to slaughter.

(on camera): He was targeted for slaughter as well?

HAJEK: Yes, we outbid the meat man by one cent more per pound.

TODD (voice-over): Hajek's bidding skills will likely stay pretty sharp. Congress has just lifted a de facto 5-year-old ban on slaughtering horses in the U.S. passing a bill allowing inspection of horses destined to be killed for meat.

In 2006, more than 100,000 horses were slaughtered, most of the meat sent overseas. Slaughter houses will soon be legally butchering horses again. The Humane Society vows to fight the process saying Americans don't eat horses. Don't want them inhumanely killed, shrink wrapped and sent to Japan or Belgium for a high priced appetizer.

(on camera): This is Winkie, a draft horse found wandering around in the wilds of Southern Ohio. The owners here believed that she was rejected by a broker because she had an illness that caused her to lose her left eye. That situation is why some who favor slaughter houses say they should be brought back into business.

(voice-over): Those activists say the ban on slaughter in the U.S. forced many owners who couldn't afford to keep horses so set them free in the wild.

SUE WALLIS, UNITED HORSEMENS FRONT: These horses are being turned out on roads where they're being hit by cars or being turned out on the desert where they don't know how to survive and they wind up starving to death or worse yet being pulled down by predators when they're still alive.

TODD: Pro-slaughter activists also say the ban forced owners to send their horses to places like Mexico to be slaughtered, where they say horses are killed brutally and slowly not as humane as the method in the U.S., which first renders the horse unconscious. I asked Hajek about that argument.

HAJEK: I don't feel that a horse should have to be punished with the human irresponsibility of over breeding or ownership or bad circumstances by paying with their life for our mistakes.

TODD: The activists who favor slaughter say that, with the lifting of the ban, a slaughterhouse could be up and running in the U.S. as soon as a few weeks from now. They estimate that up to 250,000 horses a year could be slaughtered for human consumption, with most of that meat going to Europe and Asia.

(END VIDEOTAPE)

BLITZER: Brian, thank you.