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Minorities Came Out in Droves for Obama; What Can President Obama Accomplish?; Pentagon: Iran Fires on U.S. Drone; Obama Campaign's Secret Strategy

Aired November 8, 2012 - 17:00   ET


WOLF BLITZER, CNN ANCHOR: Happening now, a dangerous new foreign policy challenge for President Obama, as word comes that Iranian fighter jets have fired -- fired on an unarmed U.S. drone over the Persian Gulf.

You know all about the rallies and the political ads, but you'd be surprised to learn how much the Obama campaign knew about you. How data mining and number crunching helped reelect the president.

And it may sound strange, but there's already some buzz out there about the next presidential election.

We're going to hear about potential candidates for 2016.

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

I'm Wolf Blitzer.


President Obama scored a pretty solid reelection victory. Congress remains divided, on the other hand. The president has four more years now to pursue his agenda.

But what can he actually accomplish?

Our chief national correspondent, John King, is joining us right now.

He's got some major challenges. And on his mind right now, is obviously what's good for the country, but also what's good for his historic legacy.

JOHN KING, CNN CORRESPONDENT: You talk about the L word, legacy, whenever someone is reelected. But remember the reality. It's a divided government and a closely divided Congress, a Republican House that disagrees with him on many issues.

And, Wolf, no money to spend because of the fiscal cliff.

So what can the president do with a second term? Number one, as we've seen in recent years, priority number one is to consolidate the gains of the first term, largely the health care bill. The health care bill will be fully implemented. There will, for sure, be problems and he'll have to deal with that.

Can he somehow keep a relationship with the Republican House if they have to go back and fix a couple of things?

At least we know Obama Care won't be repealed. And that's his top priority -- keep it that way. Let it be implemented, secure that as his Democratic and a legacy for the country. Otherwise, you look around and you say what can he do?

Education reform is something. Some people in the White House talk about. Some Republicans point to John Boehner, the House speaker. He used to be a key education negotiator in the Hill. A lot of Republicans think the president backed away from sopro -- some proposals they actually liked in the first term as he closer to the election because he didn't want to anger the teachers union. So I would look at that.

And you just mentioned a story in the news now that will complicate and perhaps even dominate the early foreign policy agenda of the second term. And that is the nuclear standoff with Iran and now, apparently, an Iran that, at least at the moment, wants to be more aggressive.

BLITZER: Yes, they're trying to make a statement, obviously.

KING: Yes.

BLITZER: We're going to have more on this part of the story coming up.

A second term president you and my -- you and I have covered second term presidents. He has more flexibility. He doesn't have to worry about getting reelected. And the president acknowledged himself, remember, in that off the record comment to Dmitry Medvedev.

KING: Right.

BLITZER: He'll have more flexibility.

He's going to have to compromise, because he's got a Republican leadership in the House of Representatives.

KING: Right. So he won the election, which gives him a bit of leverage going into these fiscal cliff negotiations and then beyond, when he gives his State of the Union, when he presents a new budget. He has a bit of leverage because he has the valid -- you know, the validation of the American people, if you will.

But he just won, with 50 percent. The Electoral College victory quite impressive. But his own victory shrunk from the last time. So he has to be careful.

The question is, can he get the Republicans?

Speaker Boehner laid out yesterday, I'll give you more revenues, Mr. President, but only if you do it through tax reform, not higher tax rates. The president would have to back away from a campaign promise to do that.

So the question now, and one of the criticisms in the first term, early first term, especially, was that the president was not a masterful negotiator, a masterful CEO, if you will, cut a deal, implement a deal. His relationship with John Boehner, the speaker of the House, is probably the greatest priority -- early priority of the second term, because with not a lot of money to spend, he's going to have to give to get.

BLITZER: Because I heard from so many members of Congress the Senate, and the House -- not just Republicans, but Democrats -- this is a president who never called them, never invited them to come over. He never really bonded with them. He never reached out. He's going to have to do a lot more of that.

KING: He is. And when you traveled the country in the campaign, a lot of state Democratic president chairmen had no love lost for the Obama operation. They would say these guys don't consult me. They ignore my advice. They won.

The best thing you can have in politics behind you, especially in the short-term, is fresh memories of a victory.

Now, the question is, how do they use that?

They don't have a huge electoral mandate, but they do have a lower case M mandate. They won the election in very tough times. He made history, the first president reelected since Franklin Roosevelt with unemployment above 7 percent. That gives you stature politically.

The question is, how do you use it?

And when you mention the relationship with Democrats, that's why it gets so hard, because to get the deal he wants for his legacy and for the good of the country on these fiscal issues, he's going to have to cut Medicare. He may have to make some changes in Social Security. He may have to do some other things in entitlement and Democratic favored programs that some of these -- never mind the older Democrats in place, Nancy Pelosi for example -- some of these new Democrats, the new senator from Massachusetts, Elizabeth Warren, a friend of the president's. Her ad said, "I will never touch Medicare." You can't get a deal on the fiscal cliff -- the president can't get he wants from the Republicans unless he agrees to deep cuts in Medicare.

So he's going to have to be the negotiator-in-chief in the early term.

BLITZER: Yes, I suspect the soc...

KING: It's going to be hard. BLITZER: -- the social secretary at the White House is going to be a little bit more active in the second term, bringing some of those members...

KING: Without a doubt.

BLITZER: -- Democrats and Republicans, over to the White House for a meal or a cup of coffee or something.

KING: Domestic diplomacy.

BLITZER: Yes, very important stuff.

John, thanks very much.

President Obama already faces a serious new foreign policy challenge. There is word today from the Pentagon that in the closing days of the election campaign, Iranian jets fired on a U.S. drone.

Let's get the details from our Pentagon correspondent, Barbara Starr.

What are you learning -- Barbara.

BARBARA STARR, CNN CORRESPONDENT: Well, Wolf, it was last Thursday, just one week ago, we now know that two Iranian Russian made jets, aging aircraft, but nonetheless, very workable, flew out into the Persian Gulf, into international air space, according to the Pentagon, and fired at a Predator drone, a U.S. Air Force Predator drone that the Pentagon says was on a routine surveillance mission, although that mission was classified.

Here's what the Pentagon had to say about it all.


GEORGE LITTLE, PENTAGON PRESS SECRETARY: We believe this is the first time that an unmanned aircraft has been shot at over international waters in the Arabian Gulf.

UNIDENTIFIED MALE: Is that an act of war?

LITTLE: I'm not going to get into legal labels. The reality is that we have a wide range of options, as I said before, to protect our assets and our forces in the region and we'll do so when necessary.

We have communicated to the Iranians that we will continue to conduct surveillance flights over international waters, over the Arabian Gulf, consistent with longstanding practice.


STARR:. And look, Wolf, even though this was an unmanned drone, no pilot on board, this raises tensions -- military tensions with Iran. The aircraft were operated by Iran's Revolutionary Guard Corps, the Pentagon says. That's the most aggressive branch of the Iranian security forces.

How important was this?

Well, the president and Defense Secretary Panetta were very quickly informed last Thursday morning when this happened.

BLITZER: Well, if they try it again, presumably, Barbara, U.S. military jets could scramble and they could get into some sort of dog fight, if you will, with those Iranian jets.

How realistic is a scenario like that?

STARR:. Well, look, the Pentagon is not looking for a shooting war with the Iranians. Top officials are very clear about this.

But what were the Iranians up to?

Are they trying to send a signal of more aggressiveness over those critical oil shipping lanes?

The Pentagon, the Obama administration can only let the Iranians go so far. If they try this again, that's really the key question. It might have been a -- it might have been an unmanned drone, but how far do you really let the Iranians go in such a critical economic area -- Wolf.

BLITZER: Yes. All right, Barbara. You're -- I know you'll stay on top of this.

Thank you.

Let's get back to politic right now.

President Obama certainly owes his reelection to an extremely well organized campaign. You know all about the rallies, you know about the political ads, the army -- armies of volunteers.

But you may not necessarily know very much about the campaign and how much it knew about you -- you.

Our Brian Todd has been digging into the data crunching that helped the campaign tailor its winning strategy -- data mining, as it's called.


BLITZER: And it's a fascinating detail. Explain to our viewers what you've learned.

TODD: Wolf, this is, experts say this is the way campaigns are going to go after voters from now on. Gone are the days when campaigns target whole regions just on a hunch. Now they are so- called micro targeting individual voters, using sophisticated ways to figure out who they can persuade.

(BEGIN VIDEOTAPE) TODD (voice-over): We pointed cameras at them, showed you the conventional way they ran their campaigns.


TODD: But far from the rallies and debates, in office back rooms and cubicles, there was another campaign -- a silent humming machine targeting your vote.

Did you get an invitation to try to win a dinner with actress Sara Jessica Parker?

Did you get an e-mail from Michelle Obama calling you "friend?"

Did you get a banner ad for a campaign when you were surfing the net?

It turns out you were targeted for these things by a sophisticated campaign technique called data mining, an effort to find out who individual voters are and how they'll respond to campaign messages.

SASHA ISSENBERG, AUTHOR, "THE VICTORY LAB": The goal is to come up with an individual level, a statistical prediction of your likelihood of supporting their candidate or of casting a ballot at all.

TODD: Then they target you for ads. The Obama campaign is widely believed to have had the most sophisticated data mining operation. Central to his election victory this year -- getting people out to vote who might not have otherwise.

"Time Magazine" profiled it with a picture of the data crunchers working in a room called "the cave." Analysts say campaigns do this by going to commercial data warehouses, which compile information on your buying habits, like what magazines you subscribe to, maybe information on where and how you like to travel. Campaigns cross-reference that with demographic information like voter registration records.

Jordan Lieberman, who data mined for Republican campaigns, but not Mitt Romney's, says a Republican ticket might use that information to win persuadable voters in an area like Northern Virginia.

JORDAN LIEBERMAN, CAMPAIGNGRID: So if you're a Republican running in -- in a Democratic area, perhaps in Arlington or Alexandria, these are people you might need to talk to. And you would talk to them with a very specific message about why you should not vote for the Democrat this time.

TODD: The biggest problem for privacy advocates?

JUSTIN BROOKMAN, CENTER FOR DEMOCRACY AND TECHNOLOGY: The -- the lack of transparency. The fact that, you know, we -- I don't know what Obama knows about me. I don't know what Romney knows about me. I don't know what -- what the 2016 candidates are going to know about me. But I do know they're going to know more about me than Obama did.


TODD: The Obama campaign responded to that by telling us that it is committed to protecting individual privacy, going above and beyond what the law requires in that field. And they say they've got a -- they've got strong safeguards in place to make sure that your personal information is not provided to outside entities -- Wolf. They say they guard that very closely.

BLITZER: Why does it seem that the Obama campaign was better at this -- this data mining, as you call it, than the Romney campaign?

TODD: Analysts say the Romney campaign had a lot less time to put it together this year. They had to fight through the primaries first and then they really couldn't get it together quite as fast as they probably needed to to make it effective.

They also say the -- the Romney team had a little less talent to do that, but also less experience in putting it together once they could.

You know, the Obama team did it very well in 2008. They did it even better in 2012. They just have people who know how to put together these numbers crunchers and how to do it so well, so fast and so effectively. It's really...

BLITZER: That's amazing.

TODD: -- it really made a huge difference this time.

BLITZER: Yes. And he is really lucky, the president, he didn't face a Democratic primary challenger.

TODD: Right. Right.

BLITZER: He could devote all of his energy to a full-time campaign.

TODD: While...

BLITZER: Romney didn't have that advantage.

TODD: Right. While the Republicans were fighting it out, that's what they were doing.


TODD: They were putting these number crunchers together and targeting these demographics.

BLITZER: Brian, a good report.

Thank you.

Many thought passions had cooled since 2008. But minority voters turned out in very big numbers to reelect the president of the United States.

We're going to find out why and what it means for both parties.


BLITZER: So, how did the Obama-Romney race stack up against earlier presidential showdowns? Jack Cafferty's Here. He has the "Cafferty File" -- Jack.

JACK CAFFERTY, CNN CONTRIBUTOR: Wolf, a majority of voters say that this election just passed mattered more than other elections before it. According to a new Gallup poll taken right before Election Day, 70 percent said the outcome of the 2012 presidential election matters to them more than in previous years.

Now, this is similar to how voters felt in both 2008 and 2004, but this concern is up sharply from the two presidential elections before that in 2000 and 1996. The poll also shows Republicans more concerned about the outcome than Democrats, not surprising since there's a Democratic incumbent president running for re-election.

All you have to do is take a quick look at the State of the Union to see why voters may have found this election to be so crucial. In 1996 and 2000, the economy was much stronger. There were no major wars or other international issues to worry about. Concern went up sharply in 2004 following the 9/11 attacks and again in 2008 with the Iraq war still going on and the country entering a great recession worse than the -- the worst we've had since the great depression.

This time around, it's hard to even pinpoint all the worries that are facing voters. Of course, the economy, high unemployment at the top of the list for many, but there's also Obamacare, our staggering annual trillion-dollar deficits, plus $16 trillion in national debt, the looming fiscal cliff, and what to do about tax increases and/or cuts in entitlement programs and other government spending.

As for the international hot spot, you can take your pick, Libya, showdown between Iran and Israel, and of course Syria.

So, here's the question for this hour. Why would the voters say that this election matters more than most? Go to You can post a comment on the blog there or you can go to our post on the SITUATION ROOM's Facebook page. I guess they're all important, but the interest in this was particularly high.

BLITZER: It was very intense. And obviously, people out there want to know more. That's what we're going to try to give them. Thanks very much, Jack, for that.


BLITZER: There's also no doubt that this election clearly mattered for minorities, most of whom came out in droves for the president surprising those who have predicted many would stay home. Lisa Sylvester's working this part of the story for us. Lisa, you've got some new details as well. LISA SYLVESTER, CNN CORRESPONDENT: Yes, Wolf, you know, if you look at the exit poll data, what comes out clear as day is that President Obama had the youth vote and the minority vote. And that's part one. But the second half of that is that voter turnout in the key swing states, African-Americans either met the turnout rate of 2008 or in the case of Ohio beat it.


UNIDENTIFIED FEMALE: Only a citizen of the United States.


UNIDENTIFIED FEMALE: Eighteen years or older?


SYLVESTER (voice-over): It was old fashioned politicking going door-to-door registering voters. The National Council of La Raza and the NAACP blanketed swing states leading up to the election.

UNIDENTIFIED FEMALE: I.D. ready and everything?

SYLVESTER: More than 70 percent of the Latino and Asian-American vote went for Obama. For African-Americans, the number was even higher, 93 percent. If GOP strategists were counting on a steep dip in minority enthusiasm in turnout from 2008, they were wrong. In Florida and Virginia, African-American voting matched the historic election of 2008.

In Ohio, that crucial swing state that put President Obama over the top African-American turnout actually jumped from 11 percent in 2008 to 15 percent in the 2012 race. But that's not all. At the same time, Governor Romney's biggest voting block grew smaller.

PAUL STEINHAUSER, CNN POLITICAL EDITOR: The percentage of the White vote of the overall electorate is shrinking. It went from 74 percent four years ago to 72 percent now. The White vote is mattering less and less in general elections. It's still the overwhelming vote, but it's shrinking.

SYLVESTER: What's behind that? The country's changing demographics. San Antonio mayor, Julian Castro, was the keynote speaker at the Democratic National Convention. He says Democrats can capitalize on that and change red states to blue.

MAYOR JULIAN CASTRO, (D) SAN ANTONIO: When you have that groundwork and when you have the right candidates to excite folks, then you're going to start to see probably progress. And within the next six to eight years, I believe that Texas will at least be a purple state if not a blue state.

SYLVESTER: But Republicans have had a wakeup call. The party's future may lie in capturing the Latino vote by appealing to them on social and family issues like abortion. Hispanics, as a whole, tend to be more socially conservative. Ben Jealous, president of the NAACP says the key there is to not ignore the needs of minorities.

BEN JEALOUS, NAACP PRESIDENT: We've also seen that, quite frankly, Black voters swing. We swing between voting for Democrats and not voting. And the party given the narrow margins that it's winning by cannot afford to have us swing back to not voting in significant numbers. And that's not anything that anybody would want. It just happens when you take people for granted.


SYLVESTER (on-camera): And that is one of the big storylines out of this election, it's that women and the minority vote that it matters. And this trend will only continue to grow in future elections. The country is changing, and there is now a very different face on politics, Wolf.

BLITZER: Good report on the White vote. It's fascinating. In 2008, the president got 44 percent of the White vote. This time it went down to 39 percent.

SYLVESTER: Yes. And you know, it was interesting the conventional wisdom was that he had to hit 40 percent, that President Obama had to get 40 percent of the White vote in order to be re- elected, but he got 39 percent and he was still re-elected. It's just because there was a smaller pool of White voters out there.

BLITZER: As you point out, organizations like La Raza and the NAACP, they were very, very active out there getting those voters in a place like Cleveland, for example, to go out and vote. It obviously made a difference in Ohio.

SYLVESTER: And that's why everybody is now saying after the election, the words that you always would hear is ground game. It kept coming down to ground game. They just had the boots on the ground out there getting people out to vote.

BLITZER: Thank you very much. Lisa Sylvester reporting.

Parts of New York about to begin rationing gas. Yes, rationing gas in the wake of the superstorm Sandy and now a powerful nor'easter. We have details. And more news coming up after this.


BLITZER: A dramatic development in the infamous WikiLeaks case. Lisa Sylvester's back. She's monitoring that and some of the other top stories in the SITUATION ROOM right now. What happened?

SYLVESTER: Wolf, the army private accused of leaking millions of government documents to the controversial WikiLeaks website while serving in Iraq is now offering to plead guilty to some of the charges against him. Bradley Manning, who's been jailed for more than two years, could be facing life in prison.

And experts say there's no guarantee that this offer will even help him. WikiLeaks has never confirmed he is the source of those documents.

And New York City and two Long Island counties will implement gas rationing measures -- excuse me -- beginning tomorrow in the wake of superstorm Sandy and a powerful nor'easter. The odd/even day rationing based on license plates is a step both Mayor Michael Bloomberg and Governor Andrew Cuomo are taking to help alleviate long gas lines and get the fuel supply back to normal.

And unemployment in Greece has soared to a record high of more than 25 percent amid a grueling five-year recession and government spending cuts. The parliament approved more labor reforms as thousands of protesters took to the streets. Greece received two bailouts from international creditors, but payments under one program were suspended. An agreement could come next week to release some of the bailout money.

And this is such a great story. Some Indianapolis Colts will be playing tonight's big game against the Jacksonville Jaguars without any hair. The reason? A number of them got their heads shaved in honor of their head coach, Chuck Pagano, who is battling leukemia.

Our affiliate, WISA, reports the players told their barber they accept their coach with open arms and they are ready to ride this out with him. Talk about solidarity. And that's reason enough to watch the game. I love that.

BLITZER: Wish the coach a speedy, speedy recovery.


BLITZER: Good man. Thank you.

A top Republican strategist has some pressing advice for President Obama. Up next, what he hopes the president will do differently in his second term?


BLITZER: All right. Let's get straight to our "Strategy Session." Right now, joining us are CNN political contributors, the Democratic strategist, Donna Brazile, and the former Bush White House press secretary, Ari Fleischer. Guys, thanks very much for coming in.

Let me read a couple of sentences from what Karl Rove, the Republican strategist, wrote in "The Wall Street Journal" today. He wrote this, he said, "Mr. Obama could try to repair the damage. He can be large-minded and generous in spirit, trying to work genuinely with Republicans rather than demonize them. And he can confront pressing problems rather than kick them down the road. But doing so will require him to act in a second term very differently than he did in his first."

Donna, what do you think of that advice from Karl Rove?

DONNA BRAZILE, DEMOCRATIC STRATEGIST: First of all, I would ignore Karl Rove. I mean, he had over $400 million and all he did was use that money to demonize President Obama, demonize liberals, demonize practically half the country. So I would ignore Karl Rove.

I think what the public would like to see President Obama, Mr. Boehner, Miss Pelosi, Mr. Reid, Mr. McConnell, is to advance the common good. To sit down, to bring to the table all of these issues that we have to face both foreign policy and domestic policy and to advance the common good.

I think that's what President Obama should do. President Bush won I believe -- Erick can correct me -- with 284 electoral votes back in 2004 when he was re-elected, and they determined that they had political capital. I believe that President Obama has political capital. That the American people right now are more interested in the president, members of Congress and others sitting down to advance the common good.

BLITZER: All right. Let me let Ari weigh in on that.

Go ahead, Ari, what do you think?

ARI FLEISCHER, FORMER BUSH WHITE HOUSE PRESS SECRETARY: Well, let's look back a little bit. Partly let's learn from mistakes. If you remember Obamacare and on cap and trade or what Republicans refer to as tax and trade, those proposals from the president were so polarizing that he was deserted by many people in his own party. Thirty-four Democrats in the House of Representatives voted against the Obamacare proposal. The cap and trade became so lethal that you couldn't even get Democrats in the Senate to take it up.

I think the trick to be successful now that we have a Republican House, Democrat Senate and a country hungry for things to get done is to govern in a way that the centers of both parties can come together. It's going to mean rejection of the liberal base. And it's also going to mean rejection of the conservative base.

I think comprehensive immigration reform is a very good place to start. He knows he's going to take heat from the AFL-CIO and others in the Democratic Party for doing it. Conservative Republicans won't go along with it. But there's a center. And it's the president's task, even if it's hard to do, to try to create, hold and grow that center from a legislative point of view.


BLITZER: Do you think it's possible, Ari --

FLEISCHER: He won't be successful of his legislations just Democratic again.

BLITZER: Well, do you think it's possible for Republican leadership in the House, the Speaker John Boehner, for example, to accept at least some increases, some tax rate increases for the wealthiest Americans in exchange for much more significant spending cuts?

FLEISCHER: Here's where I am on that. If we knew we were getting bona fide meaningful lasting spending cuts, entitlement reform, raising the age of retirement on some of these programs, that way the program will be there for younger workers and they don't bankrupt the country, I think you actually would see enough Republicans support Democrats on some form of revenue.

But the trick is if people think that any taxes raised are going to go to more spending, it will never happen. Because that's defeating the purpose which is to reduce debt. That's one of the reasons Republicans are so cynical about raising taxes. We've seen this before and the money just goes to bigger and bigger government.

California's lesson, all they do is raise taxes on the rich and don't solve their problems. We don't want America to become like California.

BLITZER: Will liberal Democrats in the House, Donna, go along with the president if he significantly makes changes, cuts spending, for example, for Medicare and Medicaid?

BRAZILE: Sixty percent of the American people, Wolf, believes that we should raise taxes on the wealthiest Americans. We've had this debate now for many, many months, many, many years on what conservatives want and what so-called Tea Party Republicans want.

Liberals are going to push their agenda. They are going to fight hard for their agenda. We're not going to sit aside -- set aside our goals, our policies, simply because the Republicans lost. They lost. And that is important that --


BLITZER: But, Donna, they still retain the majority in the House of Representatives. And there aren't enough Democrats in the Senate to beat back a filibuster.

BRAZILE: We defeat -- Wolf, we're going to fight for our causes. We may lose. We won more than -- we won more than 57 percent of the Senate seats out there. I mean, we got a lot of popular votes out there. We're going to fight. We might lose, but I think it's important, Wolf, that we sit at the table and we put all of these issues on the table.

For the last two years we've heard about what the Tea Party wants, what the Republicans want, now you're going to hear about what progressives would like to have done. We might lose, but the important thing, Wolf, is that you listen to our ideas and that we have an opportunity to advance the issues that we believe in.

And if we lose, we lose. But you know what, the other night we went to the voters in many of these states on a lot of these issues, and we won.

BLITZER: Go ahead, Ari.

FLEISCHER: Wolf, let me -- let me get on to the taxes for the rich for just a second. Do it, pass it, you just got $700 billion over 10 years in a nation that is going even with it passed deeper in debt by $10 trillion over 10 years.

BRAZILE: So you want to go Mitt Romney's math?

FLEISCHER: Passing taxes on the rich doesn't even get close to addressing the problem. It's just doodling in the margins of history where our nation is going broke.

So, Donna, it's a political issue. You're right, polls support it. It has nothing to do with actually reducing the deficits or the debts because it's so small compared to the size of our debt.

BRAZILE: You know what, you know, they're going to expire at the end of the year, along with many other cuts, tax cuts, payroll tax cuts.

Ari, all I'm saying is just let's put it all on the table. For the last two years all I've heard from the conservatives is that if we -- if we let these taxes expire, you know, we're going to go back into a recession.

All I'm saying is let's put it all on the table and then stop protecting --

FLEISCHER: But, Donna, I just said -- conceded.

BRAZILE: Let's stop protecting the 2 percent, the 3 percent, the 10 percent, whatever it is.

FLEISCHER: All right. For the sake of this conversation I concede --

BRAZILE: We look at all of these -- all of these issues need to be put on the table.

FLEISCHER: For the sake of the conservation, done.

BRAZILE: Ari, that's all I'm saying.

FLEISCHER: What are you going to do after that? What comes next? I can see that point for conversational purposes.

BRAZILE: Domestic discretion -- domestic discretionary --

FLEISCHER: We just raised $700 billion over 10. Where do you get the other $9.3 trillion?

BRAZILE: Domestic discretionary spending has been cut significantly over the last four years by this president. We're now spending less money, less government than any time in our history since President Eisenhower.

FLEISCHER: That has nothing to do with the amount of debt we're going to face.

BRAZILE: So all -- of course we have to face debt. But we also got to deal with a revenue problem that we have in our country. FLEISCHER: OK. You won't answer the question.

BRAZILE: And part of that revenue -- part of the revenue needs to go toward deficit reduction. But we also need to ensure that we can pay for the services we need including --


FLEISCHER: But, you know, you're not answering the question.

BRAZILE: -- paying for military and other issues.

FLEISCHER: You won't answer the question. I conceded for the purposes of conversation.

BRAZILE: Ari, you know, I'm so sick of answering questions.

FLEISCHER: Raise taxes on the rich.

BRAZILE: I'm so sick of answering --

FLEISCHER: Then what will you do?

BRAZILE: I am so sick of answering questions. Polls by the right so that I can animate the right. I'm saying let them all expire. If that's the only way we can come up with a deal.


BRAZILE: We are going to have to have a serious conversation in this country about how do we pay down our deficit but also invest in the kind of programs we need to keep America strong in the 21st century and get our people back to work.

BLITZER: And that would mean obviously if there's no deal going over that so-called fiscal cliff, and it means all the Bush tax cuts not only for the wealthiest Americans but for everyone, middle class --

BRAZILE: The payroll taxes, Wolf.

BLITZER: All the tax --

BRAZILE: Unemployment insurance.

BLITZER: Taxes will go up for everyone, Donna.

BRAZILE: Wolf, I'm not -- I understand what's going to go up. I'm a taxpayer. I'm a small business owner. All I'm saying is that we keep having the same conversation. This is the Tea Party conversation. I want to have an American conversation. I want to talk about all of the programs that are set -- all of the taxes that are set to expire. Not just the Bush tax cuts.

FLEISCHER: OK, Wolf, here's the deal --

BRAZILE: And I want also to talk about all of the cuts that we'll have to deal with if we don't deal with the sequester.

FLEISCHER: All right. Donna, let me in on this.

BLITZER: Ari, Ari.


BRAZILE: A lot of issues to discuss.

BLITZER: All right, we're up against a tight -- a tight, tight commercial break.


BLITZER: So, you know what, this conversation has been an excellent conversation. And we're going to have plenty of opportunities in the next days. And there's not much time. It's until December 31st if there's no legislation that's passed, signed into law by the president, then all the tax -- all the tax rates for everyone go up. That's just a matter of fact.

BRAZILE: And so will unemployment insurance expire and payroll tax cuts.

BLITZER: Right. You're absolutely right. Everything.


BLITZER: All those tax rates will go.

BRAZILE: We've got a lot. We've got a lot on the table, Wolf.

BLITZER: Not just for the wealthy but for everyone.

BRAZILE: Thank you.

BLITZER: So there's a lot of work.

BRAZILE: Absolutely.

BLITZER: Important work to do on both sides to try to reach a deal.

Guys, thanks very much.

An emotional return to breathtaking destruction after a devastating superstorm and a powerful nor'easter. CNN is with one family when they see the little that's left of their home for the very first time.


BLITZER: A new layer of misery up and down the east coast after a devastating superstorm and now a nor'easter. One family is returning home for the first time.

CNN national correspondent Susan Candiotti is joining us now with more. Another heartbreaking story from New Jersey -- Susan.

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Absolutely, Wolf. You know, Bill and Sue Kosakowski own a home here. There are only 110 homes on Pelican Island in Berkeley Township, New Jersey.

Sandy just tore this place up. And so did the nor'easter. Of course they've never had power returned here. Bill rode out the storm. His wife did not. But she came back here for the first time with her husband. And it was an emotional return. We went along.


CANDIOTTI (voice-over): With Sandy's storm clouds gathering, Sue Kosakowski evacuated. But over her objections, her husband Bill stayed behind. It was traumatizing.

BILL KOSAKOWSKI, STORM VICTIM: We rode out the storm until Friday morning. Friday morning I said I couldn't take anymore because they turned the gas off. When they turned the gas off, that was the end for me. I told my wife I would walk across the bridge if I had to. But I was getting off.

CANDIOTTI: Armed with a police pass, the retired Bayonne, New Jersey, fire chief married to wife Sue for 23 years, joined other residents allowed back on Pelican Island for a few hours to take stock of the devastation.

(On camera): What a sight, huh?

SUE KOSAKOWSKI, STORM VICTIM: Yes. Look. Yes. They broke in. Just everything's just broken down. Yes.

B. KOSAKOWSKI: That's my boat.

S. KOSAKOWSKI: This is his boat.

CANDIOTTI (voice-over): Ripped from a lift behind the house, the storm surge swept his boat into the street.

Inside the house the couple gets a look at breathtaking damage. Sue for the very first time.

S. KOSAKOWSKI: Oh, my god.

B. KOSAKOWSKI: This house was spotless.

CANDIOTTI: Marks on the ceiling show how high waves got inside.

B. KOSAKOWSKI: When the water was up over my knees, I thought I might be able to save something. So I put the chairs up on top of the table. Didn't do any good.

CANDIOTTI: As things got even worse, Bill retreated upstairs to the couple's bedroom overlooking the bay and huddled with his retriever, Blink.

B. KOSAKOWSKI: Never been so scared in my life.

CANDIOTTI: Their dream retirement home is in shambles. But with all they lost, Sue is grateful she didn't lose Bill.

S. KOSAKOWSKI: The house is stones and bricks and windows and glass. I thought I lost him. And that would have been -- losing him would have just -- would have just devastated me. I wouldn't have known how I would have gone on if I had lost him.

B. KOSAKOWSKI: Come down here and expect to live the rest of your life in calm and peace. And one fail swoop everything washed away.


CANDIOTTI: And the former fire chief knows he shouldn't have stayed behind despite that evacuation order, he did stay. It wasn't worth the risk, Wolf. He admits that.

This is the boat that we showed you before. And he and other residents are only allowed to come back for a few hours at a time to start the massive cleanup that lies ahead. And they have no idea, no idea at all, when power will come back -- Wolf.

BLITZER: Our heart -- our hearts go out to all these folks. What a heartbreaking story, Susan. Thank you.

It may sound strange but there's already, already, get this, some buzz out there about the next presidential election.


BLITZER: It may be hard to believe, but even as the confetti dropped over the Obama victory celebration in Chicago, the name dropping had already already started for 2016.

CNN's John Berman looks ahead.


JOHN BERMAN, CNN ANCHOR/CORRESPONDENT (voice-over): Remember when they all used to do that funny dance? When the Giants won the World Series. When Barack Obama was re-elected president. Remember that campaign? It seems so long ago -- so yesterday.

Now, 2016 is the new 2012. Just ask Joe Biden, when reporters wondered whether this would be the last time he cast a ballot for himself.

JOE BIDEN, VICE PRESIDENT: I don't think so.

BERMAN: Or last month at a phone bank.

BIDEN: After it's all over, when the insurance rates go down, then you vote for me in 2016.

BERMAN: Could the vice president be kidding? Unlikely. There's nothing funny about Joe Biden.

He might have Hillary Clinton to contend with. Who can forget last month when she was asked by "Marie Claire" magazine if she is running for president. Her answer, "No, I'm not." You see that? She didn't say, "I will not." Just that, "I am not." Clearly, leaving the door wide open. She might as well started printing bumper stickers.

Even her husband practically announced her intentions.

BILL CLINTON, FORMER PRESIDENT: I have no earthly idea what she'll decide to do.

BERMAN: How about other Democrats? Keep an eye on Governor Martin O'Malley of Maryland. It's not hard since he keeps turning up on this show, this one, this one, and this one.

And Republicans? Paul Ryan already ran for president once, according to Mitt Romney.

MITT ROMNEY (R), FORMER PRESIDENTIAL CANDIDATE: Join me in welcoming the next president of the United States, Paul Ryan.

BERMAN: We learned today that Florida's Marco Rubio will coincidentally be head-lighting a birthday celebration for the Iowa governor in Altoona. Don't be surprised if you see Louisiana Governor Bobby Jindal take a ski trip to New Hampshire, or Chris Christie with the time here in South Carolina.

And, of course, there are others. So many others. It's never to early to dream.

There are still a great many twists and turns and unknowns, but one thing about 2016 seems fairly certain. They'll still be counting ballots in Florida from this time.

John Berman, CNN, New York.


BLITZER: All right. Let's talk about all of this right now. Joining us Rick Stengel, the managing editor of "TIME" magazine, our corporate sibling out there.

Great new issue, Rick. And you have a lot of buzz. Would you call the class of 2016 yet a "TIME" photographer take some shots, some portraits of potential candidates. Let's talk about what you called the buzz matchup for 2016.

Hillary Clinton and Jeb Bush. Look at those portraits. Very nice portraits.

RICK STENGEL, MANAGING EDITOR, TIME: Yes, indeed. They're all the pictures by Marco Grob, and the -- of course, neither person has declared, Wolf, and the political class, folks like you and me, and political consultants all, you know, wake up the day after Election Day thinking about 2016. I don't think Secretary Clinton or former Governor Bush is thinking about it all the time, but, obviously, that would be the marquise matchup that would get everybody excited.

BLITZER: Yes, that's what we call -- not you, we call it the buzz matchup. My own sense is I believe Hillary Clinton eventually will rest, get her batteries recharged, and then want to be the first woman president of the United States, but that's just me.

Let's talk about some other --

STENGEL: That's your opinion, yes.

BLITZER: Let's talk about some other possibilities out there. What I'm calling the Obama legacy versus a GOP star power. Take a look at this. Joe Biden, the vice president, Rahm Emanuel, the mayor of Chicago, Chris Christie, the governor of New Jersey, Marco Rubio, the senator from Florida.

I don't know -- how serious do you think these individuals might be about 2016?

STENGEL: Look, Wolf, they're all ambitious men and probably an interesting way to look at it is, if you look at the demographics of this race in 2012, they will be vast -- quite different in 2016 so that a Republican candidate that got the same number of votes and the same groups as Governor Romney would lose by a lot more in 2016.

Part of the appeal of someone like Marco Rubio is, obviously, the Hispanic, Latino vote. George Bush, when he ran last time got 40 percent of the Latino vote. Mitt Romney did much worse. And if the Republican Party embraces it in the same way, they'll do even worse next time. So that's part of the appeal of Marco Rubio.

BLITZER: Yes. Well, we got a lot of time to dissect it. Marco Rubio, by the way, as you heard John Berman report, he's heading in the next few days to Iowa for an event out there. So we're always reading into everything.

For political news junkies like me, it's never too early to start thinking about Iowa, New Hampshire, and all of the rest.


Hey, thanks very much, Rick, for coming in.

STENGEL: Thank you, Wolf.

BLITZER: So what went wrong for Mitt Romney? In our next hour we're going to hear from a Republican who says one reason is that women voters think his party, that would be the Republican Party is, quote, "nutty."


BLITZER: Jack's back with the "Cafferty File." Jack? JACK CAFFERTY, CNN CONTRIBUTOR: The question this hour is why would voters say this election matters more than most? Gallup did a poll, 70 percent of the people they talked to felt that way.

Olivia writes, "This was a historic milestone for this country. The perception that the wealthy few who knew their money could buy a candidate and transform him into a changeling could not buy our ideals. The spirit of the nation stood proud beside this president because he understood the struggle and understood what was at stake."

Debbie in South Carolina, "I think this one mattered more than usual because whoever is president will probably get to appoint two justices to the Supreme Court. And now we know there won't be two more Scalia or Alito types to tilt the court even more to the extreme right."

Joshua writes, "Obama talks about raising taxes back to the levels under Bill Clinton, but he never talks about going back to Clinton's spending levels. How much of a dent in Obama's annual trillion dollar deficits will taxing those making over $250,000 make? Not much."

D writes, "Well, the lengthy, high-priced formalities out of the way and now we'll see if the politicians have any energy and moral bearing to get this country going, again. Sorry, I'm not too optimistic, I hope I'm wrong."

Carol in Massachusetts says, "The country's past the tipping point. Both parties need to grapple with how to balance an aging and diverse population's needs without going completely broke. Civility needs to replace sniping or the Mayans may have been on to something."

And Larry in Georgia suggests, "It's because we have the attention span of gnats."

If you want to read more on this go to blog, or through our post on the SITUATION ROOM's Facebook page -- Wolf.

BLITZER: Jack, thank you.