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JOHN KING, USA

New Details Emerge in Alleged Domestic Terror Plot; Interview With Former Homeland Security Chief Tom Ridge; Interview With Maryland Congressman Elijah Cummings, Utah Congressman Jason Chaffetz; Interview With Rep. Marsha Blackburn

Aired October 12, 2011 - 18:00   ET

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


JOHN KING, CNN ANCHOR: Good evening, everyone.

We begin tonight with breaking news.

Top members of Congress just came out of FBI briefings on that alleged Iranian terror plot right here in the United States. Remember, Iran is accused of trying to assassinate the Saudi Arabia ambassador to the U.S. right here in Washington. Those lawmakers who received the classified briefing call the evidence -- quote -- "overwhelming."

An Iranian middleman allegedly tried to recruit hit men from Mexico's drug cartels in a plot to assassinate to Saudi ambassador, possibly by bombing a popular restaurant right here in the nation's capital. Senator Dianne Feinstein is head of the Intelligence Committee. Listen to this.

(BEGIN VIDEO CLIP)

SEN. DIANNE FEINSTEIN (D), CALIFORNIA: I think this is something that should be taken very seriously. I also think that there may be a chain of these things. It's hard for me to believe that there is just one plot involving the United States. I think we need to explore whether there are other plots going on into other countries.

(END VIDEO CLIP)

KING: That's a warning from the chairwoman of the Intelligence Committee, Dianne Feinstein.

The House Homeland Security Committee chairman, who was also in the secret briefings, says Iran was contemplating an act of war.

(BEGIN VIDEO CLIP)

REP. PETER KING (R-NY), HOMELAND SECURITY COMMITTEE CHAIRMAN: This is different from anything. I can't emphasize that enough. This is different from anything that has happened before, to actually have an act of war carried out in the United States by Iran. And that's what this was contemplated to be.

(END VIDEO CLIP) KING: Let's discuss this.

Our CNN foreign affairs correspondent, Jill Dougherty, is with us, also Sylvia Longmire, a former agent for the Air Force Office of Special Investigations and author of the book "Cartel: The Coming Invasion of Mexico's Drug Wars."

Jill, I want to start with you.

When you hear Dianne Feinstein come out and say she believes not one, but more plots, do we have any more of the intelligence strings that the government has that would lead her to come out of the briefing and say that?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Well, we do know that these plotters, according to U.S. officials, were thinking about -- I'm not quite sure how you can say how well planned it was. But they were thinking about contemplating actions against terrorist acts against the Israeli Embassy in Washington and potentially in Buenos Aires, Argentina.

We do know that. And there potentially are other people who could have been involved. The Treasury Department, for instance, says that -- in those documents, they say that he, the main person who was dealing with this, Arbabsiar, told them that he needed four people to carry out that attack. We don't know exactly who those people were.

Maybe there weren't any. He was just naming a number. That was actually from the Mexican defining how many people he needed. So there could be certainly other people or other plots involved, potentially.

KING: And when you talk to your sources, obviously we're talking about extremely high level targets, the Saudi ambassador to the United States, potentially the Saudi Embassy, potentially the Israeli Embassy, potentially other high-stakes diplomatic targets like that, so those are top level. But do they think the plot was top level or do they think maybe the targets were five star, if you will, but the planning was shoddy?

DOUGHERTY: You know, we still come back to that expression of kind of disbelief or incredulity about some of the aspects of this. To a number of people it still doesn't make a lot of sense. Why would they go to the Mexicans? If they really wanted to kill somebody, potentially they could carry it out.

Well, it still doesn't completely make sense or hold water and that is what they are worried about. However, they do claim that they did have information, direct information that it was directed at the highest levels.

KING: And, Sylvia, let me bring you into the conversation. You're an expert on these Mexican drug cartels.

When you hear members of Congress come out of a classified briefing and say the evidence was overwhelming, that evidence could be overwhelming that these suspects wanted to pull this off. Does it surprise you, based on your expertise about the cartels, that the cartels would even consider something like this?

SYLVIA LONGMIRE, FORMER AIR FORCE OFFICE OF SPECIAL INVESTIGATIONS AGENT: Oh, absolutely surprised, especially for the amount of money we're talking about -- $1.5 million, that is the value of a lost drug load of cocaine.

That's just a drop in the bucket compared to what these cartels make on a daily basis. The amount of money was too low. They obviously didn't do their homework on how the cartels do business in Mexico. For them to carry out an attack on U.S. soil to draw that kind of attention from Mexican authorities and from the Mexican government, the amount of damage that would be done to their business in Mexico, it would just be the end of them.

I don't think they would be willing to take that kind of risk for only $1.5 million.

KING: And yet we had Congresswoman Sue Myrick on the program last night, Republican of South Carolina -- of North Carolina -- excuse me -- and she is a member of the Intelligence Committee, and she has for years warned that she worries about just something like this, somebody reaching out to these nefarious cartels who certainly are well armed and who certainly are well financed to try to get them to project force across the border on U.S. soil.

Do you think that fear is misguided?

LONGMIRE: I think it's an interesting concept, and for the Iranians or any other Middle Eastern group or any other terrorist organization to look to distance themselves from possible implication in such a plot makes a lot of strategic sense.

Going to the Mexicans, they have a presence in over 1,000 U.S. cities, they are already here. They have the networks and they have the money and some of the cartels definitely have the expertise. I can see why that might be an option that they would look at on the table. But when you start getting down to the details and the nuts and bolts of such an operation, it starts to look less and less practical.

KING: When you say that they have the expertise, let's hone in on what was alleged here, that they wanted to hire someone or some people to go into a restaurant possibly here in Washington, D.C., perhaps 150, 200 people in the room with the goal of either assassinating -- and I assume you could do that with guns or you could do that with explosives, directing it at the Saudi ambassador and if you read the complaint, the Iranians involved said who cares if there are members of Congress or anyone else in the room. Let them die, too.

Do they have that expertise? I know you're skeptical they would do it right here in the nation's capital, but do they have the expertise to do that?

LONGMIRE: Certain groups, particularly Los Zetas, have the expertise to do it, but that's not even their M.O. in Mexico.

In Mexico, if they want to assassinate somebody, they will use assault weapons and maybe they will use grenades if they want to scare somebody, throw grenades in front of a police station or newspaper office. But whenever they want to kill someone, they have yet to even blow up a building in Mexico. Why would they go to those lengths to assassinate someone in the United States, when there are so many other subtle ways that they could get that done?

KING: Sylvia, stay with us.

Jill, as the administration decides how to go forward, obviously the criminal case will proceed. One of the suspects is in Iran. I assume there is little or no hope of ever seeing that suspect in a U.S. court.

What about beyond that, beyond the justice system when it comes to additional sanctions? Is the United States confident at the United Nations level or elsewhere it can get new sanctions put in place and then does it have any confidence -- there have been sanctions against Iran for some time -- any confidence at all that it will mean anything?

DOUGHERTY: You could say they are kind of tapped out on sanctions.

But one of the problems that at least the administration would say is that some of the sanctions are not enforced by countries around the world. So what they are doing, a full-court press here at the State Department, is to go to the United Nations, certainly talk with members, as Susan Rice, the ambassador, is doing, talk with other members of the U.N. Security Council, present as much of the evidence as they can and make the case that either they have to increase their own unilateral sanctions, these countries, or they have to really enforce what is out there.

But I think, John, it's important to note that one crucial part of this plot is the transfer of money, which apparently we understand from those documents came from Iran, went to a third country financial institution and then made its way into New York and into that monitored-by-the-FBI bank account.

Now, on "WOLF BLITZER" tonight, one of the top officials from Treasury was saying that, in essence, these sanctions had been circumvented, that they are still looking into exactly how that happened. So whether it was willingly or unwillingly, the third-party bank, we're told, did not know -- the Treasury, at least, did not know that they were part of this kind of down payment on an assassination. But, nevertheless, it shows how Iran could circumvent these sanctions.

KING: A potential loophole in the sanctions there, they may have to look at some of that.

Sylvia, let me bring you back into the conversation. It's inevitable in our system, especially when we're nearing a political year, that not only do members of Congress comment about this, but presidential candidates comment about it as well.

I want you to listen to the Texas governor, Rick Perry, who specifically draws attention to the allegation that what the Iranians wanted to do here was hire the Mexican drug cartels to come across the border and kill a diplomat on U.S. soil. Let's listen.

All right. Obviously we don't have the sound from Governor Perry. What he said is that we cannot have national security until we have border security. He thinks that there's a Southern border issue here that might have allowed this plot to somehow succeed.

Is there any connection between this alleged plot, I know you're skeptical they would pull this off -- but if the Mexican drug cartels had been hired by the Iranians, were in on this deal, does anything on the U.S.-Mexico border today have any impact on whether or not they could have pulled it off?

LONGMIRE: I don't think so.

I mean, I have my own opinions about how border security can be strengthened. But you have to understand that the cartels are already here.

And many high-level members of the cartels already live in the United States, in border states in order so they can remain safe from their rivals and from their enemies. So some of these cartel members come and go freely across the border illegally. Some of them are already living here. And again they have a presence all across the country.

So, if they were the ones to be hired to carry out any sort of professional hit or attack in the United States, for them to come here and do it is not exactly a challenge.

KING: Joining our conversation is the former secretary of homeland security, Tom Ridge, who was the first man in that job.

And, Mr. Secretary, thanks for your time and your insights tonight.

Let me ask you this, when you were George W. Bush's homeland security adviser, first in the White House and then the cabinet secretary, anything like this ever come across in the intelligence, the Iranians trying to orchestrate a terrorism plot in the United States of America, question one; and question two, anybody trying to hire the Mexican cartels to be their assassins to cross into this country and do the job?

TOM RIDGE, PRESIDENT & CEO, RIDGEGLOBAL: I think, clearly, John, this is probably the most audacious example of Iran, the number one terror state, to target the dignitaries of allies of ours, and to plan their assassination on United States soil is certainly unprecedented, at least in terms of the briefings that I received.

And the fact of the matter is, people are acting surprised, which, from my point of view, is really rather remarkable when this terrorist state supports the destabilizing influence of Hamas in Israel, Hezbollah in southern Lebanon, they promote and support the militants that are killing our soldiers in Afghanistan and in Iraq.

And at the same time the State Department is still under some -- some notion that you can negotiate some kind of arrangement with them to make sure that they don't go nuclear.

And at the same time we keep a group on the terrorist -- foreign terrorist organization list within the same department, even though they are opposed to the regime of Ahmadinejad.

So it's really rather remarkable and audacious in every conceivable way.

KING: Well, when you were in the government, sir, and privy to all the classified information, this is the Quds Force allegedly involved in this, and the question is, how high up did it go in that structure, with the Ayatollahs, with Ahmadinejad?

Can you freelance? Could somebody lower down in the Quds Force say, you know what, I'm going to try to do this, I'm going to try to kill the Saudi Arabian ambassador to the United States in Washington and not have somebody pretty high up know?

RIDGE: John, it's a -- excuse me -- it's a monstrous leap of faith. It's incredulous to think that somebody on the Quds Force would be operating unilaterally, independent either of the Ayatollah himself or -- or Ahmadinejad.

I mean, quit clearly, that is a force under the control of the hierarchy of the Mullahs within Iran. So I just can't imagine that anybody's been authorized to operate independently of that leadership.

KING: In all of the post-9/11 intelligence you went through, was there ever a hint, ever a sniff, ever chatter that Iran was trying to project force in the United States?

I know you see al Qaeda, you see al Qaeda in the Arabian Peninsula, you see other groups. Ever a note that said Iran is trying to launch an attack on our soil?

RIDGE: My recollection is that there has never been anything this audacious where we had that specific information targeting their terrorist activity to our soil and to take out foreign dignitaries. It's a first timer.

But again, given where Iran is in the world of terror -- and they are the number one promoter of it in terms of training, financing, equipment, and the like -- we should not, absolutely should not be surprised. And we should also probably -- we can well imagine that this is one of several plots and time will tell whether this will lead us to others.

KING: Members of Congress came out of their classified briefing today saying just that. That they worry that are additional plots.

Let me ask you this, Mr. Secretary.

The Mexican drug cartels grew in some part over the recent years, including your time in the United States government. I know you were worried about them because of your duty as the homeland security secretary, worried about the border. Was there ever intelligence chatter that suggested that they were potentially assassins-for-hire for some other entity, whether it be a foreign government or anybody?

RIDGE: Well, no, I don't think there was ever any -- any material lead that suggested it to us. But, you know, the infrastructure of their cartels exist on both sides of the border, and I think the previous expert mentioned that.

So the notion that the Iranian government, through the Quds Force, would try to engage a cartel, which would engage one of their surrogates, one of their operatives, one of their connections in the United States to pull off this audacious act is completely logical in the scheme of as far as removed that they can get it from the Iranian government is certainly part of their strategic and tactical operational plan. It makes a lot of sense, if they could pull it off.

KING: Secretary Ridge, Sylvia Longmire, our foreign affairs correspondent, Jill Dougherty, appreciate your insights on this breaking news tonight. We'll stay on top of this story as we get more information.

But, next, did the attorney general of the United States lie to Congress?

(COMMERCIAL BREAK)

KING: More breaking news tonight.

Did the nation's high-ranking law enforcement officer lie to Congress about his knowledge of a botched government gun trafficking program?

House investigators today subpoenaed the attorney general, Eric Holder, and other top Justice Department officials, demanding they turn over communications relating to the Operation Fast and Furious probe. That operation tried to trace the illegal flow of weapons from the United States to Mexico's drug cartels by actually allowing some U.S. guns to go south of the border. It was shut down after some of the guns turned up at murder scenes in both Mexico and here in the United States.

House Oversight Committee Darrell Issa accuses the attorney general of lying when he told the committee he didn't learn about the operation until just a few weeks before his testimony last May. Today's subpoenas should -- should provide a paper trail.

(BEGIN VIDEO CLIP)

REP. DARRELL ISSA (R), CALIFORNIA: And when we do a subpoena, we often get overly redacted documents. This is not the most transparent administration, at least in some areas. However, we have a constitutional obligation, we will do it, and we will do it according to the rules.

(END VIDEO CLIP)

KING: Let's dig deeper now with the House Oversight and Government Reform Committee. Joining us, Maryland Representative Elijah Cummings. He's the committee's top Democrat. And Utah Republican Representative Jason Chaffetz.

Congressman Chaffetz, I want to start with you as a Republican here. This is the nation's highest-ranking law enforcement officer. And I will grant you there are some legitimate questions to be answered here. But when people are using terms like lying, negligent, incompetent before you have the paper trail, isn't that a bit reckless?

REP. JASON CHAFFETZ (R), UTAH: Well, we want to be very careful on how we articulate this.

But, remember, we have got two dead agents, we have 2,000 weapons that are unaccounted for, and I feel like we have been misled because for the attorney general to come to Congress and say, well, he just heard about it a couple weeks ago, and the documents show otherwise, it doesn't added up.

KING: Well, Congressman Cummings, let's get to one of the questions here. Let's first listen to the attorney general. He came before this committee back in May. Here's what he said.

(BEGIN VIDEO CLIP)

ISSA: When did you first know about the program officially I believe called Fast and Furious? To the best of your knowledge, what date?

ERIC HOLDER, U.S. ATTORNEY GENERAL: I'm not sure of the exact date, but I probably heard about Fast and Furious for the first time over the last few weeks.

(END VIDEO CLIP)

KING: He says over the last few weeks.

That is on May 3, 2011. Listen to this interview the president of the United States, not the attorney general, the president of the United States, had with CNN Espanol back in March.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: There have been problems, you know. I heard on the news about this story that -- Fast and Furious, where allegedly guns were being run into Mexico, and ATF knew about it, but didn't apprehend those who had sent it.

Eric Holder has -- the attorney general has been very clear that he knew nothing about this. We had assigned an I.G., inspector general, to investigate it. (END VIDEO CLIP)

KING: It begs the question, how did the president know about this in March, and how did the president know the attorney general knew nothing about this in march, when the attorney general says in May he just learned about it a couple weeks ago?

REP. ELIJAH CUMMINGS (D), MARYLAND: I think the attorney general will clear that up, but the fact still remains that the attorney general sent to our committee a lengthy letter just this weekend explaining the situation. And I think that needs to be cleared up.

Keep in mind that I believe that Fast and Furious was a very unfortunate situation, sadly, that ended in the death of two agents. But at the same time, I think we have to be very careful as to how we proceed. I mean, I think we need to go where the evidence leads, but we have got a subpoena that has just been issued that is literally requesting tens of thousands of documents from the Justice Department.

And many of these documents are totally unrelated to the Fast and Furious. You have got to begin to ask the question, what is this about? Is this about trying to score some political points, or is it about what this -- our committee is supposed to be about, that is government reform, and I emphasize, oversight and government reform?

KING: Congressman Chaffetz, what are your colleague's point that are you going too far, are you asking for too much, are you overstepping your bounds and going from oversight into a political witch-hunt?

CHAFFETZ: Well, no. We want to make sure that this never, ever happens again.

We have two dead agents and we have hundreds of crimes committed by these guns. We just in the last few days heard about the Sinaloa cartel having over 100 guns. We essentially gave guns to bad guys that we knew were killing people and doing these nefarious things.

So we want to make sure that this never, ever happens again. But there are so many unanswered questions from this administration. They pledge openness and transparency, but that is not what we're getting. And so the attorney general does not -- his statement does not line up with the president knowing back in March that supposedly Attorney General Holder did not know about this, just as you pointed out.

KING: It could just be a matter of being more precise, correct, though,, Congressman Chaffetz? The president said this in late March. The president said this in late March. The attorney general comes in, in early May. So there's a five- or six-week period there. He says a few weeks.

It could be -- do you concede the point that he was not as precise as he should have been, that there's not a scandal here?

CHAFFETZ: Well, you can see where people can easily conclude it's either incompetence or he's just flat-out lying. We want to know.

CUMMINGS: John, not one single person has appeared before our committee saying that Eric Holder was briefed with regard to Fast and Furious and the horrible tactics that were used. Not one.

(CROSSTALK)

CHAFFETZ: But we have memos. We have at least five memos with Eric Holder's name on them.

CUMMINGS: There are memos, but again that has been cleared up in the letter that was sent to us this weekend, where he basically states that there are memos that come across his desk all the time.

(CROSSTALK)

KING: Let me jump in and read from that letter.

Here's what the attorney general said to your committee: "Given the volume of material to which I must devote my attention, I do not and cannot read them cover to cover. Here, no issues concerning Fast and Furious were brought to my attention because the information presented in the reports did not suggest a problem."

Congressman Chaffetz, to you first.

I understand, you have legitimate questions here, but do you read everything that comes to you in your office?

CHAFFETZ: Well, look, you have Lanny Breuer...

(CROSSTALK)

KING: Congressman, do you read everything that comes to you in your office?

CHAFFETZ: I should, and I should be held accountable.

KING: You should, but do you?

CHAFFETZ: This is a major, major investigation. It's a major investigation.

And if you have the chief of staff and you have the deputy attorney general in Lanny Breuer, who have got briefed not just once or twice, but on a regular basis, and you have two dead agents, the president of the United States knew about this back in March. How can the attorney general back then in May state say that he knew nothing about it until just a couple of weeks ago? That does not add up.

(CROSSTALK)

KING: Congressman Cummings, what does the attorney general have to do? If you're convinced that he can put this behind him, what does he have to do?

CUMMINGS: I think that, John, he has to come up and say what he has said in his letters and make it clear under oath.

But at the same time, I want to make sure that we are not harming any pending cases, that we are not putting FBI informants in jeopardy. And the FBI has already said that they are concerned about those kinds of things. And when I say in jeopardy, John, I mean possibly being killed.

This is serious business. We have to be very careful with our words and accusing the attorney general, the highest-ranking attorney in the country. Calling him an accessory to murder and things of that nature, I think that's totally inappropriate for our committee and we should not be engaged in that.

(CROSSTALK)

KING: Congressman Chaffetz, are you putting other lives at risk, additional lives at risk by demanding this sensitive information?

CHAFFETZ: No.

We don't want to get in any way -- in the way of any investigation that they're doing into those nefarious characters. There has been no added explanation. It begs one.

And I do agree with Mr. Cummings that until the attorney general comes before Congress under oath and explains it, these questions will continue to be out there.

(CROSSTALK)

KING: When will that be? When will that be? If you say there's a cloud over the nation's highest law enforcement officer and other top officials in his department, at a pretty critical time -- and these guys do pretty incredible and critical work -- when will that be?

Congressman Cummings, to you first. You're the ranking Democrat. You have friends in this administration. When can you get the attorney general up there?

CUMMINGS: John, I don't run the committee. The person who issues subpoenas, sometimes without even consulting us, is Mr. Issa. So you would have to ask him that question.

KING: Congressman Cummings, Congressman Chaffetz, appreciate your time tonight, gentlemen. Thank you.

CUMMINGS: Thank you. All righty.

CHAFFETZ: Thanks, John.

KING: Still to come, it was billed as a must-perform debate nation for Texas Governor Rick Perry, yet many conservatives labeled him MIA.

And tonight's number is personal for me and millions more who start their workday before they reach the office. That's next.

(COMMERCIAL BREAK)

KING: Welcome back. Here's the latest news you need to know right now. Field commanders in Libya claim they captured another one of Moammar Gadhafi's son. Motassim Gadhafi was taken into custody after a four-hour long fire fight in the city of Sirte. He is now been taken to Benghazi.

The U.S. Senate, it's still in session this hour. Majority Leader Harry Reid says they will go until midnight if necessary, so free trade agreement between South Korea, Columbia and Panama can be passed today.

The Nigerian man accused of trying to set off a bomb on Christmas day flight to Detroit in 2009, pleaded guilty to all charges today.

Alright, turn to Mexico's Pacific Coast paralyzed now by flooding in the wake of Hurricane Jova which made landfall before dawn.

A new survey shows that for the first time, the number of wireless connections in United States for Smart phones, tabloids, modems and the like now exceeds the country's total populations. Three hundred and sixteen million people, 328 million wireless gage gets, which brings us to tonight's number, which is personal for me. Zero. Zero. That's the number of blackberry e-mails I received on my blackberry which started about 7:00 this morning until just a few minute ago. Now, if you're like me and you start your office, start your day before you come to the office, that's a problem.

This is a problem that has been going on worldwide in recent days. The outage has spread literally across the world. Look at this. On Monday, started in Africa and parts of Europe. On Tuesday, the Middle East and Southeast Asia and South America. Today makes its way to the Americas here. Yikes, a problem.

Seventy million blackberry users worldwide, we don't have a number, an exact number of how many people were affected but reports indicate it is in the millions. I know I'm one of whatever that final number is a problem for blackberry because any bad publicity at the moment complicates this already.

Android devices power 43 percent of Smart phones in the United States. The Apple iPhone is 28 percent of the market and blackberry down about to 18 percent. So if you are not getting your e-mails all day, maybe, maybe you will look for something else here.

Still ahead today, the truth, the truth about the president's jobs program in the debate here. Also, Rick Perry who supposed to be a big debate night last night for him, why do so many say that the Texas governor was MIA?

(COMMERCIAL BREAK)

KING: Where was Rick Perry? That is one question being asked after the latest Republican debate and that's bad news for the already struggling Texas governor.

(BEGIN VIDEO CLIP)

GOV. RICK PERRY (R), PRESIDENTIAL CANDIDATE: Am I going to lay it all the out for you tonight. You know Mitt's had six years to be working on a plan. I've been on this for about eight weeks.

(END VIDEO CLIP)

KING: Does the 999 plan add up? That's another big question. Proof that Herman Cain rise in the poll means more scrutiny for him and his signature economic proposal.

(BEGIN VIDEO CLIP)

HERMAN CAIN, PRESIDENTIAL CANDIDATE: The 999 plan that I was proposed is simple, transparent, efficient, fair, and neutral.

(END VIDEO CLIP)

KING: So how did the debate focused solely on economic issues change GOP the race?

Joining us here in Washington, Senior Economic Writer for the "Wall Street Journal" Stephen Moore. From Atlanta, Republican strategist Nancy Pfotenhauer, and in Saint Louis, CNN Contributor, Dana Loesch.

Let's start with Rick Perry and the harsh criticism. He is a conservative favorite. Many viewed him as the leading alternative for the former Massachusetts governor Mitt Romney. But listen to some of the criticisms last night from our contributor, Erick Erickson. He posted this on redstate.com.

"I didn't even think he punched his card and showed up until the second half. The reality is, Perry has $15 million, few people saw the Bloomberg debate and he'll get another shot next week in a more credible debate with a larger audience. I wouldn't write him off just yet."

So, Erick is saying, watch our debate next Tuesday night on CNN and we'll see if Perry shows up. But Dana Loesch, I want to go to you first because you were shall I say, a bit harsh.

Let me read some of your tweets. "If Perry can't challenge Romney on this easy target, I don't don't trust him to challenge anything else as president. You also said Perry had a golden opportunity to put the screws to him and fumbled." And lastly, upon picking there are more, but I'm going to stop here, "Perry better jump in and hold him to the fire for this. If he doesn't, I'm unconvinced he wants to be president."

As a conservative whose looking for somebody to emerge as the principle challenge in Romney, Texas governor didn't do it last night, did he? DANA LOESCH, CNN CONTRIBUTOR: He didn't. And I've seen him speak before. I know that he can speak very well and I know that when he wants to, he can be very aggressive. And I didn't see any fire in his belly last night. He seemed as though he just didn't want to be there.

There were so many opportunities for he could have jumped in and have been very aggressive. And you know I like Perry as a person. I haven't decided on anyone in the primary field yet. But this is the time. Debates like this, this is when you have to convince the voters of your platform and if you cannot adequately convey what you believe and the things that you have accomplished to the voting audience during a national debate, I don't know how you can expect it to do it from the White House either.

I mean this is the time when you really have the candidates and you know I realize that he hasn't been debating as long on the national stage as some of the other candidates out there. But he missed a lot of prime opportunities and I noticed a marked difference in the Perry that we see now and the Perry that we've seen this summer, the Perry who made remarks about Ben Bernanke and so on and so forth.

So, I don't know if there is someone in his campaign whose holding him back a little bit and one last thing that I noticed as well, during the debates, this has happened every single did I bait that Perry has participated in. During the debate, his campaign will send out points. Although they will e-mail out talking points to people, things that Perry should be saying during the debate. For instance, on T.A.R.P. last night. So I think that there is some kind of disconnect in the campaign.

KING: Well Nancy, you were through this as an adviser of John McCain and you know the pressure, especially pressure after a candidate had a couple of tough debates which Governor Perry has had. He's slipping in the polls. He has focused on the economy. Romney has a plan out, Cain has a plan out. Everyone is saying, what's your plan, Governor Perry and he says this?

(BEGIN VIDEO CLIP)

PERRY: One of the things that I laid out, I think it's a pretty bold plan, to put 1.2 million Americans to work in the energy industry and you don't need Congress to do that. We're going to be focused on initially the energy industry in this country and making America, again, independent and clearly the place where domestic energy needs to be produced from.

(END VIDEO CLIP)

KING: Now, I know he's an oil state governor and I know he says more will come in the days and weeks ahead. But at this first debate focused on the economy after two debates when you're struggling and you're dropping in the polls, is that good enough to just - it sounded, forgive me, and this is probably unfair to Sarah Palin, but when you asked her questions about first joining your ticket, she will always go to the default of energy. It's not good enough, is it?

NANCY PFOTENHAUER, PRESIDENT, MEDIASPEAK STRATEGIST: I don't think it's complete enough given the situation that our country is facing. Every American is concern about the economy. It's the number one fear about the future. And it's not actually even about the future. Now, it's about our present. And so that raises the bar for any candidate to clear. And I have to agree that when we saw Perry last night, you're thinking this guy doesn't have the chops right now, the debating chops to get through a debate with President Obama who has a dismal record on the economy. And so, I have to agree that you know in the first debate that we saw after he rolled out, it was a kind of Republican rock him, sock him robot with Perry right next to Romney. Last night I was going, OK, one of those robots got popped.

KING: One of those robots got popped. So if you are a Republican or you are a conservative and looking at this and to Nancy's point, if you think Obama is weak on the economy and looking for somebody to debate them in the election and watched Governor Perry last night, I want to be fair. He's got plenty of time. He also got millions of dollars that he can spend on campaign ads and maybe he can take out Romney that way. But in terms of debating the president of the United States, the incumbent on the economy, did Perry do anything last night that would give you confidence, that's the guy you want up to next straw poll?

STEPHEN MOORE, SENIOR ECONOMY WRITER, WALL STREET JOURNAL: No. The problem John you played that quick words, I've only been in the race eight weeks. The problem is he was strongest when he entered that race and he's gone down ever since then. So, I think he doesn't have a lot of time to turn things around.

You know it's interesting because obviously Mitt Romney is the big front-runner and he's been playing rope-a-dope. Remember the fight between Ali and - you know he is just standing back and none of the blows are really hitting him. So, in a lot of ways, Mitt Romney keeps winning these debates because nobody can land a punch on him. But you know Nancy, when you talk about who can debate Barack Obama, I still love the idea of Herman Cain running to Barack Obama -

(CROSSTALK)

KING: Hey, everybody hang on. One second, we're going to continue the conversation but Erin Burnett "Out Front" at the top of the hour. Erin is here with a preview.

And Erin, I hear you're looking into this blackberry problem for me.

ERIN BURNETT, HOST, OUT FRONT: Yes, I am. It's been a bit of a tragedy John, as you know for many of us. So yes, we have some pretty special on that.

Also, you're talking politics. We're going to be joined by Michele Bachmann at the top of our hour and. And well, we are going to talk to someone who has known, the man of the center of this whole terror issue, Manssor Arbabsiar. He's here for 15 years. And he joins us exclusively. So, we'll find a whole lot more about the suspect. Back to you John.

KING: We'll be there in just a few minutes, thanks Erin.

When we come back, the perks and perils of being the front- runner.

(COMMERCIAL BREAK)

KING: Yes, there are perks but also great perils that come with being the undisputed front-runner for your party's presidential nomination. On the up side, morning show appearances with your new best friends.

(BEGIN VIDEOTAPE)

GOV. CHRIS CHRISTIE (R), NEW JERSEY: I want to see Mitt Romney in the White House in January 2013.

UNIDENTIFIED FEMALE: Did he promise you anything?

CHRISTIE: Absolutely nothing.

UNIDENTIFIED FEMALE: Vice president Christie?

CHRISTIE: No.

UNIDENTIFIED FEMALE: No?

CHRISTIE: No, he didn't promise me anything.

UNIDENTIFIED FEMALE: Governor Romney, would he be on your short list?

ROMNEY: Of course, he'd be in anyone's short list. He may take himself off the short list and say, no way where he had no interest but the truth is Governor Christie is one of the leading figures in the Republican Party.

(END VIDEOTAPE)

KING: And the downside, well, Harpoon catching from both the left -

(BEGIN VIDEO CLIP)

ROMNEY: He didn't create the recession but he made it worse and longer.

UNIDENTIFIED FEMALE: You said things are worse -

ROMNEY: I didn't say that things are worse.

(END VIDEO CLIP)

KING: And from the right -

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The White House has pointed to the Massachusetts law as the model for Obama care.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: I agree with Mitt Romney. He's right.

(END VIDEO CLIP)

KING: Oh, is it really? With still 80 days before the first votes are cast in Iowa, Mitt Romney too loose? Stephen Moore, Nancy Pfotenhauer, Dana Loesch, they are all still here.

Nancy Pfotenhauer, are you went through this with John McCain. Being the front runner is great some days and other days not so great, right?

PFOTENHAUER: And it is an unbelievable prior patch to be at. I mean you want to get into it but once you're there, you're going, whose idea was this? I mean, obviously the candidates that he's debating and fighting for against for support of the American people are smart enough to know to attack him on the right and then you have the left happy to attack him on the left. I think they have been very, very adapted with their attacks but I frankly think he's carried most of those thrusts relatively well.

KING: And Dana, what is his most biggest vulnerability?

LOESCH: I think his own record. I've been pretty critical of Mitt Romney. I'm sure he's a great guy and there's nothing personal. It's all political. But I think there are some legitimate concerns about his record when he was governor of Massachusetts and Jon Huntsman pointed that out from the last debate. He was 47th out of 50 states in terms of job creation and likes to say that his health care plan didn't increase taxes except it did because of the runoff costs. They had to increase taxes after its implementation just to address all of the economic problems with it. And then there was the mandate that went along with it. So, there are a lot of concerns.

KING: A lot of concerns there. Stephen Moore, you see that the Democratic National Committee, you see David Axelrod doing a conference call today spending so much time criticizing Mitt Romney. That that tells you that they feared him the most or just that he the whakamolly (ph) he's up right now and so you hit him?

MOORE: Like what have Republicans done for 50 years? They always choose the front-runner. So, when you ask us for the good position to be the front runner status for Republicans, hell yes because Republicans Iowa and the front-runners always win.

He's next in line. But you know he does have a problem, John. And that is look at those polls CNN did the poll last week. There's a new poll out today. He's only about 23 percent with Republican voters. He's the front-runner but you know Nancy, when you have you know the front-runner who is the presumptive nominee, then it can only be 23, 24 percent, there is a lot of discontent among conservatives. KING: Let's watch our debate next Tuesday night then Iowa coming up. We'll stay with it. Nancy, Steve, Dana thanks for coming tonight.

Here's a question, will Washington do anything, anything to help the millions of Americans who are unemployed and underemployed? That's our truth. Next.

(COMMERCIAL BREAK)

KING: Broken government is sadly Washington's answer to the country's job crisis. A big democratic jobs plan collapsed in the Senate last night and today Democrats and Republicans are doing what they do best, partisan finger pointing. President Obama didn't hesitate to blame Republicans but vowed to try again.

(BEGIN VIDEO CLIP)

OBAMA: Now, a lot of folks in Washington and the media will look at last night's vote and say that's it, let's move on to the next fight. But I've got news for them. Not this time. Not with so many Americans out of work. Not with so many folks in your communities hurting. We will not take no for an answer.

(END VIDEO CLIP)

KING: And to hear Vice President Joe Biden, the White House simply can't fathom the Republican opposition.

(BEGIN VIDEO CLIP)

JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES OF AMERICA: When we put this bill together, we put together elements of a bill that they had always supported. When have Republicans been against tax cuts for small businesses? When have they been against working on infrastructure? When have they been against giving veterans a break?

(END VIDEO CLIP)

KING: Well, here's tonight's truth. Yes, there are some parts of the White House plan that are borrowed straight from the Republican playbook, but it's a stretch, a big stretch for the vice president to say all of the president's plan has appeal to the GOP, in fact the White House use some of the specifics would be dead on arrival with Republicans that wanted to make a political point. Let's take a closer look at the defeated Senate democrat's plan.

The price tag, just shy of $450 billion. Senate Democrats pay for it with a sur-tax on millionaires. They knew no Republicans would support that. There are over $250 billion in tax cuts, most Republicans, like most of those tax cuts. The $100 billion in infrastructure spending to fix roads, and schools and so on, is opposed by most Republicans as more stimulus spending and Republicans are mixed on the other $100 billion in federal aid.

Most are willing to extend unemployment benefits but only if other spending is cut to pay for it. But Republican opposed aid to help state pay for teachers and first responders again saying, that's more of what they consider, the president's failed stimulus approach.

So what now? Both the democratic president and the Republican house speaker say they are open and ready to pass smaller bills designed to spur job growth. Here's the question though, can they agree now on those?

Republican Representative Marsha Blackburn from Tennessee can help us find the true there. Where is the truth, congressman? If the speaker says let's do several bills, the president says can you reach agreement, can you tell the 25 million Americans out there who are underemployed or unemployed that we're going to help you?

REP. MARSHA BLACKBURN (R), TENNESSEE: The American people are saying and it does have by partisan support. Let's get government out of the way. What we've done in the past hasn't worked, big bailout, T.A.R.P., stimulus, son of stimulus, not any of that. There's no single bill that is going to fix the job situation.

What it means is rolling back government, talking to a lot of these job creators, talking to hard-working taxpayers who are saying we are sinking in this Obama economy. Let's begin to do some things differently. And John, I think that's where the American people are. That's what we're ready to work on.

KING: We're in Washington, it is your Republican party controls the house. You have the Democrats narrowly control the Senate and a democratic president. The simple rules of Washington say, for you to get a bill that says lowers regulations, gets the government out of the way to use your language, for you to get the president to sign that, you have to give something. What are the Republicans in the house willing to give? Will you give the president that infrastructure bank? Will you give him aid to the states to keep teachers and firefighters and police on the payroll?

BLACKBURN: Everyone knows that's more stimuli. And that is not something that has worked. We are - I think that there are many people who are in favor of putting veterans back to work and the wounded warrior credits, looking at small business tax credits. What they are not in favor of is anything else that is going to be a big still or failed stimulus bill. It hasn't worked.

KING: The Democrats think they have a political issue with this. The Senate democratic plan would have put a sur-tax on millionaires. If you look on public opinion polling that Washington Post Bloomberg News Poll just asked this, do you support for deficit reduction, raising taxes on households earning over $250,000? Sixty eight percent of Americans support raising taxes on those above $250,000, 53 percent of Republicans. Why are house and Senate Republicans holding so fast to absolutely no taxes on more affluent Americans?

BLACKBURN: What we know is that people that want to pay more can already pay more. All they have to do is make out a check to the U.S. treasury and if they feel as if they are paying their fair share, they can do that. That doesn't need a bill. Anybody that feels like they are under taxed, they can just go ahead and pay more. They can contact their member of congress, contact the U.S. treasury, they can get that check right in. And I'm certain the U.S. treasury would be able to help them with it.

KING: Listen here to the democratic and the Republican leaders of the Senate, blaming each other.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D), MAJORITY LEADER: It seems as if the Republicans don't really want to put Americans back to work. They believe a weak economy means a weak president.

SNE. MITCH MCCONNELL (R), MINORITY LEADER: Nothing could be more ridiculous and absurd as to suggest that Republicans are somehow rooting against our economy.

(END VIDEO CLIP)

KING: With this partisan divide, until we go through another election cycle and maybe the voters pick a different government or re- calibrate the government a bit, can those who are unemployed or underemployed just expect that partisan bickering or do you think in the next few weeks, they will actually see something that creates jobs, that the president will sign and that you can support?

BLACKBURN: John you know something everybody should agree on is, let's freeze regulations for a year and let's freezes federal spending. I have a bill that would freeze federal spending a couple of years. Let's let our employers have some certainty. Let them begin to know what to expect for the next couple of years. So just freeze it. Stop the madness.

And let's say all right, let's push all this aside, let's freeze it, then let's begin to get some of these regulations off the book that are impeding the growth of jobs. One of the things that you're going to see agreement on today and through the rest of the week is the free trade agreement. This is something that is expected to create 250,000 new jobs that are what people are wanting to see.

KING: Congressman Blackburn, I appreciate your time tonight. I think most Americans agree stop the madness. I think one of the problems in Washington is the Democrats and Republicans had very different definitions of madness. But we'll watch how this plays out in the days and weeks ahead. Thank you for your time tonight.

BLACKBURN: Thank you very much.

KING: And we will see you tomorrow. Erin Burnett Out Front starts right now.