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Top 10 Political Stories of the Year; Political Insiders Share Their Top-10 Political Picks; Putin Signs New Military Doctrine, Concerns about Russia's Economy; Today is Critical Shopping Day for Retailers.

Aired December 26, 2014 - 13:30   ET

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

(BEGIN VIDEOTAPE)

JAKE TAPPER, CNN CHIEF WASHINGTON CORRESPONDENT (voice-over): The number two Republican in the House did not make it to Election Day. House majority leader, Eric Cantor, lost his primary to this guy, economics professor, David Brat, in what may be the political upset of the decade.

REP. ERIC CANTOR, (R-VA), HOUSE MAJORITY LEADER: Obviously, we came up short.

TAPPER: Number eight, the U.S. does not negotiate with terrorists, but we will do a prisoner swap. Sergeant Bowe Bergdahl, the only U.S. prisoner in Iraq or Afghanistan, was brought home after the U.S. traded five Taliban fighters from Guantanamo Bay for his release. The celebration had one huge footnote. Not everyone was thrilled with the exchange rate.

REP. PETER KING, (R), NEW YORK: For the president to decide that these five hardest of the hardcore in return for Sergeant Bergdahl was just wrong.

TAPPER: Not to mention, the administration broke the law by not giving Congress 30 days' notice.

Number seven, a fence jumper who sprinted across the White House lawn and let himself into the front door, exposed the major security breaches with the security service.

REP. JASON CHAFFETZ, (R), UTAH: Don't let somebody get close to the president. Don't let somebody get close to his family.

JULIE PIERSON, DIRECTOR, U.S. SECRET SERVICE: I take full responsibility.

TAPPER: Those security gaps led Julie Pierson, the first female director of the Secret Service, to step down.

Number six, accusations that U.S. veterans died while waiting for treatment at Veterans Administration hospitals was a national embarrassment. A month-long CNN investigation showed altered death certificates and secret waiting lists.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I want to know the full scope of this problem.

TAPPER: Secretary of Veterans Affairs, Eric Shinseki, was sacked after the scandal broke. And the repairs to the broken system still seem to be a long way off.

Number five, President Obama's foreign policy under attack. An off- the-cuff phrase uttered by the president, "Don't do stupid stuff," was criticized by former Secretary of State Hillary Clinton as an inadequate defining principle. The Israel/Gaza war, the civil war in Syria, the Russian invasion of Ukraine, the prisoner swap for Alan Gross in Cuba. The president's foreign policy was criticized by many Democrats.

Number four, 2014 marked another year of congressional gridlock on immigration reform. There was no greater example of the broken system than the thousands of unaccompanied children from Central America flooding across the Texas border. President Obama opted after the midterms to go it alone, using executive action in an attempt to reform the system. Critics call his actions unconstitutional.

Number three, any notion of America's first black president ushering in a post-racial era of healing got squashed. After white police officers in Missouri and New York killed unarmed black men, protesters around the country took to the streets. Following the grand jury's decision not to indict Officer Darren Wilson, President Obama issued a speech urging calm.

OBAMA: So we need to accept that this decision was the grand jury's to make.

TAPPER: And the split screen on your television showed the depth of the disconnect, a city burned and the president's pleas going up in smoke.

Number two, the U.S. went back into Iraq. This time, to fight ISIS Just a few months after President Obama dismissed the terrorist group as a J.V. squad, is took several swaths of land along the Syrian border. The president finally changed his tune and ordered targeted attacks in Iraq and Syria against the terrorist group.

And the number-one top political story of the year, on election night, it was a red wave as Republicans won control of the U.S. House and the Senate.

UNIDENTIFIED MALE: We crossed the finish line. We took the Hill.

TAPPER (on camera): The politics of 2015 might just look like a giant stack of promises made in the race in the White House for 2015. We'll have to see if a lame-duck president can stick it out with a dead- locked Congress.

I'm Jake Tapper.

(END VIDEOTAPE)

BRIANNA KEILAR, CNN ANCHOR: Well, that's CNN's list. Up next, our political insiders will shake their picks for the top

2014. Stay with us.

(COMMERCIAL BREAK)

KEILAR: We are taking a closer look at some of the top political stories of 2014 and looking ahead to 2015. How will President Obama deal with the new Republican-dominated Congress?

Joining me to talk about all of this is "Time" magazine reporter, Zeke Miller; Rebecca Berg, the political correspondent for "The Washington Examiner"; and CNN senior political analyst, Ron Brownstein.

I wasn't to start with Hillary Clinton. She had a book tour over the summer. Definitely rocky moments in there. We expect she's running, but when is it going to happen? Is it still months off? Is she positioned well, do you think, after this year?

REBECCA BERG, POLITICAL CORRESPONDENT, THE WASHINGTON EXAMINER: Certainly in a strong position. But if you look at the way that Hillary Clinton has been acting and some of what is on her calendar for the first few months or the next year, it's clear that she's not in any hurry to start her presidential campaign. She has a paid speech on the docket for as late as March. What I've been told by members of her campaign or circle is that she isn't thinking of even doing an exploratory committee. She's going to jump in all in one --

(CROSSTALK)

RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: It's very little that Hillary Clinton did of her own volition in 2014 that's going to have a big impact on 2016. I think what is more important or significant is the way that she has systematically aligned herself with some of the big unilaterally decisions that President Obama has made on immigration, on climate, on Cuba, one after the other. There are a number of ways in which she's shaping the battlefield for 2016 and it shows in both the way she has felt compelled to endorse them and the way that the Republican candidates have felt to oppose them. A lot of the issue landscape is already being put in place.

KEILAR: And you see that as well, that it's -- we're sort of gearing up here for 2016.

And even the last press conference, the presidential press conference, where he called on all female reporters, is this kind of the year of the women when it comes to politics, too?

ZEKE MILLER, POLITICAL REPORTER, TIME MAGAZINE: Certainly. It's definitely one of the years in politics, record number of women elected to Congress from both parties, significant gains. On that front as well, women reaching across for Capitol Hill. It's definitely a theme of the past year. It's certainly, as we start talking about a likely Hillary Clinton candidacy, something that we will hear a lot more about, women being able to reach across the aisles and men often times fall short.

KEILAR: It's actually proven.

Let's talk about - we may be able to combine some of these topics -- immigration reform. The president taking executive action. And then this issue of race, really, Ferguson, Missouri, the Eric Garner death in Staten Island. All of these things sort of really, I think, just causing so much upset, discord. And how does this affect President Obama and Congress?

BROWNSTEIN: They have both manifestations. We are living through the most profound 21st century. Most people don't realize, this year that is under way now, this is the first time ever in American history where a majority of our K to 12 students are not white. It's ripping through the political system and we see it manifest itself in a lot of different ways, the debate over race relations and police relations and minority communities and others. There are many more ways in which this will play out, especially because our politics have become so polarized, with Republicans winning 60 percent of whites and Democrats relying on support of 80 percent of non-whites in 2016.

BERG: And I'm so glad that you mentioned the Republicans really struggling because what is so interesting to me, you look at the passions underlying these racial tensions in the country, and Republicans have been strongly opposed to immigration reform, or at least the president and Democrats of comprehensive immigration reform. And so I think what we're going to see in the coming year is a very difficult challenge for Republicans to not present themselves as the party that is anti-immigration reform, anti-tackling these issues, but as a party that has solutions of its own. And that's what they need to do at the start of the year.

MILLER: These issues that have come out of Ferguson in the Eric Garner case, within both parties there is question about how far should the federal government can, how far can the federal government go? We have pro-police members of the Democratic Party. You have Republicans, like Senator Rand Paul, calling for justice reform. That might be -- criminal justice might be --

BROWNSTEIN: Challenges to the parties was really apparent in 2014. The reality is that right now Democrats cannot win enough white voters to win the House. And the reality is that, since 1992, Republicans can't win enough nonwhite voters to consistently win the White House. The problem that Republicans have in addressing these issues, 80 percent of Republicans are in districts that are more white than the national average. 90 percent of Mitt Romney's votes come from white voters. That's a coalition that can win the House. It has a lot more trouble to win the presidency. And the Democrats are in the reverse situation.

KEILAR: So there's this stalemate in a way electorally.

But let's talk about the president specifically taking executive action on immigration. You have this new Congress coming in. Republicans have won the majority. What is it going to feel like on Capitol Hill come January? What can Congress really accomplish, because historically you look at a makeup like this and it actually can be productive? But do we think that it will be this time? MILLER: There's real pressure to try to get something done. You look

at soon-to-be majority leader, Mitch McConnell, and speaker of the House, John Boehner, they have been trying to cut deals for years now. They have not been able to get over the finish line. The problem is, there are divisions and fractions within their own caucus. And it hasn't changed. It's gotten worse. When you talk about something like immigration and criminal justice reform, they are going to have as much trouble then as before. The problem is within their own conference. It's not Democrats. It's Republicans themselves.

BERG: I would argue they might even have more trouble of passing some of these must pass pieces of legislation.

(LAUGHTER)

(CROSSTALK)

BERG: I know. Can you believe it? But what Republicans have done in the past because of this discord within their own house side has been to pull some Democrats over and get their votes to pass these bills.

BROWNSTEIN: That's right.

(CROSSTALK)

BROWNSTEIN: And there's another dynamic, which is, as President Obama has moved unilaterally on some of these issues, he increases the pressure. It's not only the substance but the form. It's the way he did it. Once he acts unilaterally on immigration, there's enormous pressure on every Republican to say, I will repeal executive action if I am elected. The problem is, yes, I will support legislative response to immigration, they are digging themselves a hole with some of these growing demographics that have much more of a problem at the presidential level than at the House or the Senate.

(CROSSTALK)

MILLER: And the same problem with women in 2012 when it came down to health care and the Affordable Care Act.

KEILAR: We have about 30 seconds, or so for each of you. Top political story of 2014, what would you say --

(CROSSTALK)

MILLER: I would say it's Ferguson and Staten Island and the sense of the difficulty of coming together at a moment of intense demographic change. And I think magnified by economic stagnation. This is a big challenge facing the country over the coming years.

BERG: I would absolutely pick Eric Cantor's shocking loss in his primary in Virginia, which was historic on its face. The first time a sitting majority has lost his primary. But also, look at the ripple effects of this. At that point, immigration seems like it could happen and Republicans looked at that race and got scared. They said this is why he lost this race. And then, you know, if it weren't for that, maybe today we'd be talking about Speaker Cantor and his relationship with President Obama.

KEILAR: And what do you think?

BROWNSTEIN: I'm going with foreign policy. We have troops on the ground in Iraq. We have -- whether it be Cuba. A year ago we wouldn't that think 2016 would be about foreign policy. It would be issues of income and inequality. There's trouble in the world with Russia, with Ukraine, with ISIS in the Middle East. I think now we'll see a lot of Republican candidates -- really, anyone who wants to run for president is going to have to talk about foreign policy. Congress wants to talk about foreign policy. This is now on the front burner. This is going to be one of the most important stories of 2014 but also into 2015 and 2016 as well.

KEILAR: I'm going to go with the story I thought that might have been the bigger story, which is the Hillary Clinton story about the splash that she made and whether it's going to be enough going into 2015 and 2016. I wonder if it's gearing up. And we will look back and kind of --

(CROSSTALK)

BROWNSTEIN: And say there was rust to work out?

KEILAR: Yes. And in retrospect, perhaps it will be more impactful than we thought it was. We'll see.

Zeke, thank you so much.

Rebecca, Ron, thank you for being with me.

Don't miss CNN's "Top 10 of 2014" special with Brooke Baldwin this Sunday at 6:30 eastern.

Still ahead, Vladimir Putin delivered a lump of coal during his December 25th government meeting. We'll have the details ahead.

(COMMERCIAL BREAK)

KEILAR: President Putin has signed a new updated version of Russia's military doctrine, and while the majority of it remains unchanged, the new sections outline the threats to Russia's national security. And among them, NATO's expansion and military buildup in Eastern Europe. Russia is worried about the possibility of a foreign troop deployment in Ukraine. NATO responded to Moscow's concern saying it poses no threat to Russia or any other nation.

The other concern for Russia is the economy. President Vladimir Putin announced that he is cancelling holiday vacations for members of the government, saying they cannot afford extensive holidays, at least not this year.

Erin McLaughlin is in Moscow watching this.

Eric, this is quite the about-face from last week when you had Putin blaming the West for all of Russia's problems. ERIN MCLAUGHLIN, CNN CORRESPONDENT: Well, to a certain extent,

Brianna, President Putin saying that the government has a role in all of this. But really that it needs to be focusing, he said, on restructuring the government's economy -- or the country's economy, rather. And there is this joke going around Russia, going around Moscow right now that the ruble, the currency here is so low that many of these ministers probably couldn't afford to party anyway.

But joking aside, President Putin's announced that he's cancelling vacation, really serves to illustrate the critical state of the Russian economy today. Russia's finance minister announcing that the economy could contract in 2015 by as much as 4.5 percent. That is, if oil remains at around $60 a barrel. Inflation is high. As I mentioned, the ruble is low. Ordinary Russians really are suffering here -- Brianna?

KEILAR: And how are ordinary Russians responding to this news as they do suffer?

MCLAUGHLIN: Many people that I've been talking to say they're really feeling the pinch. Their salaries have remained the same, and yet the cost of living has increased. And many say they want to see their government take action. Take a listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE (through translation): It's good, as long as they don't cut our holidays. Let the government officials work. Seems like they are not tired this year.

UNIDENTIFIED FEMALE (through translation): The government shouldn't have any holidays. They fail to perform.

UNIDENTIFIED MALE (through translation): Everything became more expensive in shops and they promise it will be more expensive in the New Year, so everything, food and household utilities, became more expensive. The price bites.

(END VIDEO CLIP)

MCLAUGHLIN: So president Putin's decision to cancel the holiday leave for government workers seeming to play well here in Russia, even though the root causes of this crisis persist. Latest opinion polls out today show that he still enjoys an 85 percent approval rating here in Russia.

KEILAR: Amazing. What many leaders would be so jealous of.

And happy holidays to you, Erin McLaughlin in Moscow for us. Thank you.

And just ahead, many happy returns. A look at why this is the second- busiest shopping day for retailers. We'll be checking that out.

(COMMERCIAL BREAK) KEILAR: We're taking you live now to Glendale, New York. This is where the wake for New York police officer, Rafael Ramos, is about to begin. This is a police officer who was very special, not just to his friends who knew him as Ralph, but also to the people in the community there. He believed that his work as a police officer was essentially a ministry. He was actually in training, just hours away from becoming a lay chaplain in graduation from a community crisis chaplaincy when he and his fellow officer were gunned down in their patrol car. He is survived by his wife of more than 20 years and his sons Justin and Jayden, and we are awaiting that wake to begin there in Glendale, New York. We'll be monitoring this.

Now, turning to news about your money. Stocks are trading higher, but the markets are relatively quiet on this Friday after Christmas. Right now, the Dow is -- what do we have? Above 18,000. Up 57. Let's say that. The S&P, the NASDAQ, they are also in positive territory. This has been a stellar year for stocks. On Tuesday, the Dow closed above 18,000 for the first time ever.

And if you're like millions of Americans, you're probably heading out to the mall today. This is a critical day for retailers across America. In fact, it's the second-busiest shopping day of the year. It's also a popular day to return those gifts that weren't quite right. You know what I'm talking about, right? After Christmas exchanges and returns, they are a $65 billion tradition, according to the national retail federation.

CNN business correspondent, Alison Kosik, joining me now to talk about this.

Are we seeing this turn out well for retailers so far?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: It is finally turning out well, because it got off to a very slow start. Black Friday, which is actually turning into a week of Black Friday deals, actually was a big disappointment. But then it looks like shoppers came out late in the season. So it looks like retailers will actually have their best holiday shopping growth in three years. The National Retail Federation says sales are expected to rise 4.1 percent this year. That's more than last year where sales rose 3.1 percent.

Now, to today. Today is the second-busiest shopping day of the year. In terms of traffic, the biggest shopping day is actually Super Saturday, the Saturday before Christmas. And on this day, they're not necessarily just returning and exchanging. A lot of shoppers are looking for bargains because a lot of retailers want to get this inventory moving. They're offering deep discounts on that merchandise. You see a lot of people out there shopping for themselves today. A few things are helping them spend their money. Lower gas prices. That's putting more money in their pockets. Once again, those deeper discounts. Also, improving economic data, that's helping confidence. You have to feel confident when you're handing over that credit card or that cash.

KEILAR: That's right. I know a lot of people are taking advantage of the sales. But it is a big day for returns and exchanges. I'm lucky, because I liked everything I got, and it all fit, which is very nice. But a lot of people aren't in that boat. What's your advice for them?

KOSIK: The number-one piece of advice is bring your I.D. with you. A lot of stores will be asking you for your I.D. They're trying to cut down on fraudulent returns. Excessive returns that people are making. So they're going to ask you for your I.D.

Another suggestion, don't open the gift. You have a better chance of getting a credit and it returned that way.

Also, hopefully, there's a gift receipt, and if there is a receipt, go ahead and check out the return policy for the store. You may actually have a bigger window of time that you don't have to rush there with all the crowds. Maybe you'll have to wait a couple days before you can return it -- Brianna?

KEILAR: Yeah, avoid those crowds.

Alison Kosik, happy holidays to you. Thank you.

KOSIK: Same to you, Brianna.

KEILAR: That's it for me. I'll be back at 5:00 eastern on "The Situation Room."

And for all of our international viewers, "Amanpour" is next.

For our viewers in the North America, "Newsroom" with Pamela Brown starts right now.