CNN CNN


 

Return to Transcripts main page

JOHN KING, USA

Republicans Prepare for Debate in Iowa; Interview With Arizona Senator John McCain; Interview With Jason Chaffetz

Aired December 15, 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 tonight from the historic Orpheum Theatre in Sioux City, Iowa, where seven Republican presidential candidates are preparing for the final debate before Iowa's kickoff presidential caucuses.

The stakes are enormous, Newt Gingrich trying to hold his lead here in Iowa and nationally, amid signs of a stall, Ron Paul looking to prove Iowa victory is within his reach, and those at back of the pack desperate to earn one of the three or four tickets out of Iowa.

Iowa votes in just 19 days. And here's proof, here's proof other candidates are going to ignore the Gingrich appeal today for a Christmas season free of attack politics. This is a Mitt Romney campaign mailing that went out to Iowa Republicans reminding them Speaker Gingrich once paired with the former Democratic Speaker Nancy Pelosi to combat climate change. It's tough. Expect more to come.

Just earlier today, Speaker Gingrich reiterated his pledge saying, please, Republicans should all be nice. Here's Mr. Gingrich, in his own words.

(BEGIN VIDEO CLIP)

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: I only have one opponent, that's Barack Obama. I have a number of friends running and one opponent.

And I'm going to run this campaign on a positive basis because I believe the people of Iowa are smart enough that they can see the difference between somebody who is trying to help the country and somebody who is simply running a negative campaign.

(END VIDEO CLIP)

KING: Can he stay positive is the big question because Speaker Gingrich, make no mistake about it, is feeling the heat.

Let's bring in CNN's Jim Acosta also here in Iowa tracking the Republican candidates.

Jim, that is the big question. The speaker's the front-runner. He says let's be nice. Describe to our viewers the kind of heat he's getting.

JIM ACOSTA, CNN CORRESPONDENT: Right.

Well, you know, it's almost impossible to figure out a direction where he's not being attacked from right now. Keep in mind he's had three other candidates in this field attack him with either Web ads or paid TV ads that are running on the local stations in Iowa. Rick Perry, Ron Paul, Mitt Romney are all doing that. You mentioned the Ron Paul -- excuse me -- the Mitt Romney flyer that is going out in mailboxes this week, hitting Newt Gingrich on the ad with Nancy Pelosi.

He's taking it from all sides. The governor of this state, Terry Branstad, did an interview with the Associated Press just this afternoon and told a reporter with the AP he's not sure Newt Gingrich has the discipline needed to be president. He's taking it from all sides.

And it might be safe to say that this mug here which has the airport code for Sioux City, John, might sum up the last 24 hours for Newt Gingrich. It hasn't been pleasant.

(LAUGHTER)

KING: I have a sticker from the airport. I have that on my desk back at the office. I use that when I'm feeling -- having a little bad day, I look at that to get a smile.

ACOSTA: I couldn't resist.

KING: So, Jim, you mentioned the Web ads, you mentioned TV ads, you mentioned the skepticism from an establishment leader here in the state like Governor Branstad. That's talk. What is evidence that the Gingrich momentum, Newt-mentum, as they like to call it, has actually stalled?

ACOSTA: Right.

You know, I think all you have to do right now is perhaps look at the polling numbers. There's a new one out today from the folks at Gallup. They have got their daily tracking poll out. And it shows Newt Gingrich has taken a hit nationally among Republicans. We should mention this is a national poll.

But it shows Newt Gingrich at 29 percent, Mitt Romney at 24 percent, and Ron Paul there at 10 percent. But contrast that with 10 days ago. The same tracking poll showed Newt Gingrich at 37 percent and Mitt Romney at 22 percent. He had a 15-point lead 10 days ago. People can talk all they want about how much they hate negative attack ads, how they wish the candidates would just stay positive.

A woman went up to Newt Gingrich earlier today in Iowa and said, Newt Gingrich, don't give up, stay positive, don't fall for these attacks. And he said he wouldn't. He would stay positive. But these negative attacks appear to be having an effect, John.

KING: That's the history of politics. Voters don't like them but they tend to work. Jim Acosta live for us tonight here in Sioux City, Jim, thank you.

Now to Congress and the major issues that need to be resolved before members leave for the holidays. First up, the government runs out of money, yes, runs out of money again at midnight tomorrow night and faces a partial shutdown if funding is not put in place by then. Secondly, there's that big debate over extending the payroll tax cut. Both Democrats and Republicans say they want to do it, but they cannot agree how to pay for it.

A source telling CNN tonight the Democrats' original plan to put a surtax on million-dollar salaries now off the table. You will remember the Republicans hated that idea. So maybe, maybe a compromise can be reached now after all. A lot more discussion on that important policy item a bit later in the program.

It's easy to get lost when talking about this in the thicket of the politics surrounding the payroll tax extension. But what does it actually mean for you? What are the hard numbers involved here?

For those answer, let's turn to CNN's Christine Romans.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT: John, let's strip away the politics of the process and look at what the payroll tax holiday means for workers' paychecks.

First, what are the payroll taxes? Well, they're taken out automatically. They're the taxes you pay on your earnings for Social Security and Medicare. Supposed to be 6.2 percent of your paycheck. Last year, the president and Congress gave workers a break. We paid only 4.2 percent of our pay, up to $106,200 of our income, that's what we pay in our taxes.

The difference is felt in our paychecks every week. And economists say that flows straight into the economy. How much money are we talking about? If the tax holiday expires, a worker earning $35,000 a year would see a $700 tax increase next year. A $50,000 a year earner would pay $1,000 more in taxes. And anyone earning six figures or higher, they would see a $2,300 tax hike.

These tax goodies are not free, as you know. They cost $200 billion. Both parties want to extend the holiday, but they say it must be paid for with cuts somewhere else. And that's where it gets ugly. Consider how small this $200 billion fight is in relation to what Congress has to fix. It will take $4 trillion in deficit reduction over 10 years just to stabilize our national debt. That's 20 times greater than the amount that has paralyzed Congress now.

There's a lot of work to do. If the payroll tax holiday is any indication, John, they haven't even begun.

(END VIDEOTAPE)

KING: Christine Romans breaking down the numbers there, a stunning presentation. After nearly nine long bloody years the war in Iraq is officially over. In a quiet ceremony attended by the defense secretary, Leon Panetta, U.S. troops lowered the flag of command that flew over Baghdad. Virtually all American forces will be out of Iraq by the end of this month. As of this week, only about 5,500 U.S. troops still inside the country.

Nearly 4,500 Americans were killed in Iraq, more than 30,000 wounded. The long war cost the United States more than $800 billion.

Stunning new developments tonight in the saga of the downed U.S. spy drone that ended up in Iranian hands. There's a new report out about just how the Iranians got it. We now know more about its true mission. Meanwhile, the top Republican on the Senate Armed Services Committee is demanding information about the downed drone.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: I think it's a very legitimate question. Why was the drone placed in such a situation where our highest level of technology could be compromised? And somebody ought to answer for that.

And I think we need to know. At least Congress needs to know. We have heard nothing obviously from the executive branch, but the media reports are that our highest level of technology has now been compromised.

(END VIDEO CLIP)

KING: Let's get the latest from CNN Pentagon correspondent Chris Lawrence.

And, Chris, let's start with the information you have on exactly what was this drone up to across the Iranian border.

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Well, John, in a word, spying.

Two U.S. military officials now confirm to CNN that the drone was on a surveillance mission looking at suspected nuclear facilities and sites inside Iran. That's an abrupt about-face from what some U.S. officials were telling us when the drone crashed. At first they were saying this was only being conducted on the Afghanistan side of the border. It was strictly looking for insurgents, nothing to do with spying.

Now these U.S. officials are saying, no, it definitely was spying. But as to something John McCain just mentioned, I have spoken to several former military officials and some aviation experts, and they say, yes, this drone is probably one of the most sophisticated drones out there, but it's not the most advanced stealth technology.

And they say the U.S. has some new technology coming online in the next year or so that will probably make this outdated.

KING: And, Chris, what about these reports that Iran essentially used technology to hijack the drone?

LAWRENCE: Yes, "The Christian Science Monitor" spoke with an Iranian engineer who says Iran hacked into the GPS signal and guided the drone down, basically tricked the drone into landing in Iran when it thought it was landing at its landing site in Afghanistan.

Now the chairman of the House Intelligence Committee, Mike Rogers, has said that's just not true. He says this was a technical problem, which echoes what some U.S. officials have said. But I spoke to a couple of aviation experts who say they do believe that Iran may have that technology to hack into a GPS signal and perhaps bring it down.

KING: Fascinating. Still a lot of questions, every day it seems more questions.

Chris Lawrence live for us at the Pentagon -- Chris, thank you.

In three minutes here, here's a question, is the Arab spring spreading? Senator John McCain on his warning to Vladimir Putin.

And coming up at 6:40, actor Christian Bale roughed up in China and CNN was right there. Stay with us.

(COMMERCIAL BREAK)

KING: Is the Arab spring spreading? Well, Senator John McCain seems to think so. And he is sending some pointed warnings to the Russian prime minister, Vladimir Putin, via Twitter.

Get this: "Dear Vlad, the Arab spring is coming to a neighborhood near you." Putin addressed the Moscow protests in his traditional year-end question and answer session. And today he took issue with Senator McCain and other critics of Russia's recent parliamentary elections.

(BEGIN VIDEO CLIP)

VLADIMIR PUTIN, RUSSIAN PRIME MINISTER (through translator): Mr. McCain is known to have fought in Vietnam. I think he has enough blood of innocent civilians on his hands and he probably can no longer live without these horrible, disgusting scenes, when television screens across the world show how Gadhafi is being killed, all covered with blood. Is that democracy?

(END VIDEO CLIP)

KING: Senator McCain was quick to respond, again, using a tweet. "Dear Vlad, is it something I said?"

Senator McCain joins us now from Capitol Hill.

Senator, what's the point of this exercise? Are you just having a little mano a mano with Vladimir Putin, or do you think, A., you want him to change something and, B., the United States in terms of our policy to do something? SEN. JOHN MCCAIN (R), ARIZONA: Well, John, first of all, later on, after that that you didn't include, he said that I was -- quote -- "nuts."

But -- and, in a way, it is a bit amusing. But it's also very serious. And I think the reason why Prime Minister Putin reacted the way that he did is because of the Arab spring that's taken place, because of the demonstrations which, frankly, surprised him a great deal.

And it will be very interesting to see what happens on December 24. But my point was that I have told you and I have discussed other times on this program the Arab spring is spreading around the world, to China, to Russia, to every country where there is an oppressive or repressive government and people want their freedom and they want their democracy.

And I think that December 24 will be a very interesting day, when the demonstrations say -- demonstrators say they're going to continue. So it's a little bit -- you know, I try to make light of it in some respects, but obviously the seriousness with which he takes it is warranted.

KING: And I want to speak to you again about the history of this day. You and I have had many, many discussions over the years about troop levels in Iraq, about when this day would come. Today's the day the United States officially brought down the flag and concluded its mission in Iraq.

I want you to listen to yourself here a bit because you took the opportunity just before this day to essentially tweak the commander in chief, saying, yes, you might be ending this war, Mr. President, but remember you're getting to do it because of the success of a policy you vehemently opposed. Let's listen.

(BEGIN VIDEO CLIP)

MCCAIN: All I will say is that, for three years, the president has been harvesting the successes of the very strategy that he consistently dismissed as a failure.

I imagine this irony was not lost on a few of our troops at Fort Bragg today, most of whom deployed and fought as part of the surge.

(END VIDEO CLIP)

KING: I remember, Senator, an interview we conducted on one of Saddam Hussein's palace balconies back in the last campaign when you were visiting Iraq in the middle of that.

What now? I know you wanted more U.S. troops left, a residual force left behind. Are you convinced now that all the troops can come home and Iraq will remain stable?

MCCAIN: By no means clear to me that Iraq can remain stable.

General Keane, as you know, who's one of the architects of the surge, said, we won the war, and now we risk losing the peace.

And I think it's important to point out that even though the Bush administration made the agreement, Condoleezza Rice, former secretary of state, said, we had always envisioned a residual force. I had always envisioned a residual force because of the areas of intelligence, the area -- protection of airspace, the contested areas in Northern Iraq and on the Iraq/Kurdistan border.

And there was -- every military commander, every one, recommended that we have about 20,000 troops remain behind in order to try to help with the stability and the security of Iraq. And the president campaigned saying he was going to withdraw all of the troops. He did that.

And I think it places the whole situation in great risk of a disintegrating situation, and I hope and pray that I am wrong.

KING: Senator, I'm in Sioux City tonight to watch something unfold that you have a great bit of experience at, a debate among -- between the Republican presidential candidates. And Iowa votes in just 19 days. It's a consequential debate, the last one before Iowa votes.

One of the men who ran against you last time, and you vanquished him, is Rudy Giuliani, the former New York City mayor. He says he looks at the race now. He sees Newt Gingrich and Mitt Romney at the top. He thinks Speaker Gingrich is the better candidate. Let's listen.

(BEGIN VIDEO CLIP)

RUDOLPH GIULIANI (R), FORMER NEW YORK CITY MAYOR: It may be that Newt is appealing to something that Mitt isn't appealing to. There's something wrong when you have been running as long as Mitt has and you're at 25 percent and you don't go much above and you go much below -- 75 percent of the other Republicans are telling you something about him.

(END VIDEO CLIP)

KING: Does Rudy have a point there, Senator? When you look at Gingrich, Romney, who do you think's the stronger general election candidate?

MCCAIN: John, in all due respect, as you know, I have stayed out of this and I haven't been critiquing the flavor of the month and who's up and who's down.

(CROSSTALK)

KING: I thought this might be the night to get in.

(LAUGHTER)

MCCAIN: But thanks for trying, John.

KING: No. What's it like -- give me this. Don't pick candidates.

What it's like to be in that room when you know it's the last debate before a big vote?

MCCAIN: Well, I think they have had too many debates, because I think it's now who makes a mistake, rather than who articulates his or her vision for the future of the country.

I think it's, you know, I think, a certain sense of relief that it's finally coming to the first real voting part of the campaign. There's a certain relief there, because all of these candidates have been really at it for well over a year, some of them a lot longer than that, so a bit of relief.

But, also, you know, one mistake and you're in serious trouble, it seems, the way it works now, too many debates, not enough town hall meetings, not enough campaign events, not enough discussion about your vision for the future, in my view.

And that's just my impression. Remember, it takes three days of your week, the day to prepare, the day of it, and the day after. And so I think there's a lot more to campaigns than just debates.

KING: Senator John McCain of Arizona, appreciate your time tonight, sir.

MCCAIN: Thanks, John.

KING: Up next, tonight's "Truth" answers this question: Will Speaker Newt Gingrich get his Christmas wish?

(COMMERCIAL BREAK)

KING: Tonight's debate may test his revolve, but at the moment Newt Gingrich would prefer you and anyone running against him think positive.

(BEGIN VIDEO CLIP)

GINGRICH: We have an ad that will come up next week where Callista and I are wishing people merry Christmas. And we're talking in a totally positive way. And I just think if these guys keep this kind of negative junk, it is so discordant with the spirit of Christmas.

(END VIDEO CLIP)

KING: While we wait for that new spot, the current Gingrich TV ad laments the new tone of the GOP campaign.

(BEGIN VIDEO CLIP)

GINGRICH: We want and deserve solutions. Others seem to be more focused on attacks, rather than moving the country forward. That's up to them.

(END VIDEO CLIP)

KING: It is up to them. And here's tonight's "Truth."

The attacks won't stop because history, including very recent history, proves they work. Look here, the numbers don't lie. What the Gingrich campaign likes to call Newt-mentum is stalling.

American Research Group polling both in Iowa and New Hampshire shows Speaker Gingrich dropping a few points just in recent days. Take a look, down five points in Iowa. Down six in New Hampshire. In that very same period, Gingrich has faced tough attacks in debates, on the Web, and on TV from several of his rivals.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Newt Gingrich was a career politician, selling access here in Washington, D.C.

GINGRICH: If enough of us demand action from our leaders...

REP. NANCY PELOSI (D-CA), HOUSE MINORITY LEADER: Together, we can do this.

(END VIDEO CLIP)

KING: Now, voters always lament negative ads and negative campaigning, and front-runners always plead, keep things positive.

Here's a brand-new Rick Perry TV ad to prove the candidates trailing Gingrich will ignore his be nice Christmas wish.

(BEGIN VIDEO CLIP)

NARRATOR: The problem, political insiders. Newt Gingrich supported increasing the federal debt ceiling $1 trillion and billions in new earmarks.

(END VIDEO CLIP)

KING: Now, to be clear, Gingrich himself is no stranger to attack politics, hardly.

(BEGIN VIDEO CLIP)

GINGRICH: Let's be candid. The only reason you didn't become a career politician is you lost to Teddy Kennedy in 1994.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Now, wait a second. Now, wait a second.

(END VIDEO CLIP)

KING: What does the newly positive Gingrich think of that attack?

(BEGIN VIDEO CLIP) GINGRICH: It was too good a line and he had set up too good an opportunity, but I shouldn't have done it.

(END VIDEO CLIP)

KING: Now, the former speaker's rivals are certain, trust me, certain to continue their attacks. And because of that, truth is, Gingrich may well have to reconsider his civility pledge if he wants to halt his recent slide and keep his place atop the pack.

Let's discuss tonight's "Truth" with a familiar face and a local legend now giving Gingrich advice. He's the former actor and the former Congressman Fred Grandy, a Sioux City native who endorsed Speaker Gingrich just yesterday.

It's good to see you. Glad to be back home?

FRED GRANDY (R), FORMER U.S. CONGRESSMAN: I love that local legend thing.

KING: Local legend, that's good.

(CROSSTALK)

Yes. I feel like an Indian chief.

(CROSSTALK)

(LAUGHTER)

KING: You know how this works. You have run your own campaigns. You're a veteran of the caucuses here. Speaker Gingrich is leading, so he says, hey, everyone, let's be nice. As you can see, they're not going to be nice.

GRANDY: No, they're going to be naughty tonight. We know that. And there's going to be ashes and soot in the speaker's stocking and everybody knows that.

KING: So can he stay nice? Does he have a chance? We already see the momentum stalling. He's plateaued, if not starting to drop a bit. Can he stay nice or does he have to fire back?

GRANDY: Well, give me a definition of nice because I thought the clip that you just ran about Teddy Kennedy was a fair comeback to somebody that had been on the speaker's case about being a career politician.

KING: But, unfortunately, he's now on camera himself saying he wishes he hadn't done it. Now if he does anything, he's on camera. Now anything he does that's a contrast, you're going to bring that up.

GRANDY: But I would suspect, because he's the front-runner, the long knives will come out for him. And I would expect him to defend himself. What is interesting, John, though is because we have never had a cycle of debates that's run this long, this is essentially a television series. And based on the experience I have had in television series, people begin to look for the person behind the persona.

And Gingrich, I think, is emerging as a much warmer, kind of deliberative, almost I would say wise human being that kind of belies the notion that a lot of people have.

KING: And as you say that, you know some of your friends, former colleagues in Washington have a different opinion.

And here's what you told "The Sioux City Journal" when you decided to make your endorsement. "It seems to me he's the target of the week, not so much for the national press, which is disposed to not like him, but for fellow Republicans that somehow think he's the Darth Vader of the Republican Party. He's closer to Obi-Wan Kenobi, as far as I'm concerned."

GRANDY: Yes.

KING: You're convinced that the Newt Gingrich you know, who is controversial, who is at times combustible, is the right general election candidate against President Obama.

GRANDY: I absolutely think he's the man for the moment, because beneath -- and the reason I went to Obi-Wan is because there's a kind of wisdom in the guy that I think belies the narrative that you frequently see particularly in the media and certainly in the punditocracy about Barack Obama, smartest guy in the room, Newt Gingrich, smartest guy in the room, title bout coming.

Clearly, they're very smart, both of them. But Gingrich has, I think, demonstrated some wisdom in the course of these debates, the longer narrative of the debates that I think has surprised a lot of people who were predisposed not to like him. And the reason I got into this, and the reason I'm enthusiastically supporting him is because I remember his record.

I had left Congress, but I was working at Goodwill Industries when he managed to pass welfare to work. That put a lot of women who were deemed unemployable into the workplace. It was the greatest, I think, successful social experiment since the Great Depression. That's what I remember about the guy. And I think you cannot minimize those accomplishments.

That, plus a kind of -- oh, I don't want to say kinder and gentler, but...

(LAUGHTER)

KING: Kinder and gentler Newt.

GRANDY: But a more deliberative, avuncular Newt I think is coming across. KING: We will see if he holds that in tonight's night's debate and in the 19 days until your state, Iowa, votes.

GRANDY: We will see.

KING: Congressman Grandy, good to see you again.

GRANDY: John, take care.

KING: Thank you, sir.

And more often than not, Iowa doesn't pick a nominee, but instead is the first cut of who won't be the nominee. Win, place, or show here, you get a ticket to New Hampshire. A strong fourth place finisher also can sometimes get a bit of a boost, sometimes.

Finishing at the bottom of the pack often means it's time to pack it in. Fund-raising dries up. The support in states down the road tends to evaporate. Former Senator Rick Santorum of Pennsylvania one of those struggling for survival just now launching a TV ad, had to hold his money because it's so scarce.

(BEGIN VIDEO CLIP)

NARRATOR: We all agree Obama's reckless agenda must be stopped. But who is the true conservative you can really trust? Rick Santorum. He's fought for conservative values his whole life, father, husband, a champion for life, a visionary that saw and understands the threat of radical Islam.

(END VIDEO CLIP)

KING: Let's dig deeper now in the stakes tonight and over the next 19 days with Dan Balz of "The Washington Post," Jennifer Jacobs of "The Des Moines Register."

Let's start with this basic question. This is, at least one candidate, maybe for two candidates, their last debate, right?

DAN BALZ, CHIEF POLITICAL REPORTER, "THE WASHINGTON POST": For a lot of candidates, this is the last debate. But it's the last very important time that Gingrich and Romney will be able to make a case to Iowa voters.

KING: And New Hampshire voters, right? There's nothing on the schedule between Iowa and New Hampshire either, right?

BALZ: Possibly. So, I mean, look, all of these debates have been consequential. We think this is likely to be quite consequential because of the fluidity of the race, because Romney has stepped it up in the last few days to go after Gingrich, because Gingrich will need to respond but knows he has to be careful in how he responds.

KING: I've been here, was here last month that I saw you. I've been back for four days now as we've traveled the state. You pick up from activists and you see it in the polling numbers that the Newtmentum has stopped, plateaued, maybe down a little bit. Why?

JENNIFER JACOBS, CHIEF POLITICAL WRITER, "DES MOINES REGISTER": It's probably the negative advertising. And he talked about that in Des Moines, he realizes that that negative advertising is probably sinking in. But he told us he thinks he can talk his way past it. He is very confident that he said the sheer evidence, the sheer weight of the evidence can beat any 30-second attack ad.

KING: But is there any evidence to support that? We see the glossy, first direct mail piece from Mitt Romney today. Rick Perry's new TV ad up. Front-runners love to say, "I'm going to stay big, I'm going to stay above it." But Dan, we've been through a lot of these rodeos, and attacks work.

BALZ: Well, they do work. And generally when they begin to work, the candidate who's being attacked fires back. And we'll have to see whether the former speaker is good to his word that he'll resist that. But it's generally not been a successful approach to politics to simply let people attack you and not really come back at them.

KING: Iowa feels different. I'm not sure what it will be like between this debate and the vote. Maybe we'll go back to traditional retail politics. You have to touch every -- every of the 99 counties.

There's a Quinnipiac poll out, asks this question: how important are debates in your decision on who to support for the Republican nomination? Important, 64 percent; not important, 33 percent.

As the Iowan here covering your state, do people here feel cheated in a way that the debates have become bigger than the traditional Iowa campaigning?

JACOBS: A little bit. A lot of people say that they have seen the candidates in person, and our polling shows that they don't necessarily want to see all of them in person. So they feel like they're getting satisfied.

KING: I don't want to end this without talking about Ron Paul. When you travel, it's for real. Now some people think he might be able to win Iowa. If we think win, place, and show, get tickets out, then maybe a fourth-place finisher, if it's a surprise and they come up big, why Ron Paul, Dan?

BALZ: A couple of reasons. One is the party's moved more in his direction, particularly on the fiscal issues. He was sounding the fiscal alarm before a lot of people, and that's where the party has moved with the Tea Party infusion of energy.

The second is he's dug deep in this state. He's put together, tried to put together a very good organization. You never know until caucus night who really has a good organization. But by all accounts, he has been quite diligent in doing the traditional organizing that often pays off in Iowa.

KING: Do you see a surprise candidate? You have Santorum, Bachmann, trying to find, and Perry trying to get his legs back here? We saw the Huckabee movement by now in the numbers. Is there somebody we're not seeing right now?

JACOBS: It's hard to tell. And you would like to think that probably Perry, Bachmann, Santorum, not all three of them are going to survive Iowa. So tonight could be the last time for one of them or a couple of them on the debate stage. We'll see.

KING: Two of those three could go, if not more. Dan Balz, Jennifer Jacobs, appreciate your time. Thank you so much.

Up next, an NFL player's under arrest, accused of attempting to set up a cocaine distribution network.

(COMMERCIAL BREAK)

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

Today the Senate followed the House and passed a $662 billion bill that funds the nation's defense. It now goes to the president for his signature.

We now have a satellite image -- look at this -- of what appears to be China's first aircraft carrier conducting drills in the Yellow Sea. That carrier causing speculation about China's growing naval intentions. A shocker in Chicago. A wide receiver for the Chicago Bears, Samuel Hurd, under arrest now and charged with conspiring to distribute cocaine. Federal officials say Hurd was take into custody following a five-month investigation.

And Herman Cain, remember him? Wasn't long ago he was the Republican presidential front-runner. He has since suspended his campaign, but Cain along with his wife, Gloria, have released a Christmas video. Take a look.

(BEGIN VIDEO CLIP)

HERMAN CAIN (R), FORMER PRESIDENTIAL CANDIDATE: For unto you is born this day in the city of David a savior which is Christ the Lord.

GLORIA CAIN, WIFE OF HERMAN CAIN: Peace be with you.

H. CAIN: Merry Christmas. And a happy holiday season from our family to yours.

(END VIDEO CLIP)

KING: And is this any way to treat a celebrity? Watch here. Actor Christian Bale being, shall we say, greeted by Chinese security when he attempted to meet a blind human rights activist. And here's the car chase chauffeuring them away.

(BEGIN VIDEO CLIP)

CHRISTIAN BALE, ACTOR: I mean, I -- half of the time I'm doing this, they're smacking me, smacking me.

They're still right on our tail.

(END VIDEO CLIP)

KING: CNN correspondent Stan Grant was with Christian Bale. He joins us now from Beijing. Stan, looked like pretty rough going out there. Take us -- what happened?

STAN GRANT, CNN CORRESPONDENT: Yes, it is. You know, this has been going on for more than a year now, ever since Chen Guangcheng was released from prison. This is a blind human rights activist who's campaigned for the rights of villagers in China, also campaigning against forced abortions.

Now, he spent four years in prison. He's been locked down in his house ever since. And whenever anyone -- human rights activists or journalists -- have tried to approach him, this is what has happened. There is a permanent security cordon around that village. There are people stationed at the gate. They are unidentified. They are wearing plain clothes, and they're not afraid to throw punches and forcibly eject people. That's exactly what happened to us today.

Christian Bale approached them. They wanted to meet Chen Guangcheng. He's been inspired by the story. They immediately came after us. Punches were thrown at us. They tried to damage our camera. In fact, our camera pretty much is shot right now.

They also came after Christian Bale's camera, and as you saw there, John, they chased us away. It was about a 30- to 40-minute car chase down through the village, around winding streets, up dirt lanes and so on, until we were able to finally shake them off and get out of the province.

It really does show the brittleness really here in China, John. We talk about China being a superpower, and China, of course, emerging as potential rival to the United States. And here's this country, with all of its economic might concerned about one man, a blind activist, going to these lengths to try to stop people to get close to him -- John.

KING: And let's listen, Stan, to what Christian Bale said after going through this little exercise.

(BEGIN VIDEO CLIP)

BALE: I think that, had we been locals, we would have been roughed up very severely. As it was, being foreigners, they tried to take the cameras, and they just forced us away.

(END VIDEO CLIP)

KING: Stan, is this standard operating procedure all the time, or is there more sensitivity on behalf of the Chinese government because of what they see in the Arab Spring, for example, and more pro-democracy movements around the world? GRANT: You know, that has been a factor. Over the past year we've seen a big crackdown on the media. We've been very much limited in what we are able to do.

And there's a concern here. There is a lot of pent-up anger, a lot of frustration. The gap between rich and poor is growing ever wider here. You're seeing a lot of this being played out in the rural areas.

Also, got a leadership change coming in 2012, and they want to batten down the hatches ahead of that.

And what Christian Bale was really hoping to do here was to shine a light into that. Interesting story, John. He had been in China for a premiere of a film that he'd shot here. That film had actually been shot with the backing and the cooperation of the Chinese government.

He then said, "Look, I'm here. I'm working here. I want to also do more. I want to look into a story about injustice, and I want to be able to challenge that the Communist Party, I want to be able to challenge the impact on ordinary Chinese that they're having to go through here." So that was his aim here today -- John.

KING: Good for Christian Bale. And Stan, great reporting, being there to take all that into account. Fascinating story. Thanks so much. Good to see you, Stan.

Tonight's "Number," 160 million. That's the number of Americans who will benefit if Congress passes an extension of the payroll tax cut. But notice the key word in that sentence was "if."

Congress has not yet passed an extension. So up next, what's the holdup? Can Congress reach a compromise, or will 160 million working Americans essentially get a tax hike in the new year?

(COMMERCIAL BREAK)

KING: We've been blessed this week to be welcomed into some of Iowa's historical and cultural landmarks, and, well, tonight's an extra special treat.

We're broadcasting like tonight from the historic Orpheum Theater, built back in 1927. Decades later, it fell into disrepair and for a while, was split into a two-screen movie theater.

A major restoration project launched in the 1990s, completed just after the turn of the century, and tonight what you see is the Orpheum fully restored, from the remarkable grand chandeliers to a magnificent main theater.

And it's not often you get your name up in the lights on such a historic marquee. Look at that. We're grateful for the hospitality.

"ERIN BURNETT OUTFRONT" coming up at the top of the hour. Erin, you want to rush out to Sioux City, I'm sure we can get you, you know, a marquee of your own. What do you think? ERIN BURNETT, CNN ANCHOR: I would like it. I'm looking forward to coming out there.

You know, one thing we're going to be talking about tonight, John, something that's a big issue in the election. Immigration, right? And whether it should be easy or hard for people to come into this country. Well, we had the chance, for the first time ever, to take cameras inside Google's New York headquarters, which by the way, John, was a pretty neat place to see. They have free food every 150 feet, cold and hot, by the way, if you are keeping track.

And we had a chance to talk about all sorts of things. But among them was this whole issue of trying to get people from China and India who come to this country for education to stay.

Eric Schmidt spent a couple of hours with me. I believe that you should be able to literally take a diploma, staple a visa to it, hand it to you and you leave. One of the biggest threats facing America right now, is that we educate these people. They go home to their home countries and found companies that end up competing with and often succeeding against American companies when they could be working here. So he makes the case.

We talk about a whole lot of other things, as well. But I thought it was interesting how he called part of our immigration plan and strategy right now utter madness. So that exclusive conversation part of our show, coming up top of the hour.

KING: Looking forward to the conversation. A glimpse of that food every 150 feet or so. But I know Eric Schmidt is well aware it's a toxic political issue. One we'll deal with at least until the presidential election. Erin, we'll see you in just a few minutes.

BURNETT: All right.

KING: Also in Washington, the clock's ticking for Congress to extend the payroll tax cut. And if there's no extension, 160 million working Americans will begin paying higher taxes on January 1, 2012. Well, today President Obama again turned up the heat.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Every economist indicates it's important for us to extend the payroll tax cut, make sure that unemployment insurance is extended. So this Congress cannot, and should not, leave for vacation until that -- until they have made sure that that tax increase doesn't happen.

(END VIDEO CLIP)

KING: The holdup at the moment is in the Senate where Democrats had proposed paying for the payroll tax cut extension with a so-called millionaire's tax. You'll remember Republicans flat-out said no way.

A Democratic source telling CNN tonight that provision is now off the table. Essentially, the Democrats blinked. That's not sitting well with the president's base.

Take a look at this posting from a progressive blogger. Quote, "I never knew the amount of depression and self-loathing that was involved in becoming a Democrat. I honestly think I hate Democrats more now that I am one than I did when I was a Republican."

Ouch!

The Republican House speaker, John Boehner has a different take.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: I think the White House and Democrat leaders realized that they never did have the votes to pass their so-called millionaire's tax. As a matter of fact, they didn't have it when they had 60 votes in the Senate, didn't have enough votes to pass it. So they're dropping it. They were dropping something that they never had.

(END VIDEO CLIP)

KING: Let's discuss this in more detail now. We're joined by Congressman Jason Chaffetz. He's a Republican of Utah. David Gergen, CNN senior political analyst, and Paul Begala, Democratic strategist, CNN political contributor.

Congressman, to you first. So the Democrats have taken the millionaire's tax off the table. That was the biggest Republican objective. Is there a path now in sight to strike a compromise to find a way to pay for this so that the 160 million Americans, let's hope a few of them are watching this program tonight know their taxes aren't going to go up, come January?

REP. JASON CHAFFETZ (R), UTAH: Well, I hope so. The House Republicans and some Democrats actually passed this bill. So as you pointed out, it is in the Senate. They maybe ought to cancel the bingo night, get rid of the wheelchair races, and actually do something in the United States Senate. It's really up to them.

KING: It's really up to them. I didn't know they were having a bingo night. I know there's a lot of things they don't do, but I didn't know that.

CHAFFETZ: I don't know what they do over there.

KING: Well, as the Congressman -- as the Congressman says, it's up to the Senate. House Republicans do have a lot -- a lot of Democrats do have a lot of frustration with the pace of action in the Senate.

You just heard me read that blog posting, and I'm sure you have heard similar and read similar. I want you to listen here first. This is the president of the United States telling the American people time and time and time again how important it is to raise taxes on millionaires.

(BEGIN VIDEO CLIP)

OBAMA: A quarter of all millionaires now pay lower tax rates than millions of you. Millions of middle-class families. That is the height of unfairness. The time when the tax burden on the wealthy is at its lowest level in half a century, the most fortunate among us can afford to pay a little more. We should end the tax cuts for the wealthiest Americans, too, because people like me don't need another tax cut.

(END VIDEO CLIP)

KING: There are a lot of Democrats, Paul, who think the president just won't take this fight to the finish line, won't just say, "No, I'm not budging." Fair?

PAUL BEGALA, CNN POLITICAL ANALYST: Well, you know, I actually think that it all depends on how the Congress goes. And you do have to have the crazy rules they have in the Senate. I think that Congressman Chaffetz is right. It's the one thing that unites Democrats and Republicans in the House, is they all hate the Senate.

The Senate has this filibuster rule. The Republicans can block anything, even a tax cut for the middle class paid for by millionaires and billionaires.

Now, I will note that it's -- the president also said, and I think it's a direct quote, it is crazy. I think that's what -- it's crazy for millionaires to pay a lower tax rate than a bus driver. That was President Ronald Reagan, by the way, who David Gergen served so famously.

So there used to be a bipartisan consensus in American. Ronald Reagan, Barack Obama, Bill Clinton, every -- most Americans believe that if you have more, you should pay a little more. We need the money. We have a terrible deficit. We've got to cut taxes to the middle class to get the economy moving again. If -- you know, rich guys like you, King, had to pay a little more, you know, you don't want to, but we always kind of do it. And that's what Ronald Reagan believed in, and I'm surprised that today's Republicans are disavowing Reagan.

KING: So David Gergen, Senator Paul Coburn, Republican of Oklahoma, says today it's all going to get passed eventually, but the political maneuvering is sickening.

The American people watching at home, we know approval rates for Congress are way down. Is there a reset button here somewhere? How do we get through these? On every big issue, this is where we seem to end up.

DAVID GERGEN, CNN POLITICAL ANALYST: It's true, John. But listen, I think the good news is they are going to pass payroll tax extension. They are going to pass payroll -- the benefits for the unemployed. They are going to get an omnibus bill so they don't shut down the government. All that is good news. They have been -- this has been sort of a mini crisis compared to some of the ones in the past.

But you know, the fact is, I'm going to go back to Paul Begala's point. It is absolutely true that Ronald Reagan, after steep tax cuts early on, agreed to a number of tax cuts, I think 11 altogether, during the course of his presidency. Tax increases, 11 over the course of his presidency.

But one of the differences is that Reagan always fought for what he believed in. And I do think a lot of Democrats think that Barack Obama puts things out there, but he doesn't fight for them. And so there is no sort of struggle. There is no sort of -- so we get to this thing that there is a disappointment on the one hand by the Democratic base. But I think the country is better served by getting something passed finally. And so that's good news for a lot of -- about 160 million people.

KING: We'll watch as this plays out. Wish we had more time tonight, but we'll stay in touch on this one. David Gergen, Paul Begala. Congressman Chaffetz, if you make it over to bingo night and win some money, you have to share it with the rest of us on the program tonight.

Up next -- up next, we'll hear from the people who aren't just plugged in the most to Iowa politics and have the most at stake here. The voters.

(COMMERCIAL BREAK)

KING: Once we decided to spend a week here in Iowa, we reached out to CNN iReporters, asking them what issues should be front and center.

(BEGIN VIDEO CLIP)

JENNY BRUSS, CEDAR FALLS, IOWA: More coverage of agriculture and farmers. Different EPA regulations removed.

BEN DAU, WAVERLY, IOWA: At this point in time, there is not a single candidate that has sort of risen that really makes me get too excited.

THERESE KUSTER, CEDAR FALLS, IOWA: My main concern has to do with small business legislation, primarily things like tax cuts.

(END VIDEO CLIP)

KING: One of the things I enjoy most when I come to Iowa is a chance to spend some time with local activists. We both know the history of the caucuses and are plugged into this cycle's organizing.

When you're here in Sioux city, that means saying hello to the former state Republican chairman, Ray Hoffman. He's torn at the moment between Gingrich and Romney. And at the moment, one benefit to visiting Ray is he owns a wonderful restaurant and wine cellar in Sioux City's historic district.

(BEGIN VIDEO CLIP)

KING: Do you see Gingrich as a viable general election candidate given his past, given his history, given his sometimes combustibility?

RAY HOFFMAN, FORMER IOWA STATE REPUBLICAN CHAIRMAN: As far as politics are concerned, I do believe he's one of the smartest men in this country. If I could be president of the United States, he would be my vice president. I guaranty that. And I think somebody who is a candidate should think about that.

KING: What happens in the last 2 1/2 weeks once we get past the last debate?

HOFFMAN: Right now, it's going to be tough. It's going to be really, really tough. It could very possibly be that tonight is going to be the night, and I have a feeling after tonight that people will know who they're not going to vote for.

(END VIDEO CLIP)

KING: We wrap up our week-long visit to Iowa. We've been to the east, the west, the middle. We're going to be at the state capital rotunda in Des Moines, Iowa, tomorrow night to wrap up our visit here, that the day after the last debate before Iowa votes. We'll see you then.

Have a great night. "ERIN BURNETT OUTFRONT" starts right now.