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President: "We're Not Doomed to Gridlock;" Intelligence Chief Caught Unaware; Ending "Don't Ask, Don't Tell"; When Gay Troops Can Come Out; 'Strategy Session'; Snapshots of North Korea

Aired December 22, 2010 - 17:02   ET



BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We took a shellacking. And I take responsibility for that. But I think what's happened over the last several weeks is not a victory for me, it's a victory for the American people and a lesson I hope that everybody takes from this is that it's possible for Democrats and Republicans to have principled disagreements, to have some lengthy arguments, but to ultimately find common ground to move the country forward. That's what we did with taxes. Those arguments have not gone away.


WOLF BLITZER, HOST: President Obama calling this the most productive post-election session of Congress in decades.

And we want to welcome our viewers in the United States and around the world.

I'm Wolf Blitzer.


We just saw the president answering questions about wins and losses, as he and lawmakers prepare to wrap up a very busy few days and a combative year. The president stopped short of calling himself the comeback kid after the Democrats got trounced by voters last month. But he insists the deals he managed to strike with Republicans prove the nation is not doomed to gridlock at all.

One of Mr. Obama's most crowning achievements, he signed the repeal of "Don't Ask, Don't Tell" into law today -- an historic change in U.S. military policy and for gay Americans in this country.

And just a short while ago, the Senate approved a critical nuclear arms reduction treaty with Russia. The president sends -- says it sends a powerful signal to the world.

Other wins for this White House include the deal struck with Republicans to extend the Bush era tax cuts and long-term unemployment benefits and passage of a landmark food safety bill.

Let's talk about all of this, what the president got, what the president didn't get, with our senior political analyst, David Gergen, and our senior Congressional correspondent, Dana Bash.

I'll start with you -- Dana.

The president, he's getting ready to leave Washington for Hawaii, to meet up with his family. Members of Congress, they're getting ready to leave the House and the Senate and head back to their states and districts as quickly as possible, as well.

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: That's right. In fact, as we speak, there are cars -- cars lined up outside the House side of the Capitol, because the House is taking what we expect to be the final vote of this year, of this Congress. And that vote being to finalize that 9/11 first responders bill. And that is something that was part of the frenzy of activity that made the president so happy and gave him the ability to claim -- legitimately claim some -- some victory at this press conference.

The frenzy included, as you mentioned, the passage of -- or approval, I should say -- of the START Treaty with Russia. That was 71 senators voting for it, including 13 Republicans.

And, Wolf, 13 Republicans defied their Senate Republican leader, who made very clear he did not think that this was right on substance, did not think this was right on timing. But still, 13 Republicans said, you know what, we want to go with the president on this one.

So very, very interesting final hours of this Congress and one that Republicans are kind of looking at each other saying, how did this happen, because so many have, in fact, crossed party lines and given the president the kind of compromise that he talked about at this press conference a short while ago.

BLITZER: Stand by, Dana -- David Gergen, I think it's pretty impressive, the -- what the president and the White House managed to achieve. They didn't get everything, by any means. But they certainly got a lot since the election on November 2nd.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Wolf, there are Republican voters tonight who must be just sort of shaking their heads and say -- saying, hey, we thought we won the elections. And here we are, seven weeks after these elections, it's Barack Obama who looks triumphant. Barack Obama walks out of here, at the end of this session, with these three big victories and, also, a trade agreement with the South Koreans and just held the most presidential looking press conference he's held in months.

So this president is back up on his feet. I think he's on even ground as we go into 2011. It does not mean there are not tough, tough fights ahead. But it does mean that instead of being back on his heels and being very defensive going into 2011, the president is back on his feet and raring to go.

And I think that he's -- he's -- there was something about him that he conveyed a -- a sense of authority tonight that it does look like he's -- his self-confidence has come back and he's -- he feels very comfortable where he is. BLITZER: He -- he certainly does. But the question, Gloria, to you, is does he move that momentum forward?

There will be a significant Republican majority in the House of Representatives, a much reduced Democratic majority in the Senate.

Can he take this momentum and really do something next year?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: You know, Wolf, context is everything. And I think in a way, the fact that there is a Republican majority is going to end up helping Barack Obama, oddly enough, because before, he had to stand side by side with Nancy Pelosi and Harry Reid, the two most unpopular politicians in this country. They were essentially controlling what occurred in Congress. They controlled health care. Now he stands outside the Congress, looking reasonable, looking like a man of authority, looking rational, saying, we all have to work together.

So, essentially, this puts him on a kind of a pedestal, in a way, separates him from the Congress, which is always a good thing, given the Congressional approval rating, and allows him to find his campaign voice again, which is what I think we heard during this press conference.

BLITZER: And we did see, Dana, from the president and the Democrats, they managed, at least, I think, pretty significantly, to wean away a few key Republicans on some of these critical issues in order to allow the Democratic agenda, if you will, during this lame duck session to go forward.

BASH: That's exactly right. And I think that is a key point. It -- it is and has been the Democratic agenda. And it is going to -- things are going to change. Obviously, the president will still be in the White House, but things will change in just a couple of weeks, when Republicans take control of the House, when they have many more seats in the Senate. And that's, in many ways, what this was about. And, you know, we obviously have been talking about President Obama. But the person we also should be talking about is Harry Reid, who is the Senate majority leader.

He is somebody who -- who has had trouble -- a lot of trouble getting Republicans on board with some things. But he realized, just as the White House did, that this was -- it's now or never. It was now or never on the "Don't Ask, Don't Tell" bill. It was maybe now or never on the START Treaty, in terms of the -- just the basic numbers that Democrats had.

And -- and that combined with the calendar, the fact that they -- that they've really pushed and made clear to Republicans, we mean it, we're going to do it. And that helped to bring Republicans on board.

BLITZER: And -- and he did express a lot of frustration and deep disappointment, David Gergen, that he could not get the Congress to approve what's called the Dream Act, that would allow young children whose parents came here illegally to serve in the military, to go to college, become legal residents of the United States. Listen to that frustration come through in this clip.


OBAMA: They realize, even though I feel American, I am an American, the law doesn't recognize me as an American.

I'm willing to serve my country, I'm willing to fight for this country, I want to go to college and better myself and I'm at risk of deportation. And it is heartbreaking.

That can't be who we are. To have kids, our kids, you know, classmates of our children, who are suddenly under this shadow of fear, through no fault of their own. They didn't break a law. They were kids.


BLITZER: Yes, you saw that frustration, David. And he was pretty passionate about it. But he failed to get it approved.

GERGEN: Yes, he was passionate, very personalized, as Paul Begala said just a few moments ago.

But what I do think, Wolf, is that it has -- while the president's back on his feet, I don't think he's on a pedestal. The -- the results of the election have still not been erased. Republicans do come into next year with the wind at their back, too, in the sense that they got a big victory and a message from the voters. The president interpreted it as, well, everybody should just get along.

Republicans, I think with some justification, said the voters were also saying, November, wait a minute. Put a brake on excess spending and too much government. And we want you to slow things down and turn things back there.

And I think next year we're going to see a lot of that kind of energy coming out of the election expressing itself.

What the president did do, which I think is -- is important here, is he -- he's found a new way of governing. And that is, breaking away from Nancy Pelosi and Harry Reid, as -- as Gloria said, does liberate him to form other kinds of alliances, as he did. And I think that really helped him in all three of these victories.

BORGER: And --

BLITZER: David Gergen -- all right, Gloria, very quickly.

BORGER: David, you're right. Let me take back the word pedestal and use the word adult. He seems like the grownup and the adult. And that's exactly what the president should appear to be.

BLITZER: Gloria, David and Dana, thanks very much.

Don't go too far away.

The Obama administration is trying to recover from a national security embarrassment.

How did the top intelligence director miss a major news development involving a sting?

A terror-related arrest -- stand by.

Plus, firefighters trapped in a raging blaze -- the race to save lives proves deadly.

And we'll tell you what drove tens of thousands of student protesters into the streets.


BLITZER: The Obama administration is promising that the director of National Intelligence won't be caught unaware again. James Clapper acknowledged in a televised interview that he didn't know about a dozen terror-related arrests in Britain that happened only hours earlier.

Our Pentagon correspondent, Barbara Starr, is watching the story for us -- and, Barbara, this is quite an embarrassment for the director of National Intelligence, for the entire national security team.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: A real embarrassment, Wolf. And a fundamental question -- was the director of National Intelligence kept in the dark about a critical threat to the United States?


STARR (voice-over): In Britain, 12 men suspected of plotting terrorist attacks arrested early Monday. It's all over the morning news in the United States. But eight hours later, in an ABC interview, the most senior U.S. intelligence director had no clue.


DIANE SAWYER, ANCHOR, ABC "WORLD NEWS TONIGHT": London, how serious is it?

Any implication that it was coming here -- any of the things that they have seen were coming here?


Director Clapper?

STARR: James Clapper, the director of National Intelligence, admitted he knew nothing about it.

SAWYER: I was a little surprised you didn't know about London, Director Clapper.



STARR: After all the close calls, the Christmas Day bomber case, the Times Square bomber case, another instance of the U.S. intelligence community not being fully informed?

How is it possible that the man who talks to the president almost every day did not know?

MICHAEL O'HANLON, BROOKINGS INSTITUTION: Obviously, it's surprising that the U.S. director of National Intelligence would not know about a major operation.

STARR: In an initial statement, Clapper's office sidestepped why he couldn't answer, saying Sawyer's question was ambiguous. Then, his office admitted, he was never told about the arrests, saying he should have been briefed on the arrests and that steps have been taken to ensure that he is in the future.

JOHN BRENNAN, WHITE HOUSE COUNTER-TERRORISM ADVISER: He was working on developments in the Korean Peninsula, in terms of political and military developments. He was focused on trying to provide support to the Congress, as far as the START Treaty deliberations were concerned.

STARR: Brennan was unapologetic about Clapper being unaware.

BRENNAN: I'm glad that Jim Clapper is not sitting in front of the TV 24 hours a day and monitoring what's coming out of the media.

STARR: A top Democrat acknowledges Clapper was failed by his staff.

SEN. DIANNE FEINSTEIN (D), CALIFORNIA: Getting the news to him, that's the job of the Counterterrorism Center. It's the job of his staff. And I think he will pick up on that.


STARR: Now, Wolf, a top U.S. official with direct knowledge of these events tells me that these arrests in Britain were relatively minor. He insists that they did not reflect a direct threat to the United States. But, of course, if the director of National Intelligence isn't getting briefed, what about the next time, when it may be a more serious threat?

So they're going to work on it, they say. This official also tells me that what General Clapper is really focused on right now is this other stream of intelligence reporting, indicating a potential threat to the United States or Europe during the holiday season, that that is what the intelligence community is focused on almost exclusively at the moment, in terms of looking at these types of threats -- Wolf.

BLITZER: As we all remember, Christmas Day last year, what happened with that Christmas Day bomber. And so people are worried. They're watching. No specific threats right now, but they're watching it closely.

We're going to have much more on this part of the story in the next hour. Congressman Pete Hoekstra, the outgoing chairman of the House Intelligence Committee, will be joining us -- Barbara, thanks very much.

Some former intelligence officials are downplaying James Clapper's lack of knowledge about those terror arrests in Britain.

CNN's Candy Crowley spoke with the former director of National Intelligence, Mike McConnell, and former CIA director, Michael Hayden.


VICE ADMIRAL MIKE MCCONNELL (RET.), FORMER DIRECTOR OF NATIONAL INTELLIGENCE: Well, having served as a DNI, let me put the DNI's day in context.


MCCONNELL: You're up at 4:00 in the morning and you're lucky to get to bed by midnight, because you're focused on lots of things. Now, I don't know exactly what the DNI was doing that day, but Korea was a problem. The START Treaty was in hot debate and everybody wants a position to be established, DNI, what do you think about this, what do you think about that?

He's a pretty busy guy. Now, this evolution -- I only know what I read in the press. It was an undercover operation by the British police. And they made an arrest.

Now, would he know about it in time?


Did he know about it at that instance?

Apparently not.

Would it made a -- would it have made any difference?

No. There wasn't anything he could do about it. The right officials did know about it.

So I think -- I see it as a point in time, a tempest in a teapot.

CANDY CROWLEY, HOST, STATE OF THE UNION: So transactionally, it doesn't really make any difference whether --

MCCONNELL: (INAUDIBLE). CROWLEY: -- he knew or he not. But it's just -- you can see how you'd look and think, wait a minute, I thought all these people were talking to each other.

GEN. MICHAEL HAYDEN, (RET.), FORMER CIA DIRECTOR: Well, I -- don't -- don't go there. That wasn't the issue. The issue was what was filling his day in the -- in the hours and minutes before -- before that event. And when I saw the tape this morning, Candy -- and I think I'm speaking on behalf of the admiral here, too, there but for the grace of God is the thought I had.

MCCONNELL: Exactly right.


BLITZER: You can see all of that interview on CNN's "STATE OF THE UNION," Sunday, 9:00 a.m. Eastern, also at noon Eastern on Sunday.

Violent winter weather wreaking havoc on California, tearing a bridge in half and sending water and mud raging through the streets.

We have a live report from the scene of the destruction. That's coming up.

And behind-the-scenes, more of my exclusive interview inside North Korea. And look at this, my jog with the women's ice hockey team in North Korea.


BLITZER: How are you?

I'm from America.

How old are you?

Do you -- do you speak English?

My name -- my name is Wolf.

My name is Wolf.






BLITZER: A deadly fire at an abandoned building in Chicago.

Kate Bolduan is here.

She's monitoring that and some of the other top stories in THE SITUATION ROOM.

This is a sad story.

KATE BOLDUAN, CNN CORRESPONDENT: This is such a sad story, Wolf. And it kind of unfolded right on television today, we want to tell you about.

Two firefighters were killed and another 19 injured in the blaze that Wolf was mentioning. The routine fire call on the city's South Side quickly escalated when the building's roof collapsed, trapping several of Chicago's firefighters inside. They have since been pulled out and all other fire personnel are now accounted for. The cause of the fire is still under investigation.

And tens of thousands of university students are taking to the streets in Rome, protesting educational reforms planned by Italian Prime Minister Silvio Berlusconi's government. Students say the reforms will harm their futures and the demonstrations come following a series of already violent protests which erupted last week when a critical parliamentary vote kept Berlusconi in office. Backers of the reform say it will save the country's education system.

And Pakistan has arrested two senior police officials in connection with the assassination of former prime minister, Benazir Bhutto. The two are accused of security breaches, covering up evidence and failing to conduct a postmortem. A United Nations panel investigation concluded in April that Bhutto's 2007 death could have been prevented.

And finally, a momentous day for The Beatles and their legendary Abbey Road album. The British government has now declared the famous striped crosswalk which appears on the cover of the album a historic landmark. It's the first street crossing ever to get the distinction. Paul McCartney calls the honor the icing on the cake for a great year for the iconic group.

I was actually surprised it's taken this long for that to be declared a landmark.

BLITZER: Yes, 30 years exactly to the assassination, the murder of John Lennon. Maybe that's part of the timing --

BOLDUAN: Maybe. Possibly.

BLITZER: -- but a great album. I remember buying that album --

BOLDUAN: It's a great album.

BLITZER: You're too young to remember that album, but I remember that album.

BOLDUAN: I call it the oldies.


BLITZER: They are. But they never get too old. Thanks.

A new reason to fear Iran is helping the Taliban in a potentially deadly war. Stand by for that.

Also, we're going to show you and let you hear what President Obama is saying. He's speaking rather passionately about the end of "Don't Ask, Don't Tell." There's still a lot of work to do before gay troops, though, can open up about their sexual orientation.


BLITZER: President Obama made good today on a major campaign promise to end the ban on gays serving openly in the United States military. When he signed the repeal of "Don't Ask, Don't Tell" into law today, he spoke at length about the sacrifices made by gay Americans in uniform.

Listen to this.


OBAMA: While today marks the end of a particular struggle that has lasted almost two decades, this is a moment more than two centuries in the making. There will never be a full accounting of the heroism demonstrated by gay Americans in service to this country. Their service has been obscured in history. It's been lost to prejudices that have waned in our own lifetimes.

But at every turn, at every crossroads in our past, we know gay Americans fought just as hard, gave just as much to protect this nation and the ideals for which it stands. There can be little doubt, there were gay soldiers who fought for American independence, who consecrated the ground at Gettysburg, who manned the trenches along the western front, who stormed the beaches of Iwo Jima.

Their names are etched into the walls of our memorials. Their headstones dot the grounds at Arlington.

And so, as the first generation to serve openly in our armed forces, you will stand for all those who came before you and you will serve as role models to all who come after you. And I know that you will fulfill this responsibility with integrity and honor, just as you have every other mission with which you've been charged.


BLITZER: Let's bring in our Pentagon correspondent, Barbara Starr -- Barbara, this may now be the law of the land, but it's going to take a while to implement it.

STARR: It is going to take some time for the Pentagon to work its way through the bureaucracy. Get ready for all of this, Wolf.

But the president today made it very clear, he does not want it to take too long. (BEGIN VIDEOTAPE)

STARR (voice-over): With the stroke of the president's pen, the 17-year ban on gays serving openly in the military is no longer the law.

OBAMA: This is done.


STARR: But, it is still military policy.

"JOHN," U.S. NAVY OFFICER: I don't have any big plans to come out new. I think I probably speak for a lot of other service members in my same position.

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, you know, 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.


STARR: But until all the paperwork and bureaucracy is done, Wolf, still some uncertainty for gays and lesbians now serving in the U.S. military. It is not at all clear whether the Pentagon will declare a moratorium on any proceedings against them. That's what people are looking for, and until that happens, advocacy groups are telling gays and lesbians, still, you have to stay quiet -- Wolf.

BLITZER: It will still be a part of the policy, "Don't Ask, Don't Tell," for at least a little bit longer, but it's still a very historic day for the United States military today.

Thanks very much, Barbara, for that.

Over the past week, I got to see some things in North Korea that few Americans ever get a chance to see. Stand by for some of the remarkable photos from my trip inside that very secretive communist nation.

And a Republican steps into the food fight between Sarah Palin and Michelle Obama. And guess what? He's not siding with Palin.

And new word on what caused that stunning accident during a stage production of "Spider-Man."


BLITZER: Kate's back. She's monitoring some of the other top stories in THE SITUATION ROOM right now, including the capture of a suspected Taliban member.

BOLDUAN: Yes, lots going on today, Wolf. Let's get right to it.

NATO's International Security Assistance Force says the Taliban member is suspected of helping to move weapons between Iran and Afghanistan. He was captured in Afghanistan's Kandahar province on Saturday. A Defense Department report on the country has warned that Iran is providing "lethal assistance" to elements of the militant group.

And some potential concerns about young people hoping to join the U.S. Army. A study released today shows that nearly a quarter of all students cannot -- can't -- pass the entrance exam. It says the results are more pronounced for young people of color. That's according to the report, and the report blames the country's education system for the problem.

And an actor's union has concluded that human error caused that shocking fall during Monday's "Spider-Man" musical on Broadway. Union officials met yesterday with the New York Department of Labor and members of the Occupational Safety and Health Administration. Actor Christopher Tierney is listed still in stable condition at a New York hospital after falling about 20 to 30 feet during that production.

We wish him a speedy recovery.

And former GOP presidential candidate Mike Huckabee is siding against Sarah Palin in her political food fight, so to speak, with the first lady. In Sunday's episode of her TLC show, the former Alaska governor and vice presidential candidate took a jab at Michelle Obama's anti-obesity campaign, claiming to be making chocolatey s'mores in her honor. Huckabee, who shed more than 110 pounds in 2004, tells radio host Curtis Sliwa that he thinks Palin misunderstood Mrs. Obama's efforts.

Food fight.

BLITZER: Yes. Well, it's always good to have a little food fight.

BOLDUAN: A little food fight.

BLITZER: Republicans fighting -- they could both be Republican presidential contenders, and they could be fighting each other on more substantive issues as well.

BOLDUAN: And as Candy pointed out, we'll then check on what they're serving on their campaign trails, because the food is not so healthy.

BLITZER: All right. We're just learning, Kate, that the House of Representatives, just moments ago, has done now what the Senate did. They've passed the 9/11 first responders health bill. That sets the stage for the president to sign it into law.


BOLDUAN: It clears the way.

BLITZER: The Senate passed it earlier, so that's good news for the first responders in New York who went to 9/11, risked their lives, spent weeks, months there. Some of them got very, very sick, and now they're going to be compensated. They're going to have medical help for the rest of their lives.

The Senate earlier, now the House, passing this legislation.

BOLDUAN: Now to the president.

BLITZER: Now the president will sign it into law.

President Obama is celebrating what he's calling a season of progress just weeks after his self-described "shellacking" in the midterm elections. Could it be a sign of more White House victories to come?

Plus, the photo album from my exclusive journey into North Korea. I'm going to show you some of the amazing pictures. That's coming up.


BLITZER: Let's get right to our "Strategy Session." Joining us are two CNN political contributors, the Democratic strategist, James Carville, and the Republican strategist, Alex Castellanos.

Alex, let me get your quick reaction to this story just coming in. The Alaska Supreme Court has rejected Joe Miller's claims. I assume that sets the stage for what everyone expects will be the case, Lisa Murkowski will continue to be the United States senator from Alaska. ALEX CASTELLANOS, CNN POLITICAL CONTRIBUTOR: Continue to be the United States senator. It's a challenge for Mitch McConnell, the Republican Senate Leader, because Murkowski doesn't owe anybody anything.

She was elected by the people of Alaska without party establishment support. She went out on her own, ran as a write-in, almost as an Independent. And she's now one of the key swing votes. We've seen her side with the president and the Democrats on a couple of things recently.

BLITZER: But she says, like Joe Lieberman, she will now side -- will caucus with the Republicans. He caucuses -- he's an Independent -- with the Democrats. She says she will be a Republican, even though she didn't get that Republican senatorial nomination.

All right, James, let's talk about the president. You saw his news conference, I assume, earlier today, about an hour or so ago. For a president who got "shellacked," his word, on November 2nd, he's done remarkably well over these past few weeks of this lame-duck session.

JAMES CARVILLE, CNN POLITICAL CONTRIBUTOR: He sure has. And not only has he done well, the opposition seems to be stuck in reverse.

I mean, from the 9/11 fiasco, to Haley Barbour's deal, to everything else, it's going to be some interesting times here come after the first of the year. I'm very much looking forward to this new crowd coming to town. I suspect that we'll have even more fun.

BLITZER: In this new CNN/Opinion Research Corporation poll, Alex, we asked about the approval ratings during this lame-duck session. The president's approval rating is up at 56 percent. The Democrats, 44 percent. The Republicans, 42 percent.

At least in the past month or so, he looks like a winner.

CASTELLANOS: The president is having a great month. I just saw that news conference, and he looked like the Obama of old, the Obama of the campaign, confident, not arrogant, in command, even talking about immigrants and really connecting with people in a human way, which I think sometimes is hard for someone of great intellectual ability like the president to do. He was very effective, but I will take exception to what James is saying.

You know, Obama and the Democrats got a lot of what they wanted. They got the START treaty, they got "Don't Ask, Don't Tell." As long as it doesn't involve raising taxes and more spending, then the Democrats seem to be able to still get what they want.

But Republicans held the line. They brought back Reaganomics, the idea that we're going to take money out of Washington and put it back in the people's pockets to grow the economy. You know, Boehner and McConnell held Republicans together for that.

BLITZER: James? CARVILLE: Well, to be fair to President Reagan, he never kept spending money in Washington, he just didn't collect taxes and the deficit went up. And we have to do that in a recession, unfortunately.

CASTELLANOS: And he produced the greatest period of economic growth we've ever seen.

CARVILLE: Not close to the '90s, Alex. Not even close. And by the way --

CASTELLANOS: That's what produced the '90s, James. At least be grateful enough to say thanks.

CARVILLE: Oh, I see. Oh really? All right. I got you.

I see. So, Nixon produced the '80s by that logic. When something doesn't happen, they just conveniently -- the 90s were the greatest growth in American history.

When the Clinton economic program took place, which was the single most successful economic program since the New Deal -- that's a fact. The Bush tax cuts did not work. That's a fact.

Why are we doubling down on failure? I have no idea. But I'd have Mr. Castellanos, why is he so enamored with failure?

BLITZER: What's the answer?

CASTELLANOS: You know, I'm just a -- James' revisionist history here, there was no Clinton economic program. Clinton had a Republican Congress that didn't let him in-debt the economy.

He certainly -- we can't credit Clinton for creating the Internet bubble, though maybe we can credit Al Gore. But I think James' history is a little wrong.

Look, the debate right now is, are we going to grow the economy naturally and organically by putting money in people's pockets, or are we going to grow it politically and artificially by putting in Washington's pocket? There, Republicans still have the upper hand. That's their agenda for jobs and growth. In January, we're going to see what the president's agenda is in his State of the Union.

BLITZER: And there's no doubt, James, that, "It's still the economy, stupid," as you coined that phrase back in 1992.

CARVILLE: Of course.

BLITZER: If the economy's in trouble, if unemployment is still at 9 or 10 percent a year from now, this president will be in trouble as far as his re-election prospects are concerned.

CARVILLE: To say the least. But, again, the 1993 Clinton budget was passed without a single Republican vote, as I like to point out to people. And this was the single most successful piece of economic legislation since the New Deal, for outstripping anything Ronald Reagan did.

And, of course, we know what happened when the Bush economic plan came in. It was the most tepid recovery we had, we didn't grow incomes.

So my suggestion -- and I hope the president does -- I hope we don't double down on failure. I hope we go to things that can work, and investments that really do create jobs and grow our economy.

BLITZER: James Carville, Alex Castellanos.

Guys, thanks very, very much.

We're learning more about an all-out effort by national security officials to make sure terrorists don't strike travelers or anyone else during this upcoming holiday season. I'll talk about that with the ranking Republican on the House Intelligence Committee, Peter Hoekstra.

And over two decades after Ronald Reagan urged Berlin to "tear down this wall," the late president is creating division in Germany. We'll explain.


BLITZER: Just back from six days in North Korea. It's, in my opinion, the most dangerous spot on earth right now. But there's another side of North Korea that I was able to see firsthand during the these extraordinary days.

Tom foreman is here. We've got a little photo gallery of some of the pictures we took.


BLITZER: We've posted a lot of them at I have a little "Reporter's Notebook" that I've written, but let's show our viewers some of the pictures and we'll discuss what's going on.

FOREMAN: Just walk us through some of this, Wolf, because I know many journalists even envy you going there, because so many of us have never been able to get in.

BLITZER: This is the airport, Pyongyang Airport. We arrived there, we took off there.

Guess how many flights a day take off or land at Pyongyang airport.

FOREMAN: I don't know, six? I don't know.


FOREMAN: Thirty?

BLITZER: No. FOREMAN: A thousand? I don't know.

BLITZER: Two or three, if that.

FOREMAN: Two or three? Really?

BLITZER: Yes. I looked up on the monitor to see where the flights were going. Maybe two or three flights a day. It's not a busy airport. They're hoping some day there'll be a lot of air traffic, but not necessarily busy at Pyongyang Airport.

FOREMAN: This a typical street scene?

BLITZER: These trolley cars are jam-packed. If you drive by and you see what's going on, they're sitting on top of each other. That's the way people get around. There aren't a whole lot of cars in Pyongyang.

FOREMAN: This looks like pretty old tech here. Is it?

BLITZER: Oh, yes, very old tech, but they're jam-packed, and that's how people get around the streets of Pyongyang.

FOREMAN: Tell me what's going on here.

BLITZER: Here, these are these posters, these murals you see all over the place, very patriotic, showing that the folks in North Korea, they're working, they're struggling, they've got enemies outside. It's all designed to pump them up.

You see these billboards all over the place wherever you go in North Korea. It's just something you get used. Very colorful. You can buy the posters, too, if you're interested, Tom, next time you go there.

FOREMAN: Have them on a big wall.

BLITZER: Yes, you may want to get a couple of those posters.

FOREMAN: Yes, exactly.

Tell me what's going on here.

BLITZER: Here is meeting that Bill Richardson and a small delegation had with the vice president of North Korea right there. You know, they all stressed this was a private visit, Richardson was coming as a private citizen, but I watched all of these meetings unfold. It looked like anything but private.

It looked like a state-to-state official delegation. They came in, they had note takers. They took him very seriously.

He's been there, I think, nine times before. And they know him, they like him, they trust him. He made some proposals, they accepted some of his proposals. I think he eased that crisis a little bit, because it was touch and go for a while. FOREMAN: A lot of layers of officialdom before you get into this room, I'm assuming.

BLITZER: Oh, yes. But you know what? It was very cool. Everybody he wanted to see with the exception of Kim Jong-il, everybody he wanted to see he saw.

FOREMAN: Here's something else. I found this really an interesting picture, because there are so few pictures we get at all out of there. What's going on there?

BLITZER: This is a silk thread factory where about 2,000 women work, and they are manufacturing silk thread.

FOREMAN: Are these cocoons?

BLITZER: Yes, that's what they are.

FOREMAN: Oh, you're kidding?

BLITZER: And it was really fascinating to see how they do it. They export about 20 percent I think to China, but it's really impressive to see the end product of the silk thread. That's one of the major achievements there.

A very nice plant there, and they took us there. You see these all over the place, in Pyongyang as well, these palaces, the structure going on.

What I got a kick out of, the snow over here. It was snowing the first day or two that we got there.

Do you know how they shovel the snow in the streets? By hand. They have got a lot of people out there.

FOREMAN: Really?

BLITZER: And they're working, they're cleaning up the sidewalks, they're cleaning up the streets. It's not a high-tech snow removal situation.

FOREMAN: It's funny you should mention. They nonetheless showed you some of what is sort of high tech for them. What is this?

BLITZER: This is one of the libraries that they have. But actually, this was at Kim Il-sung University, which is the main university. And they are teaching the young people -- you see all the boys, the men in the university. They're all wearing blazers and ties and jackets. The women are dressed in lovely dresses, and they are all very serious.

Sort of low-tech computers, not necessarily the state of the art. But they have got some pretty impressive capabilities.

FOREMAN: Did you have the sense the whole time that you are being shepherded? Because that's what I hear from several journalists, always.

BLITZER: Yes. Well, we had North Korean officials with us every step of the way. They were very polite, very nice, very helpful. They spoke English.

But we were not allowed to go any place by ourselves. In fact, this was my North Korean minder over here, a very nice guy.

This is the head of this huge farm we went out to. Tomorrow, we're going to have a report outside of Pyongyang, what it's like.

This is a apple orchard. And they say in all of the acres, hundreds and hundreds of acres, there are 2,000 (sic) apple trees and few other fruit trees there -- excuse me, two million apple trees.

FOREMAN: Wow. That's a lot.

BLITZER: That's what they say. It may be exaggerated, that number, but it was impressive, because as far as you could see, there are these apple trees all over the place. They love apples, all different kinds of apples.

FOREMAN: So this guy right now is writing, that's Blitzer with a "B."


FOREMAN: Getting that part down.

This, I love this picture.

BLITZER: These are -- look, they take advantage. They love football -- soccer, as we call it, football as they call it. They get out and they have a little exercise.

In the next hour I'm going to show you some video that I shot. I shot it myself.

I saw some young girls -- the North Korean Girls Ice Hockey Team, 16-or-17-year-old girls. They were jogging outside the main ice skating rink of North Korea.

I told my driver, "Can I stop? Can I go out there and jog a little bit?"

I hadn't gotten any exercise, so I went out there and jogged with the girls. And they were so cute. They probably thought I was an idiot, but it was fun.

FOREMAN: Let me ask you one last quick question, because I know we're running out of time here. But one of the things that I've always been amazed at is the degree to which when you do hear reports from even, like, 40-year-old North Koreans who have made it to China or somewhere else, the degree to which they seem, in many cases, utterly unaware of anything outside of their country, they truly have no idea of what the rest of the world is like, could you get any sense of that when you were there? Did you have any kind of conversation?

BLITZER: I think for most of the average folks, that is almost certainly true. But for the elite -- and I met with a lot of the elite -- the top government officials, the people who were learning English, the foreign ministry types, those involved in nuclear negotiations, the military, the top ones, they know what is going on, because their questions about what is going on here in Washington were very specific.

They watch CNN International. They have access to the Internet. I didn't have access to the Internet. They took away the cell phones.

I had a hard-line phone in my hotel room that I could make outgoing calls to the United States at $10 a minute. I could not receive calls from the United States. But they all have access.

They are pretty sophisticated. The average folks are not. They are restricted, they get to know what the government wants them to know. It's a whole different world. But for the elite, they are pretty good. They know what's going on.

FOREMAN: And I think transcripts of your outgoing calls will be available on WikiLeaks this afternoon.


BLITZER: Yes, they were watching.

We're going to have much more of this coming up not only in the next hour, but the next several days. I want our viewers to go inside North Korea. It's not every day we have that chance, and I was grateful for Governor Richardson letting me go with him, and the North Koreans giving me a visa, which is not an easy deal.

If you're preparing to fly home or anywhere for Christmas, you're going to want to hear the latest on what the government is doing to try to prevent holiday terror attacks.

And it's a wet, muddy and very dangerous season in California.