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ERIN BURNETT OUTFRONT

Do We Need the TSA?; House Republicans Agree to Senate's Two- Month Payroll Tax Cut Extension; Interview with Sen. Scott Brown; Interview with Rep. Marsha Blackburn; Interview with Gov. Terry Branstad

Aired December 22, 2011 - 19:00   ET

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


ERIN BURNETT, HOST: Thanks, John. Breaking news tonight, house Republicans cave. The Senate's two-month payroll tax cut extension. But has the capitulation and this entire fiasco damaged the Republican party?

Then the TSA, it costs us more than $8 billion a year, do we need it? A Congress woman OUTFRONT and 12 days until the Iowa caucus. Is there a sleeper candidate about to rise? Terry said he has an idea, let's go OUTFRONT.

I'm Erin Burnett and OUTFRONT tonight, a deal. Finally, a deal. The house Republicans agree to the Senate's two-month payroll tax cut extension. Now, this also includes unemployment benefits and also that dock fix it prevents people to take Medicare doctors getting big drop in payment.

Now, the house added one small tweak that's going to make it easier for employers to actually process the tax breaks, and this really is the final hour before midnight on a tax change. The GOP's image though has taken a beating.

A CNN/ORC poll found when it comes to handling major issues, people have increasing confidence in President Obama. Look at him now, 50 percent have more confidence in him, back in march it was only 44. And when you look at Republicans in congress, 31 percent now versus nearly 40 in March.

So, how damaging is this to the Republican party? And what can it do to fix its image as we head into Iowa and the presidential election. Senator Scott Brown from Massachusetts joins us tonight. Senator, good to see you and thanks for coming on, sir.

SEN. SCOTT BROWN (R), MASSACHUSETTS: It's great to be on, Erin.

BURNETT: Well, you know, I didn't know how this interview would go tonight. I have to admit because I didn't know if we'd get a solution in Washington. You've been pretty frustrated angry, I could use some stronger terms. But I mean, you put out some strong statements, calling your colleagues in the house, you Republican colleagues irresponsible. Do you think that they actually have resolved this at this point? BROWN: Well, obviously they have, and that's a good thing. And I think there have been some lessons learned. We need to work in a bipartisan bicameral manner to get something done. And I think what everybody fails to realize in D.C., is that we're Americans first. And we need to work together in this moment in time, when we have an opportunity to do it better than the rest of the world. So, I'm going to continue to work with people of good will who want to try to solve problems and not throw rocks, and not get into the chest thumping partisan stuff. And so, here we go, I'm glad level heads prevailed.

BURNETT: And it's tough though, I mean, I know we all want to say, OK, we're glad that there was a deal because everyone agreed they wanted this. And it was -- it was awful and it was embarrassing for Americans, for the country, to have this happen this way.

But then, you take a step back, and it was even embarrassing the Senate could only come up with a two-month schedule on something that Democrats and Republicans both wanted to do for a year, and as everyone watching knows, two-month tax policy is not anything that's going to help this economy.

So, what do you have to say about that? About the fact that in the Senate, the best you could come up with was a kick the can down the road solution?

BROWN: I think that's a very good observation. I think we need to create certainty and stability, not only with businesses but individuals, so they know what's next. Whether its regulatory uncertainty, tax uncertainty and provide providing an uncertainty in benefits. Absolutely right.

But that was the deal that was presented before the senate. And the fact that we are going to do nothing, is that what you really want us to do is nothing? Of course not. We should have finished out the year on a good note, started the new year on a good note. And then work together to extend the package up for a year.

But you know, it goes to a bigger problem. We have to start to solve our economic issues. We're in a financial emergency, and we need to do it better.

BURNETT: So, let me ask you about the broader issue here, which is not just how to pay for the payroll tax, but in general, have a deal with the fact that revenue and spending in this country is completely out of whack.

So, let me ask you, the tea party, you know, you're a guy they like a lot, and that was a big part of your story. Are you open to the Bush tax cuts going away or do you want to disagree with me on the tea party there?

BROWN: No, no. Not disagree. It's just - listen, I was elected by everybody in Massachusetts. Not one particular group been - I seems that they like the left's always mad at me. The right's always mad at me. So that, being said, what I'm going to try to do is find solutions. And we hell, right? And when it comes to tax policy, listen, we need to do an overhaul of our tax code, and make sure we can do a lot of things, repatriation, lower corporate tax rates, lower overall rates for everybody. So, we can actually, you know, put more money in people's pockets.

The fact that the federal government is taking more of our harder money and using and using it incorrectly is wrong.

So, when you're talking about taxes expiring, listen, in the middle of a three-year recession, I think Americans should have as much money as possible in their pockets, because to take it out of the federal government's hand and put it in their pockets, they can do it better than the federal government.

BURNETT: Are you morally opposed to the Bush tax cuts going away to people having their rates go up? And I asked this to Jeb Hensarling last night.

BROWN: Listen, that's easy. We've had a tax policy now for 11 years, Americans have come to recognize and rely on. We need to create a tax certainty. We need to actually have a long term tax policy, so individuals and businesses can plan. Yes, I'm not in favor of increasing taxes on anybody right now, especially in the middle of a three-year recession.

BURNETT: OK, I guess you answered that question. That's your vote on that.

BROWN: It's pretty straightforward.

BURNETT: Are you in the camp where, I'm for increased revenue, but only when it's getting rid of loopholes? Somebody may really pay more and their rate may go up? Which camp?

BROWN: Well listen, bottom line, I've already voted to close the ethanol subsidy. If there's other like that, I'm happy to do it. We should do a top to bottom review of every federal program. Look at all the fraud, waste and abuse, and take any savings we have, either to use it to pay down the debt or deficit or lower overall rate for everybody. And until we do that, I don't think there's any reason to raise any taxes right now, especially in a tough economic mess. Because the federal government taking more money out of people's pockets and wasting it, I'm not for that.

BURNETT: What defined compromise in your view? Does it getting tough, you know, for people watching this and say, alright, the Democrats wants some increase revenue. And you guys don't. And then, you both go on either side and say, we're just not going to move. And then we end up with two month extensions of the payroll tax. So, where does the compromise come from with Scott Brown?

BROWN: Sorry, there's a little bit of delay. So, I'm sorry to keep jumping on you. But listen, it's not - of course, we don't want to increase revenue. It's a fact that -- I personally, let me talk about me, I don't think the government is a good steward of our money. And until they do it better, and they re-established that trust from the American taxpayer, I don't think we should be raising taxes.

That being said, are there ways to do it, increase revenues? Sure, there are. But it's not by - not the first thing shouldn't be, hey, let's raise taxes. Let's take more money from the American people. It should be, by doing all the things that we shake our heads about, and say, we can do it better. And I've worked across the lines since the day I got there, whether it was the jobs bill or a whole host of other things, I'll continue to work with people of good will who want to do that. And many more of those people down there, I'll tell you.

BURNETT: Well, you gone across the line. I think a lot more than some people would have wanted. I was reading a story in the Boston Herald today about you, saying tea party movement is extremely unpopular in Massachusetts which is why I tackled earlier when you jump on me in the tea party.

But I'm curious, because you're now running in a race against Elizabeth Warren, it's tight. She's ahead of you. Outside the margin of statistical error. Do you think you're going to have to go left to win in Massachusetts?

BROWN: No, listen, I'm going to be the same person I've always been. I said I was going be down there and be independent voter and thinker. And certainly, I'm happy to talk to you after the new year about the election. But people are going to have a very clear choice and this is going to be polls galore.

And, you know what's important is me doing my job, and doing what I did tonight and doing what I've done for the last two years, which is to work across party lines and try to move our country forward. Because I'm not a rock thrower, I'm a problem solver, and I always have been, and I'm proud of it. And I'm excited about the upcoming election, but quite frankly, I'm going to try to continue to do my job and spend a little time with my family. I want to wish everybody a merry Christmas, happy holiday and a great and successful and safe new year as well.

BURNETT: Alright. Well, thank you very much senator Brown. I appreciate you taking the time tonight.

BROWN: Thank you.

BURNETT: Alright, let's bring in John Avlon, senior columnist from Newsweek and Reihan Salaam, nation review online. Independent thinker, going across lines but we're not getting revenue.

JOHN AVLON, CNN CONTRIBUTOR: Yes. Look, he's in a tough spot, not just a tough re-elect. He's in a state where independents outnumber Democrats or Republicans. And there hasn't been a Republican in the Senate for Massachusetts since Ed Brooks. So, he's got to show he's not part of the problem, that he's part of the solution. He's got to able to reach across the aisle.

But you see, he got skimmed in without tax cut theology. That there, he was saying, look, let's close from loopholes. BURNETT: I like the how you use the word, theology.

AVLON: Well, thank you. Yes, but it is. That's the problem. The tax cut has become a theology, it's an article of faith. We're no longer dealing with simple math when we try to reduce the deficits. That's the problem.

BURNETT: Reihan, what do you think about that? Yes, go ahead.

REIHAN SALAAM, NATIONAL REVIEW ONLINE: I actually think it's very sensible. I think Republicans have made actually made a substantive move on this issue. There was a time when they were saying, we're not going to move on revenue at all. Now they're saying, we welcome broadening the revenue base, and then lowering rates, doing the sensible stuff that Simpson-Bowles also recommended. This is huge progress.

BURNETT: Half-way, how do you know it's not an intellectual move? Because they are basically - this is their thing about how 48 percent of people don't pay federal tax, right?

SALAAM: Well, that's the different view which I think is bananas. I think that people who complain about that is - because it's not the life cycle. It when you pay people when they're young, et cetera, et cetera.

But I think that's saying that we want to broaden the base, the problem with that there are a ton of people that benefit from the mortgage interest deduction. A lot of them voted for Scott Brown. And that's the kind of thing we have to go after. Because that's the kind of thing where you have a huge amount of revenue.

BURNETT: Why would introduce a tax something that I think a lot of people would say, economically needs to go away, but politically is incredibly hard to talk about.

SALAAM: Absolutely.

BURNETT: But, this revenue thing. I don't really see where you say they're moving on revenue. It's saying I'm for increased revenue, but I'm lowering the rate.

SALAAM: Well actually, one thing to keep in mind is that when you grow the economy faster, then revenue grows that way. That's the great way during the tech boom in the late 90s, that's where the revenue came from. It came from huge capital gains revenues.

BURNETT: You're not a believer and like put rates to one percent and my revenues goes, you know --

SALAAM: Absolutely not.

BURNETT: I'm just checking. I'm just checking.

AVLON: And there's a lot of retrospective love for Bowles- Simpson on the part of the republicans now. BURNETT: Yes.

AVLON: But, you can't get around the fact, the Jeb Hensarling and the Paul Ryan and the Republican congressmen on the committee voted against it. Now, Tom Coburn had the guts to vote for it.

Bu you know, we all know the way out of this right? We all know that ultimately, it's not -- you're not going to be able to raise tax rates without Republicans putting up the fight. But we should be able to close loopholes rates as revenues. And that became the line in the sand last time around. That's what they were rejecting. So, that becomes the problem.

One of the big pictures I think Republicans have learned today, is that there is such a thing as too extreme. And you start hurting your credibility with the American people, that's why Republicans in congress right now are the least popular folks in Washington.

BURNETT: That's right. Alright, well, thanks to both of you, appreciate it.

Still OUTFRONT, former presidential candidate John Edwards corruption trial was set to start next month. But today, his attorneys have asked for a pretty significant delay so he can deal with unspecified medical issues.

Then the TSA, we talked about that this week, $8 billion a year, do we need it? Someone taking a stand on that tonight. And last night, the mother of 19-year-old Ayesha Cannes broke down in tears discussing her missing daughter on this show. And we have an update on that story for you tonight.

(COMMERCIAL BREAK)

BURNETT: Well, Scotch whisky association has won a temporary injunction against a company in India. That it claims they've been passing off as an Indian whisky as the genuine article. A court in Goa today ruled that in addition to dropping the term scotch whisky from their labels and advertising, the distillery is also no longer allowed to use the name Glenn Mon, because according to the court, that name is too easily confused with popular scotch whisky brand that traditionally use the word, Glenn in their names.

Now, the scotch whisky association seems very happy with this decision. Their director of legal affairs, Glenn Barkley said "we're pleases the judge recognizes our concerns in this case, through a temporary injunction. The defendants have indirectly misled the general public using the word Glenmon. They are directly misleading the general public by using the words Scotch whisky."

Better watch out guys, you're going to be late for French if you keep acting like that.

But this brings us to tonight's number which is 17. That is the age of this single authentic single malt scotch whisky. It was borrowed from Will Surratt. Will Surratt is our executive producer. Andre hog who is on my ear right now screaming, don't open it, don't open it. Gave it to him for Christmas. Don't worry Andrew, I think scotch is just nasty. But at any rate, that is the age of the scotch whisky, and we will open it later on with two glasses, Will.

A strange development meantime, in the upcoming corruption trial of former presidential John Edwards. The man who fathered a child out of wedlock, and who allegedly used campaign funds to cover up his 2008 affair with a videographer, Rielle Hunter, wants to delay next month's criminal's trial because of a medical condition.

His attorneys say Edwards has quote, "unspecified medical issues" and they're asking for a two-month delay. Prosecutors oppose the motion and have already delayed the trial once after Edwards said he needed more time to prepare his defense and attend his daughter's wedding.

Former prosecutor and legal contributor, Paul Callan is OUTFRONT tonight. Alright, what do you make of this situation? Does this reek to you of trying to manipulate or no?

PAUL CALLAN, LEGAL CONTRIBUTOR: No, I don't see it as manipulation. I mean, the defense makes a compelling case here. By the way, not based on Edwards being sick, but on the fact that they've been served with 500,000 pages of documents, 100,000 of them in the fairly recent past. And they just have not had an opportunity to review all of this material to prepare for trial. He's facing five years in prison, so they're saying, you know, judge, we just need more time to review it, and by the way, he's sick. Something's wrong with John Edwards.

BURNETT: But, they've already asked for time because they needed time to look through all the documents.

CALLAN: Well, they have.

BURNETT: When Kate got married this summer. They have a lot of time now.

CALLAN: Well, they've had a lot of time. They cite probably six or seven cases of similar or lesser complexity, which they say took longer to try, and got them -- the defense got more time. So they say, this is not unusual for a case of this complexity.

BURNETT: Does it matter what the medical condition is, in terms of what the judge will rule here or not?

CALLAN: Well, I'm --

BURNETT: Will you be specific?

CALLAN: I'm betting he's not getting a vasectomy. However, if he had done so, perhaps he wouldn't be facing these charges. But yes, the medical condition. We better break out the scotch on that one. But the medical condition, depending on what it is, could have a bearing. He has to be able to participate in his defense. If it's something serious that affects his ability to perceive and participate, yes, that would be an absolutely legitimate reason for an adjournment.

And I think they make a strong argument. You know, 500,000 pages of documents, it's a lot of material to go through in a criminal case. And to give a fair trial, due process requires that the defense be given a fair opportunity.

BURNETT: You mentioned how long - because how long he may if he were to be convicted, what's at stake here?

CALLAN: He's facing five years in prison for breaking campaign finance laws and for lying to federal investigators. So, it's a serious charge for somebody who once was thought to be a potential president of the United States.

BURNETT: Certainly is. Paul Callan. Thank you.

CALLAN: Thank you.

BURNETT: We've all heard the saying, if it looks like a duck, quacks like a duck. And well, it's probably duck. But that's not the case for somehow GOP members when it comes to TSA officer. Outrage of a recent strip searchers of the elderly and path down of toddlers, they are backing a bill that would ban TSA officers from using the title officer wearing a badge or wearing uniforms resembling those of police officers. It's called the staff TSA breach in policy act or the strip act. Something you probably can be remembered.

There's been a lot of controversy about the TSA recently. It has a budget of more than $8 billion. I spoke with the secretary of homeland security Janet Napolitano about this, this week, she said the money is worth it.

(BEGIN VIDEO CLIP)

JANET NAPOLITANO, SECRETARY, DEPARTMENT OF HOMELAND SECURITY: We have the largest, most complex aviation system in the world. I think there's something like 1.8 million passengers fly every day and 450 plus airports in the United States. And it is a very safe system. But it takes work to be there 37.

(END VIDEO CLIP)

BURNETT: I also asked the secretary about the badges issue, she said being a TSA officer is a tough job.

(BEGIN VIDEO CLIP)

NAPOLITANO: If you make a mistake, if you miss something, you are the last line of defense before somebody gets on the plane. And, you know, the result could be very, very serious. And so our officers undergo a lot of training, and continual, every day they're getting new things coming to the system.

(END VIDEO CLIP)

BURNETT: Joining us now is the sponsor of the STRIP Act, representative Marsha Blackburn, Republican of Tennessee. Representative, good to have you with us, we appreciate it.

REP. MARSHA BLACKBURN (R), TENNESSEE: Good to be here. Thank you.

BURNETT: She makes a good case. These people do have a lot of pressure on them, and they are the last line. And I'm wondering why it is this badge issue and uniform issue is so important.

BLACKBURN: I think it's important because they are not officers, they are not federal law enforcement officers, they do not get any federal law enforcement officer training. They are not eligible for those benefits. And even though they have gone to wearing these uniforms, which they did this through administrative rule making, not through coming to Congress.

They wear the uniforms, they wear the badge, we still have had over 25,000 breaches. And what we are saying is, these are screeners, you have reclassified their job title to say officers. You did that administratively. They should go back to being screeners and focus on protecting the flying public not to overreaching their authority because they're wearing a law enforcement uniform and a badge.

BURNETT: What do we get if they take it off? I mean, I'm just curious because the American federation of government employees said the bill's insulting to 44,000 TSA workers that they represent. If they are lucky, you can get what you want in your bill, it doesn't add anything to national security. It's just insulting to them. What do you say to that?

BLACKBURN: I say that what we're talking about is TSA has now become the largest agency, when you're looking at employment, it's larger than labor, education, energy, HUD and the state department combined, 65,000 employees. They have unionized 40,000 of these screeners and it should not be insulting to say, look, you need to go and be a screener. Is it insulting to federal law enforcement officers, that you have someone who is a screener with minimal training?

They advertise for screeners on pizza boxes and at discount gas stations in the Washington, D.C., area.

BURNETT: Right.

BLACKBURN: They do not have to go through this law enforcement training. Maybe they should stop impersonating federal law enforcement officers and stop the overreach. Get back to assisting and protecting traveling public.

BURNETT: Why do this bill? Why not go all the way as some have, who are running for president and the Republican party, and say, get rid of the TSA all together or the DHS?

BLACKBURN: What we want to do is put the focus back on protecting the traveling public. And they have a task to perform, which is to make certain individuals are meeting the guidelines and not traveling with things they should not be. But what we also want to do is make certain that we're greeting good value for the dollar that was spent.

You can look at the study that was done comparing the costs of screeners in San Francisco and LAX. TSA does the security at LAX and San Francisco, it's done by a private company, it costs $11,000 less per individual to train to TSA standards, and they find more items that should be removed before individuals get on the planes.

So, I think what we're trying to do is focus, Erin, on how do you make certain individuals are safe? How do you do it in a way that's going to be sensitive to the taxpayer, respectful of the individuals flying, and not allow these TSA screeners to impersonate federal officers.

BURNETT: Alright. Well, thank you very much. Appreciate you taking the time.

And viewers, let us know what you think, about the badge issue and about the TSA, whether you think they make this country safer. I know a lot of you -- some people are watching at an airport tonight quite throwing things at the screen, they're not happy with the TSA. But nonetheless, please get in your iPad, go to the blog and let us know.

Alright now, turning to Libya. Officials on the human rights watch said Moammar Gadhafi's son Saif al-Islam should have access to an attorney. Now, Saif was captured by anti-Gadhafi forces in southern Libya last month. And he told the group that he had no complaints about the conditions of his detention, but he wanted to meet with a lawyer to discuss his case, alright?

The group said was mandated by Libya's laws. We spoke to the former acting prime minister of Libya, Ali Tarhouni. We asked him if Saif, once considered a reformer in that country could be rehabilitated and actually returned to Libyan society.

(BEGIN VIDEO CLIP)

ALI TARHOUNI, FORMER ACTING PRIME MINISTER, LIBYA: No chance in hell. Even this reformer, he's a killer, he's the son of a killer. And even as a reformer, not a single reform that took place. He talked. He indeed and raised the hope of a lot of people.

(END VIDEO CLIP)

BURNETT: Pretty direct words. And remember this image? They're hard to forget. The images of Libyan Leader Moammar Gadhafi, just moments before his execution style death. Now, we also asked Tarhouni whether there should be -- its right, people are so focused on whether Moammar Gadhafi was executed or not.

(BEGIN VIDEO CLIP)

TARHOUNI: I think it is wrong. It is a murder. This is a thug. This is a killer that killed, maimed, stole the treasure, bribed mothers from their livelihoods, from their love ones. And not for one or two, for 40 years. So I'm into the sure it's really an issue. (END VIDEO CLIP)

BURNETT: So, he doesn't think it's fair. I wonder how Moammar Gadhafi was killed. He was killed almost one month to the day before his son's arrest. The new Libyan government is investigating Saif for corruption and crimes committed during the revolution. He's also been charged with war crimes by the international criminal court.

Well, on tonight's OUTFRONT 5, a moment of silence was held for North Korean dictator, Kim Jong-Il. You will not believe where, trust us. They made our jaw, dropped.

And twelve days until the Iowa caucus, is there a dark course candidate on the horizon?

(COMMERCIAL BREAK)

BURNETT: We start the second half of our show with stories we care about. Where we focus on our own reporting, do the work, and find the OUTFRONT 5. And number one tonight, house republican finally reaching a deal on the senate payroll tax cut extension bill. A mentor republican in the house Kate. It's two-month bill - deal.

Republican senator Scott Brown from Massachusetts came OUTFRONT with his take on the whole fight.

(BEGIN VIDEO CLIP)

BROWN: I think there have been some lessons learned. We need to work in a bipartisan, bicameral manner right now to get something done. And I think what everybody fails to realize in D.C. is that we're Americans first.

(END VIDEO CLIP)

BURNETT: Brown called House Republicans irresponsible in waiting so long to do a deal.

Number two, did WikiLeaks pay Army Private Bradley Manning to leak classified documents? CNN has obtained a court document that claims Manning told someone in military prison that he sold documents. But this contradicts what Manning told a hacker reportedly. He said at the time, he could have made a lot of money, but he believed information should be free.

The 24-year-old faces 22 charges, including aiding the enemy. Life in prison is possible sentence.

Number three, the U.N. General Assembly paid tribute today to North Korea's late leader, Kim Jong Il. A moment of silence was held insides the U.N. -- yes, this really happened today.

OUTFRONT asked the U.N. why Kim Jong Il was honored? And we were told that, quote, "based on precedents and the protocols accorded to all member states in such matters." North Korea announced today it will accept all South Korea delegations wanting to express their condolences to Kim Jong Il. Yes, there was a moment of silence today in the U.N. for Kim Jong Il's death.

Number four: jobless claims dropped to 364,000, their lowest levels since April 2008. Economists say the decline came as a surprise. Jobless claims have actually been dropping, though, for three straight weeks. Some people are saying, maybe the job market is finally turning around. Some of this, though, may be linked to people going out on the market who thought they might be losing unemployment benefits.

It has been 139 days since the U.S. lost its top credit rating. What are we doing to get it back?

Well, today, we learned economic growth was not as strong as we thought. Third quarter, growth revised, lowered to 1.8 percent from 2 percent. That's not enough to create enough jobs.

Twelve days and counting, but this highly anticipated Iowa caucus, as crucial to presidential candidates as -- well, I don't know, it's conventional wisdom, right? Well, for the Democrats, it's historically actually been a really good indicator of who's going to win the nomination for the president. But for Republicans, the Iowa winner has won the party nomination only 50 percent of the time.

This year, we've seen five different candidates take the lead. And earlier, I asked Iowa Governor Terry Branstad if the caucus is still important.

(BEGIN VIDEOTAPE)

GOV. TERRY BRANSTAD (R), IOWA: You really have to be in the top three if you're going to be able to be competitive beyond Iowa. So, I think the Iowa caucuses are very important. George W. Bush, of course, won the Iowa caucuses and was elected president of the United States twice. And so, it is important, and Iowa voters take their responsibility very seriously. They're looking for the best possible candidate.

BURNETT: You have not endorsed anyone before the caucus. I'm curious, given that we've seen five leaders -- obviously, as I mentioned, currently, Ron Paul being the leader. Do you believe he's electable and why won't you endorse?

BRANSTAD: Well, first and foremost, I have a lot of confidence in the Iowa caucus-goers, and I think they're going to sort it out and decide who they think is the strongest. And just because Ron Paul is ahead today doesn't necessarily mean he's going to win on January 3rd. We've had several winners, and I think a lot of voters are still undecided -- looking for the best candidate, the one they think has the best vision and the best leadership qualities to lead this country.

I think part of Ron Paul's appeal is, he's voted against all this excessive federal spending and manipulation of the currency that's gotten us in the mess we're in. People look at what's happened in Europe, they don't want America to go that direction.

(CROSSTALK)

BURNETT: Will you endorse him? Will you support him though?

BRANSTAD: They also have some concerns --

BURNETT: You're saying a lot of positive things.

BRANSTAD: Well, yes, and I certainly like his economic policies, but I have concerns about -- I think he's naive when it comes to dealing with Iran and some of the international challenges that we face.

BURNETT: So, who are you going to cast your vote for?

BRANSTAD: Well, I haven't decided yet. Unlike a lot of Iowa voters, I'm waiting to se who I think has the strongest and best message, and the best possibility of being the next president of the United States. I think a lot of Iowa caucus-goers are in that same position. So, you could still see the lead change a few more times.

One person to look at is Rick Santorum. He's not been the leader yet, but he's gaining momentum. He's been to all 99 counties. I think he is going to be a contender in the end here, and, you know, I -- it's the top three that are going to go on to New Hampshire.

BURNETT: Are you disappointed in Mitt Romney's commitment, or has he made it up to you and won you over?

BRANSTAD: Well, he is -- early on, I was very concerned that he was not putting enough time and effort into Iowa. That's changed. He's opened headquarters here.

He's been here recently. He's participated in the most recent debates in Iowa. And he's growing to have a bus tour on the 28th, 29th and 30th of December.

So, Romney is definitely engaging, along with, you know, Governor Perry and Congresswoman Michele Bachmann and Santorum, and Gingrich and -- you know, so we have a wide open race going on here in Iowa. And I have a lot of confidence that the Iowa caucus-goers -- I think we're going to get a great turnout.

I think people are concerned. They want a change in the direction of this country and know that we're going to have to choose a new leader.

BURNETT: Do you think it is American in the modern era that Iowa gets to go first and have such an undue importance in the whole process, when there are all these other states that don't get to go first? And why do you think you deserve to go first every single time? Why can't New Jersey have a chance, Minnesota? BRANSTAD: Well, I know there's a lot of jealousy in other states. But we take this responsibility very seriously. And I think it's important -- I think it's important to start somewhere where retail politics are important, where people ask tough questions and want to get to know the candidates and know their records. But also their vision in where they want to lead the country.

BURNETT: All right. Well, thank you very much, sir. We appreciate you taking the time. Good to see you, Governor.

BRANSTAD: You're welcome. Thank you.

(END VIDEOTAPE)

BURNETT: All right. John Avlon is here, along with Tim Punke, Democratic strategist, and Ned Ryun, president of the Tea Party group American Majority.

All right. Ned Ryan, what do you think about his point about Mr. Santorum, the sleeper hit? Take a look at Rick Santorum. I didn't expect to hear that.

NED RYUN, PRESIDENT, AMERICAN MAJORITY: You know, the thing you're seeing in the Iowa polls, you know, Rick is trending upwards, I do think you will see a surprise January 3rd, looking at the polls, Newt's plummeting, Rick Santorum and Rick Perry, quite frankly, are both surging in the polls. So, I think you're going to see some surprises come the night of January 3rd.

And like the governor made the point, the thing with Iowa is about surviving. It's about being in that top three. You can't win the nomination in Iowa, but you sure as heck can lose it. So, really, it's going to come down to, who's going to survive Iowa, to come out of the state, to get to New Hampshire, get to South Carolina.

So, I do think there might be a surprise third place finisher. Right now, I don't know, it's so fluid.

BURNETT: What do you think, John Avlon? You've been looking at some ads. Rick Perry's ad there. He's trying to get in the top three.

AVLON: I love Rick Perry's new ad where he makes --

BURNETT: He's been --

(CROSSTALK)

AVLON: Cat like pounce on his wife.

But, I mean, the ad wars, it's -- people should go -- it's a good time. But, look, I mean, he's been going on a charm offensive.

BURNETT: It's not what you just said it was. It's different than that.

AVLON: It's not actually that different. Let's see, actually, it's a good time. But --

(BEGIN VIDEO CLIP)

ANITA PERRY, GOV. PERRY'S WIFE: It's an old fashioned American story. I married my high school sweetheart, but first, I had to wait as he volunteered for the Air Force and flew planes all over the world.

I'm Anita Perry.

When Rick's tour of duty as the captain the Air Force ended, he returned home to farm with his dad and asked me to marry him. We grew up in small towns, raised with Christian values -- values we still believe in. And we know Washington, D.C. could use some of that.

GOV. RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: I'm Rick Perry, and I really approve this message.

(END VIDEO CLIP)

BURNETT: That was a pounce. All right. I see what you mean.

(LAUGHTER)

BURNETT: OK. Quickly because we're short on time, I want to ask you about the other news of the day -- Chris Christie, I knew it, I just had a feeling, the guy said he might be open to V.P. on Mitt Romney's ticket.

AVLON: That would be a great pick for Mitt Romney in a lot of respects. Controversial, but you know what? Chris Christie has credibility with the establishment and the Tea Party. And that's what no person in this race has, is credibility with both those wings of the Republican Party.

BURNETT: All right. Tim Punke, what do you think? Would that really hurt Barack Obama? Is that a winning ticket, Romney-Christie? If Romney could even get there. I mean, we're a long way away from that.

TIM PUNKE, DEMOCRATIC STRATEGIST: We're a long way away from that, with Gingrich up in a lot of the polls.

BURNETT: That's right.

PUNKE: Especially the primaries in January. But, you know, I think Chris Christie would be a difficult choice for Romney. I'm not sure what value he brings to Romney.

I think people see Christie as sort of a centrist. He's not from a critical state and he doesn't represent some interest group that's unique from Romney.

I think, you know, a candidate that a lot of people talk about is somebody like a Marco Rubio, who brings Florida, who brings Hispanic voters, who certainly brings the Tea Party and the conservatives more than somebody like Chris Christie.

So, I can see why Chris Christie wants to be vice president, but hard to imagine he'd get that chance.

BURNETT: All right. Well, thanks to all three, appreciate it.

RYUN: Thanks, Erin.

BURNETT: All right. Last night, the mother of a missing 19- year-old college student broke down in tears on this program. But we have an update for you tonight. And we're looking forward to sharing it with you.

And in tonight's IDEA segment, yes, IDEA, we talk to the man behind the most popular Christmas toy of the season. We on this staff -- even though there's a lot of young kids on this staff -- could not understand why people are crazy about this thing.

We'll be back.

(COMMERCIAL BREAK)

BURNETT: We do this at the same time every night, our "Outer Circle," where we reach out to our sources around the world.

And tonight, we go to Iraq, where a wave of explosions have ripped across the capital, killing dozens.

Arwa Damon was there.

And what happened, Arwa?

ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: Erin, to see this type of violence following the U.S. troop withdrawal is pretty much the Iraqi's worst nightmare. There were 16 explosions taking place during the early morning rush hour and completely indiscriminate. One of them happening in front of a school, just as children were arriving, others targeting crowded intersections, busy marketplaces, this level of sophistication and coordination bears the hallmarks of al Qaeda, and it's stirring up fears amongst Iraqis that perhaps their own forces cannot protect them -- Erin.

BURNETT: Arwa, thank you.

And now, let's check in with Sanjay Gupta.

What's coming up on "A.C. 360" tonight, Sanjay?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well, Erin, some breaking news ahead on "360" -- 160 million Americans just got a holiday gift from Washington, a deal to keep your paycheck from shrinking in 2012. We'll give you details.

And also tell you how the deal went down, the mechanics of it, and why dysfunctional Washington may be having the same fight, Erin, just months from now. We're also going to dig deeper into something I find fascinating, forensic science, but some say is really just junk science. Tonight, you're going to meet Megan Winfrey (ph). She's serving a life sentence for murder. There was no DNA evidence linking her to the crime. She was convicted in part by dogs, like these dogs who picked her out of a scent lineup. A really remarkable story.

Those stories and also the "Ridiculist" at the top of the hour as well -- Erin.

BURNETT: All right. Thanks very much for that. We're looking forward to it, Sanjay.

GUPTA: Thanks, Erin.

BURNETT: Well, last night, we brought you the story of missing 19-year-old Aisha Khan, the Kansas college student who disappeared on Friday. And tonight, an ending to this story of sorts.

Aisha is safely back with her family, but is there are a lot of questions about what happened to her. She disappeared after making a troubling phone call to her sister, telling her she was being harassed by a drunken man who tried to kiss her. Aisha's mother came on the show last night and made this passionate plea for her daughter's return.

(BEGIN VIDEO CLIP)

FOUZIA KHAN, MOTHER OF AISHA KHAN: Release our daughter and bring her back. We need her and we can't live without her.

(END VIDEO CLIP)

BURNETT: Well, shortly after our broadcast, Aisha was back with her family. Now, the spokesperson says the family's prayers have been answered but did not elaborate on what happened to Aisha.

Now, OUTFRONT has learned that Aisha was married five months ago. Some have speculated the devout Muslim may have been in a prearranged marriage. I asked her mother if it was possible Aisha ran away. And she said, no, her daughter was happy and would never do that.

Police say she was not abducted. There aren't any criminal charges pending. It's a personal family matter.

We're just happy she's home safe and hope that she is happy.

OUTFRONT next in today's IDEA segment, the man behind the most popular Christmas toy, Jessica Ryan (ph) keeps stealing the toy. I think she likes it.

And the tiny nation of Samoa lobbing a big bomb in the battle between the superpowers.

We'll be back.

(COMMERCIAL BREAK)

BURNETT: So, it's down to the wire now for Christmas shopping. Less than 48 hours left.

And if you're looking for one of the hottest toys of the season, good luck. Our intern Sabrina has been all over New York today trying to find the Medusa, I'm sorry, Lalaloopsy, silly hair dolls, and did hair beautifully, as you can see, here they are. They are made by the same company that makes those more controversial Bratz dolls, you know the ones that some parents think are too sexy and send a wrong message to young girls.

The CEO of that company Isaac Larian and he's OUTFRONT tonight.

And, good to see you , Isaac. We appreciate it.

Let me start with the Lalaloopsy and their hairs.

ISAAC LARIAN, CEO, MGA ENTERTAINMENT: Good to see you, Erin.

BURNETT: They are a little scary to me, I must admit. But what makes them so popular? Did you have any idea that this would be the hit?

LARIAN: Yes, we did. They are very different, they are whimsical, they have a great back story. They were sold from the last piece of cloth that they were made of on a different day. For example, Crumb Sugar, which is one of them, was made from the baker's apron the last day and that's how they came to life. They have great back stories.

They are very sweet and they are the number one selling toy right now in America.

BURNETT: They are. And I've got to say, Sabrina tried a lot of places.

Your personal story is a story of a disrupter. That's why you're on tonight. I mean, you came to America at the age of 17 from Iran. I think you said you had $700 or so in your pocket, one-way ticket, founded the largest independent toy company in the world. You won huge multi -- hundred million dollar lawsuit against Mattel.

What comes next for you -- just keeping to try to find the next big toy?

LARIAN: Yes, exactly. I enjoy -- as a child, I didn't have a lot of toys. I have lived the American Dream. This is a great country. I have been here for 40 years and I like to be inspirational for other immigrants who come here, as well as my own children.

I was named entrepreneur of the year by E & Y, and it's a great rags to riches story, and I hope other people follow it.

BURNETT: And it is a great story. Let me hold up this doll. I have to admit, there was a time I was buying a Happy Meal for a niece and I didn't want to get it because these dolls were hyper-sexualized.

Do you have any regrets about the Bratz girls? Do you feel that they are too sexual, especially because you've got young girls?

LARIAN: No, absolutely they are not. These are plastic girls. They are not blond. They are not six foot tall. They don't have implants.

And they wear the clothes that they want to wear. And they basically self-express. They are multi-cultural, which is very important to me, and I think they are making a good comeback next year. They are definitely different. They are not like other dolls which are out there.

BURNETT: All right.

LARIAN: But I don't think they are sexualized.

BURNETT: All right. Well, thank you very much, Isaac. We appreciate your taking the time.

And, viewers, let us know what you think about Isaac story and about those Bratz dolls and Lalaloopsy.

Meantime, coming up, Samoa, China, America, and the super power battle.

(COMMERCIAL BREAK)

BURNETT: And now the glorious island of Samoa. Now, Samoa is a country in the South Pacific Ocean. It became independent from New Zealand in 1962.

We'll show it to you here on a map. There it is. And that red line is the international date line. Left, eastern hemisphere. Right, the western hemisphere.

Now, as you can see, the line has moved slightly over the years to accommodate the needs of certain countries. I mean, yes, it's a pretty political line and it is about to shift in a move that will rock the world in a battle of the superpowers.

Let's take a closer look. Here is what the current date line looks like, all right? You can see it right there. There it is. OK.

At the end of the month, Samoa is going to jump from December 29th to December 31st and move to the east, splitting from American Samoa.

Samoa and American Samoa no longer together. We are told the move will be celebrated with feasts and the ringing of church bells.

Well, this morning, we spoke with the Samoan ambassador to the United States. He says Samoa wants to be in the same time zone as trade partners like Australia and New Zealand, and he quickly, some Asian countries. Asian countries -- China? I'm sorry, China -- yes.

He doesn't like admitting it, but the tiny nation of Samoa is lobbying a huge bomb into the middle of the standoff between America and China.

A few weeks ago, we had the chance to speak with the prime minister of Samoa, the Honorable Tuilaepa Lupesoliai Sailele Malielegaoi. We asked him about his country's relationship with China and he said this.

(BEGIN VIDEO CLIP)

TUILAEPA LUPESOLIAI SAILELE MALIELEGAOI, PRIME MINISTER OF SAMOA: The opportunities are immense in terms of some of our products like water and other medicinal (ph) drinks. There are the most people. That's where the market is, market potential.

(END VIDEO CLIP)

BURNETT: But is it really just about future market potential? China has done a lot for Samoa. In the last decade, China has given Samoa the money to build a world class athletic complex, a courthouse, an even an office building for their members of parliament. Also, the largest hotel in the entire island, and direct flights from China for tourist.

But this isn't just about money perhaps. It's also about respect. The prime minister of Samoa told us it's very different dealing with China's leaders as opposed to America's.

(BEGIN VIDEO CLIP)

MALIELEGAOI: When we go there, we access the top leaders. We made a talk with the president, with the prime minister. We do not find that access here in America.

(END VIDEO CLIP)

BURNETT: A lot of frustration with America. But it's interesting that no matter where we've traveled around the world, especially small countries, developing countries, countries in Africa, they all get the athletic facilities, the roads, the trains and everything from China. But when push comes to shove and you ask them who they really want to get in the bed with, there's still an amazing respect for the rule of law and the way that America operates.

For now, even when that dateline move, America is still the superpower.

"A.C. 360" starts now.