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THE SITUATION ROOM

Gridlock on Capitol Hill; Christmas Terror Attacks Planned?; Congress Battles Over Earmarks; Could South Korea Drill Lead to War?

Aired December 16, 2010 - 18:00   ET

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


SUZANNE MALVEAUX, CNN ANCHOR: Well, you don't want to miss Larry's final show. That is tonight live at 9:00 p.m. Eastern.

You are in THE SITUATION ROOM.

Happening now: lots of talk and now threats, but no action on Capitol Hill. Lawmakers are fighting while critical bills are languishing.

Also, captured insurgents allegedly reveal alleged al Qaeda plans for suicide bombings in the U.S. and Europe around Christmas.

And as Wolf Blitzer travels to North Korea on an exclusive assignment, a top U.S. general warns that a South Korean military exercise could cause a chain reaction leading to all-out war.

Welcome to our viewers in the United States and around the world. Breaking news, political headlines and Jeanne Moos are straight ahead. Wolf Blitzer reports on his North Korea trip this hour.

I'm Suzanne Malveaux, and you are in THE SITUATION ROOM.

The clock is ticking. The stakes are enormous, but nothing is getting done on Capitol Hill. Now, in the House, Democratic leaders have pulled the tax cut compromise from consideration, because they are not sure they have enough votes to move it forward. Now, in the Senate, the only thing lawmakers could agree to do was to stop working on the START treaty for now and take up the spending bill to finance the government. That will be happening in the next hour.

But one lawmaker, Republican Senator and Tea Party favorite Jim DeMint of South Carolina, is threatening to force a reading of the 2,000-page measure, which could take two days.

And now Senate Majority Leader Harry Reid is threatening to keep the Senate in session right through Christmas and New Year's, all of the way to January 5.

So, what is this all about?

Let's get insight from an insider, Republican Senator Bob Corker of Tennessee.

Senator, we have seen this happen from time to time, hour to hour. Things are changing now, and people look at this, and they think, this is ridiculous. What is going on, on the Hill? SEN. BOB CORKER (R), TENNESSEE: Well, what has happened is we have a 1,924-page omnibus bill.

And, typically, the way we spend money in Washington, through appropriations process, you would have 12 smaller bills that would come forth. Each of those bills would come to the floor for about a week and people would debate them. You would be able to take out wasteful programs and those kinds of things.

Instead of that, all of this is being lumped together, and we are being asked to vote on it in a very short amount of time. So, it obviously would be much better. These bills really are supposed to come to the floor in July and August and September.

Obviously, Congress did not do its job this year, and what we have ended up doing is having this massive bill come forth. Obviously, people are very concerned about it. It has 6,000 earmarks in it. And I think people are concerned about passing this. I'm obviously very opposed to it.

And I think what we should do, Suzanne, is just pass a three-month, what is called a continuing resolution bill, where we fund government through next February or March, and then we begin making those cuts that we need to make to balance or get our budget or get our spending more in line.

And so that is what we'd all like to see happen.

MALVEAUX: I will get into that, but you said Congress did not do its job this year. Why not?

CORKER: Well, we don't set the agenda on my side. And, by the way, both sides in the past have not done as good as they should. But these bills just never were brought to the floor. They never came to the floor.

Again, the other side in this case does set the agenda. But the fact is the work hasn't been done. And I think that everybody, obviously, is very concerned about a trillion-plus spending bill we haven't even had the chance to read.

So we have got a little bit of a pause. People are trying to go through the bill itself. I'm just fundamentally opposed to this entire process. I am fundamentally opposed to the amount of money that is being spent. I'm fundamentally opposed to 6,000 earmarks and would us, just again, have a short-term spending bill.

Let's move back this year. Let's start cutting spending, much like the deficit reduction commission looked at.

(CROSSTALK)

MALVEAUX: Sure.

Do you have any earmarks in this spending bill?

(CROSSTALK)

CORKER: I don't have a single earmark, except there is a clerical error that lists me on one. I quit earmarking last year. I don't like the process. I signed a letter with some senators. And, somehow or another, I was added in on one national program.

But, no, they know that is not my earmark. I'm not part of the process. I don't like it.

MALVEAUX: All right.

Senator, unfortunately, we have run out of time, but we certainly hope that you and your colleagues get the work done that needs to be done in an expedient fashion, so that, obviously, we can get on about the business of getting things done for the American people.

Thank you so much, Senator.

CORKER: Thank you so much. I appreciate it.

MALVEAUX: Appreciate it.

The al Qaeda affiliate responsible for some of deadliest violence in Iraq may now be plotting suicide attacks in the U.S. and Europe around Christmas.

CNN's Deborah Feyerick is working the story for us.

And, Deb, what do we know about this?

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, Suzanne, the original threat information allegedly comes from two captured Iraqi insurgents. Iraqi authorities tell a U.S. official the insurgents claim al Qaeda is planning suicide attacks in the United States and Europe during the Christmas holiday. Iraqi Foreign Minister Hoshyar Zebari is in New York City today. This is what he had to say.

(BEGIN VIDEO CLIP)

HOSHYAR ZEBARI, IRAQI FOREIGN MINISTER: There are some threats that they may activate their networks, you see, during Christmas or the holidays. Really, our job really is to alert on the basis of the intelligence to share it with the relevant countries.

(END VIDEO CLIP)

FEYERICK: Now, I spoke to numerous sources. The general feeling is they are a bit more on edge today than they were yesterday, before the threat was made public.

Several people who thought they would be leaving early for Christmas,, instead, they are saying they're going to stay put, run down leads and reevaluate intelligence, taking the possibility of a threat very seriously.

Now, keep in mind one of the men in Sweden's weekend car bombing on a crowded shopping street was an Iraqi Swede. White House spokesman Robert Gibbs had this to say.

(BEGIN VIDEO CLIP)

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: We know that al Qaeda and its extremist affiliates want to and seek to do harm and damage in Europe and in the United States.

(END VIDEO CLIP)

FEYERICK: It was short, it was sweet. U.S. agencies and security experts usually on high alert at this time of the year. Law enforcement agencies right now very sensitive and extremely vigilant, even though there are no specific details concerning any possible threats to New York, Washington or any other U.S. city -- Suzanne.

MALVEAUX: And, Deb, the most famous Christmas Day bomb plot, the so- called underwear bomber, I understand he was in court today. Tell us about that. What actually happened?

FEYERICK: Well, prosecutor brought two new charges against Umar Farouk Abdulmutallab. He's the Nigerian student who tried to blow up a U.S. passenger jet over Detroit almost a year ago.

He had been charged with attempted murder and use of a weapon of mass destruction. Today, he was also hit with conspiracy to commit an act of terrorism transcending national boundaries. He was also charged with possession of an explosive device and furtherance of an act of violence. Both of those charges carry a maximum life sentence.

He is acting as his own lawyer. He stood silently as the charges against him were read. The judge entered a not guilty plea on his behalf. And a trial date is expected to be set in January, January 12 -- Suzanne.

MALVEAUX: OK, thank you, Deborah.

I want to get more with CNN national security contributor Fran Townsend. She was homeland security adviser to President George W. Bush and is a member of the CIA and Homeland Security External Advisory Boards.

Fran, what do we know about this alleged plot? What does this mean for us?

FRANCES TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: Well, Suzanne, the government has to take every lead and run it all down and make sure it is not a direct and credible threat, but we have to remember this builds on what we have heard going back.

Law enforcement and intelligence have been very clear that they have seen this growing threat going back to late spring, early summer of this year, and we have seen governments around the world respond to that. The French, the Germans, the British have increased their security measures, and so this should not be terribly surprising.

The government typically before a holiday does step up their security screening procedures. We saw in the U.S. they did that just before Thanksgiving. And so I think this is part of kind of the new normal, if you will. Travelers should expect increased security measures and randomness added.

Sometimes randomness, Suzanne, is not because they are not competent. They do that to throw off people, so that the bad guys, if they are watching them, don't know what to expect when they hit a screening post.

MALVEAUX: So, do we know -- do we know think this is a very specific, credible threat or this kind of a general feeling that, OK, holiday season, we might be under some sort of plot or plan by al Qaeda?

TOWNSEND: No, everyone I have spoken to, law enforcement and intelligence officials, say there is no specific and credible intelligence information saying that there will be an attack inside the United States.

There's been -- it is more than just a feeling though. They have seen increasing intelligence that al Qaeda is both intending and planning to launch attacks around Europe and in the U.S. And they have done a lot of work to try and disrupt those plots when they can identify them in Europe.

And I think, because of all that, this increase in activity, look, there have been more unsuccessful attempts in the last 12 months than any other 12-month period, and so they are right to take every threat seriously.

MALVEAUX: The D.C. metro system just announced that they are going to be undergoing random bag checks. Do you think that is a good idea? Is that necessary or does it seem like an unnecessary intrusion?

TOWNSEND: No, I think it is necessary, it's effective, and, oh, by the way, it is also cost-effective.

The New York City Police Department has been doing it in the New York City subways. You go into a subway station one morning and all of a sudden they're there. You don't know what mornings they will be at which stations. They also sometimes have the bomb-sniffing dogs on trains.

All of the randomness of this makes it much harder for al Qaeda to plan an attack and know they will be successful, because after all their greatest resource are their operatives and you don't want to risk having an operative get arrested and have an unsuccessful attack.

MALVEAUX: All right, Fran, thank you so much. Happy holidays. Hope we are all safe. Thanks, Fran.

(CROSSTALK)

TOWNSEND: Thank you.

MALVEAUX: Well, a crucial new review of the war in Afghanistan. Will the U.S. be able to start bringing home troops next July, as planned? And 20 states suing to block the health care reform law were in court as this pivotal federal trial begins.

(COMMERCIAL BREAK)

MALVEAUX: We are now hearing from Wolf Blitzer, who is now in Pyongyang, North Korea. He is with Governor Bill Richardson. He is on the phone now.

Wolf, I understand -- can you hear me?

WOLF BLITZER, CNN ANCHOR: Yes, I hear you fine.

MALVEAUX: I understand it is about 8:15 in the morning there, Friday morning. Can you give us a sense when you arrived? It's your first full day. And what is on the agenda?

BLITZER: Yes.

It is a snowy day outside, but it is going to be an important day for Bill Richardson, the U.S. governor, the governor of New Mexico, the former secretary of energy -- excuse me -- secretary of energy, former U.N. ambassador.

He's got meetings today scheduled with high-ranking North Korean officials, including the new vice minister for U.S. affairs, a man by the name of Rhee Yong-Jo (ph). They are in the process of renegotiating what else he is going to be allowed to do, what he is going to be allowed to see.

There is going to be a major meeting tomorrow, though, already agreed to with North Korea's chief nuclear chief negotiator, Kim Kye-Gwan. He is the first vice foreign minister. He is the man who actually invited Governor Richardson to come here to Pyongyang for these meetings.

Tonight, there will be an official welcoming banquet in his honor here in Pyongyang. And that will set the scene, I assume, for these efforts to try to cool the situation between North and South Korea right now, which, arguably, is the tensest situation since the end of the Korean War, the armistice, back in 1953.

So these are important meetings. And everyone assumes in the Richardson delegation that the North Koreans have some messages they want to convey not only to him, but more importantly, presumably, to the U.S. government, to other governments, the South Koreans, the Chinese, and to the world, through the news media.

And that is one of the reasons they allowed CNN, me specifically, to come in and cover these talks. So, we are just beginning a full day here. It is Friday morning. And we will see how it goes, but so far so good. Everything seems to be moving in the right direction.

MALVEAUX: And, Wolf, what have you seen so far since you have landed?

BLITZER: We flew from Beijing to Pyongyang on Air Korea. That is the official North Korean airline. It is a Russian-made Tupolev jetliner. Everything was smooth, about an hour-and-a-half flight. It landed at Pyongyang Airport.

We were received by -- Richardson was received. We were watching it -- received by high-ranking North Korean officials. There was the North Korean official state news media that had gathered here.

Then we were taken in a motorcade from the airport to this hotel about a half-hour away where we are staying. And we all had a private dinner last night, just relaxed. And today is the start of these official talks.

I know that Richardson is very, very engaged with the North Koreans and in trying to negotiate access to some areas that have previously been restricted that he has not been allowed to go and he would very much like to go to, specifically some of the nuclear facilities that the North Koreans have in Yongbyon and maybe elsewhere.

So, we will see how he gets going on that. We are scheduled to be here until Monday, when we fly back to Beijing. So it will be an intense three or four days.

MALVEAUX: And, Wolf, how are you allowed to actually communicate with us? I know there are a lot of restrictions once you land there in North Korea. Can you talk at all about those arrangements?

BLITZER: They have allowed me at least for now -- and we are still in the process of negotiating satellite broadcasting and stuff like that -- as of now, I can't do that.

But they have no problem with me going to my hotel room, which is where I am at right now, and making an international phone call to you. So I'm on the phone and I'm reporting what is going on. There is a reporter here covering this from "The New York Times" as well. And she's one of their Beijing reporters. And, presumably, she is going to be filing via phone for "The New York Times."

I don't have access to the Internet here. But we are working on that. That may change. Hopefully, that will change, maybe later today. We will see. But right now, it is -- all of this is a work in progress.

MALVEAUX: Sure.

BLITZER: And we are carefully trying to walk through the various areas where they are sensitive, where they're not so sensitive. But as far as this phone interview, this debrief that you are doing with me, they did not have a problem with that.

MALVEAUX: And give us a sense of how big the delegation is. Who are you actually traveling with and who have you met when you landed on the ground? Is it a small group of North Korean officials? Do they have journalists as well, or do they have minders or people who are watching you?

BLITZER: The Richardson delegation is very small. He's here with, I think, four or five of his aides, including one of his good friends who is a real expert on North and South Korea.

And so -- and some of his other aides are here as well. But that is a very small delegation. As far as the news media, me, our CNN photographer and this "New York Times" reporter, that's basically it. So Richardson is traveling rather lightly.

The North Koreans, there are a lot of North Korean officials here all over the place, obviously. And they are making sure that he gets what he needs. And they are protecting him. And it's an interesting -- I'm going to put it this way. It's an interesting environment, what is going on.

Sort of, you know, it is a little different. Even the restrictions, which were rather limited, that we had in Beijing the other day, virtually none, obviously here, it is much more complicated.

MATTHEWS: Are you able to walk outside of the hotel, walk freely on the streets and view for yourself what is going on? Or how is that...

(CROSSTALK)

BLITZER: Yes, but I'm accompanied -- I'm accompanied by North Koreans.

But it is -- walking outside the hotel now is not that great, because it is freezing cold outside, maybe 10 degrees Fahrenheit, and snowing. It is beautiful. I mean, it is a beautiful sight, but it is bitter cold. So I would not exactly go outside for a run right now.

(LAUGHTER)

BLITZER: I did try when I got up this morning to go to the little gym they have here to do a little running on the treadmill, but, unfortunately, it was closed.

MALVEAUX: I admire your persistence there, Wolf. Quite amazing.

BLITZER: But they told me they would open it up later for me.

(LAUGHTER)

MALVEAUX: Your influence is worldwide.

Take us back a little bit to tomorrow. You said you are meeting with a top nuclear negotiator, that Governor Richardson is. What is his hope that comes out of that particular meeting?

BLITZER: He is hoping, when he meets with the chief nuclear negotiator of North Korea, the first vice minister, Kim Kye-Gwan, he is hoping that he will get access to the Yongbyon nuclear facility.

I think they want -- Richardson, I know, wants to try to persuade the North Koreans to calm the situation down. These recent incidents have really ratcheted up the tension between North and South Korea. His goal is to see if they can get back to some sort of dialogue and for the North Koreans to take some of the steps that they earlier had indicated they would take.

Now, in the face of all of these tensions, the North Koreans insist the South Koreans and the U.S. are provoking them, and that is why these tensions have ratcheted up. Obviously, you get a different story from the South Koreans and the U.S.

But Richardson's goal is to hear what they have to say, offer them some of his own views. And he has a lot of sharp views, as you know, on these issue. And hopefully it will calm down things a bit, but it is a work in progress.

This visit by Richardson, by the way, is one of several that have recently occurred in the last few weeks here to North Korea by other U.S. experts. We had Siegfried Hecker of Stanford University, the former head of the National Lab at Los Alamos. He was on our show yesterday. He was here. He had access to previously restricted areas, as did Charles Pritchard, Jack Pritchard of the Korea Economic Institute, a former high-ranking Clinton administration expert on North Korea.

So Richardson's delegation is the third one that we have seen here in the last few weeks. And the North Koreans clearly want to use this as an opportunity to send their message to him and to the rest of the world. And that is presumably what is going to happen today, tomorrow, and Sunday. And we get ready to leave, go back to Beijing, on Monday.

MALVEAUX: And, Wolf, you talked to the governor about whether or not he had the blessing of the Obama administration. What is the thought about this mission, going as a U.S. citizen, a civilian, not as a diplomat? Does he have the approval of the president? Is he delivering a message from the president, or is he simply going as a private citizen?

BLITZER: He is simply going as a private citizen. He says he obviously consulted with the Obama administration. They didn't tell him not to go, and as they did on an earlier occasion, six months ago, when he was invited, and he didn't go at that time.

At the same time, they are not really thrilled, based on my personal conversations with Obama administration officials before I left Washington. They're concerned he will be used for propaganda purposes.

But they did not tell him not to go. He says he is not carrying any specific messages from the president or the secretary of state or anyone else. He is just going as someone who has been a longtime visitor to North Korea. He's been here many times. He has brought back prisoners. He has brought back remains. He's been engaged with the North Koreans as a member of Congress first, later as the U.N. ambassador, secretary of energy, and now as a governor.

But he is here as a private citizen. He's wrapping up his two terms as governor of New Mexico on January 1. And he is just someone who is concerned about the tensions, he says, and that is why he came. He does suspect, based on previous experiences, that the North Koreans will give him a message to deliver back when he get back to the United States. We will see what that is. We will see if that happens.

MALVEAUX: And, Wolf, you said -- final question here. You said that it was important to get access to their nuclear facility. Why is that important? What does the governor and his delegation hope to see or find out from visiting that facility?

BLITZER: Well, it seems, based on what Siegfried Hecker saw -- he is the expert on all of this -- that the North Koreans over the past year or have really moved quickly in expanding their nuclear uranium enrichment program. They're moving to a whole new level.

And it has been widely reported, including in "The New York Times," that they now seem to be considerably more advanced than the Iranians in this front.

So, I think that Bill Richardson, the governor, who himself has become sort of an expert on these areas since he was the secretary of energy, I think he wants to get a firsthand look at what is going on, so he will have a better appreciation and as a result the rest of the world will, presumably, as well.

And from my perspective, as CNN's correspondent here, I am hoping we will have access and we will able to show our viewers what is going on as well.

MALVEAUX: Wolf, thank you so much for your insights. We appreciate your updates. Obviously, we will keep posted and updated on your trip out of Pyongyang, North Korea.

Our own Wolf Blitzer there with a very small delegation, Governor Bill Richardson. Perhaps we will get a message from the North Korean government that will be delivered here through this very special and exclusive trip.

We will be right back.

(COMMERCIAL BREAK)

MALVEAUX: Tea Party supporters voted for change, but they are outraged to find it is business as usual on Capitol Hill, where the bill financing the government for the next year is full of spending on lawmakers' pet projects called earmarks, also known as pork barrel spending.

Our CNN's Jim Acosta has more -- Jim.

(BEGIN VIDEOTAPE)

JIM ACOSTA, CNN CORRESPONDENT: Suzanne, remember all those Tea Party leaders who got behind Republicans in the last election in the hopes of ending wasteful spending in Washington? They're already talking about another revolt in 2012 over earmarks. (voice-over): It was the battle cry of the Tea Party: Cut government spending. Now some of those same Tea Party leaders smell "hyporkrisy," as in hypocrisy over all of the pork in the $1 trillion government spending bill that funds federal agencies.

(on camera): If a Republican votes for this spending bill, watch out?

AMY KREMER, TEA PARTY EXPRESS: Oh, we will go after them, yes. We are not going to accept it. We are absolutely not going to accept it. There's all kinds of pork in there.

ACOSTA (voice-over): Earmarks in the bill top $8 million, and it's more than just the $165,000 for maple research in Vermont. According to the spending watchdog Taxpayers for Common Sense, top senators in both parties have requested dozens of earmarks worth hundreds of millions of dollars.

The group says Senate Minority Leader Mitch McConnell's pet projects add up to $86 million.

KREMER: We're not going away. We're here to stay.

ACOSTA: Tea Party Express Chairman Amy Kremer says she has fire coming out of her ears over earmarks.

KREMER: Bovine waste from I can't even remember where. I think they need to focus on bovine waste coming out of Washington, D.C.

ACOSTA: As Texan Republican John Cornyn took to the podium and vowed he will vote against the spending measure, a reporter reminded him his earmarks are in the bill, too.

QUESTION: The bill contains many earmarks that you requested? Why are you opposing this bill when it includes things that you have called for in there?

SEN. JOHN CORNYN (R), TEXAS: I intend to vote against those earmarks, because I think the American people sent a message on November the 2nd saying they want a new way of operating in Washington.

ACOSTA: But the old ways, Tea Party leaders say, are hard to break, like the deal to extend the Bush tax cuts crafted by Republicans leaders in the White House that include some giveaways to special interests.

Indiana Republican Mike Pence wants to put off that vote off until January, when the GOP will control the House.

(on camera): To those Tea Partiers who have a little buyer's remorse right now, you would say?

REP. MIKE PENCE (R), INDIANA: The new Congress is not here yet. The reality is...

ACOSTA: You are saying be patient?

PENCE: ... Democrats are still in control.

ACOSTA: Democrats insist there are fewer earmarks in this spending bill than in years past, but that is not stopping Senator John McCain from tweeting out what he considers the most egregious earmarks. His number one, $10 million for a foundation to honor the late Democratic Congressman John Murtha, who was once dubbed the king of pork on Capitol Hill -- Suzanne.

(END VIDEOTAPE)

MALVEAUX: Thanks, Jim.

Let's get more with our CNN chief national correspondent, John King, host of "JOHN KING, USA," which begins at the top of the hour, also CNN chief political correspondent Candy Crowley, host of "STATE OF THE UNION" Sunday mornings at 9:00, and CNN senior political analyst Gloria Borger.

Thank you so much for joining us.

Obviously, there's a lot that's going on at the Hill. Maybe not a lot that's going on at the Hill, which is the problem here.

CANDY CROWLEY, CNN ANCHOR: You got it.

MALVEAUX: What do you make of this? We've got the Tea Party folks who are looking at the spending bill and say, "We don't like this. It's full of earmarks and pork."

And we've got established Republicans who are -- you know, they want their projects done. They're trying to get them in, get them squeezed in before the new Congress. Is this going to be a split? Are we seeing a standoff here in the Republican Party?

CROWLEY: I don't -- no, I mean, I think you will see this play out, and come up and go back down again over the course of next year and the year after. The problem is whether it will have resonance in the way it did in this past election year. I'm not sure it will.

I mean, in the end, you know, politics is the art of the doable, and if there's one thing that Republicans took away from this past election, it was not just stop spending. It was also get something done. And sometimes you've got to -- as the president is learning, you have to give a little on stuff you don't particularly like. And I think that's what, in the end, the Tea Party folks will find out, as well.

JOHN KING, CNN ANCHOR: And I think we will find out just how seriously the Republicans who won, especially the Republicans who were here before the election, who were not Tea Party favorites, but the older establishment, we're going to find out in the next few months how much they fear the Tea Party, how much they fear a challenge in the next cycle.

Do they think it was just a one-campaign wonder, and by the time we get to 2012 and beyond, the Tea Party won't have as much legs. Because what you have now, there's a lot of guys saying, "Well, I'm against my earmarks for now. I was for them then." Or they were for them before they were against them. We've heard it before. But we don't know how this is going to play out until, as Congressman Finn (ph) said there, we get to the new Congress.

MALVEAUX: Do you think there were...

(CROSSTALK)

MALVEAUX: ... how strong they were, Gloria?

BORGER: Well, there's conflicted messages here, you know, as you point out. "Well, I put my earmarks in, but that was before I was told not to put my earmarks in." OK. What do you believe? Do you want you earmarks or don't you want your earmarks?

And we're seeing this start to play out in the presidential, already, too, because on the tax-cut bill, there's a question of, OK, $858 billion. You've got a lot of Republican presidential wannabes out there, Mitt Romney and Sarah Palin to name two, saying, "OK, we're against this bill," and then you have John Thune, who's a member of the United States Senate saying, "You know what? We had to deal. We had to get it." And that's going to be set up for 2012.

CROWLEY: Well, remember, what looks potent now might not necessarily be potent two years from now. I bring you the Iraq debate and Hillary Clinton who, we all said, "Oh, she's positioning to run for the presidency. She's going to vote for this war." And by the time she got to the primaries, it was like an anvil around her. Right?

So you know, it just is -- it is -- politics is pretty fleeting in terms of what has potency.

KING: And all of the groups -- the liberals are mad now, because this is a compromise. The Tea Party people are mad because this is a compromise. Divided government forces compromise, and it leaves the groups on the extreme unhappy. The question is does it boil or does it just bubble?

BORGER: And when you talk about divided government, what about the House and the Senate? That's divided government, because the folks in the House don't trust the people in the Senate, and that's within the Democratic Party. So you know, that's part of what's driving all of this is all this crazy warfare going on, because these people haven't trusted each other for the last two years.

MALVEAUX: And Senate Majority Leader Harry Reid is now saying -- he's threatening that this is going to be business through perhaps not only Christmas holiday, but New Year's going into January 5. How do we think this is going to play out the next couple of days or even weeks?

BORGER: Who knows?

CROWLEY: Exactly. That's not a question that any of us should answer. I mean, you know, they went to Christmas Eve last year on health care. If they can find -- you know, sometimes it's a ploy, let's get together or we're all going to sit here. None of them want to stay here through the holidays, and I suspect they won't.

But you know, at the moment, they're dealing with a lame-duck Congress that has to do some stuff. And so, you never know how far they're going to push it. Honestly, I'm a little surprised at the continuing animosity here. I think -- because it seemed like it kind of went down, then boy, the bad blood is terrible.

BORGER: But there are big issues. Like -- like you know, arms control and the START treaty. "Don't Ask, Don't Tell" is hanging out there, Republicans saying we're not going to do any of that until we get the spending bill done, Jim DeMint saying, "It's sacrilegious to keep us here, but by the way, I'm going to read the entire spending bill for the next four days."

KING: Washington is like the fifth grade sometimes.

(CROSSTALK)

KING: We just went through a very raw election, and to Candy's point, normally -- normally, they say, "OK, now it's time to just figure it out. Here's a list of ten. We're going to do six and go home for Christmas." It's taking longer this time because of the rawness.

MALVEAUX: Do we think it's going to be improved in the next Congress in January? Do we see any signs of change?

KING: Yes and no. You have to pass a budget. They're going to have to raise the debt ceiling. That's going to force the Republicans to do some things they don't want to do. It's going to force the president to do some things they don't want to do. That's why this is so hard in the House right now, because they still have the gavel and they're being forced to do things they don't want to do.

BORGER: It's up to Obama. Honestly, it's up to the president. Let's see what he says in the State of the Union. Let's see what's -- what gets done here by the end of this lame-duck session. I think his State of the Union is going to be a very big message.

CROWLEY: And just again, I think back to the message. The message is do something. I don't think either side can afford to come in next year and sit around like this and be idle. They've got to do something.

KING: Do you guys want to draw straws to see who gets to be here anchoring and then toss to Anderson Cooper and Kathy Griffin?

(CROSSTALK)

MALVEAUX: You'll be at home. All right. Thanks, guys.

Te war in Afghanistan at a crossroads. Will the U.S. be able to start bringing troops home next summer as planned? Details of a critical new war review.

And a top U.S. general warns of a possible chain reaction that could lead to a new Korean war. (COMMERCIAL BREAK)

MALVEAUX: A critical review of the war in Afghanistan is out, and it notes significant progress with significant challenges still remaining, but it says that the U.S. is on track to start bringing home some troops next July.

The report cites gains against the Taliban but calls them "fragile and reversible." It says progress in the relationship with Pakistan is "substantial but uneven."

And as for al Qaeda, the report says its "senior leadership has been depleted" and its terror capabilities degraded.

President Obama ordered the annual review, and he touted it at the White House with top members of his administration and the military by his side. But the president also warned that the Afghan war continues to be what he called a very difficult endeavor.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We remain focused on the three areas of our strategy: our military effort, to break the Taliban's momentum and train Afghan forces so they can take the lead. Our civilian effort, to promote effective governance and development. And regional cooperation, especially with Pakistan, because our strategy has to succeed on both sides of the border.

(END VIDEO CLIP)

MALVEAUX: The president also announced that he'll travel to Pakistan next year.

Well, South Korea is about to begin a round of military exercises on the same island that was shelled last month by North Korea. The drills have the blessing of the State Department.

(BEGIN VIDEO CLIP)

P.J. CROWLEY, STATE DEPARTMENT SPOKESMAN: South Korea is entitled to take appropriate steps in its self-defense, making sure that its military is -- is prepared in the event of further provocations is a perfectly legitimate step for South Korea to take.

(END VIDEO CLIP)

MALVEAUX: But some U.S. military leaders have a different take and a serious warning. Our CNN Pentagon correspondent, Barbara Starr, has those details.

And Barbara, tell us what's going be on here. Is there a division or a split?

BARBARA STARR, CNN CORRESPONDENT: Well, you know, where you stand is where you sit. That's an old cliche for a good reason. The Pentagon, where they stand is they are paid to worry about threats, and that's what they are worried about right now.

South Korea announced it's going to begin this live fire artillery drill. General James Cartwright spoke today about this. He is the vice chairman of the joint chiefs, a very pragmatic man. And he is concerned, he says, that once this live fire exercise starts, North Korea could respond, South Korea could fire back, as happened a few weeks ago when this island, this very island was shelled. And listen to what he had to say about what his bottom-line concerns are right now.

(BEGIN VIDEO CLIP)

GEN. JAMES CARTWRIGHT, JOINT CHIEFS VICE CHAIRMAN: What we worry about obviously, is that if that is misunderstood or if it's taken advantage of as an opportunity if North Korea were to react to that in a negative way and fire back at the -- at those firing positions on the islands. That would start potentially a chain reaction of firing and counter-firing.

What you don't want to have happen out of that is for the escalation to be -- for us to lose control of the escalation. That -- that's the concern.

(END VIDEO CLIP)

STARR: Lose control of the escalation. Very serious words from the U.S. military about the potential escalation on the Korean Peninsula. Behind the scenes, the Pentagon has been trying to urge South Korea to not go ahead with some of the scheduled live fire drills.

They're entitled to, of course, but it's very provocative, and nobody wants to see another incident with the north. That's the concern here at the Pentagon. And by the way, there will be a handful of U.S. troops on scene when these live fire drills begin -- Suzanne.

MALVEAUX: OK. Barbara, thank you so much.

Many people thought the president's pen put an end to the fight over health-care reform, but it's not over. The battleground has moved now from the Capitol to the courtroom.

And frigid weather gripping much of the United States. Now a massive recall of heaters, two million of them. We have details of the hazard they pose.

(COMMERCIAL BREAK)

MALVEAUX: Wal-Mart is announcing a huge recall of heaters. Don Lemon is monitoring this and other top stories that are coming into THE SITUATION ROOM right now.

Hey, Don. What do you have?

DON LEMON, CNN CORRESPONDENT: Hey, you're right about that. The retail giant Wal-Mart recalling more than two million Chinese-made heaters that pose a, quote, "fire and burn hazard." So far Wal-Mart has received four reports of minor injuries and 11 reports of property damage. The affected brands are Flow Pro, Airtech, Aloha Breeze, and Comfort Essentials. The company is telling customers to bring in the units for a refund.

Washington Metro riders, get ready to show authorities your carry-on items. Police announced today they'll start conducting random inspections as part of a program to keep the system safe. They say the inspections will be brief and nonintrusive, but if riders refuse, they can't bring the carry-ons into the station.

Federal agents in Georgia have busted an alleged drug ring, an operation named "Rude Beast." Officials seized almost $3 million worth of Ecstasy from a suburban Atlanta home. A customs officer at Atlanta's Hartsfield-Jackson Airport was among 14 arrests. That agent is accused of taking payoffs from undercover officers to smuggle guns and drug money.

The security guard who wounded a raving gunman at a Florida school board meeting says he is not a hero. Mike Jones spoke to reporters two days after helping end a standoff in Panama City. He described what was going through his head at the time. Listen.

(BEGIN VIDEO CLIP)

MIKE JONES, SECURITY GUARD: I knew the superintendent and I fell backwards and all of the board members fell backwards. And he and I engaged in a gun battle. But I'd lost the superintendent and I'd let him down. And I love him and the board and the board, and I love the school system. And that is all that came to my mind.

And when the superintendent came back from behind that counter, and Franklin Harrison, and he came and hugged my neck, that's when I lost it like I am now. I could -- just crying. I cry at chick flicks, too, y'all.

(END VIDEO CLIP)

LEMON: Well, Jones said he tried to lure Duke outside without luck, though, and in his words, Jones believed he was just doing his job. He -- he says he's not a hero, but Suzanne, I believe he's a hero. And all those people, it's a traumatic experience, but I think they're going to have a great holiday season; a lot to be thankful for.

MALVEAUX: A brave guy. And thanks, Don.

Well, there is a new legal challenge to President Obama's signature achievement. That is health-care reform. We're going to show you why this lawsuit is different.

Plus, the antidote to saggy pants. CNN's Jeanne Moos takes a "Most Unusual" look.

(COMMERCIAL BREAK)

MALVEAUX: A new challenge to President Obama's health-care reform law is under way now in a federal court in Florida. It is the latest of more than a dozen cases questioning whether it's constitutional, but there are several things that set this case apart. Our CNN Brian Todd is in Pensacola for us.

Brian, tell us what you're learning.

BRIAN TODD, CNN CORRESPONDENT: Well, Suzanne, this may be the most intense battlefront right now over President Obama's health-care law. Attorneys here trying to save it and those trying to kill it just duked it out in this courthouse with some people who have a real stake in this watching closely.

(BEGIN VIDEOTAPE)

TODD (voice-over): Bruce Schoon says he lost his painting business ten months ago, has had virtually no health insurance since then, and needs treatment for a stroke and a nerve injury. He's worried about the searingly intense legal battle over President Obama's health-care law.

(on camera) How important to you is it that this law stands?

BRUCE SCHOON, UNEMPLOYED PAINTER: It's imperative. It's imperative to me and to all -- all the people that have worked for me. They've had some sort of condition or another, and making between $13 and $17 an hour plus raising a family, you can't pay $500 of $600 a month insurance.

TODD: Just a few yards away, inside a charged Florida courtroom, government attorney Ian Gershengorn (ph) argues for people like Schoon, telling a federal judge, "We don't turn people away in the emergency room because they don't have insurance. We don't make them take out their appendix. We give them care."

And the only way to give everyone that care, he says is to save the part of the plan that kicks in in a few years, the part that requires healthy people who don't have insurance to buy it, even if they don't want to, so the money can be used to insure everyone.

But that new rule, the linchpin of the health-care overhaul, is under siege. Florida Attorney General Bill McCollum spearheads a lawsuit by 20 states against the federal government. He zeros in on the main point their lawyers made before the judge, citing a crucial part of the Constitution.

BILL MCCOLLUM (R), FLORIDA ATTORNEY GENERAL: There's no economic activity involved. No actual activity here that gets the Commerce Clause connected to it, that gives the federal government the power to order you to buy the product, in this case insurance, or else pay a penalty.

TODD: Judge Roger Vincent seems sympathetic to that argument, saying of the rule to make everyone buy insurance, "There are lots of alternatives to that without imposing on liberties or freedom of choice."

A good indication, says law professor Randy Barnett, of how the judge feels about the so-called individual mandate to buy insurance.

(on camera) If you had to handicap how this is going, how do you think this judge is going to rule?

PROF. RANDY BARNETT, GEORGETOWN UNIVERSITY LAW SCHOOL: If you go by the tenor of the questions she asked, you'd have to think that he would strike down the mandate and uphold the Medicare requirements.

(END VIDEOTAPE)

TODD: Those Medicaid requirements make all states expand their Medicaid programs for poorer patients. The states' attorneys argued here that that would place a huge and unfair financial strain on the states. This judge should rule in the coming weeks whether that provision and the mandate to buy insurance hold up under the Constitution. No matter how he rules expect those two parts of the new law to head to the Supreme Court -- Suzanne.

MALVEAUX: So Brian, if those two provisions of the law go to the Supreme Court and they're struck down, does that mean that health-care reform is dead?

TODD: Experts say it really could mean that, because especially that provision that makes you buy health insurance. That is seen as a key source of revenue that will pay for a lot of other provisions in the plan. If that is struck down, a lot of people think it could mean the death of the entire overhaul.

MALVEAUX: Brian, thank you so much.

A hands-free device for those who like the low look. The market might be limited, but one designer hopes that his invention will catch on.

(COMMERCIAL BREAK)

MALVEAUX: Here is a look at "Hot Shots."

In Japan, Geisha girls shop at an annual fair.

In Kashmir, Muslim women carry empty wicker baskets on their heads as they walk home.

In Oman, the national flag is displayed with fanfare at a sporting event ceremony.

And in Slovakia two puppies born to a finalist on a Slovakian talent show play in a pile of fresh snow.

"Hot Shots," pictures worth 1,000 words.

Well, nothing quite divides the urban community like sagging pants. Defenders say it's fashion. Critics say it's embarrassing. An inventor insists that he's got a solution.

Our CNN's Jeanne Moos takes a "Most Unusual" look, maybe too close, at this modern garter for men. (BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): Look down below. Is it suspenders? Is it a garter?

UNIDENTIFIED MALE: Would you let your husband wear that?

ANDREW LEWIS, SUBS INVENTOR: It's a simple waist strap with four vertical suspender straps.

MOOS: A new invention designed to moderate what some consider the scourge of urban fashion.

LARRY PLATT, "AMERICAN IDOL" CONTESTANT: Pants on the ground, pants on the ground.

MOOS: Saggy pants.

(on camera) He's as low as he can go.

UNIDENTIFIED MALE: That's the limit?

LEWIS: And the idea is the user controls how low they want to sag.

MOOS: For years now the mainstream has tried to stop the sag.

UNIDENTIFIED MALE: This insidious spectacle.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Brothers should pull up their pants.

MOOS: Now there's something that will pull them up or at least keep them from falling way, way down.

(on camera) Now what do you call this thing?

LEWIS: It's called Subs.

MOOS: Short for subspenders. Inventor Andrew Lewis noticed the guys wearing saggy pants...

LEWIS: ... were constantly hiking and pulling like there's a point which even for them their jeans fall too low.

MOOS: Now they can fasten Subs onto their pants. Normally, you do it with pants off, but since we were on Seventh Avenue...

UNIDENTIFIED MALE: All right.

MOOS: No more tripping over your own saggy jeans.

UNIDENTIFIED MALE: I feel free now. I can run. I can jump. I don't have to worry about constantly pulling them up. I like it. I mean, we want to be what we want to be.

UNIDENTIFIED MALE: My wife would divorce me. UNIDENTIFIED MALE: Wow. That's creative.

UNIDENTIFIED FEMALE: So insanely dumb.

MOOS (on camera): It's a new invention to keep them up.

UNIDENTIFIED MALE: Keep them up. Yes, I just wear a belt.

MOOS (voice-over): A belt? How prehistoric.

Subs can be worn invisibly with your shirt over them.

UNIDENTIFIED MALE: I like it, though. But does the belt have different colors?

MOOS: Different colors are planned for the future for those who prefer to flaunt their Subs.

They're sold online for 30 bucks at HatchVentures.com, though Lewis says Macy's men's accessories has asked to see samples.

UNIDENTIFIED MALE: I think it's a lot better, a lot better improvement.

UNIDENTIFIED FEMALE: No offense. You've got a great body, hello, but it's just not really what I want to see.

UNIDENTIFIED MALE: Yes, he has a very cute butt. However, I'm sorry, but no, no. I don't want that for my man.

MOOS (on camera): Here's a back view.

UNIDENTIFIED MALE: Good. I don't think I want to see the back view.

MOOS (voice-over): Of course, Subs might not work on every body.

PLATT: Looking like a fool with your pants on the ground.

UNIDENTIFIED MALE: Think Larry King would wear those?

MOOS: Jeanne Moos...

(on camera) Can we get the rear view again?

MOOS (voice-over): ... CNN...

(on camera) It's one of your best angles.

(voice-over): ... New York.

(END VIDEOTAPE)

MALVEAUX: I'm Suzanne Malveaux in THE SITUATION ROOM.

"JOHN KING USA" starts right now.