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THE SITUATION ROOM

Interview With Congressman Peter King; President Obama's Scorecard; Fight to the Finish over START; Bus Burst into Flames; Grilling on Homegrown Terror; Taking on Radical Muslims

Aired December 20, 2010 - 17:00   ET

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


CANDY CROWLEY, HOST, STATE OF THE UNION: Thanks, Brooke.

Happening now, America's nuclear security on the line -- the Senate is struggling with another controversial item on its end of session checklist. This hour, the showdown over START.

Plus, a welcome show of restraint by North Korea. Stand by for more of Wolf Blitzer's exclusive reporting from a nation that's been threatening to drag the U.S. into a new and dangerous war. And a legal fight over the bloody and gruesome video games available -- a state law to protect children from excessive is being challenged in the Supreme Court.

Wolf Blitzer is reporting from North Korea.

I'm Candy Crowley.

And you're in THE SITUATION ROOM.

Right now, members of the U.S. Senate are pressing ahead with the fight to the finish of one of the most difficult and dysfunctional lame duck sessions of Congress in recent memory. At stake, the START arms control treaty with Russia and one of President Obama's top priorities.

The White House is predicting today that the Senate will approve the treaty and give Mr. Obama another hard-fought legislative win in these closing days of Congress.

We want to begin with our senior Congressional correspondent, Dana Bash.

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, Candy, you know, it really does seem to be up in the air whether or not they do have the votes for this treaty. Democrats I talked to here say that they agree with the White House, that they do believe they have the votes. The president has been working the phones big time today, calling senators. Hillary Clinton, the secretary of State, has been doing the same.

But, of course, what nay need to do is it get two thirds -- a majority in the Senate -- to approve this treaty. That's a pretty high bar, especially in partisan times, especially for what has become a partisan issue in this treaty.

And the other thing is, Candy, they're up against the Republican leader in the Senate, who told you first yesterday that he is a no on this.

But it's not just him. It is his number two, Jon Kyl, of Arizona. He is somebody who had been the point person negotiating with the White House. He now says he is a no. And I'm told by GOP sources he is working it hard to try to convince other Republicans to come his way and vote no on approving this treaty.

Here is the sense and a -- and a taste of some of the debate on the Senate floor today.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: It's unfortunate that something as important as the Senate's consideration of a treaty like this one was truncated in order to meet another arbitrary deadline or the wish list of the liberal base. And it's deeply troubling to think that a legislative body charged with the solemn responsibility of advice and consent would be deprived of this role because it would inconvenience our negotiating partners.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D), MASSACHUSETTS: Is there no shame ever with respect to the arguments that are made sometimes on the floor of the United States Senate?

Is the idea always just say it, just say it, say it enough, go out there and repeat it and somewhere it will stick. Maybe in the right-wing blogosphere or somewhere else, people will get agitated enough and believe somehow that this is being jammed. This treaty is on the floor for the sixth day. It's a simple add-on treaty to everything that has gone before, over all the years of arms control.

(END VIDEO CLIP)

CROWLEY: So, Dana, we're -- we're hearing, you know, the Republicans objecting, you know, that we don't have enough time and they're -- they have some questions about it. But we're also -- you and I discussed this right before going on air, there is just a bad feeling up there at this point. They're fairly annoyed with each other.

How much of this is on principle and how much of it is the Republicans felt they got stiffed, they don't want to bring up "don't ask/don't tell?"

What's the -- what's the mix there?

BASH: It definitely is a mix of substance and tone. But I've got to tell you, more and more, in listening to Republican senators, talking to them in the hallways, I'm getting a feeling it is more tone and atmospheric that you talked about. Anger, as we've heard from many Republicans publicly, that they believe that they are getting crammed and jammed, even though, as John Kerry pointed out in that sound bite, they had at least six days of debate and that the treaty has available for public viewing since April.

But I think that the fact that Democrats are -- are -- and in many cases, successfully, trying to push so many of their issues -- issues that Republicans consider partisan, like passing the "don't ask/don't tell" repeal during -- interspersed with this debate. That has really stuck in many Republicans' craw. And that is definitely playing into some of the growing opposition among Republicans.

CROWLEY: Dana Bash, some long nights ahead.

Good luck.

Keep us posted.

Thanks.

BASH: Thanks, Candy.

CROWLEY: The mayor of New York is asking senators to stop making excuses and pass medical benefits for September 11 rescue workers. Michael Bloomberg was joined by fire and police officials and some lawmakers. The 9/11 health bill has been in limbo since Thursday, when Senate Democrats couldn't muster enough votes to open debate.

(BEGIN VIDEO CLIP)

MAYOR MICHAEL BLOOMBERG (I), NEW YORK: So this is not a vote on whether we should increase the deficit. It's a vote on whether we should stand by those who stood by America in its hour of greatest need. It's a vote on whether we should fulfill our obligation to the men and women in uniform and in hard hats whom we rightly call heroes. And it's a vote on whether the thousands of Americans who are suffering from 9/11-related illnesses will at least have the piece of mind that their government has not abandoned them.

(END VIDEO CLIP)

CROWLEY: Senate Democrats believe they can get enough votes to approve the bill, after they trimmed its price tag to $6 billion too -- $6.2 billion and changed the way it would be funded.

But it's not clear if they'll have enough time to get it done. We are told the final vote probably wouldn't happen until Christmas Eve.

I'll talk about all of this ahead with Republican Congressman Peter King of New York.

The Obama administration says North Korea did the right thing by stepping back from the brink of a potential war. The communist regime did not retaliate, as threatened, for South Korea's military exercises. The live fire drill took place near the same island shelled by North Korea last month -- an attack that ratcheted up tensions on the Peninsula.

New Mexico governor, Bill Richardson, tells CNN his visit helped influence the North Koreans to try to diffuse the crisis.

The North also agreed to allow U.N. monitors to return to its uranium enrichment facility. U.S. and South Korean troops have been on high alert, fearing a dangerous war with the North could turn into a nuclear conflict.

Our brand new poll just released this hour shows 57 percent of Americans think the United States should use its many troops deployed in the region to defend South Korea if it's attacked by the North.

Joining me now, our Wolf Blitzer from Pyongyang.

He is on the phone, obviously. He's been over there covering Governor Bill Richardson in these delicate, delicate times for North Korea -- Wolf,

Wolf, give me a sense of when you first learned and how you first learned that North Korean was, in fact, backing off and would not retaliate against the South for the South's live fire exercises.

WOLF BLITZER, HOST, THE SITUATION ROOM: It's interesting, Candy, because throughout the days that I was here covering Richardson's talks -- and he met with top ranking North Korea officials -- I kept hearing some -- at least private comments to me, as a reporter, that seemed to be a little bit more moderate, a little bit more responsible than some of the earlier statements that they made for propaganda purposes.

But it -- I assumed that once the South Koreans began their live fire exercise on this island, that the North Koreans would respond militarily with some sort of retaliation. That's the statement going into the exercise that the North Korean military had made. And I assume when they make a statement like that, they're not going to back down.

So it was not only encouraging, but surprising, to me, at least, when they formally said, you know what, we're not going to respond militarily right now. It's not -- it's not worth it.

With hindsight, I think it came on the heels of the North Koreans agreeing to some of Richardson's proposals to create a hotline -- at least they were receptive to creating a military to military hotline between North and South Korea; a joint military commission involving the U.S. And both Koreas, as well as allowing International Atomic Energy Agency monitors to come back and start inspecting the -- the nuclear facility.

So it's -- it's -- there -- there was a series of steps that were coming through. And -- and at least in the -- in the statements that the North Koreans were making to me, they seemed a little bit more moderate. But I was still surprised when they -- when they formally announced they weren't going to retaliate.

That -- that seemed to be a new opening. And -- and maybe there's a -- a new chapter. But -- but, of course, we'll have to wait and see.

CROWLEY: So when you talk about the things that Bill Richardson, who is the gov -- the outgoing governor of New Mexico, proposed, he has no official standing with the administration. They clearly know he's on this trip. They'll clearly debrief him when he gets back.

But when he says things like, OK, there should be this hotline and -- and you should do this and you should do that, is there anything that he -- that -- that the governor knows that says to him that South Korea will go along with these things, that the administration is on board or is this pure freelancing?

BLITZER: I don't think it's pure freelancing. And certainly the North Koreans don't consider him to be a freelancer, even though he's here as a private citizen. The Obama administration said to him, if you want to go, go. Six months ago, they said to him don't go after the -- the torpedo destruction of that South Korean warship, the -- the Cheonan, that killed 46 South Korean sailors. At that point he was invited and the -- and the Obama administration said don't go. He didn't go.

This time, they didn't tell him not to go, so -- so he's here.

I think they'd look at him as a -- a United States official, basically. In all of the meetings that I covered, it seems like a government to government meeting. He's there at a table with his two or three aides and they've got a whole team on the other side of the table. There's note takers and it looks very, very formal -- these -- these meetings he's having are anything but informal.

I'm sure he'll go back, he'll brief the Obama administration on what happened and what he saw, what he learned. And I assume it will be useful for the Korea experts in Washington.

But I think he leaves here -- and we're getting ready to leave -- I think he leaves here encouraged by the specific proposals that they accepted, but more importantly, that they refrained from escalating this crisis.

You know, candidacy, this could have been a disaster. This is the most dangerous spot on earth right now -- a million North Korean forces over the DMZ; on the other side, hundreds of thousands of South Korean forces; 30,000 American soldiers in between, not only with artillery and rockets, but nuclear weapons. And this thing could have escalated, it could have exploded -- a tinder box, as Richardson kept calling it.

And -- and the fact that it's calm now, it's quiet, at least for the time being -- it's not over with, by any means -- but it's -- it's -- it's been eased significantly, I think is encouraging.

CROWLEY: Our Wolf Blitzer getting ready to leave North Korea. I know you've got great personal stories. I can't wait to hear them personally from you and -- and also on the air.

A safe trip back -- Wolf, thanks.

BLITZER: Thanks, Candy.

CROWLEY: There is new word on when President Obama is likely to sign the repeal of "don't ask/don't tell." There are still a lot of questions about exactly how and when gay troops will feel safe to open up about their sexual orientation.

Also, the crackdown on air cargo proposes something surprising -- the illegal Cuban cigars -- lots of them.

And take a look at this -- there is a bus in there and passengers still managed to get out.

(COMMERCIAL BREAK)

CROWLEY: We are watching the Obama administration changing course in the way the president deals with Republicans as they prepare to take control of the House. The fate of the START arms control treaty with Russia, now before the Senate, will tell us a little more about the new political dynamic between the White House and Congress.

We are joined by our senior political analysts, Gloria Borger and David Gergen -- Gloria, is there any down side for the Republicans just to kick this into next year?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, first of all, Candy, I think that you'd have to say that blocking START right now looks a lot politically easier for them than, say, blocking unemployment benefits. But I would also have to say that when you have the entire defense and foreign policy infrastructure of the last 40 years, including former presidents, secretaries of State of both parties, against you, it does tend to look a little more political. And the message of this last election was, we want people to work together.

And so, you know, people could say, gee, they're just trying to put this off until the next Congress, why are they doing that?

CROWLEY: Well, so, David, why are they doing that?

DAVID GERGEN, SENIOR POLITICAL ANALYST: Well, I think some people genuinely have concerns about the treaty especially missile defense, but others are really angry about the way they think - they think things has been jammed through by the Democrats here at the last minute.

But I have to tell you, Candy, I think the story that's likely to come out of this is that at least nine Republican senators join the president in voting for START and he's probably going to be more than that. I think the signs point to a victory right now. The big story is going to be the president got two big bipartisan victories, the tax compromise and START coming out here at the end of year and it's going to be a lot about the president's rebound.

CROWLEY: Yes, it's looking like he's having a pretty good December. I want to sort of add to that notion and I want to take a look to both of you -- the CNN Opinion Research Corporation poll.

The question is how will this person's policies lead the country? In a right direction or wrong direction, 55 percent said the president's policies will move the country in the right direction and 48 percent said that about Democratic Leaders, 44 percent said that about Republican leaders.

So Democrats and Republicans about even, but the president enjoying a clear advantage. What accounts for that change, do you think?

GLORIA BORGER, SENIOR POLITICAL ANALYST: Well, I think this also shows quite frankly, Candy, that Republicans don't get a free pass here. They have to prove they can govern, particularly since they're in charge of the House.

But I also think that people -- we've seen this in the president's popularity ratings all along is that they tend to give him the benefit of the doubt over and over again. They say he's trying, they like him. He's personally still pretty popular.

CROWLEY: And David, you know, just last month, he was shellacked. And now 55 percent of the country think the president is going to take the country in the right direction with his policies. What do you make of it?

GERGEN: Well, a couple of things. One, I think the economy is starting to perk up a little bit. Secondly, people have had a closer look now at the Republican agenda, the positive agenda. They want to put forth and what they want to change.

But I have to tell you, Candy, I don't think - what happened the last month is erase the elections. A lot of Americans did vote for Republicans to go and be a brake on excesses and what they thought a Democratic control of Washington was about.

If you asked the Americans what they thought of the blocking of this big omnibus $1.1 trillion spending bill with 6,700 ear marks that just occurred because the Republicans pushed that and Republicans won on that, I think they would say, the Republicans did the right thing by doing that. Americans still want restraint on spending on the big government.

BORGER: Yes, but they also want their tax cuts, don't they? They like the tax cut bill. They seem to want everything and as long as the president is giving it to them, they kind of like them.

CROWLEY: Just sort of quickly David here at the end, it was an OK December for him?

GERGEN: Compared to what Bill Clinton first started 60 days after the elections of 1994. When he got shellacked, this has been a surprising -- I think all of us are hugely surprised at the rebound the president is experiencing.

BORGER: You know, we've never seen the president in this kind of situation with the back against the wall, with the onslaught from conservatives and he kind of turned on a dime, Candy.

So we'll have to wait to see what he does with the Republican Congress. But so far, he's only improved his ratings no matter how mad the liberals are.

CROWLEY: Agility, agility. There are three things you need to be - all right, Gloria Borger, David Gergen, thanks so much for joining us. Appreciate it.

GERGEN: Thank you.

CROWLEY: One woman called it one of the most intense things she's experienced in her life. Ahead, what happened when a bus full of holiday travelers burst into flames?

(COMMERCIAL BREAK)

CROWLEY: Kate Baldwin is monitoring some of the other top stories here in THE SITUATION ROOM right now including the horrifying bus ride for some holiday travellers. Amazing.

The video is amazing. And want a little holiday surprise for you. Take a look at this. A Greyhound bus carrying 29 passengers from Ohio burst into flames on the way to Indianapolis.

Passengers tell our affiliates they've heard a pop an hour before the fire broke out and the flames began spreading after the bus pulled over.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Probably one of the most intense things I've been through in my life.

UNIDENTIFIED FEMALE: It was disarming. I was asleep, like, wow. This is something very strange going on.

UNIDENTIFIED MALE: Open the side window, jumped out. I got everyone off of the bus.

(END VIDEO CLIP)

BROOKE BALDWIN, CNN ANCHOR: Wow. Authorities say it appears a mechanical problem triggered the blaze. Thankfully, no one was injured.

Other things we're watching. British counter terror police have arrested 12 men on suspicion of what's being called preparation or instigation of an act of terrorism in the U.K. Authorities say the arrests in three cities were necessary in order to ensure public safety. A source did indicate that there was no known link to a suicide bombing in Sweden earlier this month.

And an Ethics board has fined New York Governor David Paterson more than $62,000 for what? For soliciting, accepting, and receiving five free World Series tickets from the New York Yankees. Paterson said he always intended to pay for the 2009 tickets, but the board found that claim to be false. No comment yet from the governor or the Yankees?

And finally, Sarah Palin is once again targeting first lady Michelle Obama's signature anti-obesity campaign. In yesterday's episode of the TLC television show, Sarah Palin's Alaska, the former governor and vice presidential candidate claimed to be making marshmallow and chocolate smores in honor of Mrs. Obama who she said discouraged eating desert.

Palin has repeatedly criticized the healthy eating campaign saying parents, not government, should decide what children should eat. Did she recently bring cookies to an event saying the same thing?

CROWLEY: I don't know. I can tell you every campaign I have been on did not have healthy eating.

BALDWIN: I heard that.

CROWLEY: For many of you including her. And the Obamas by the way -- he's a very healthy eater most of the time.

BALDWIN: So we hear. We don't see behind the scenes.

CROWLEY: The incoming chairman of the House Homeland Security Committee is demanding answers about radical American Muslims and home grown terrorism. I will ask Republican Peter King about the hearing to turn into the witch hunt.

We'll show you new and controversial ways police are trying to catch criminals but they could be spying on you too and the U.S. Supreme Court considers whether it's OK to ban the sale of violent video games to kids.

(COMMERCIAL BREAK)

CROWLEY: The incoming chairman of the House Homeland Security Committee is taking on critics who asked him if he was, quote, "a Muslim hater."

Republican Peter King of New York published an article today on why he wants to hold hearings on the radicalization of American Muslims. Congressman King joins us now. Thank you so much.

Because I do think that this has become a difficult topic for people to discuss because you don't want to appear as though you are bias or you will hold any hatred for any particular segment.

And, yet, what we hear about all the time is home grown terrorism. So let me ask you first -- what is the point of these hearings? What do you want to know?

REPRESENTATIVE PETER KING (R) NEW YORK: Candy, right now we have two things going on in the country. One is that al-Qaeda is attempting to recruit if you're a home grown terrorist. They're attempting to recruit Muslims living here in the country because it's become more and more difficult for al-Qaeda to attack us from the outside.

We saw the subway Barber in New York. We saw Major Hasan, the Army officer at Fort Hood who murdered 13 people. We saw Shahzad, the Time Square bomber. All of whom are living legally in the United States.

So on the one hand, we have this reality of attempting to recruit Muslims here in the country. At the same time, we have a real reluctance by Muslim leadership to cooperate with law enforcement in this country. To accept the reality that there's a radicalization going on in the Muslim community. I want to bring this issue out. I believe it has to be discussed. Not just to demonize -- I'll be the first to tell you that 90 percent, 95 percent, 98 percent, whatever the number is of the Muslims are outstanding Americans and they're patriotic.

Whatever reason, there's a reluctance among many Muslim leaders to cooperate with law enforcement. I've seen it in various investigations from talking to law enforcement officials. I hear it time and time again. You also have another reality is that, I believe, it was two years ago, the Pew poll came out and said 15 percent of the young Muslim men between 18 and 29 could support suicide bombings.

So all of these reality out there, I think the Homeland Security Committee there's an obligation on my part have a decision, have it discussed, do it in a rational way not back down when I get attacked for being bias or whatever.

The fact is that this is -- the hearings we should have -- a section of opinion. Get the debate. People talk about it privately and no one wants to talk about it in public.

CROWLEY: Congressman, let me ask you, 18 to 29-year-old men, if you were in certain places in this country and you wanted to recruit for a gang or you wanted to recruit for a large burglary outfit or if you wanted to recruit for, say, the type of organizations that Timothy McVeigh ultimately belonged to, you would find that there are some angry young men who are looking for a venue to put their wrath.

Is this just another venue? Can't it be -- isn't it that simple, that there are going to be people in our society, whether they are Muslims or white American, you know, family going back to the Mayflower, I mean, however you want to put it, there's just going to be a certain amount of unhappy people that are susceptible to that. And it has nothing to do with being Muslim.

KING: Yes, no ethnic group, no religion has a monopoly on crime, on hatred, on bigotry, or violence. Absolutely.

The difference here though is I don't believe that the leadership in the Muslim community is going to work with law enforcement to sort that out, to say we think that so and so is being recruited or is recruiting others. They somehow draw this wall around them. I'll give you an example.

There was a case where Somali-American parents went to law enforcement and said that their sons were being recruited to be suicide bombers in Somalia. When the investigation was begun, an imam in the mosque instructed his members not to cooperate with the investigation.

There's any number of other investigations or processes going on where the police and law enforcement told me they are not getting cooperation from the Muslim community. And that's the difference. And that's why to me it's unfair.

CROWLEY: So your beef is really with Muslim leaders you feel are not cooperating, as opposed to not understanding that people get radical -- particularly young men can get radicalized.

So who do you want to come to these hearings?

KING: Well, we're working on that now, but basically experts in the Muslim community, Muslims themselves. I have actually spoken with one or two fairly prominent Muslim leaders who have told me privately that they want to work with me on this hearing. One of them may actually testify as part of a panel.

It's not going to be a "gotcha" hearing. We're not trying to be pulling out secret documents to catch people saying one thing now different from what they said a year ago. It's really having an intelligent discussion.

And I've met with Muslim leaders in my own community and I asked them why they're not forthcoming. And whether it's cultural or whatever the reasons are, I think we have to get it out there. This is encouraging the Muslim community to be more cooperative, not to see -- not to build this wall around them, not to think that they're being attacked. Because the fact is that I -- prior to 9/11, I had a close relationship with the Muslim community and maybe any other politician.

CROWLEY: Let me ask you because time is waning here, let me ask you about 9/11.

You've been lobbying for this bill for -- it's a health care bill for first responders. You've been lobbying your fellow Republicans.

What is the problem here? This seems like a gimme for any politician to help what most of the country looks at and says these are heroes of 9/11. What's the problem with your Republican colleagues? KING: Well, first, let me take this opportunity to urge all Republicans in the Senate to vote for it. This is an American issue, not a Republican issue.

I think some Republicans have gotten blinded by the fact that it involves New York. They figure if it's going to New York, there must be something wrong with it. That is absolutely untrue.

These are the men and women who put their lives on the line. It's all paid for, it's all going to be documented.

And I can tell you, from constituents in my district, who I see all of the time, they are dying the most hideous deaths -- rare blood disorders, cancers, pulverized glass in their lungs. It's absolutely horrible, what they're going through.

I think somehow people in the Washington, Republicans in the Senate, are seeing this from a distance. They don't realize how real the suffering is, and they some how think there's a gimmick or something involved. It is not.

This is endorsed by Governor Huckabee, by Mayor Giuliani, by all of us who have been there and know what it's all about. So I'm really imploring my fellow Republicans to vote for it.

CROWLEY: Congressman Peter King, thank you so much for joining us on two important topics. We appreciate it.

KING: Thank you, Candy.

CROWLEY: President Obama has scored some major victories since he admitted his shellacking in the midterm elections, but just how much has he really accomplished? The political scorecard ahead.

Plus, it's more than 40 feet high and adorned with $11 million in jewels. Ahead, what a luxury hotel is now saying about its most expensive Christmas tree ever.

(COMMERCIAL BREAK)

CROWLEY: Violent weather is battling the West Coast. Kate Bolduan is monitoring that and some other top stories in THE SITUATION ROOM right now.

Kate, what have you got?

BOLDUAN: Bad weather, unfortunately, just in time for Christmas, everybody.

Threats of major flooding are forcing a number of evacuations in parts of southern California. Heavy rains have been pounding the area for days now, triggering mudslides that have shut down major highways. More rain is expected tomorrow and Wednesday.

Meanwhile, as much as 10 feet of additional snow is expected for the Sierra Nevada. Good for skiers, maybe. That will double the amount that's already fallen there.

And unfortunately, the scene isn't any brighter across Europe. Both runways at London's Heathrow Airport are currently open, but officials say stranded passengers could expect delays beyond Christmas. Absolutely painful.

Meanwhile, ground travel is also paralyzed across the region. Another three to six inches of snow is expected to fall in some areas over the next 48 hours. Temperatures are forecast to remain near freezing.

And here's a little holiday one for you. A luxury hotel in the United Arab Emirates is not apologizing for promoting what's being called the most expensive Christmas tree ever.

The tree stands nearly 43 feet high and is adorned with $11 million in necklaces, watches, and over 180 precious stones. I couldn't even get it out, I was so excited. Critics have called it a bad publicity stunt. The hotel stresses the jewels are on loan from an Abu Dhabi gallery.

When we were talking about it last week, I wasn't criticizing it. I was just darn jealous when you see all of those jewels.

(LAUGHTER)

CROWLEY: Right. It's a crass display of something, though, I must say.

BOLDUAN: Exactly.

CROWLEY: Quite the tree. Thanks, Kate. Appreciate it.

In an historic move, the Senate repeals the ban on gays serving openly in the U.S. military. But some say it could take months to implement.

Plus, new Census data could dramatically shift the country's political landscape. Could tomorrow's report bring new trouble for President Obama in 2012?

(COMMERCIAL BREAK)

CROWLEY: The White House says President Obama will likely sign the repeal of "Don't Ask, Don't Tell" into law Wednesday, but there are still a lot of questions about how the U.S. military will adjust to its new policy on gays in the military.

We want to bring in our Pentagon correspondent, Barbara Starr.

Barbara, it's going to take a while, won't it?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Oh, absolutely, Candy. The president may be about to sign it all into law, but the law is not about to change anytime soon.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Mr. Specter, aye.

STARR (voice-over): After 17 years, Congress repealing the ban on gays and lesbians openly serving in the U.S. military.

SEN. JOSEPH LIEBERMAN (I), CONNECTICUT: In America, regardless of your race or religion or nationality or gender or sexual orientation, you know, if you play by the rules and work hard, there's no limit to where you can go.

STARR: But not just yet.

JOHN, U.S. NAVY OFFICER: There's not going to be a huge rush to make big announcements just because the Senate has passed this law.

STARR: We can only tell you that John is gay and an officer in the Navy. CNN agreed to disguise his identity. He is thrilled about repeal, but he and others are being warned not to come out just yet.

There's no all-clear signal, and it might not happen for months. The Pentagon will now review hundreds of rules and regulations to see what, if anything, needs to be changed. After that, yet another 60 days before "Don't Ask, Don't Tell" is wiped from U.S. law.

Defense Secretary Robert Gates says he doesn't know how long it will take, but he does know the Pentagon will be under scrutiny.

ROBERT GATES, DEFENSE SECRETARY: The president would be watching very closely to ensure that we don't dawdle or try to slow-roll this.

STARR: The top Pentagon lawyer says there will be one underlying principle.

JEH JOHNSON, DEFENSE DEPT. GENERAL COUNSEL: Gay and lesbian service members must be treated the same as everyone else.

STARR: According to the Pentagon, regulations already governing personal conduct and behavior should be enough. The current plan, no separate barracks or bathrooms. As for gay partners, the Pentagon will follow federal law -- a spouse is someone of the opposite sex.

For John, it's still a pivotal moment.

JOHN: So now that I know that in my mid 20s it's a great comfort to look out to the future and know that my personal life is not going to be in conflict with my professional life, I can pursue professional success.

(END VIDEOTAPE)

STARR: One unanswered question still, will the administration declare a moratorium on new separation proceedings for gays and lesbians now serving before the ban fully goes into effect? The military says for now, "Don't Ask, Don't Tell" remains the policy at the Pentagon -- Candy. CROWLEY: Our Barbara Starr. One big question at first, will there be a repeal? And now a heck of a lot of other questions about how to do it.

Thanks so much.

Joining us now to talk more about the repeal of "Don't Ask, Don't Tell" our "Campaign Session," two CNN political contributors, Democratic strategist Donna Brazile, and Republican strategist Mary Matalin.

Thank you both so much for being here.

Let me ask you, in some ways -- and I know there are many differences between the desegregation of the U.S. military and the repeal of "Don't Ask, Don't Tell" that would eventually allow gays and lesbians to serve openly. But a lot of people have noted that when the military desegregated, it made a change, sort of, across society. It opened the doors.

Is there a similarity here? What next for the gay movement, Donna?

DONNA BRAZILE, DEMOCRATIC STRATEGIST: Well, hopefully, the Employment Non-Discrimination Act, gay marriage. We should not have second class citizens in this society. Gay men and lesbians are serving their country in every capacity, from firemen to policemen, to, as you well know, men and women in the uniform. So we owe it to them not to have a policy of discrimination.

This is an important step, and hopefully the president and Congress will use this momentum and others to ensure that the implementation goes smoothly, and perhaps to ensure that at this hour, perhaps tomorrow or the next day, no one is denied an opportunity to serve their country or lie about it ever again.

CROWLEY: Mary, are we a step closer to public and government acceptance to gay marriage?

MARY MATALIN, REPUBLICAN STRATEGIST: Well, this non- discrimination in the military is and always has been different. And I support the repeal of "Don't Ask, Don't Tell." But to suggest that we should use our military for our social experimentation is what gets critics all riled up about it.

On the other hand, people who want to serve the country should not have to lie about it. So, I think in the end, with the proper methodical execution, it is where the country is. But to make that leap to gay marriage, which, for lots of reasons, the majority of Americans still do not support, some being religious and other reasons -- does not mean they're homophobic, does not mean they're discriminatory, or discriminate towards -- we should keep it as a separate policy issue and not connect these two.

CROWLEY: I want to ask -- BRAZILE: Candy, we've got to keep equal justice under the law. That has to be the framework that we use to pass laws and to adjust social policy.

Equal protection of the law was hollow until we were able to pass the Civil Rights Act of 1964 outlawing segregation in the land. So it's important. We've made a very historic step in this country over the weekend. It's important that we continue to step forward for justice and equality for all citizens.

CROWLEY: Let me get the two of you to stand by, our audience as well, because we're going to have much more with our "Strategy Session" ahead.

Plus, behind the scenes of a potential showdown. More of Wolf's exclusive reporting from North Korea.

And they aren't terrorist bombs or weapons, but Customs and Border Protection have seized thousands of cigars. The details ahead.

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(JOINED IN PROGRESS)

CROWLEY: -- other places, the South, where in fact it's more friendly Republican territory?

What does this bode for President Obama?

BRAZILE: You know, President Obama won by 182 electoral votes. And while population growth is one predictor, I don't think it is the sole predictor.

Look, President Obama won in states where we had Republican governors, like in Florida, and in states where the Democratic governor of Montana, he lost. So I think it's important the president, you know, go out there and unify his party, reach out to his base, and also reach out to Independents, continue to expand, you know, the participation of young people. And if the president is able to do that and we get the economy moving along, guess what? It will be a good night for Democrats come 2012.

And Mary, God knows we need a good night.

(LAUGHTER)

MATALIN: It always a good night with you, Donna.

CROWLEY: Mary, tell me about how you parse how important these Census Bureau numbers are insofar as they rearrange the congressional delegations.

MATALIN: They're critical. Ed Gillespie, a longtime Republican strategist and former chairman of the Republican National Committee, devoted his entire energies and focus in the last election cycle on legislative chambers. And I think he flipped so many -- or his efforts flipped so many, that we're in control of these -- the redistricting process in these critical states.

So the political ramifications of that is it's more daunting to get electoral votes for President Obama in his reelection effort, but policy-wise, it has a critical impact, too, because these governors and these legislative chambers can get in front of implementation of health care, for instance. There's not much they can get done at the state level without the governors signing off on, and the legislators supporting the sign-off on the -- paying for the funding of the new health care law. So it's very important electorally, politically, policy-wise, going forward for the next decade.

CROWLEY: Big numbers out tomorrow. I'm sure we will be parsing them with both of you.

I want to thank you so much, Donna Brazile and Mary Matalin, for sticking with us.

MATALIN: Thank you. Merry Christmas.

BRAZILE: Merry Christmas, Mary --

CROWLEY: Appreciate it. Merry Christmas to you all.

BRAZILE: -- Candy.

MATALIN: Same to you, babe.

CROWLEY: Police are going to new lengths now to spy on potential criminals and terrorists. We will look at whether those techniques are effective and whether your privacy is threatened.

And a Supreme Court smack-down between the video game industry and Governor Arnold Schwarzenegger. Your kids and their exposure to bloody images are caught in the middle.

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CROWLEY: Here's a look at "Hot Shots."

In Vallieres, a man waves a flare as people hit the streets to protest the country's presidential election.

In India, street dwellers warm themselves around a fire.

In Virginia, a U.S. sailor is greeted by his girlfriend after coming home from a seven-month tour of duty on the USS (INAUDIBLE).

And at a zoo in London, a baby elephant plays in the snow.

"Hot Shots" and why they say a picture is worth a thousand words.

If your child plays video games, you should know about a legal fight playing out at the U.S. Supreme Court, especially if your kid is a fan of some of the bloodiest, most gruesome games.

Our Kate Bolduan is here to tell us about it. Some of these images are going to be disturbing, but this is an important court challenge for parents to know about.

BOLDUAN: Some of the images are very disturbing, and that's part of the story. But it's an important case that we have to tell you about and you'll want to know about.

Gamers and likely your kids call it free speech, but the state of California and parents' groups across the country say it's an issue of consumer protection. And it's all coming to a head just in time for the holiday season.

(BEGIN VIDEOTAPE)

BOLDUAN (voice-over): Fifteen-year-old Matt Myers is like most every teenager today.

MATT MYERS, PLAYS VIDEO GAMES: Oh, that's not cool.

BOLDUAN: The high school 10th grader can't get enough of video games like "Call of Duty." Its most recent release, "Black Ops," sold a record-breaking 5.6 million copies in the first 24 hours. But it's other brutal depictions of violence in games like "Postal 2," beheading women, mass killing, and even urinating on victims, that's made for a fierce real-life battle between the video game industry and the state of California.

JAMES STEYER, PARENTS RIGHTS GROUP: This is a case about parents' right to choose and the fact that there's demonstrable scientific evidence that ultra-violent and sexually violent video games have very negative impacts on kids.

BOLDUAN: The law, signed by Governor Arnold Schwarzenegger in 2005, would ban the sale or rental of games the state deems excessively violent to anyone under 18. The goal, to protect children from potentially harmful material, much the way the state regulates youth access to alcohol, cigarettes and pornography. But the multibillion-dollar gaming industry sued in federal court, saying the law violates the First Amendment by limiting creative expression.

MICHAEL GALLAGHER, CEO, ENTERTAINMENT SOFTWARE ASSN.: What this law would do would put the government in the role of controlling or having a significant say over the decision of families about consumption of media. It's focused right now through video games, but really implicates all of media in its reach if it was -- we rolled the clock forward.

BOLDUAN: Video game makers argue they've already imposed an industry-wide rating system that effectively monitors access of graphic material to minors. The fight has made it all the way to the Supreme Court.

And stuck in the middle are parents. Two-thirds of American households have game consoles, and parents like Tim and Amy Myers are constantly under pressure, especially during the holiday season, to buy up the newest, hottest games. TIM MYERS, PARENT: It's a challenge to keep the teenager off the game without you having to hover over them constantly.

AMY MYERS, PARENT: I'd prefer if Matthew wasn't playing the games. Not only because I think they're a little violent, or very violent, but because I'd rather he'd do other things with his time.

BOLDUAN: As for their son, Matt, he's just looking for the next big battle.

M. MYERS: It's invigorating, it's captivating. I find it interesting. And it's also, in a major part, the game my friends are playing.

(END VIDEOTAPE)

BOLDUAN: The Supreme Court is still considering this case. The gaming industry has the support of various free speech, entertainment and media organizations. California, though, has the backing of 11 other states.

And Candy, we expect to get a decision from the court by spring at least.

CROWLEY: This is an expensive suit for the gaming industry and for the states, obviously.

BOLDUAN: Absolutely.

CROWLEY: But the question here is -- you and I know enough grown boys 18 and over who could keep them in business with this video game. Why not just say, fine, 18 and over only?

BOLDUAN: They say it's a bigger issue beyond that. Yes, they can make plenty of money not having anyone younger play these games. They say it's a slippery slope.

If you're taking on this type of media, what's next? What next is the state going to try to control? But the states say they have a right to try to give another tool to parents to have a say in what their kids are watching, as parents are so busy and can't watch over them 24 hours a day.

CROWLEY: Yes. Well, it's always sort of the free speech and parenting versus how far does the government steps in.

BOLDUAN: Absolutely. Where and if do they draw the line? And that's where the Supreme Court comes in, of course.

CROWLEY: Kate Bolduan, thank you so much. Appreciate it.

BOLDUAN: Of course.

CROWLEY: You are in THE SITUATION ROOM.