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President to GOP: No Holiday for You; Battle Between the GOP Wives; Putin: John McCain Is "Nuts"; Interview With Yochi Dreazen; U.S. Declares Iraq War Over; Ruling Against Iran in 9/11 Case; Actor Christian Bale Finds Drama in China

Aired December 15, 2011 - 17:00   ET

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

WOLF BLITZER, HOST: And you're in THE SITUATION ROOM.

Happening now, President Obama heads into the election year disappointing parts of his political base. We're going inside his decision to back down on a new millionaires' surtax.

Will it help him break the latest deadlock with Republicans on Capitol Hill?

Plus, the fight between Newt Gingrich and Mitt Romney becomes a family affair. Their wives in the spotlight, as Gingrich's marital history becomes more of an issue thanks to his competition.

And the war of words between the Russia prime minister and the U.S. senator. Vladimir Putin says John McCain is, quote, "nuts."

This hour, John McCain's reaction in a new CNN interview.

And we want to welcome our viewers in the United States and around the world. Breaking news, political headlines and Jeanne Moos all straight ahead.

I'm Wolf Blitzer.

And you're in THE SITUATION ROOM.

A new warning today for President Obama to Congress -- don't expect to go off and enjoy your holiday unless you make sure working Americans aren't stuck with a tax increase. It's another last minute attempt by the White House to get Republicans to compromise, break partisan gridlock.

But in the process, the president is letting go of a goal that's near and dear to so many Democrats' hearts.

Let's go straight to our White House correspondent, Dan Lothian.

He's working the story for us.

What's the latest -- Dan?

DAN LOTHIAN, CNN CORRESPONDENT: That's right. And what he's letting go of is the fact that millionaires, he's always believed, should bear a heavier burden so it eases some of the burden on middle class Americans. Right now, though, negotiations continue behind the scenes. There seems to be more of an optimistic tone that a deal will get done to extend the payroll tax cut and unemployment insurance, to prevent a government shutdown. But so far, no deal.

So today, the president again turned up the heat.

(BEGIN VIDEOTAPE)

LOTHIAN (voice-over): With the clock winding down to an end of the year deadline, President Obama put more pressure on Congress to extend a payroll tax cut and unemployment insurance.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Congress should not and cannot go on vacation before they have made sure that working families aren't seeing their taxes going by $1,000 and those who out there looking for work don't see their unemployment insurance expire.

LOTHIAN: The president says 160 million working Americans stand to benefit if Congress acts and the economy could be helped, too.

So what is standing in the way?

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: There are issues that need to be resolved in the spending measure, but they can be resolved. And there are certainly -- there are certainly many paths here to getting a payroll tax cut extension done.

So I think that a willingness to be reasonable here would go a long way.

LOTHIAN: There has been one major concession. Senate Democrats backed off a surtax on millionaires as a way to pay for the payroll tax cut, even though the president's view has been that wealthier Americans need to pay more and ease the burden on the the middle class.

OBAMA: And I know that many of our wealthiest citizens would agree to contribute a little more if it meant reducing the deficit and strengthening the economy that made their success possible. And it's paid for by asking our wealthiest citizens to pay their fair share.

UNIDENTIFIED MALE: The president, at one point, was supporting the insistence on the millionaires' surtax and then is no longer doing it.

So what changed?

CARNEY: We believed that that was a fair way to do it, an eminently fair way to do it. But Republicans, almost in lockstep, lockstep disagreed.

LOTHIAN: In other words, as Speaker John Boehner put it, the votes were there.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: I think the White House and Democratic leaders realized that they never did have the votes to pass their so-called millionaires' tax. So they're dropping it. They were dropping something that they never had.

(END VIDEO TAPE)

LOTHIAN: As this down to the wire push and pull continues, Americans continue to grow even more frustrated. A new pull -- a Pew Poll, rather, showing this -- the discontent at record levels, in fact, two-thirds of voters saying that most members of Congress should be voted out of office come next year -- Wolf.

BLITZER: Dan, what's the reaction from the White House to a little bipartisan goodwill, if you will, the Democratic senator, Ron Wyden, the Republican Congressman, Paul Ryan, they released a new Medicare reform proposal and wrote an op-ed piece about it in "The Wall Street Journal."

What are they saying at the White House?

LOTHIAN: Well, you know, Jay Carney was asked about that at the briefing here today. And he pointed out that the president is all for reforming Medicare, that he believes that whatever should be done should help to protect the senior citizens. And guaranteed -- guarantee, rather -- affordable -- affordable Medicare for those down the road.

What they see with this, the concern they see here, they believe, is that it will undermine and not strengthen Medicare. So right now there's that deal out there that seems like it's -- like it could move somewhere. But the White House has some concerns about it -- Wolf.

BLITZER: Dan Lothian, thank you.

Meanwhile, more partisan gridlock in Washington. The U.S. government may -- repeat, may just be about 31 hours away from a partial shutdown that could cast a cloud over the 2012 election. The measure to keep the federal government funded expires at midnight tomorrow night. Congress is scrambling to try to pass a plan by the deadline to keep the money flowing. If not, the Obama administration says more than 600,000 federal employees might have to be furloughed. They would lose their jobs, roughly half of them from the Defense Department. Almost a third of the Social Security Administration's workforce might be furloughed. But the White House says critical benefits, payments and essential government services will continue.

The clock is ticking. We'll see if they can get their act together.

In the Republican presidential race, the frontrunners' wives are taking center stage. And that's driving home the contrast between Mitt Romney's marital history and Gingrich's. And that's just what the Romney campaign is eager to see.

CNN's Joe Johns is working the story for us.

Gingrich keeps getting more and more flak for the fact he is now on his third marriage.

JOE JOHNS, CNN CORRESPONDENT: That's certainly true. And, you know, the news here, Wolf, is that the Romney campaign has started putting the candidate's wife, Ann Romney, out there, increasing her visibility. She's been to events in both Iowa and New Hampshire recently, as we get closer to the opening bell of the primary season.

(BEGIN VIDEOTAPE)

JOHNS (voice-over): What usually doesn't work very well in a presidential campaign is for some guy to interrupt an event and start shouting embarrassing questions about a candidate's personal life.

UNIDENTIFIED MALE: So it seems like you have a pattern...

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: How would you know?

UNIDENTIFIED MALE: -- in cheating on your wife.

(CROSSTALK)

GINGRICH: How would you...

(CROSSTALK)

GINGRICH: -- other than...

(CROSSTALK)

GINGRICH: -- other than, other than, other than personal hostility.

JOHNS: But it's the velvet glove approach that's harder to deal with, for example, the wife of contender Mitt Romney in a living room in Iowa with a few dozen supporters.

ANN ROMNEY, MITT ROMNEY'S WIFE: I look back and I -- I think of how my husband was -- has been the kind of guy you can count on. And that's the personal side of him that people don't know about.

JOHNS: How long has Mitt Romney been married to the same woman?

By the time this is over, you might eventually have it memorized.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I've been married to the same woman for 25 -- excuse me, I'll get in trouble -- for 42 years.

JOHNS: Presidential candidates love to think of their spouses as secret weapons. Ann Romney is on the trail now to humanize her husband, to try to make him seem more appealing.

But her appearances are also a bid for values voters, women voters and voters for whom trust is a big issue.

A. ROMNEY: And that he is strong -- has strong family values. And that's what matters to him. And that's -- that's -- that's where his world is.

JOHNS: Contrasting Romney with Gingrich, who's had a much more complicated personal life.

PETER HAMBY, CNN POLITICAL REPORTER: The Romney campaign is almost certainly putting Ann Romney out there to highlight the couple's 42 year marriage and her children and Romney as a family man, as opposed to Gingrich, who is right now on his third marriage.

JOHNS: Not only married three times, but Gingrich has admitted adultery, asked God for forgiveness and converted to Catholicism, which is the faith of his wife, Callista. She, too, is seen on the campaign trail, but not heard nearly as much.

CALLISTA GINGRICH, NEWT GINGRICH'S WIFE: Newt and I are determined to run a positive, issue-oriented and solutions-based campaign.

JOHNS: Republican political veteran, Mary Matalin, says some values voters might want to know more about the Gingrich personal story. But for many, it's news that's a decade old.

MARY MATALIN, CNN POLITICAL CONTRIBUTOR, REPUBLICAN STRATEGIST: People have discounted it. They already knew about Newt's marriage history and they've -- they discarded that as a concern about him.

(END VIDEO TAPE)

JOHNS: For her part, Ann Romney says she is not trying to compare and contrast her husband's personal life with Newt Gingrich. But campaign insiders have said they think the former speaker's past life is a liability to him and it looks like they're working it -- Wolf.

BLITZER: They certainly are.

We'll see how the voters, the caucus goers in Iowa, the voters in New Hampshire and elsewhere, respond to all of this.

Thanks very much, Joe.

Jack Cafferty is here with The Cafferty File -- Jack.

JACK CAFFERTY, CNN CORRESPONDENT: Wolf, I don't know about you, but I'm a little tired of being treated like a mushroom by my government -- you know, kept in the dark and fed fertilizer.

President Obama is hailing the end of the Iraq War as though the enemy had signed a terms of surrender on the deck of the USS Missouri.

Total hogwash.

This is the same war Obama referred to as "dumb" nine years ago. But now, it's all "Hail to the Chief," marching bands and rah, rah, rah, look what we did. Well, what we did was invade a country that had done nothing to us, killed hundreds of thousands of their people, as well as thousands of their own, bankrupted our treasury in the process, all in the search for weapons of mass destruction that a cynic might suggest we knew all along didn't exist in the first place.

The Iraqi government told us a few months ago to get the hell out of their country. That's why we're leaving. We're being kicked out. There's nothing noble about that.

Before we were told to take a hike, though, we built the largest embassy in the world, along with more than 500 military bases at the height of the war, all at taxpayers' expense. We had every intention of staying, occupying. No intention of going anywhere. See, there's all that oil there.

As it is, we will leave behind some 17,000 people at that embassy compound. Yes, some of them will be members of the State Department and the diplomatic corps, but there'll also be contractors and intel folks who can keep an eye on things, you know, just in case those weapons of mass destruction turn up or in case Iran tries to fill the power vacuum, which it will.

What garbage. And the government has the gall to paint this as some sort of military triumph. This isn't the end of anything. This is beginning of yet another long-term occupation, not unlike Japan and Korea and Germany.

Here's the question, then -- why, after all of these years, can't our government bring itself to tell us the truth about Iraq?

Go to CNN.com/caffertyfile and post a comment on my blog or go to our post on THE SITUATION ROOM'S Facebook page.

Disgraceful -- Wolf.

BLITZER: All right, Jack.

Thank you.

And we're going to go further in in-depth on the realities inside Iraq amid ceremonies marking the end of the war. I'll talk to a reporter who has covered the mission from day one.

And could Jon Huntsman suddenly be a force in the Republican presidential race?

The new Hampshire battle could change everything for a candidate at the back of the pack.

(COMMERCIAL BREAK)

BLITZER: A low-key finale to a long and controversial war. In Iraq today, U.S. troops lowered the flag of command that flew over the capitol. The defense secretary Leon Panetta was there at the ceremony to mark the official end of the eight-year mission and thank Americans for their sacrifices.

(BEGIN VIDEO CLIP)

LEON PANETTA, U.S. SECRETARY OF DEFENSE: Your dedication, your commitment to this mission, has been the driving force behind the remarkable progress that we've seen here in Baghdad and across this country.

(END VIDEO CLIP)

BLITZER: Joining us now to talk about Iraq in-depth, a journalist who's reported from the country on-and-off since the war started. We're talking about Yochi Dreazen, he's a senior correspondent right now for the National Journal, he worked for the Wall Street Journal for a long time.

You were there from day one, right?

YOCHI DREAZEN, SENIOR CORRESPONDENT, NATIONAL JOURNAL: Yes, from the invasion.

BLITZER: You were in there. You were basically there, came back. Did you ever think -- because I was in Kuwait when the U.S. troops went in -- the eight, nine years later it would take for the U.S. to get out of Iraq?

DREAZEN: No, and frankly, once the war got to its peak, I never thought we'd leave. As you know, some of these bases had 50,000 people, they had McDonald's, Burger King. They were so big, it was hard to imagine them ever being taken down, let alone turned over to the Iraqis.

BLITZER: I was surprised when the president of the United States spoke earlier in the week and he was upbeat about what the future of Iraq looks like. I'm not very upbeat about it, but I -- you've been there, you've spent a lot of quality time in Iraq. What do you think the future is like? Are you optimistic that things are moving in the right direction?

DREAZEN: Frankly, I share your pessimism. I was there for all September -- I was struck when the president used the word democratic to describe Iraq. It's many things, most better than under Saddam, but the Prime Minister's consolidated power.

Rival politicians are arrested. Journalists are beaten, sometimes killed. Demonstrators are unarmed or shot at. So, many things are happening there. Much better than under Saddam, but it is very, very far from democracy.

BLITZER: I want to play a little clip. This is what the president said the other day when he received Nouri al-Maliki, the prime minister, over at the White House.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Today, despite continued attacks by those who seek to derail Iraq's progress, violence remains at record lows. Mr. Prime Minister, that's a tribute to your leadership and to the skill and the sacrifices of Iraqi forces.

(END VIDEO CLIP)

BLITZER: He was pretty effusive in his praise for Nouri al- Maliki. In that article that you recently wrote, you called him a mini Saddam Hussein.

DREAZEN: It's interesting what he and the presidents (ph) are focused on. Violence is down. There's no question. The question is, hoe does he get to the point where violence is down. There's an evidence of pretty (ph) widespread torture of Sunni prisoners. All of the Iraqi military in Baghdad and Basra answers directly to Maliki, which was never the intent.

See, you have someone whose passes (INAUDIBLE). He was tied to a party that is explicitly responsible for terror attacks against U.S. targets. Consolidated all security control under his direct power. So, violence is down, but it's a double-edged sward as to why.

BLITZER: He refuses to give up the defense ministry, the interior ministry, which is in charge of the police, the secret police, and all of that. That's all under his authority. He refuses to appoint anybody else to take charge. He's got a history of the Dawa Party, as you well know, and it's not necessarily a great history.

DREAZEN: It's not. I mean, this was a sort of secretive party that battled Saddam Hussein from within Iran. So, he spent much of his life living in Iran --

BLITZER: And Syria, too.

DREAZEN: And Syria. They were linked to the hijacking of a TWA plane in the 1980s. That it's murkiest whether he personally was involved in it. What is known for sure is that the bombing of U.S. embassy in Kuwait in 1983 demolished the building, thankfully, didn't kill many people. That was Dawa, that was his party, and that's the man who's now the prime minister of Iraq.

BLITZER: Is the argument that administration officials make, White House officials, state department officials, I don't know if they really believe it, but they make the case that forget about Iran. The Iraqis are not going to let Iran have a great influence in their country. This is a Persian country, Iran. Iraq's an Arab country.

DREAZEN: You're right. And obviously, you spent a lot of time there. So, you know that there are these long standing tensions. At the same time, this is a man who's spent a lot of time in Iran. His personal relationship with the president of Iran, Mahmoud Ahmadinejad, is very close.

So, Iraq is nationalistic, but this is a leader who has unusually close relationship with Iran, so much so that Saudi Arabia, Kuwait, our other gulf Sunni Arab allies, they're very worried about it.

BLITZER: Yes. I've spoken to some of them in recent days, and there's no doubt they have great, great fears about Nouri al-Maliki. We can only hope that things are moving the right direction, but I'm not very upbeat. I know you're not, as well. All right. Yochi, thanks very much for coming in.

DREAZEN: My pleasure.

BLITZER: An add to international smackdown, the Russian Prime Minister, Vladimir Putin, questioning Senator John McCain's sanity. It happened during a conversation, question and answer program today. Putin was asked about this most recent tweet from McCain's account saying, "Dear Vlad," this is from McCain, "Arab spring is coming to a neighborhood near you." That's from John McCain.

It was linked to news reports suggesting that the Russian leader would suffer the same fate as Libya's Moammar Gadhafi. Listen to Vladimir Putin's very angry response.

(BEGIN VIDEO CLIP)

VLADIMIR PUTIN, RUSSIAN PRIME MINISTER (through translator): Mr. McCain as is known was taken prisoner in Vietnam, and he had been held not just in jail, but was put in a pit where he was kept for several years. Any person under those circumstances would hardly remain mentally sane.

(END VIDEO CLIP)

BLITZER: Wow! Mentally sane. McCain certainly fired right back at Putin with this tweet. "Dear Vlad, is it something I said?" Let's get some reaction now from our own John King. He's covering the world of politics in Iowa right now, but he had a chance just a little while ago to speak with Senator McCain. John, what did he say?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Wolf, just about three minutes ago, we ended that conversation and I began by getting into this dust-up between Putin and McCain, and the senator laughed. As you know, he has pretty good sense of humor. He had a big laugh, and he said, John, he called me nuts. And Senator McCain said in part, this is his way of poking at Vladimir Putin, but he says it's also a bigger issue.

He said, as you read that tweet there, that he truly believes because of technology and because of communication, that younger people, that the Arab spring is spreading to places like Moscow and that Putin's attempt to essentially come back into the presidency and to keep having his power staying in control, he believes is at risk and he said he thought it was important for him personally.

And he thinks it's important to the Obama administration to support voices for democracy in Russia, and he said he's very much looking forward to later this month when there are supposed to be a larger protests and larger marches in the streets in Moscow. And he said he does want to have a little poke back and forth with Vladimir Putin, but more importantly, he's trying to support pro-democracy forces inside Russia.

BLITZER: Who would have thought, Putin and McCain had odds right now. Bitter words. Let's talk politics for a moment, John. What are the folks in Iowa saying about Newt Gingrich right now? He's trying to play nice, even though he's getting hammered, not only by Mitt Romney and Ron Paul, but the other Republican candidates as well.

KING: Essentially what they're saying about Newt Gingrich's Christmas wish, for all the Republicans to be nice to each other. They're saying, nice try, Mr. Speaker. They say, you can give as good as you get, if you will, and you've proven that in the campaign at times. And also, look, every frontrunner, when you get up in the front, you start to feel a little comfortable, you say, OK, let's all be nice to each other. Let's not scrap up the eventual nominee.

We already are seeing today, our Peter Hamby obtained a mailing. The Romney campaign sending a glossy direct mail piece raising Speaker Gingrich sitting down with Nancy Pelosi, the former Democratic speaker, to do that climate change ad saying with friends like these, you can't trust Newt Gingrich. Look in tonight's debate for Speaker Gingrich to be front and center in the attacks.

Governor Perry has a new ad up today, just today in Iowa, that attacks both Gingrich and Romney. So, Speaker Gingrich would like everybody to be nice, but Wolf, he's leading in the polls in Iowa. He's closing in a New Hampshire. He's leading in South Carolina. He's leading in Florida.

The simple rules of politics tell you his rivals are not going to be nice, and it won't just be Mitt Romney and Rick Perry. Ron Paul's after the speaker. And if you're Michele Bachmann, your Rick Santorum, and you need to, somehow, find your way to get a ticket out of Iowa, guess what, this is the last debate tonight before Iowa votes. Speaker Gingrich will have the bull's eye. You can count on it.

BLITZER: It's going to be lively. There's no doubt about that. All right. John, thanks very much. John is going to be reporting at the top of the hour for our North American viewers. "John King USA" coming in live from Iowa later tonight.

The feds say they've uncovered a link between terrorists, and get this, used car dealerships in the United States.

And we'll have more on Mitt Romney's shots at Newt Gingrich and his newfound wealth. Stay with us. You're in the SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: In the countdown to the Iowa caucuses on January 3rd, the spotlight is blaring on Newt Gingrich, Mitt Romney and Ron Paul right now, but when the New Hampshire primary rolls around a week after Iowa, we might be hearing a lot more about Jon Huntsman. New polls suggest his days at the bottom of the pack may be numbered at least in the lead-off primary state of New Hampshire. We're joined now by CNN contributor, the Democratic strategist, James Carville, and the Republican strategist, Terry Holt. Guys, thanks very much for coming in. I'll put the numbers up on the screen showing that Huntsman is doing a whole lot better now than only a few days ago, likely to a Hampshire Republican primary voters.

According to American research group poll, Romney's at 35, Ron Paul, 21, Gingrich, 16. Huntsman's now moved up to 13 percent. The Suppolk University southern (ph) news poll, Romney 38, Gingrich 20, Huntsman's up to 13 percent in that poll. Terry, you're the Republican. It's my assumption that every time Huntsman moves up, those are potential votes that he's taking away, taking away from Mitt Romney.

TERRY HOLT, REPUBLICAN STRATEGIST: That could be, but you know, New Hampshire with a small universal (ph) voters, it's possible to develop a level of support there that in these closing stages are going to make you be seen by some of the rest of the voters.

I think with so many undecided in the race, Wolf, this means that places like New Hampshire and Iowa, too, really, are very volatile politically that things can change very quickly, and that if somebody gets the momentum, they can do some damage. I think everybody's real challenge in New Hampshire is how do you survive poor showing in Iowa so that you can leverage before you built in the Granite State.

BLITZER: I want to talk about Iowa in a second, but James, if huntsman keeps going up in New Hampshire, does that open up the possibility that Romney might not win? We've always assumed he was going to win New Hampshire, because he almost lives there. He's from neighboring Massachusetts. Could it be an opening for Ron Paul, for Newt Gingrich?

JAMES CARVILLE, DEMOCRATIC STRATEGIST: Wolf, what it could be, I think there are two things to remember. Number one is the fact that primary in New Hampshire is very, very volatile, even after Iowa. Between Iowa votes and New Hampshire votes, their history has shown that the lead can change quite dramatically. Secondly, New Hampshire's a unique opportunity for Governor Huntsman, because it is an open primary.

Independents can vote in that where as you can't do that in South Carolina. You can't do that in Florida. In Iowa, as we all know, is caucuses which is pretty intense party laws. So, those two factors, you've got to figure in, but obviously, the more that Huntsman rises, the more worried that Romney would get, whether it's continued or not, I have no idea.

BLITZER: Terry, listen to this because it's interesting what's been going on with Mitt Romney's strategy this week. On Monday, gave an interview to Fox. He called Gingrich erratic. On Tuesday, he gave interview to the "Washington Post." He said Gingrich was extremely and extremely unreliable leader. And then he gave interviews to the "New York Times" and CBS. I'll play these two clips.

(BEGIN VIDEO CLIP) MITT ROMNEY, (R) PRESIDENTIAL CANDIDATE: Zany is great in a campaign. It's great on talk radio. It's great in the print. It beats, makes for fun reading, but in terms of a president, we need a leader. Newt Gingrich has been an unreliable leader in the conservative movement.

(END VIDEO CLIP)

BLITZER: Strong words coming from Mitt Romney, and so far, Newt Gingrich, except a little bit on Monday, he's not taking the bait. He's trying to take that high road. What do you make of that?

HOLT: Well, he's taking the high road because he's got the high poll numbers, obviously. And to be able to play defense is really key for him. But you know, Romney's hitting on something that a lot of folks that when Newt Gingrich was speaker said themselves, that his leadership skills were erratic, that he was prone to be impulsive.

He was pretty much -- you know, James will remember, he's pretty much the evil foil for Bill Clinton and his rise and return to power in the late 1990s. So, Newt has the baggage. He's going to have to withstand some pretty withering attacks, and I think that they are going to be successful. That the shine will come off of Newt Gingrich sooner or later.

BLITZER: James, you're a brilliant strategist. If he asked you -- and he's obviously not going to ask you -- but put on your political strategist hat right now. Advise Newt Gingrich how to respond to the attacks from Mitt Romney and all of the other Republican candidates. What would you tell him?

CARVILLE: Well, I think he's doing about as well as he can do. And I agree with Terry, unfortunately. I'd like to see him do better. I think that the shine is already starting to come off. And he has to have a really good debate tonight.

Look, there's a lot of pressure on Gingrich. If he has just an average debate, he's done.

BLITZER: But how forceful, how tough should he be in that debate?

CARVILLE: I don't think he needs to be tough. I think he needs to bounce off. I think when he's attacked, he need to say, look, we've spent all this time talking about this and that, I have answered all these questions, but I'm the only person that's answered the question.

These are the three things I would do to get the economy moving, this is what I would do about foreign policy. I would simply answer the charges by saying, everybody knows I've already answered that because once you start answering it, then it's going to get down deep into the debate.

And I suspect that the Fox people are going to be pretty tough on the Speaker tonight. It's going to be interesting.

HOLT: I just want to jump in and say I think that Republican voters have dated profusely during this election season so far, but they've never really gone steady very long. And I think that leading up to Ohio (sic) and New Hampshire, a lot can change. It's going to be a very volatile season going into January.

BLITZER: You mean Iowa.

HOLT: Iowa and New Hampshire. I'm sorry.

CARVILLE: No, no, Terry, I agree with most of the things you said, which is kind of unusual.

HOLT: I love it.

CARVILLE: I would say if I was -- I would tell the Speaker -- just say I've already answered that, but I'm answering a question that no one is, and that's how are we going to do X, Y and Z.

(CROSSTALK)

BLITZER: But it goes against, Terry -- and you know Newt Gingrich and James knows him. I've covered him for a long time. It goes against his instinct that, when somebody comes over and hits you, your inclination is to hit right back. And Republicans do want a fighter, because you know in a general election campaign, he's going to be hit, whoever the Republican nominee, with everything the Democrats have.

HOLT: That's been the most potent rationale for his candidacy, he's been a gutsy debater. People have said over and over again that they would like to see a debate between Barack Obama and Newt Gingrich, that Barack Obama would lose that kind of a debate. But at this point, it's really true. It's more about electability, it's about leadership, and those are the things that are going to test Gingrich in the next few weeks.

BLITZER: Some of Newt Gingrich's supporters, James, have suggested that Mitt Romney and the others are sort of like sparring partners for Newt Gingrich. He's practicing a little bit with them, but he's ready for the heavyweight championship match against the president of the United States.

CARVILLE: Well, I love boxing, and sometimes your sparring partner can fool you if you're not looking. And I think they're starting to land a couple of punches on him, and he's got to be very wary of that. He's got some tough sparring partners in there.

If you look at "The National Review," if you look at other people, the sort of big-time Republicans are starting to gang up on Newt. I'm kind of pulling for the guy. I hope he has a good night tonight.

BLITZER: Well, we'll soon find out.

Guys, thanks very much.

HOLT: Thanks, Wolf.

BLITZER: James Carville, Terry Holt, thank you. Syrian soldiers who defected are now revealing the orders they say they were given to attack and kill protesters.

And China's military adds a powerful new weapon to its arsenal.

(COMMERCIAL BREAK)

BLITZER: Lisa Sylvester is monitoring some of the other top stories in THE SITUATION ROOM right now.

Some very, very disturbing accounts of the latest violence in Syria.

LISA SYLVESTER, CNN CORRESPONDENT: Yes, that's right, Wolf.

Two Syrian soldiers who say they just couldn't take it anymore and deserted are now telling their stories. One says Syrian officers ordered soldiers to open fire on crowds, saying, "At one point we killed eight people in 15 minutes. The protesters were unarmed. They didn't even have rocks! That's when I decided to defect."

Another former soldier recounts the day in April when a crazed protester was shot in the shoulder and arrested at a checkpoint. "His mother approached us and said, 'Let him go; take me instead,' and a mukhabarat guy in civilian clothes in front of me shot the guy point blank and killed him, in front of his mother."

In other news, a new satellite image shows what's believed to be China's first aircraft carrier stretching its sea legs for the second time. The drills have caused speculation about China's military intentions. The Chinese reportedly bought the stripped-down ship which was built in the USSR back in the 1980s to turn it into a casino.

And fewer Americans for the death penalty. A new study finds the number of death sentences and executions are at historic lows, with a 56 percent drop in the last 12 years. Seventy-eight people were sentenced to die by lethal injection so far this year. While Americans don't want to abolish it altogether, experts say there are growing concerns about fairness and the high cost of capital punishment.

And experts are urging government scientists to limit the use of chimpanzees, saying, "While the chimpanzee has been a valuable animal model in past research, most current use of chimpanzees for biomedical research is unnecessary." The Institute of Medicine panel says chimps close genetic link to humans, makes them valuable to research, but also warrants greater justification -- Wolf.

BLITZER: Thank you.

A legal milestone for families of victims of the 9/11 attacks. A judge has ruled on responsibility in a longstanding lawsuit, and it's implicating Iran.

And tonight, a major accusation against dozens of U.S. businesses that they helped fund terrorists. We have details coming up. (COMMERCIAL BREAK)

BLITZER: A major legal victory today for widows of the 9/11 attacks 10 years ago.

CNN's Mary Snow is joining us from New York.

Mary, all of a sudden, Iran is at the center of this legal case. What's going on?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, this is a follow-up to a report we did in May when a lawsuit was filed here in New York claiming Iran had a link tot 9/11 attacks. Now, today, a victory by default, but attorneys say they hope this case brings new focus on Iran.

(BEGIN VIDEOTAPE)

SNOW (voice-over): Attorneys emerging from federal court in Manhattan claiming victory after making their case that Iran was linked to the 9/11 attacks. A federal judge says he'll issue a default judgment, saying the plaintiffs established their claims with sufficient evidence.

Iran never responded to the suit filed on behalf of widows like Tara Bane. She lost her husband Michael on September 11th.

TARA BANE, 9/11 WIDOW: Just very happy, relieved, and I felt some justice for Michael and his death and everyone's that we lost that day.

SNOW: Leading more than a dozen attorneys on this team was Thomas Mellon. Motivating him, the 9/11 Commission Report. That report address assistance from Hezbollah and Iran to al Qaeda, stating, "We believe this topic requires further investigation by the U.S. government."

Among the evidence Mellon's team collected, testimony from three Iranian defectors. It was used in making the allegations in the lawsuit that Iran and Hezbollah had knowledge of the planned 9/11 attacks before they happened.

THOMAS MELLON, ATTORNEY: This is a group of private lawyer that did their very best, but I believe a further, more detailed and deeper investigation and understanding is required.

SNOW: The 9/11 Commission Report found strong evidence that several of the 9/11 hijackers traveled through Iran into or out of Afghanistan. Several members of al Qaeda have also lived in Iran since 9/11, says CNN national security analyst Peter Bergen. But the claim that Iranian officials had prior knowledge of the 9/11 attacks Bergen says is doubtful.

PETER BERGEN, CNN NATIONAL SECURITY ANALYST: I'm pretty skeptical about that, because I think Bin Laden was careful to make sure that very, very few people, including in his own organization, knew exactly what was going to happen on 9/11. So the idea that Iranian officials were somehow clued in I just think fails a common sense test.

(END VIDEOTAPE)

SNOW: Now, as for what's next, the attorneys are going to try and seek monetary damages from Iran, the next phase of this case. We did contact the Iranian mission (ph) for reaction. A spokesman sent us a statement saying, "Iran rejects categorically rejects any claims it had prior knowledge of the 9/11 attacks" and says, "Iran considers the allegations a new plot against Iran" -- Wolf.

BLITZER: Thanks very much.

Mary Snow, in New York.

We're going to be hearing from you on our question this hour. Why, after all these years, can't the U.S. government bring itself to tell us the truth about Iraq? That's Jack Cafferty's question. He's got your e-mail. Stand by for that.

And dozens of American businesses linked to a major terrorist organization, the case that involves the DEA and used car dealers.

Stand by. New information coming in.

(COMMERCIAL BREAK)

BLITZER: Let's get right back to Jack for "The Cafferty File" -- Jack.

CAFFERTY: The question is: After all of these years, why can't our government bring itself to tell us the truth about Iraq?

Kendra in Alabama, "If the Obama administration admits that the Iraq War was a mistake, then they'll have to answer for the three extra years our troops have been there. Also, let's be honest, he will do and say anything to make himself look good for re-election."

B.J. in Illinois writes, "They're good liars, and good liars stay with the lie. Question: Why do they have so many secrets? It's supposed to be an open society."

Ed in Texas, "Stay alert, Jack. The same Neo-Cons who sold the war in Iraq are hard at work on their next project: a war with Iran."

Bonnie in New Jersey, "Seriously, did you use the words 'truth' and 'government' in the same sentence? Whether it's Iraq, bailouts, how many are really unemployed, job creators, et cetera, they think we're all a bunch of blithering idiots who believe anything they tell us. It's like being married to an unfaithful spouse. If I don't caught, it didn't happen."

Richard in Texas, "What is our government going to say, oops, sorry, 'Mission Accomplished' nine years later? How did invading Iraq make America a safer place to live? What economic benefit was this war to America?" Bob writes, "Simply put, Jack, the truth hurts. The first thing we did after invading Iraq was protect the oil fields. And as we depart now, we continue that pursuit by protecting the oil fields in southern Iraq. It's always been and always will be about the oil."

And Noel writes, "Because it was a mistake. America has gone from being the world's policemen to being the world's mother-in-law. Have you ever known a mother-in-law to admit she made a mistake?"

If you want to read more about this, go to my blog, CNN.com/caffertyfile, or through our post on THE SITUATION ROOM'S Facebook page.

See you Monday.

BLITZER: Yes. See you Monday, Jack. Thanks very much.

Let's get to a dramatic car chase right now involving the actor best known for his role as "Batman." The Academy Award-winning actor Christian Bale is in China for the premiere of a film he shot there. He's also highlighting the plight of a blind human rights activist who's been held in his home for more than 15 months, and it all landed Christian Bale in a real-life drama.

Here's CNN's Stan Grant.

(BEGIN VIDEOTAPE)

CHRISTIAN BALE, ACTOR: Why can I not go visit this man?

STAN GRANT, CNN INTERNATIONAL CORRESPONDENT (voice-over): Hollywood actor Christian Bale is used to action, but this is no movie set.

BALE: We've been stopped.

GRANT: Plainclothes Chinese security, who would not identify themselves, determined to stop him and our crew contacting a detained human rights activist.

UNIDENTIFIED MALE: Watch it, Christian. Watch it.

GRANT (on camera): We're trying to get out of here. Once again we've been stopped. We've been stopped right here.

And as you can see, they're pushing Christian here. We're just trying to leave peacefully. We're trying to leave peacefully.

(voice-over): As we leave, the guards give chase in their car.

(on camera): They're still right on our tail.

(voice-over): Christian Bale says this is not what he had hoped for. He made an eight-our car journey from Beijing to try to meet a personal hero, the blind, self-taught lawyer Chen Guangcheng.

BALE: I'm not being brave doing this. The local people who are standing up to the authorities and insisting on going to visit Chen and his family, and getting beaten up for it, and my understanding is being detained for it and everything, I want to support what they're doing.

GRANT: Bale has been in China for the premiere of a film he's made here about the Japanese invasion of Nanjing in the 1930s. Bale could have rolled up the red carpet and left, but the actor whose movie is about suffering and injustice could not leave China without highlighting this real-life struggle.

Chen Guangcheng has campaigned against alleged forced abortions and the treatment of villagers in China. In 2006, he was sentenced to more than four years in prison for disrupting traffic and damaging property. He denies those allegations.

Chen has not been allowed to leave his home since his release last year. Local Chinese authorities in Shandong Province have his house and local village in lockdown. No one allowed in to see Chen.

Authorities here declined to comment on the case.

The United States has championed Chen's cause. Secretary of State Hillary Clinton has raised his case during past visits to the region.

Christian Bale now wants to add whatever weight he can.

BALE: I mean, this doesn't come naturally to me, but this was just a situation I said, I can't look the other way.

GRANT: Bale has followed CNN's coverage of Chen's case and approached us to try to meet the blind activist. His hopes were high, until this

BALE: What I really wanted to do was shake the man's hand and say "Thank you" and tell him what an inspiration he is.

GRANT: The Chinese security continued to chase us for more than half an hour. We got away. Chen remains locked in his house.

Stan Grant, CNN, Shandong, China.

(END VIDEOTAPE)

BLITZER: And for our North American viewers, Christian Bale will join John King in the next hour on "JOHN KING USA." You'll want to see that interview.

Dramatic stuff under way in China.

It's not often you hear of a supermodel being called a game-changer. We're going to show you how this beauty is breaking barriers in underwear.

(COMMERCIAL BREAK)

BLITZER: A Dutch ad for a new push-up bra might make you do a double- take. Not for the killer cleavage on display, but who who's showing it off.

Here's CNN's Jeanne Moos.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): How do you prove your push-up bra can push up even the most miniscule bust? Have a man model it.

UNIDENTIFIED MALE: She's attractive.

MOOS (on camera): She is actually a man.

UNIDENTIFIED MALE: Oh.

UNIDENTIFIED MALE: Not bad.

MOOS: Now, she is a man, actually.

UNIDENTIFIED MALE: Really? OK.

UNIDENTIFIED FEMALE: She looks good.

MOOS: She is a man.

UNIDENTIFIED FEMALE: OK. Then he looks really good.

(LAUGHTER)

MOOS (voice-over): Serbian-born model Andrej Pejic is the latest "it" girl -- or boy. He got to be the bride in a Jean Paul Gaultier fashion show. "Out" magazine named him "Stylemaker of the Year."

ANDREJ PEJIC, MODEL: Open up minds.

MOOS: "Huffington Post" awarded him "Ultimate Style Game Changer of the Year," and now he's changing how bras are sold.

(on camera): And she's advertising bras.

UNIDENTIFIED FEMALE: Does she have breasts?

MOOS: No.

(voice-over): Pejic flaunts what he doesn't have, not shy about appearing shirtless. And that's the point that Dutch department store HEMA is trying to sell, saying its mega-push-up bra will bump you up two cup sizes even if you're starting cupless.

UNIDENTIFIED FEMALE: If he can look like that, what can it do for a woman?

UNIDENTIFIED FEMALE: I love it.

MOOS (on camera): Would that convince you that that's one heck of a push-up bra? UNIDENTIFIED FEMALE: Yes!

MOOS (voice-over): (AUDIO GAP) move over, Victoria's Secret. Pecks, rather than breasts are making waves.

"New York" magazine named Pejic "Male Model of the Year." But even on the portfolio page of one of his modeling agencies he's rarely seen dressed like a guy. What a year it's been for him.

PEJIC: It's been, you know, an amazing experience.

STEVEN TYLER, AEROSMITH (singing): Dude look like a lady

MOOS: He may leave some confused.

UNIDENTIFIED MALE: I'm mixed up on what's going on today.

MOOS (on camera): You're mixed up?

UNIDENTIFIED MALE: Yes.

MOOS (voice-over): Even a woman who gave us an earful of unable to get used to gender swapping, even she broke down.

(on camera): Would you buy this bra when you see what it can do for him?

UNIDENTIFIED FEMALE: Yes.

MOOS (voice-over): His cups may not runneth over, but --

(on camera): -- when it comes to gender-bending, there is no one more elastic.

(voice-over): When it comes to selling bras, we'll see if he really can-can.

Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

BLITZER: Leave it to Jeanne Moos to find these stories.

Thanks, Jeanne, very much.

That's it for me. Thanks very much for watching.

I'm Wolf Blitzer in THE SITUATION ROOM.

The news continues next on CNN.