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JOHN KING, USA

Interview With Rick Santorum; Will Congress Extend Payroll Tax Cut?

Aired December 13, 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. I'm John King reporting live from the historic CSPS Hall in Cedar Rapids, Iowa.

There's a breaking political story here tonight exactly three weeks before Iowa casts the first vote of the 2012 presidential campaign. An Iowa conservative activist who just signed on with the Newt Gingrich presidential campaign is quoted just before he took that campaign job as calling Gingrich rival Mitt Romney's religion -- quote -- "the cult of Mormon."

Let me read you the entire quote because the context is important here -- quote -- "There's a national pastor who is very much on the anti-Mitt Romney bandwagon," Craig Bergman said, "a lot of the evangelicals who believe God would give us four more years of Obama just for the opportunity to expose the cult of Mormon. There's 1,000 pastors ready to do that."

That was Craig Bergman speaking at a focus group, a voter focus just before he took the job. He's now hired as the Gingrich Iowa political director. CNN's making calls as we speak to see if Bergman will be allowed to keep that job.

Also tonight, as we continue our weeklong Iowa visit, a candidate who has tirelessly visited each of Iowa's 99 counties, yet is struggling in the polls. Iowa could well end former Senator Rick Santorum's campaign, but he predicts otherwise.

(BEGIN VIDEO CLIP)

RICK SANTORUM (R), PRESIDENTIAL CANDIDATE: I feel very good that we're going to surprise a lot of people. And I know most folks are thinking we're going to be at the back of the pack. We're not going to be at the back of the pack. We're going to do very, very well.

(END VIDEO CLIP)

KING: The Iowa campaign is very different this time around. There are fewer candidate visits, not as many TV ads. Iowa tradition tested this cycle in a way that has some veteran activists here more than a little nervous.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I think it is the nature of campaigning and I think this year we have seen something that we haven't seen in past years. We have seen debate performances that have captured the imagination of the American people.

(END VIDEO CLIP)

KING: Now, whether Iowa's unique role is endangered, we will get to that in a moment.

But as always let's begin by getting you up to speed on the day's other big stories.

You're looking at live pictures right now of the floor of the House of Representatives where members of Congress getting ready this hour to vote on extending the payroll tax cuts.

Let's bring in our congressional correspondent, Kate Bolduan.

Now, Kate, this is something Democrats say they want, Republicans say they want, the president says he wants, but never quite that simple, is it?

KATE BOLDUAN, CNN CORRESPONDENT: Up here, John, rarely, I guess we could say at this point.

We are expecting this vote in the House in the next few minutes. But it can always slip a little sooner or a little later. We're just watching as this unfolds. This will be -- the House will be voting on the Republican proposal to extend the payroll tax cut for employees one more year. This also comes with a provision that would extend unemployment benefits, but also require some overhauls to the program and also a two-year doc fix if you will to prevent scheduled cuts to reimbursements to doctors who treat Medicare patients, three big issues that many say need to be handled of course by the end of the year, when these measures expire.

But still this also includes a controversial provision that House Republicans included in order to win over some lukewarm conservatives who didn't really think that the payroll tax cut was good policy, if you will, to have it extended another year. This is the controversial provision having to do with the Keystone oil pipeline project.

After I give you all of that, I will tell you House Republican leaders, they are confident this measure will pass. But as you well know, that means the fight is far from over -- John.

KING: And, Kate, this version will pass the House. It's dead on arrival in the Senate. So what next?

BOLDUAN: What next? Well, we -- what next is that if this moves over to the Senate, which it would need to move over to the Senate, as you know -- we know that Senate Majority Leader Harry Reid says it will not pass there.

And even it did for some reason pass the Senate, the president in the White House just today issued a veto threat. This provision is really going nowhere. And so what needs to happen is the top Democrat in the Senate, the top Republican in the Senate and the House speaker, John Boehner, they need to sit down and really start negotiating. That does not seem like that has happened yet.

Maybe it has to do with the clock, that we aren't up on the deadline quite yet. Maybe it has to do with some -- of course also has to do with some of those outstanding issues. But really quick this is getting messier and more contentious. We're up against -- we're adding another deadline to the mix, if you will, John.

This Friday the government runs out of funding. The last short- term spending bill will run out of funding on Friday. They have been negotiating a big, massive spending bill to fund the government through the fiscal year 2012, to this point, had not been related to this payroll tax issue.

Well, now Republicans are saying that Democrats are holding up that approval until they give on the payroll tax negotiations. Democrats say that's not necessarily true because there are serious outstanding issues with that massive funding bill, but they are not denying the fact that they will not be finalizing that massive funding measure until this payroll tax cut issue is extended.

So we're now talking about it's getting more heated, it's getting more contentious and we're now up against -- we're adding another deadline to the mix, John.

KING: And we wonder, Kate, why congressional approval is somewhere in the low single digits. Kate Bolduan on Capitol Hill, she will keep an eye on that vote. We will go back to Capitol Hill as news warrants in this hour.

Let's get a little perspective now from CNN analyst and former presidential adviser David Gergen.

David, when you listen to that, the House has a version, the Senate has a version, both versions could be held up in this big spending debate, if you're sitting at home and you're thinking, why are my taxes going up in 20 days, you're not very confident in your government tonight.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: You're not.

But I do think there is good news here, and it's likely that the payroll tax cut will be extended and families will not face an increase of $1,000 a year in their taxes. Both sides have come to the position. Many Republicans came reluctantly.

The bad news is, we're in for another case of brinksmanship. Both parties are trying to muscle the other one into accepting their version. Rather than sitting down and working out a common version, they're trying to, you know, put the real -- put the squeeze on the other side and make them blink.

KING: And so, David, this practice now, the House says its version has to have the Keystone pipeline. That is a favorite of some conservatives, and it's a way that the House speaker says you create jobs. They did away with earmarks. Is this the wave of the future, if you want to get a big bill through, a popular bill, the tax cut, since you can't do earmarks anymore, you just add your pet project or you add your pet showdown to big, important legislation?

GERGEN: Well, John, you know this so well. This has actually been done since time immemorial, that you introduce something else that's extraneous, it's irrelevant to the main bill at hand in order to get some votes.

Republicans, frankly, may not have been able to pass a payroll tax extension without some sweetener in the bill and they went for this Keystone, this pipeline that would run from Canada through the United States. And, frankly, there is justice on both sides of that Keystone argument.

You will well remember that the administration was supposed to make a decision this year on the Keystone, but that they then, for what appeared to be obvious political reasons not have to decide something before the elections that would either tick off labor or tick off the environmentalists, they shoved that decision down the road past the elections.

Republicans are coming back and saying, OK, if you want us on the payroll taxes, we will do that, but you have got to make a decision within the next three months on this Keystone. We're not going to let you defer this until after the election. That's not an unreasonable position on their part, but it is irrelevant.

KING: It's irrelevant to this particular bill. If only we could do one issue at a time, wouldn't that be something else?

GERGEN: Yes.

(CROSSTALK)

GERGEN: If we would just make one step forward at a time, we'd all feel better.

(CROSSTALK)

KING: One step forward, two steps back, two steps forward, one step back, your government at work.

David, thanks for your insights.

GERGEN: Yes.

KING: Moving on to important legal matters in Pennsylvania today, Jerry Sandusky waived his right to a preliminary hearing that was set to take place this morning.

His attorney says the former Penn State coach is ready to defend himself at trial, calling this the fight of Jerry Sandusky's life. Sandusky, as you might know, faces more than 50 -- 50 -- charges of child sexual abuse. Sara Ganim is a reporter for "The Patriot-News" and a CNN contributor who has covered this case from the beginning. She with us from Bellefonte, Pennsylvania, tonight.

Sara, why did Sandusky decide to waive his right? Did he not want to be in the courtroom confronting some of his accusers?

SARA GANIM, CNN CONTRIBUTOR: John, that's exactly what his attorney said afterwards after he decided to waive.

It was really quite remarkable that in court -- we were only there about 30 seconds for actual court, you know, testimony. It wasn't even testimony. It was just a couple of seconds for him to say, I'm going to waive.

But what happened afterwards, right behind me, Joe Amendola, his attorney, came down on the courthouse steps and talked to the media for almost three hours, first an hour as a group, and then individually for another two hours, and basically laid out his entire case, and said, you know, it would have been one-sided in the courtroom, because the alleged victims and witnesses would have testified and they don't really have that much of a chance to cross- examine and attack credibility and things that you could do at trial.

But, here, he kind of got exactly what he wanted. He got that stage to present his entire case with no prosecutor around and no victims to counter it.

KING: Interesting strategy there.

Sara Ganim, thanks for the reporting tonight.

Let's get some legal perspective from our senior analyst, Jeffrey Toobin.

And, Jeff, what did you make of that? What did Jerry Sandusky and the defense gain by waiving this preliminary hearing? And did they lose anything?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Well, they certainly gained by losing.

I mean, they gained by not having detailed testimony about horrible acts broadcast around the world. I mean, this was an attempt to limit the damage to the potential jury pool. I think in that respect, it was a smart move.

He lost by not being able to cross-examine, to learn about the possible chinks in the credibility of some of these witnesses. But I think, by and large, it was a smart move. It also gives him, I think, additional flexibility for plea bargaining. The community is not as outraged as it might be having heard the details of what these witnesses say happened to them. So in balance, I think it was a smart move, although let's be clear, he's still in a world of trouble.

KING: And obviously sometimes what they say at this stage is not what happens at the end. But do you take them at their word that they want to fight vigorously or do you think that they avoided public testimony today to help them negotiate a better plea deal?

TOOBIN: Well, I think they are saying what every defendant says at this stage, which is we're going to fight. But a plea bargain is always a possibility.

Given Sandusky's age, given the magnitude of these charges, I think a plea bargain is definitely still possible. But it will probably take a few weeks or a few months to play out. The fact that he is out on bail is going to slow the process down. If he pleads guilty, he's got to go to prison. Being out is better than being in.

KING: Smart, important perspective from Jeffrey Toobin. Jeff, thanks so much.

In a presidential campaign yesterday is, well, yesterday. That's why Newt Gingrich without the slightest bit of irony able to issue this decree to his supporters and staff today -- quote -- "I have refrained from launching attacks on my Republican opponents, though I have reserved the right to respond when my record has been distorted. I'm instructing all members of my campaign staff and respectfully urge anyone acting as a surrogate for our campaign to avoid initiating attacks on other Republican candidates. It is my hope that my Republican opponents will join me in this commitment. Running a positive, solutions-based campaign is the only way to guarantee President Obama is not reelected."

You got that? Don't be negative. Hypocritical? Let's listen to what the former House speaker said about Mitt Romney just yesterday.

(BEGIN VIDEO CLIP)

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: I love the way he and his consultants do these things. I would just say that if Governor Romney would like to give back all the money he has earned from bankrupting companies and laying off employees over his years at Bain, then I would be glad to then listen to him. And I bet you $10, not $10,000, that he won't take the offer.

(END VIDEO CLIP)

KING: No response from Mitt Romney yet on the be-nice pledge. But, if Romney didn't have enough to worry about as he tries to cast himself as a trustworthy conservative, this 2002 video unearthed by a conservative blogger now going viral.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I think people recognize that I'm not a partisan Republican, that I'm someone who is moderate and that my views are progressive.

(END VIDEO CLIP)

KING: Here in Iowa, the Texas governor, Rick Perry, has a new ad out tonight touting his role as a Washington outsider.

(BEGIN VIDEO CLIP)

GOV. RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: Washington is the capital political correctness, where doublespeak reigns and the truth is frowned upon. You can't say that congressmen becoming lobbyists is a form of legal corruption or that we give aid money to countries who oppose America.

(END VIDEO CLIP)

KING: Recent polls show Governor Perry is moving up a bit. We will see how that one plays out

One person not coming to Iowa now, Donald Trump, who pulled out of the Newsmax debate scheduled for December 27. He was to moderate, you might remember. The Donald's decision comes after most candidates say they weren't coming either.

Let's not forget that the current occupant of the Oval Office also running, and running hard, something he appears to be taking quite seriously. Listen.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We're going to have to fight for it. It's not a slam dunk. We're going to have to deliver this message effectively all across the country. And at a time when people have been battered by the worst financial crisis since the Great Depression and the worst economic crisis since the 1930s, it's understandable if people aren't feeling as chipper as they were back in 2008.

(END VIDEO CLIP)

KING: The voters may not be feeling so chipper as the president just noted there earlier today. But listen to this from his senior adviser.

This is Obama senior campaign adviser David Axelrod. Here's his take on Newt Gingrich's sudden rise in the polls -- quote -- "Just remember, the higher a monkey climbs on a pole, the more you can see his butt. So, you know, the speaker is very high on the pole right now, and we will see how people like the view."

Interesting choice of words there from David Axelrod. Wow.

Turning now to international news, strong words against Iraq's Prime Minister Nouri al-Maliki and the United States from a very surprising source, Iraq's deputy prime minister.

CNN's Arwa Damon sat down with Saleh al-Mutlaq. Take note of the accusations he makes about Maliki and the Obama administration.

(BEGIN VIDEO CLIP) SALEH AL-MUTLAQ, IRAQ DEPUTY PRIME MINISTER: They don't know what's happening in Iraq or because they don't want to admit the reality in Iraq. He left Iraq with a dictator. He left Iraq with no power sharing. He left Iraq with a political process which is going to leave Iraq to be divided.

He left the Iraq in a way that chaos is going to be seen everywhere in this country. Al-Maliki's playing a game between Iran and the United States, and there will be a day whereby the Americans will realize that they were deceived by al-Maliki sometimes and they will regret that.

(END VIDEO CLIP)

KING: Arwa Damon joining us live from Baghdad.

Arwa, the deputy accusing the prime minister of being a dictator. Tough words. How true are they?

ARWA DAMON, CNN CORRESPONDENT: Well, John, it's a shared view when it comes to the vast majority of other Sunni and to a certain degree Kurdish politicians, as well as amongst the minorities.

There are great concerns that al-Maliki is consolidating more and more power. They point to the fact that the government announced in recent weeks that it rounded up hundreds of individuals that it accuses of being Baathists, of being terrorists.

But people like al-Mutlaq say that those individuals who are now in detention are quite simply opponents to al-Maliki and they fear that this is going to be an even more growing trend as the U.S. continues to draw down.

KING: And a quick reference to Iran by the deputy prime minister there. What was that about, Arwa?

DAMON: Well, it's about Iran's growing footprint in Iraq. The deputy prime minister and other opponents of the current prime minister, Nouri al-Maliki, have great concerns about the impact that Iran is going to have and they say that that impact is going to grow as the U.S. continues to depart.

They point to certain realities, like the fact that they say the Iraqi government did not extend America's presence here because it made a calculation, calculated that it was in Iraq's national interests to not aggravate its neighbor Iran and they're very worried about the potential for Iran's growing influence here, not just when it comes to politics, but what is more concerning is when it comes to violence as well.

There Iranian Shia special groups here. These are Shia special groups that are directly backed by the Quds Force and they continue to be active. In fact, the U.S. Embassy recently put out a kidnapping warning, warning its employees, warning American citizens of a heightened threat that is being caused by these Iranian-backed Shia special groups -- John. KING: Interesting and fragile time in Iraq as American troops completely withdraw.

Arwa Damon live in Baghdad tonight, Arwa, thank you.

Still to come here, a closer look at Speaker Gingrich's call for a truce among the Republican contenders. That's smart if you're leading but is it also hypocritical?

And next: Rick Santorum on why he still believes Iowa will deliver a surprise.

(BEGIN VIDEO CLIP)

SANTORUM: You want to shock John King, you walk out of here and sign up for Rick Santorum. You deliver Linn County. And let me assure you, we have got this going on in every county in the state. And you put us at the top of the list, and you will shake the political establishment of this country.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

KING: Not just politics here in Iowa. That's Nearly Elvis, as he calls himself, entertaining at last night's Linn County Republican dinner right here in Cedar Rapids. He was, believe it or not, not the main event.

That billing went to longshot Republican presidential hopeful Rick Santorum.

(BEGIN VIDEO CLIP)

SANTORUM: But for Iowa, Barack Obama would not be the president of the United States. And I can honestly say that it is your obligation now to give us the antidote to Barack Obama.

(LAUGHTER)

(END VIDEO CLIP)

KING: Senator Santorum is trying things the old-fashioned way here, visiting all 99 Iowa counties and appealing to the evangelical voters who often sway the GOP caucuses. The polls suggest Santorum is near the bottom of the pack. But over coffee this morning at the Blue Strawberry Cafe here in Cedar Rapids, he insists there's a big surprise coming.

(BEGIN VIDEOTAPE)

KING: Twenty-one days out. If you look at the polling, you're up a bit from when I saw you in the first week in November.

SANTORUM: Yes.

KING: But you have still got Gingrich, Paul, Romney, Perry ahead of you.

SANTORUM: Got them just where I want them.

KING: You got them just where you want them.

SANTORUM: Just where you want them.

KING: Where do you draw the line? Let's be serious for a second.

Dow you have to be in the top three to continue? You don't have the funding other guys have.

SANTORUM: Right now, I think the expectations are pretty low for us and that's an advantage. And you have got six people in this race. And if we can finish above two or three, that's a huge deal that people who are spending millions of dollars, getting a lot more press coverage nationally than we do.

And for us to be able to do that on a shoestring, I think, shows the real strength of the message and the messenger. And that's what we're trying to get out of Iowa is to show that strength.

KING: Your contrasts were pretty sharp last night. Let's just focus on Speaker Gingrich and Governor Romney. They're the two guys at top of the pack in this state. They're the two guys at top of the pack if you move on state by state or in the national polls. You're making the point they can't win. Why can't Newt Gingrich beat Barack Obama?

SANTORUM: Well, I think that the problem with Newt and Romney is they can't draw clear contrasts with Barack Obama on some of the most important issues of the day, big government.

I mean, both of them supported the Wall Street bailout. Both of them supported government mandates for health care. Both of them supported cap and trade. Those are -- talk about three big issues in this election, those are three huge issues in this election.

KING: But let me add a fourth. Some conservatives don't like the Medicare prescription drug benefit. Senator Rick Santorum voted for that.

SANTORUM: Yes, but I wasn't an advocate for the provisions in the bill that ultimately conservatives didn't like. As you know, there are a lot of good things in the prescription drug bill.

Medicare Advantage, which was a precursor to the Ryan plan, was in the Medicare prescription drug bill, which is private sector Medicare. Health savings accounts, a dramatic expansion of health savings accounts was in the Medicare prescription drug. There are a lot of good things in that Medicare prescription drug bill that I was working on for years and made it, if you will, the medicine go down a little easier.

But I was never out there saying, hey, we need a big prescription drug plan. It's something I swallowed to get some things that I thought were more important and, in the end, probably wouldn't have done it, given the financial situation the country's in right now.

KING: How do you explain the Gingrich surge if voters are paying attention, voters have had all these debates to watch the candidates?

You say he's a big government conservative or not a true conservative. How do you explain then that not only is he rising in the national polls, if you break down the Iowa polls, he's doing well among Tea Party voters, who don't like government, he's doing very well among evangelical voters?

SANTORUM: I would just say that there's time. There's time for people to get over the romance and look at who the candidate really is.

And we have seen this in -- time and time again in this race where people have risen on the -- the thrill of the moment, if you will, and people then take a more sober look at the candidate. And we're sort of the sober candidate here.

KING: In your speech last night you said, look, Governor Romney has won only one election. He has run three times. He's won only one. And he won it, you said, as a liberal Republican in Massachusetts.

Square that with this. This is Senator Rick Santorum February 2008, when you supported Governor Romney. "Governor Romney is the candidate who will stand up for the conservative principles that we hold dear. He's the clear conservative candidate that can go into the general election with a united Republican Party."

SANTORUM: It's a different environment. Health care was not an issue in 2008. I think there was one question on health care in all of the debates in 2008.

It is now the central issue in this campaign. And we can't have someone with Governor Romney's track record on health care being the clear alternative to government-run health care on the federal level.

KING: There's a big debate in Washington today about an issue you were talking about last night, the payroll tax extension.

The House Republicans want to extend that payroll tax. They want to attach the Keystone pipeline project to it. You think the whole policy is wrong because that money comes out of Social Security. So do you believe just no and let middle-class taxes go up, or no to the payroll tax extension, but do something else to help middle-class families?

SANTORUM: Look, I believe we need to pass a robust reform of the tax code. We need to lower rates for middle-income people. We need to lower rates for everybody.

KING: What happens in January, though? If you are going to have that conversation, whether you're successful in this campaign, whether it comes up after this campaign, what about January, 20 days from now, when their taxes would go up? What would you do in the short term?

SANTORUM: Well, look, I would look for an income tax cut. That's where I would go.

Look, either there is a Social Security trust fund that we need to fund with Social Security taxes or there isn't. And if Social Security's just another government program that is not tied at all to this particular tax, then fine, let's create it that way.

But don't create this aura that the Democrats have for years that this is a trust fund program that is -- that has to remain solvent, and the Republicans undermined the solvency of the Social Security trust fund, when they are now undermining the solvency of the trust fund and using it for political purposes. It either is or is not a unified system. If it is not, then what we see here is politics.

KING: Let me ask you lastly, you just did an editorial board where you said the president's foreign policy was pathetic. In the past, you have used the term appeasement. This came up at the president's news conference last week, and he said to those critics, including you, he said, why don't you ask bin Laden if he thinks that's -- answer that.

SANTORUM: That's a pathetic answer, in my opinion.

Osama bin Laden was a continuation of President Bush's policy. It had nothing to do with a contingency or a problem that came up on his watch. He simply followed through, which we have been trying to do for 10 years.

KING: Deserves no credit for that?

SANTORUM: Any more -- no, the people who deserve credit for that were the military whose mission it was to find them. And the president doesn't deserve credit for doing -- he didn't make a decision, if you will, as to go after bin Laden. That decision had been made 10 years ago.

KING: He gave the go-ahead, though, for a sensitive military operation across Pakistan's board.

SANTORUM: I do give him credit for that.

But, again, that's not a strategic decision with respect to how we're going to deal with contingencies around the world. In fact, he's bungled every single contingency, whether it was Iran and his lack of support for the Green Revolution that emboldened the Iranians to continue to do things like plan an attack on the American soil, which, by the way, the president hasn't responded to at all, whether it's his bungling of Egypt.

Now we have the Muslim Brotherhood and radical Salafi Islamists who are going to be controlling a country that was a friendly country and was a partner in peace to Israel who will no longer be. He's bungled Syria. Syria, which is a client state of Iran, he went out and embraced them, opened up an ambassadorship, and now -- and called Assad a reformer.

And Assad has done nothing but brutalize his people even more as a result. And we continue to still have diplomatic relations and entreaties into Assad, as the rest of the world is stepping away from him for the thug that he is.

KING: Appreciate your time.

SANTORUM: Thank you, John.

KING: Thank you.

SANTORUM: Appreciate it. Thank you.

(END VIDEOTAPE)

KING: That was Senator Rick Santorum earlier today.

One of Iowa's big decisions three weeks from now will be how many, how many candidates get lost from this Republican field.

Up next here, that drone that went down in Iran, the drone was violating Iran's airspace. And now some say President Obama should have committed what could have been interpreted as an act of war, bombing the wreckage before Iran could get its hands on such sensitive technology.

Stay with us.

(COMMERCIAL BREAK)

KING: The downing of a U.S. spy drone in Iran has set off a rather feisty debate. What should the Obama administration have done, if it had any options before the Iranians got their hand on it. For the former vice president, Dick Cheney, the answer: simple. Here's what he told my colleague, Erin Burnett.

(BEGIN VIDEO CLIP)

DICK CHENEY, FORMER VICE PRESIDENT OF THE UNITED STATES: They'll send it back in pieces after they've gotten all of the intelligence they can out of it.

The right response to that would have been to go in immediately after it had gone down and destroy it. You can do that from the air. You can do that with a quick air strike, and in effect, make it impossible for them to benefit from having captured that drone. I was told that the president had three options on his desk. He rejected all of them.

(END VIDEO CLIP)

KING: Now President Obama has asked Iran to return the drone, but there is no chance that's going to happen.

(BEGIN VIDEO CLIP) MAHMOUD AHMADINEJAD, PRESIDENT OF IRAN (through translator): The North Americans, at best, have decided to give us the spy plane. Currently, we have control of this plane. Those who have been in control of this plane surely will analyze the plane's system. Furthermore, the systems of Iran are so advanced also, like the systems of this plane, to the unpiloted planes we have made many advances, much progress, and now we have this spy plane.

(END VIDEO CLIP)

KING: Let's talk this over. We're joined by retired Air Force Colonel Cedrich Leighton. He's a former member of the military's joint staff. And Peter Brooks, former deputy assistant secretary of defense, now a senior fellow at the Heritage Foundation.

Peter, I want to start with you, do you agree with the former vice president that the current president of the United States should have launched a military strike of some sort inside Iran's borders?

PETER BROOKS, FORMER DEPUTY ASSISTANT SECRETARY OF DEFENSE: I think the vice president makes a very good point, John, and I agree with him. I think this is one of the things we should have looked at. This technology falling into the hands of the Iranians bothers me, but it bother me more that it's likely to fall into the hands of an advanced military industrial complex such as that in China and Russia, who will really be able to exploit it.

So yes, I think we missed an opportunity, although we're outside of government here and we don't have all of the information that the president had, but I think the vice president makes a very good point.

KING: Colonel, what are the consequences, if the United States launched an air strike or sent in a commando team, a Special Ops team of some sort across Iran's border?

COL. CEDRICH LEIGHTON (RET.), AIR FORCE: Well, John, those consequences could be quite severe, because it depends on exactly how they planned the mission. But it could be construed as an act of war. And with that, of course, given the heightened tensions that we're experiencing with Iran, it is a very dangerous course to go on one of these missions. It's not unprecedented, but it is one of those things that is extremely dangerous and has to be considered very, very carefully.

So there are still dangers with special operations missions. There's some dangers with bombing it. Each of these could have been construed as an act of war.

KING: And so the question is, if each of these could have been construed as an act of war, and if it's that dicey a decision for the commander in chief, what exactly are we losing here. What are the risks of Iran getting this drone? And as Peter noted perhaps Russia and China getting access to this technology.

Listen here to the defense secretary, Leon Panetta, who seems to be playing down the significance. (BEGIN VIDEO CLIP)

LEON PANETTA, DEFENSE SECRETARY: You know, it's -- it's a little difficult to know just, frankly, how much they're going to be able to get from, you know, from having obtained those parts. I don't know the condition of those parts. I don't know exactly what state they're in.

(END VIDEO CLIP)

KING: Colonel, you have experience on the joint staff at a time when these drones are becoming increasingly important to U.S. intelligence gathering, U.S. strikes against terror targets around the world.

How significant is it that the Iranians, and perhaps the Russians and the Chinese, now have this technology in their hands to study?

LEIGHTON: It's very significant, John. Basically, the idea is that the technologies that are being used to make these, to make the RQ-170 in this case, is stealth technology. It's extremely sensitive.

And that kind of technology, there's no doubt in my mind, that it has gone to the Chinese and to the Russians. The Iranians, of course, have intelligence relationships with both countries, and they are going to do that.

But it is extremely -- an extreme setback, I would say, for our programs, because it got into the hands of the Iranians, who will then pass it on. But it is one of those areas where we need to, you know, work with what we have and then work -- work our way out of it as best as we can.

KING: How do you work your way out of it as best you can? Peter, you can see the smirk on President Ahmadinejad's face in that interview. They believe they have a public relations coup, a propaganda coup, and perhaps an intelligence coup. How do you work your way out of it?

BROOKS: If we destroyed the drone we wouldn't be here, John. There is no easy way out of it. They're going to exploit it for its communications gear for its sensors, its codings, all of these sort of things. And it's going to be a real problem for us in the future, considering how heavily we rely on these -- on these drones, whether we're looking at Iran's nuclear program or going after Osama bin Laden.

Remember this was the same drone that was used there. I mean, there are -- there would be consequences to a strike -- a strike in destroying that on the ground in Iran. But what's Iran going to do? You know, go after a Saudi ambassador in the United States? Aid the Taliban? Aid militias in Iraq?

I mean, there -- we are at war with Iran today. And I think it was a major mistake, and there have been many mistakes in Obama's policy towards Iran, including not supporting the Green Revolution, and the way the nuclear program is launching forward towards a nuclear weapon. But we are where we are today, and I think the administration's not going to talk much about this, because I think it was a big mistake.

LEIGHTON: Well, I think that also, John, if I may, the big issue here is that -- you know, the timing of everything. If it had been known that the drone was down, they could pinpoint the actual area where the drone was down, that it may have been possible to do one of the actions that Peter talks about.

But the further you go in time, the more difficult it becomes to do one of these actions, and it becomes a much harder thing for the military to pull off.

BROOKS: We blinked, John.

KING: Colonel Leighton, Peter Brooks, I understand it's a spicy debate. We'll continue, gentlemen. Appreciate both of your time tonight. Take care.

A deadly attack in the middle of a busy market. That market set up for Christmas. The chilling pictures next.

(COMMERCIAL BREAK)

KING: Welcome back. If you're just joining us, here's the latest news you need to know right now.

Live pictures, we're going to show you the floor of the House of Representatives. They are voting now on the House Republican version of a proposal to extend a payroll tax cut. But the House Republican version has provisions, including calling for the Keystone Pipeline Project to be sent through the United States. The president says he would veto the proposal, as it now stands.

But this is the House Republican proposal. The difference is with Senate Democrats. We'll keep an eye on that vote and bring you the latest when it is completed.

Moving on now, the ad time for next week's "All-American Muslim" is apparently sold out. This comes after Lowe's, the home improvement retailer, caused a stir by pulling its ads, that under pressure from conservative Christians who called the reality show propaganda. The hip-hop mogul Russell Simmons said today he's buying any remaining ad time available.

A deadly attack on a crowded Christmas market in Belgium. Police say a man acting alone tossed three grenades and opened fire into the crowd. Four bystanders plus the gunman were killed. Scores injured. Police don't know the motive.

A call for a nationwide ban on using cell phones or texting while driving. The National Transportation Safety Board said it would battle a growing threat on America's roads. The ban would apply to hands-free, as well as hand-held phones but would not apply to passengers. Let's move on now to tonight's "Number." Today's "Number," 188. That's how many days have passed since Newt Gingrich's campaign staff quit, en masse back in June.

At the time, you'll remember, Gingrich was having trouble raising money, rejecting most of the advice from his staff about how to organize and run his campaign. He just returned from a cruise in the Greek isles with his wife, which was the last straw from any members of his original campaign team.

Well, 188 days later, Speaker Gingrich is leading in the polls, has not one but two super PACs supporting his bid for president and has been fending off attacks by his Republican rivals. Remarkable turnaround by Speaker Gingrich.

When we come back, we will talk about Speaker Gingrich and why -- why he decides, after attacking Mitt Romney for a couple of days in a row, to say, "No more attacks. Let's keep peace in the Republican Party." We'll be right back.

(COMMERCIAL BREAK)

KING: Iowa votes three weeks from tonight, and at the moment, it is the former House speaker, Newt Gingrich, who is the driving force in the Republican campaign. But there's a bit of breaking political news in Iowa tonight and an interesting, intriguing appeal today from Speaker Gingrich.

Let's talk it over with our exclusive political duo, James Carville and Mary Matalin. They're sitting by -- standing by for us in their home in New Orleans tonight.

I want to start, guys, with this controversy about a campaign staffer. A guy named Craig Bergman, he's a conservative activist, well known here in Iowa. When he sat down for a voter focus group, he did not work for Newt Gingrich, and he said something -- I'll get to it in a minute -- then he took the job as the Iowa political director for the Gingrich campaign. My question will be, can he keep his job after saying this?

And here's what he said at the focus group: quote, "There's a national pastor who is very much on the anti-Mitt Romney bandwagon. A lot of the evangelicals believe God would give us four more years of Obama just for the opportunity to expose the cult of Mormon. There's a thousand pastors ready to do that."

Now, Mary Matalin, he might be saying something that is a fact, that there are pastors who say that about Mormonism, but can the Gingrich campaign, especially at a time when the speaker says, "I don't want to be negative on other Republicans," how do they deal with this?

MARY MATALIN, REPUBLICAN STRATEGIST: Yes. Look, the reason Newt ascended, and John, you crackled these numbers all the way up, and you're on the ground, and you can feel it. The reason he ascended was -- and the timing of his ascension was when he stopped bickering amongst the field and turned all of his great ability to articulate and frame up an issue against Barack Obama. So he does not need this kind of distraction.

And there -- you all in the press are not going to buy that he's going to put out that statement. And it should -- that statement that he put out today should naturally apply to this. It's just not -- it's a distraction he doesn't need, and I think a lot of conservatives do not want to fight about religion. They don't question people's faith, whatever that faith is.

KING: So, James, do you just say, "Sorry, buddy, I know you said this before you joined the staff, but you're gone?" JAMES CARVILLE, DEMOCRATIC STRATEGIST: Well, I don't -- he -- what he was saying is what a lot of people think. If I say a lot of people think this, then he didn't say that he -- it just -- it struck me as not parsing. It struck me as kind of clear that he was repeating what he had heard.

And, you know, it was before he was on that. I think that's, like, pretty thin gruel. It really does. I'm not -- I'm not on the ground. Maybe it's a distraction. It's easy just to ax the guy than not, but I don't -- can't see where he didn't say that was his personal opinion. And he said it was what other people were thinking. It was before he went to work for Newt Gingrich. I don't -- I don't buy it.

MATALIN: The voice of fairness, John, I want to clarify. I didn't speak to should he be fired or not, just Newt needs to clean it up. It's a distraction. But for two people who have often been -- tried to be fired from campaigns, that's a worse distraction.

CARVILLE: Yes. It's -- it does...

KING: Let me ask you, you know, Speaker Gingrich sent a note to his staff and his supporters today. Now, he had ripped the veneer off Mitt Romney yesterday. They had a pretty feisty back and forth, the two of them. They're the leaders. Doesn't surprise you. James, you were saying just last night, you want more of it. You wanted to see a good fight.

But the speaker wrote a note to his staff today, saying, "I've refrained from launching attacks at my Republican opponents, but I have reserved the right to respond when my record has been distorted. On Monday, this occurred when Governor Romney and I engaged in what in diplomatic circles is called a frank exchange over our respective records in the private sector." The speaker went on to say, enough, that Governor Romney had said, "Let's not damage the Republican nominee," that he agreed with him.

Mary, some would say, you know, smart strategy. Some would also say, boy, that is hypocrisy from a guy who gives as good as he gets, and of course, he wants everyone to be nice. He's leading.

MATALIN: And some would say it's yet another distraction. First, let's all stipulate that everybody hates primaries. They're the worst. They're the most emotional. You hate fighting with your own guys. It's easy to fight against the Democrats. This is -- this is just what happens.

So making all these promises, speeches, and it's distracting. And I'd say it's less hypocritical than distracting. And they're not -- they're not even fighting over some philosophical or policy difference. They're fighting over who made money and what the bet was and all that.

It's -- they should just all stop, quit talking about it and just talk about what their policy preferences are and how they would be good against Obama. That's what they need to get back to.

CARVILLE: I think, John...

KING: James, I know...

CARVILLE: ... critical.

KING: James, I know you -- I know you and Newt have a good relationship. I know you and Newt have a good relationship. I want to take you back in time. Newt might be Mr. Nice Guy today. Here he is talking about your friend, the former president, saying he needs to fess up about Monica Lewinsky. Let's listen.

(BEGIN VIDEO CLIP)

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: What you have lived through for two and a half long years is the most systematic, deliberate obstruction of justice cover-up, an effort to avoid the truth, we have ever seen in American history. And the time has come to say to the Democrats and to say to the president, quit undermining the law in the United States, turn over the evidence, agree to the witnesses, have the hearings. The American people have the right to know the truth.

(END VIDEO CLIP)

KING: Back in those days he could give as good as he got, too, right, James?

CARVILLE: Right. And he also lost his job, and the president kept his. So historical background here.

Look, there's not a frontrunner in the history of politics that didn't say, "Hey, no more negative. That's it. I'm going up. I'm in the lead now."

And this -- this is not going to last. They're going to tear the hide off of him, and he's going to strike back. And we're going to have quite a little -- quite a little show here between now and the 3rd of January. And the better news is, it's going to keep going on after the 3rd of January. It will be going on for a while. So I'm just going to sit back and watch LSU play BCS and watch these guys go after each other. That's -- both of them.

KING: Three weeks from tonight, Iowa votes. James and Mary, got to leave it there for now. You're going to watch the game. You guys can have a peaceful watching of the game. At least you're rooting for the same team.

Before we go to break, 234 yay, 193 nay. The House Republicans passing their version of a payroll tax cut. The president said he would veto that plan. We'll watch this one.

When we come back, tonight's "Truth" is about a candidate who did well where I'm sitting tonight four years ago. Can't find evidence of him this cycle just yet.

(COMMERCIAL BREAK)

KING: Some breaking political news just in to CNN. We told you just moments ago about what could have been a controversy here in Iowa involving the new political director for the Newt Gingrich campaign.

Well, the campaign reacting quickly to comments, controversial comments or comments that could have been made controversial, anyway, and announcing tonight a new statement from R.C. Hammond, the Gingrich spokesman, just moments ago, says, quote, "Craig Bergman agreed to step away from his role with Newt 2012 today. He made a comment to a focus group prior to becoming an employee that is inconsistent with Newt 2012's pledge to run a positive and a solutions-oriented campaign."

Again, Craig Bergman, he was the political director here for Gingrich in Iowa. Stepping away from a job he just accepted, that after saying something to a focus group. He was quoting another pastor, but he talked about the cult of Mormonism. The Gingrich campaign not wanting to be in that controversy.

Three weeks from tonight, Iowa votes. Gingrich is leading at the moment. Moving very quickly to distance himself. Craig Bergman now stepping down from his job as political director of the Gingrich campaign. We'll stay on top of that story and all the political developments here in Iowa. We'll be back here tomorrow night.

That's all for us for now, though. "ERIN BURNETT OUTFRONT" starts right now.