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THE SITUATION ROOM

Fiscal Cliff Pressure; Guns in Every School?; Starbucks Enters Fiscal Cliff Battle; Interview with Asa Hutchinson; Mad Scramble As Fiscal Cliff Nears; NBC Host Facing Gun Law Probe?

Aired December 26, 2012 - 16:00   ET

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


JOE JOHNS, CNN ANCHOR: Happening now: time running out and pressure is mounting. Can the White House and Congress keep the country from going off the fiscal cliff?

A dangerous winter storm roaring across the eastern half of the U.S., bringing blizzard conditions and travel nightmares.

Plus, the NRA's controversial proposal to put armed volunteers in every school, we will go in-depth with the man in charge of the national school shield program.

Wolf Blitzer is off. I'm Joe Johns.

You're in THE SITUATION ROOM.

The U.S. is now just six days away from the so-called fiscal cliff. And a mad scramble is on here in Washington to avoid the drastic tax hikes and spending cuts that many fear will plunge the economy back into recession.

President Obama flies back from Hawaii tonight to be ready if the Senate comes back with a plan when it returns to work tomorrow. And House leaders are huddling with members on standby to return.

Senior congressional correspondent Dana Bash is following all of it for us.

Dana, what are you hearing?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: There was a conference call. Of course, members of the House leadership even, they're back in their districts right now, but there was a conference call today among those House Republican leaders, trying to figure out if and when the House should come back into session.

Two Republican sources tell me they did not make a decision on this call. It's still up in the air. And a big reason for that is if anything can get done in the next six days, the ball is in the Senate's court.

(BEGIN VIDEOTAPE)

BASH (voice-over): The Capitol is a ghost town. The halls are empty, neither chamber in session, an eerie calm since the fiscal cliff only Congress has the power to avert is less than one week away.

From their homes for the holidays, Senate Democratic leaders are trying to figure out if the president's scaled-back bill to keep middle class tax cuts in place can pass Congress at the 11th hour.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: There is absolutely no reason, none, not to protect these Americans from a tax hike. At the very least, let's agree right now on what we already agree on. Let's get that done.

BASH: But to get that done, Democrats first would likely need nearly 10 Senate Republicans to cross party lines and vote to effectively increase taxes on the top 2 percent of Americans. Some conservatives be grudgingly now say they're willing to do that.

SEN. JOHNNY ISAKSON (R), GEORGIA: If we get done to the end of this year and the only choice we have is save taxes going up on the middle class, then I would support that.

But I wish we would have a comprehensive bill that dealt with spending, dealt with entitlements and dealt with taxes altogether.

BASH: The Senate returns to work Thursday, but Democratic sources say their best realistic chance of getting GOP votes is when the pressure will really be on, at or close to December 31, the last day before everyone's taxes go up.

But CNN is told that Senate Democratic Leader Harry Reid is privately warning colleagues if he's not sure the president's scaled-back bill will pass both houses of Congress, he won't even bring it up for a vote. The concern sources say is that a failed vote and going off the fiscal cliff would spook the markets even more.

Sources in both parties say the most likely scenario at this point is going of the fiscal cliff. Why? After January 1, when everyone's taxes go up, the new Congress sworn this on January 3 could vote to cut taxes, a much easier vote to cast for Republicans, as well as some Democrats.

(END VIDEOTAPE)

BASH: As for the president, he is now scheduled to leave his family in Hawaii tonight, come back to Washington tomorrow morning, in the hopes of helping his fellow Democrats try to find enough Republicans to pass his plan to raise taxes on the wealthy.

But, of course, this goes without saying that was a plan that most if not all Republicans campaigned very strongly against.

JOHNS: Right. The most likely scenario is actually going off the cliff now. That's pretty incredible.

BASH: Yes.

JOHNS: Well, let's bring in Ryan Lizza. He is our -- Washington correspondent for "The New Yorker," also a CNN contributor. You look at this thing and we're hearing echoes of the past. Dennis Hastert, the Republican speaker from the House of Representatives, said, and I have it here somewhere: "I don't want to be critical of John," meaning John Boehner, "but if -- you don't ever bring something to the floor without the votes."

So this is what happened last Thursday night where he brought this bill to the floor, his plan B, and it went nowhere. Was that a major miscalculation for him?

RYAN LIZZA, CNN CONTRIBUTOR: It was. Look, Denny Hastert governed the House, he was the speaker of the House in a very different time.

He had a lot more bullets in his gun in terms of rounding up votes. He could hand out projects to districts of wavering members. And he had a very tough leadership team and whip team that went out and got the votes.

Boehner is not a strong leader. He doesn't have the pork and the earmarks anymore since they have been banned. So it's much harder to gather the votes. And a lot of the incoming -- or the folks that came in, in 2010, the Tea Party folks, they look at the Hastert era and the Tom DeLay era and they say those are the guys we don't want...

(CROSSTALK)

JOHNS: You're both longtime Capitol Hill watchers, and I think we just have to ask you plainly, are you seeing any sway now in the Republican rank and file in following Boehner? Is he losing some of his support?

BASH: Obviously, the fact that he thought that he would be able to bring this bill last week to the floor to raise taxes on everybody making a million dollars or more and then had to pull it before he even brought it up for a vote, that gives you your answer. The answer is yes.

He really clearly thought he was going to do that. He went out so far on a limb it almost broke off saying that it was absolutely going to -- he was going to do it, it was going to pass. What he was trying to do I'm told from sources familiar with the meetings that he had leading up to the decision, which didn't go anywhere, was try to save Republicans from themselves.

He understands, he's an old-time pol -- Joe, you covered him for years in Congress. He gets the realities and also gets the consequences. And he sees the polls as well, that most Americans say that they will blame Republicans if we go off the cliff and most importantly will blame Republicans if everybody's taxes go up because this really has real meaning to people. He saw that. He tried to stop it and he failed.

JOHNS: I think to that point, let's just look at what's happening in the approval ratings for the president of the United States right now.

Back on December 15, the 15th and 16th, it was showing approval rating when it comes to handling the fiscal cliff Obama was looking at 48 percent. Now it's 54 percent. John Boehner has pretty much held steady, 25 percent, 26 percent, what have you.

So you look at that though and you see this crisis, other crises where the Congress and the president are in a standoff, if you will. Is it almost advantage to the executive because the president's one guy against many?

LIZZA: Look, his approval rating is going up, he should be in a powerful position. Unfortunately for him, the House of Representatives is not going along with him because they don't care what the president's approval rating is.

Most Republicans that John Boehner has to control are in safe districts. I was looking at this before. Only 10, only about 10 Republicans were reelected in 2012 with a margin of under I think five points. So most of these guys are in safe Republican districts that voted against Obama and in 2014, their next election, what they care about is making sure they don't have a primary challenge on the right.

Incentives in the House of Representatives just are not aligned for what has to get done for us to avert the fiscal cliff.

BASH: You can't underscore that enough. What you just said really hit the nail on the head. I'm told by Republican sources familiar with the conversations that Boehner and other leaders were having with their rank and file. The rank and file were saying, sorry, sorry, Boehner, I'm not going to vote with you.

Most of them said it's because they are afraid not of getting beaten by a Democrat, but getting a primary. And that is a real, real fear.

LIZZA: Which is why, as Dana pointed out in her report, these guys -- things may change after January 3, when you go over the cliff and it may be -- things may speed up. It may be a lot easier for Boehner to get something through the House, because then his guys who are worried about conservative challenges, they're voting for a reduction in taxes only.

That may be what has to happen for us to get a deal.

JOHNS: All right.

A lot of people have said Boehner is not Winston Churchill by any stretch of the imagination. So if he's not leading right now, who is?

LIZZA: The House Republicans? Well, who is leading them?

Look, he's just -- he's not a powerful leader. Those days are gone. We're in a different era now where about 50 -- at least 50 of his members don't care what he says. He doesn't have the power to force them to do something that is a cornerstone of Republican policy, not raising taxes.

These guys all ran against raising taxes. And for Boehner on that Friday when he went to the White House and said I'm going to do something I shouldn't do, I'm going to propose raising taxes on people over a million dollars in income, that's the first time any major Republican has done that since 1990, when George H.W. Bush raised taxes.

It's just -- it's not done in the Republican Party. And he couldn't get his members to go along with it.

BASH: And again I think that's an excellent point. It's not so much Boehner that he doesn't know how to lead. I can't think of anybody who would do a better job.

It's the entire body right now and the state of politics where we are right now, particularly in the Republican Party, that makes it very difficult to lead. Nancy Pelosi is still able to lead her caucus. She kept every single Democrat, even the most moderate, those who are leaving Congress that don't care, she kept them all in line to not vote for the Boehner bill. Boehner just can't do it.

JOHNS: All right, thanks so much. Really good to see you all, Dana, as always. Ryan Lizza, great to see. Happy holidays to you both.

BASH: Thanks. You, too, Joe.

LIZZA: You, too.

JOHNS: First tornadoes and now blizzard conditions. We're following several severe weather stories making it difficult this holiday week for millions of Americans.

CNN's Holly Firfer is at the world's busiest airport, Hartsfield- Jackson in Atlanta, of course.

Holly, what are you seeing there?

HOLLY FIRFER, CNN CORRESPONDENT: Well, Joe, it's pretty steady here.

It's getting a little bit more crowded as the evening goes on. But I can tell you that some people hoping to head home after Christmas and finding it tough to travel today because of that massive storm that is barreling through the country. It's wreaking havoc on the roads and in the air.

(BEGIN VIDEOTAPE)

FIRFER (voice-over): Snow, ice and high winds.

UNIDENTIFIED FEMALE: We want to get out.

UNIDENTIFIED FEMALE: It's always scary when you're flying that you will be stuck in the airport.

FIRFER: As massive storm it that left many in the Midwest and parts of the South with a white Christmas is pounding the Northeast with blizzard-like conditions forcing hundreds of flights to be delayed or canceled. The highways were not much better as officials warned people to stay off the roads, especially in the Midwest, where icy conditions made driving treacherous. On Christmas Day, as many as 30 tornadoes bounced across Texas, Louisiana, Mississippi, and Alabama. The hardest hit, Mobile, Alabama, where a twister ripped through the city, downing trees, power lines and damaging more than 100 homes and businesses, as well as a church and a high school. Some were caught on the road when the tornado hit.

UNIDENTIFIED MALE: At that point, we just kind of drove as fast as we possibly could to get out of the way.

FIRFER: Today, officials assessed the damage and a cleanup began across much of the South.

PATRICIA HUNTER, VICE PRINCIPAL, MURPHY HIGH SCHOOL: This is a dangerous situation with all the roofs off, and the windows blown out. This is just devastating.

FIRFER: The top priority now, getting power back to more than 215,000 residents across the Southeast left in the dark. With temperatures expected to dip below freezing in some areas, officials say the main concern is keeping people safe.

(END VIDEOTAPE)

FIRFER: And almost 1,200 flights today already have been canceled across the country and they're expecting many more delays. As a matter of fact, some airports are seeing almost four hours of delays. So they're telling people to check at the airport, check your flights before you get there.

And as the storm continues to move into the Northeast tonight and tomorrow, there will be more delays and cancellations. We're already hearing that more than 90 flights have been canceled for tomorrow. So the best advice is if you can stay where you are, spend some more time with friends and family, don't hit the roads. But if you have to get to the airport, one word, Joe, and that's going to be patience.

JOHNS: Four-hour delays, that really sounds pretty dramatic. I wouldn't like to sit in an airport that long on any day.

FIRFER: No.

JOHNS: Thanks so much for that, Holly.

FIRFER: Right.

(WEATHER UPDATE)

JOHNS: Tornadoes, that's the thing I have been following.

We have seen the damage they have done in Alabama. What's the latest on the tornado watches in the Carolinas, Alexandra?

ALEXANDRA STEELE, AMS METEOROLOGIST: Well, Joe, we still do have a tornado watch posted until 5:00 for right here. It's just the outer banks of North Carolina.

So the good news in terms of the severe weather threat, about an hour ago was the last time we had a tornado warning, meaning one of these storm cells showed rotation. Now, the axis of this, all lightning, but this is the outer banks. And that's off the coast now. So that is all pushing eastward and finally, the severe weather element of this is all pushing out and it will really just be the snow concern with the winds for tonight and through the day tomorrow.

But, Joe, you know, places like Newark and New York and Philadelphia won't have snow, they'll have rain, heavy rain, but it's the winds. And flying and winds certainly don't mix and that's what will be most problematic for the airports at the big cities tonight and for tomorrow.

JOHNS: That's for sure. And it sure started on cue, didn't it? Christmas and --

STEELE: Oh, it did.

JOHNS: It's amazing.

STEELE: And now, we've got another storm coming together and getting its act together for New Year's Eve and New Year's Day that will cross the country. And, Joe, it will take a very similar path. So, we'll get to that in another in a couple of days.

JOHNS: Absolutely. We'll be watching for it. Thanks so much, Alexandra.

STEELE: Sure.

JOHNS: Starbucks jumps into the fiscal cliff battle, sending a message to lawmakers and the White House via a cup of coffee.

Plus, my interview with the man in charge of the NRA's controversial proposal to put guns in every American school.

(COMMERCIAL BREAK)

JOHNS: Starbucks is stepping into the fiscal cliff battle between House Republicans and President Obama. The CEO is asking workers at Washington area Starbucks to write "come together" on cups tomorrow and Friday in an effort to encourage compromise.

In a letter to employees, Howard Schultz wrote, "Rather than be bystanders, you and your customers have an opportunity -- and I believe we all have a responsibility -- to send our elected officials a respectful but potent message, urging them to come together to find common ground."

CNN's Poppy Harlow recently sat down with Schultz.

Poppy, tell us more about what Starbucks is trying to do here.

POPPY HARLOW, CNN CORRESPONDENT: Well, the timing is certainly spot on, Joe, right, as Congress comes back in session from the holidays tomorrow. If it they go to Starbucks, they're going to get this message loud and clear from their barista. This is going to be, as you said, in the D.C. area, some parts of Virginia. Starbucks is asking their barista to voluntarily write "come together" to really urge politicians to get a deal done on the fiscal cliff before the end of the year.

And when I heard this news, I wasn't very surprised because Howard Schultz, the CEO, has been very outspoken on this issue. We sat down earlier this month to talk about the fiscal cliff and the risks to U.S. businesses, to the world economy and to the average U.S. citizen if we don't have a deal, if we don't get it done.

I want you to take a listen to what he told me.

(BEGIN VIDEO CLIP)

HOWARD SCHULTZ, CEO, STARBUCKS: The real difference today versus perhaps any other time in history is that this single issue has a seismic effect on the rest of the world, that we have never been as connected and the domino effect of a bad outcome here will have significant negative consequences domestically and around the world. Not the least of which will be the level -- fracturing of confidence in the United States of America.

HARLOW: Seismic and significant, very powerful words.

SCHULTZ: Yes.

HARLOW: How could this play out for Americans if we don't have a deal? What is going to feel like to them, Howard?

SCHULTZ: I think there will be tremendous personal pressure on people who are going to see their daily lives affected in ways that are hard to fathom, hard to calculate and hard to understand. And that's why I think this is so critical, coupled with the fact that this will have a significant avalanche effect on the rest of the world.

(END VIDEO CLIP)

HARLOW: Just to give you some perspective here, Joe, he said compared to the debt ceiling debate, that whole debacle a year ago, this is going to be night and day. That's how much worse he thinks it's going to be for the global economy if we don't get a deal. So what are they doing? They're putting their money behind this, too.

I'm going to show you a full page ad that you're going to see in "The New York Times" and "The Washington Post" on Thursday and Friday. Simple, but there you have it, "come together". That will be on your Starbucks cup.

They're teaming up with Fix the Debt, which some other CEOs have also become involved with, that campaign to get a deal done. They're also teaming up with AOL, which is also behind this. If you go to patch.com/fixthedebt, those are local Web sites.

So, big companies getting behind this in a different way.

JOHNS: All right. Poppy Harlow there -- thank you so much for that report. Very interesting, he's really getting actively involved and speaking out on politics. Interesting to see where that heads.

HARLOW: Yes.

JOHNS: All right. Children and firefighters have been targeted by gunman. Now, the NRA is calling for more guns, not less, to keep people safe. I'll talk to the director of the NRA's National School Shield Program.

And NBC's David Gregory under investigation. Did he break D.C. laws in an interview with NRA leaders? Coming up next.

(COMMERCIAL BREAK)

JOHNS: The Syrian regime suffers another high level defection.

Lisa Sylvester is monitoring that and some of the other top stories in THE SITUATION ROOM right now -- Lisa.

LISA SYLVESTER, CNN CORRESPONDENT: Hi there, Joe.

Well, Syria's military police chief reportedly has fled to Turkey on a scooter after plotting his escape for three weeks. In a video posted online, a man purporting to be the police chief accuses the government of carrying out massacres of innocent civilians and he says the military is nothing but armed gangs that kill. He says is he defecting to, quote, "join the people's revolution."

And the recovery in the housing market remains on pace. Home prices rose 4.3 percent in October over last year, that is it the biggest percentage increase in more than two years. Near record low mortgage rates and fewer foreclosures are helping spur sale which is in turn is boosting prices.

And the world's longest high speed rail line is up and running and it's in, well, where else, China. The 1,428-mile line spans more than half the country linking the capital of Beijing to the southern Chinese boom city of Guangzhou. Trains will run at 186 miles an hour on average and trying to aim to have 74,000 miles of high speed rail line by the year 2020.

And civil rights icon Nelson Mandela has been discharged from a South Africa hospital. The 94-year-old former president will continue treatment at his home. He was hospitalized with a lung infection on December 8th. One week later, he had surgery to remove gallstones.

I'm sure everyone's very pleased to hear, though, Joe, that he's doing well -- Joe.

JOHNS: Thanks so much for that, Lisa.

In the wake of the Connecticut school shooting, the NRA wants to put armed volunteers in every American school. The proposal is facing heavy criticism. The man in charge is here to defend it.

Plus, how the host of NBC's "Meet the Press" may have broken Washington, D.C. gun laws.

(COMMERCIAL BREAK)

JOHNS: I'm Joe Johns.

Here are some of the stories we're working on for our next hour:

A gunman who shot dead two firefighters said killing is what he liked best. And now, the investigation may be uncovering more of his victims.

Plus, are gun owners being treated like sex offenders by having their identities posted online?

And schoolchildren make sure their cancer-stricken janitor gets a brand new smile.

Stand by. You're in THE SITUATION ROOM.

(MUSIC)

(COMMERCIAL BREAK)

JOE JOHNS, CNN ANCHOR: Children, teachers and now firefighters are being targeted by gunmen in just the last few days. The NRA says one answer to keeping people safe is putting armed security guards in every school.

Joining me now is Asa Hutchinson. And former Congressman Hutchinson, you're known very well here in Washington, D.C. I have to ask you now that you are the point man on NRA issues in trying to keep guns out of schools, there was another shooting over the weekend.

This one involved a man who shot the two volunteer firefighters. He left a note. It sounded like a very serious situation. Now, we know what your solution is to guns in schools, but what's your solution to that?

ASA HUTCHINSON, DIRECTOR, NRA'S NATIONAL SCHOOL SHIELD PROGRAM: Well, you described me as point man. It is the point person for school safety issues. And so there's a larger debate that will take place in terms of whether there should be additional restrictions on large ammunition clips or so on further restrictions.

My focus is on the safety side of things and that's been my mandate is to look at schools, what more can be done, part of it would be a solution of an armed presence, which we have in one-third of our schools.

What a tragedy it was with the fire personnel as devastating and as incredible that one human being can even think in those terms. So that's a tragedy that I'm sure will continue to be investigated. JOHNS: Back in the day, you were the DEA administrator, but right now there is so much talk in Washington about the Bureau of Alcohol, Tobacco and Fire Arms. One ever the questions they raised, is why there isn't a national gun registry? Do you think there should be one?

HUTCHINSON: Again, that's not my focus, but that's not something I think is a solution. Whenever you look at a national database, one of the concerns as a result of the shooting we saw in Connecticut and the concern about the mentally ill, those who have been declared mentally ill, there's not a national database for them either that we have all the states putting in information.

And so we have some weaknesses in our system all across the board it that needs to be examined, one of them being that. Again, Joe, my limited responsibility which is a vast responsibility is looking at real solutions for safety.

And I believe that when you're looking at the challenge of schools, whether you're protecting a shopping mall or whether you have an armed person that a police officer is off duty that churches.

Even why would we not think it logical that we protect the children of our nation in a school environment? It can be gun consistent with their learning atmosphere and that's my challenge to bring experts together to accomplish that.

JOHNS: You were part of the news conference with the National Rifle Association on Friday. I want to play you a little bit of what Wayne Lapierre had to say there. Listen.

(BEGIN VIDEO CLIP)

WAYNE LAPIERRE, EXECUTIVE VICE PRESIDENT, NATIONAL RIFLE ASSOCIATION: The truth is that our society is populated by an unknown number of genuine monsters. People that are so deranged, so evil, so possessed by voices and driven by demons that no sane person can ever possibly comprehend them.

(END VIDEO CLIP)

JOHNS: Of course, he's the executive vice president of the NRA. I have to ask you, when you listen to that sound bite, the question that rings in my head is whether he just articulated a good reason for gun control as opposed to against gun control. What's your view?

HUTCHINSON: Well, I think you have to put guns in the hands of the right people. For example, hunters obviously have a need for their own weapons and there are recreational uses and so on. But when you're talking about for law enforcement purposes, and the monsters as have been described are the deranged that are intent on killing people.

We want to protect our airplanes, our passenger and we've done that with federal air marshals. We want to protect our society from them in places that people are in danger and we've come to solutions in every environment. The schools should not be exempt from that.

And so when you look at our school atmosphere where one-third of our schools have been armed presence, I think that you can look at expanding that. To me the objections are primarily a cost issue, a training issue, which is critically important.

That's why I want to bring together whether it's the Secret Service or federal air marshals to make sure that the people in sensitive environments in schools such as schools that have a weapon for protective purposes are properly trained. I think we can do that.

JOHNS: Do you think that news conference really set the right tone, if you will, for a conference post the shooting in Newtown?

HUTCHINSON: I think they were respectful that the NRA and Wayne Lapierre waited. A response was demanded from the NRA and he articulated the position. He might not have articulated it like I would have. I emphasized the independence of my study group and the emphasis of school safety.

And quite frankly, I'm grateful for the NRA stepping forward and actually offering a positive solution in terms of school safety and focusing on the debate on that, which I think is the right debate that we have. They'll debate and my former institution of Congress the issue of further restrictions.

I want to focus on the safety side of the children and I think that's the right debate to have that will provide long term solutions.

JOHNS: Asa Hutchinson, always good to see you . Thanks for giving us a little bit of time in THE SITUATION ROOM.

Is "Meet The Press" David Gregory in hot water with D.C. police over an interview he did with the NRA? We're taking a look at the legal ramifications. As we go to break, a live picture of Honolulu. President Obama leaving this beautiful day behind as he heads back to Washington in the next few hours. For all of you digging out right now in the snow, this picture is for you.

(COMMERCIAL BREAK)

JOHNS: Just in to THE SITUATION ROOM, word that the U.S. will hit its debt limit next week. The Treasury Secretary Timothy Geithner has written to Congress informing lawmakers that the country will hit its borrowing ceiling this coming Monday, December 31st.

But the estimates are that the Treasury Department can keep the country running through February or March. Geithner says he will take what he calls extraordinary measures to keep the country from defaulting, but he says uncertainty from the fiscal cliff makes it hard to say how long they will be effective.

The White House and Congress are scrambling to keep the country from going over that fiscal cliff. In a Gallup poll done just before Christmas, 50 percent of people surveyed said it is very or somewhat likely that they'll reach a deal in time, but nearly as many 48 percent say it's not too likely or not likely at all.

Joining me for today's "Strategy Session" to discuss this, CNN contributor and Democratic strategist, Maria Cardona and CNN contributor and Republican strategist, Anna Navarro.

And you know, you look at this thing, I was talking to you, Maria Cardona, in the break a minute ago, it's really starting to look like the fiscal cliff is actually going to come to pass.

MARIA CARDONA, CNN CONTRIBUTOR: Yes, it looks that way, Joe, which is so interesting because with the news that you just gave about the debt ceiling, it will make the fiscal cliff look are more like the fiscal grand canyon if leaders aren't able to fix what is about to happen in terms of tax rates going up for everybody as well as making sure that the country does not default on all of this.

Look, it's really ironic because if you look at where Democrats were with these Bush tax cuts a decade ago when I was at the Democratic National Committee as communications director, there was a visceral reaction against them. And now Democrats want to extend these tax cuts for 98 percent of Americans. Republicans should just basically declare victory and go home. I mean, it's a little insane where we are right now.

JOHNS: Ana Navarro, we've been talking in Washington about the idea of so many Democrats now supporting the Bush tax cuts at least for people making less than $250,000. What's your take on that?

ANA NAVARRO, CNN CONTRIBUTOR: My take is that it's beginning to look a lot like cliff-mas, Joe. I think like most Americans, I thought last week, I thought ten days ago that there was possible solution that could be reached before December 31st. It's looking less and less likely now.

And, yes, we're talking -- we're having a discussion about the Bush tax cuts. But let's also remember that just last week, John Boehner tried to pass what was the Democrat proposal, you know, the Schumer proposal, of doing taxes, you know, for people that -- cutting them for people that make less than a million dollars.

So what was a very popular idea with Democrats before the election is no longer the case so times change. It's complex. Let's hope Boehner's back in Washington, Obama's back in Washington tomorrow. The players are there. Harry Reid is there.

Let's hope that they get there and for the sake of the country for the sake of our stability of our fiscal well, they get together on a plan that works. Nobody will get 100 percent of what they want. Hopefully somebody -- we get enough of what we want to keep the wheels turning.

JOHNS: Ana, I have to ask you. Do you think Speaker Boehner's leadership is suffering while this crisis continues?

NAVARRO: You know, I think a little bit of both to be honest with you. Certainly he tried to get something from his caucus last week. That didn't work. That was not a strong moment for him. It was a moment of weakness.

But at the same time, I think he looks like he's really trying. And it also paints the picture and makes it obvious that, you know, he's not just negotiating with President Obama.

He also has to then come back and sell to his own people, sell to his own caucus, which at points may be even more difficult than negotiating with the White House. So it tells us all just how complex a situation we are dealing with.

JOHNS: Now, Maria, we were talking in the break a little bit about how so many people just want this over and we did the report earlier today talking about the leader of Starbucks actually asking people to write "come together" on the coffee cups.

So do you think this is the kind of thing that has gotten through now to the American public as to how important it is or is it still abstract?

CARDONA: No, I do actually think that it is something that the American people understand. Sadly probably more than what our leaders in Washington seem to be understanding at the moment.

And in fact, during this election, it was something that they were very vocal about, the American people. They want our leaders to put politics aside, to put partisanship aside, and come together to make the decisions, the tough decisions.

And it's true, no one is going to get what they want, but people need to understand that President Obama did win and he won frankly on the argument that the Senate has now put forward and passed, which is let's extend these tax cuts for 98 percent of the American people for those making $250,000 and believe and let's deal with the rest of this later.

That bill is sitting in the Senate today and I actually feel bad for Boehner. I agree with Ana that I really do think he's trying. But unfortunately, he pulled a political ploy this past week that blew up in his face and that could seem to the American people that he put politics before the good of the country.

JOHNS: Do you agree with that, Ana, do you think this was a big mistake, a missing judgment when he put the bill on the floor that he couldn't pass?

NAVARRO: Certainly it was a wake-up call. I don't think it was a mistake because I think he was attempting to send a message and I think he was attempting to do something. So I prefer him going down in an attempt to do something and move the ball than doing nothing.

And, yes, President Obama won the White House, but the American people also elected a majority of Republicans back to the House. So what we have is a divided government where one of our chambers is in Republican hands, the White House and the senate is in Democrat hands.

That means that the message the people were sending is that they want compromise. If President Obama wants to build a legacy, get things done, complicated things like immigration, not just fiscal cliff, but all things on his to-do list in the next four years, it requires compromise.

And if the Republicans don't want to be seen as obstructionists and be seen as part of the solution, they also need to compromise. We have to come to the realization that the elections are now past. Let's put politics aside and let's get things done.

JOHNS: Ana Navarro, Maria Cardona, thanks so much. Always good to see you all and happy holidays to you.

CARDONA: Thanks so much, Joe.

NAVARRO: Thank you, Joe.

JOHNS: David Gregory under investigation. Did he violate D.C.'s gun laws on the air? Jeffrey Toobin joins me straight ahead.

(COMMERCIAL BREAK)

JOHNS: An unusual police investigation here in the nation's capital. It started with this interview with a top NRA leader on NBC's "Meet the Press."

(BEGIN VIDEO CLIP)

DAVID GREGORY, NBC: Here is a magazine for ammunition that carries 30 bullets. Now isn't it possible that if we got rid of these, if we replaced them and said could you only have a magazine that carries five or ten bullets, isn't it just possible that we could reduce the carnage?

(END VIDEO CLIP)

JOHNS: Gun magazines like the one David Gregory held up are illegal in the District of Columbia, presuming that was the real thing where "Meet the Press" is recorded. I asked D.C. police about this and I got this statement.

NBC contacted the Metropolitan Police Department inquiring if they could utilize a high capacity magazine for their segment. NBC was informed that possession of a high capacity magazine is not permissible and the request was denied.

This matter is being investigated by MPD. We want to talk about this with CNN's senior legal analyst, Jeffrey Toobin. He is the author of "The Oath, The Obama White House and the Supreme Court."

So Jeff, let's just start with the law. We have it. We can put it right up there on the screen here in the District of Columbia, the law on ammunition feeding devices. No person in the district shall possess, sell, transfer any large capacity ammunition feeding device regardless of whether the device is attached to a firearm.

For the purposes of this subsection, the term large capacity ammunition feeding device means magazine, belt, drum, feed strip or similar device that has a capacity of or can readily be restored or converted to accept more than ten rounds of ammunition. So assuming what he held up was the real thing, did NBC break the law?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: It's obvious. David Gregory is going to the big house. It's just done. No, this is so silly. Come on, I know it's the day after Christmas, but, I mean, look, this is a silly little diversion. He was obviously using it for a demonstration.

There is no chance that this would result in a prosecution. It's a good opportunity for the Washington, D.C. police to point out that it's illegal to possess those sorts of weapons in the District of Columbia and I commend them for doing that. But the idea that this could lead to a prosecution is just absurd.

JOHNS: So the next question, I think you probably ask your lawyers and if you went to the Metropolitan Police Department and asked them about it, there is some suggestion that perhaps they also went to ATF, as well. Figure the D.C. police gave them one story, no, you can't do that. Atf said, yes, you can. Does that help anything, does it make any difference at all?

TOOBIN: That would make a huge difference if you got conflicting advice as a representative of the press. You are certainly not going to be accused of committing a crime if a federal agency told you it was OK to do it. And just putting all that aside, for a prosecution, you need a prosecutor.

In this case the U.S. Attorney's Office in the District of Columbia to exercise prosecutorial discretion and say this is a case we want to bring. There is simply no way that reasonable prosecutors like the federal prosecutors in Washington would say we need to prosecute David Gregory or anyone at NBC for this case.

However, it is worth pointing out, Joe, that this illustrates that guns are portable. NBC Studios are about a 15 minute drive across the Potomac River to Virginia where it's very legal to buy and possess many kinds of weapons where it's not illegal -- where it is illegal in Washington.

So the fact that it is so easy to get these magazines and that they are legal in much of the country, that's I think an important point and that's the point that David Gregory was trying to illustrate.

JOHNS: D.C. has had some very strict gun laws and we know about the Heller case that went to the Supreme Court. Does that play into this will conversation at all?

TOOBIN: Well, it does because the Heller case as you point out in 2008, that was the very important Supreme Court decision that said the second amendment gives individuals the right to bear arms. And Justice Scalia's opinion said the firearms at issue in that case were handguns in the home for self protection.

The question of what other handguns -- what other guns, what other firearms are protected by the second amendment is very much up in the air at this point. And so the idea of how many weapons a state or the District of Columbia or the federal government can prohibit is an unsettled legal question at this point.

Justice Scalia said certainly the government can regulate big weapons, but just what that means. And I think that's one of the subjects you'll hear a lot about when Congress starts talking about gun control when it reconvenes next month.

JOHNS: A very gray area. Thanks so much. Always good to see you, Jeff Toobin.

TOOBIN: OK, Merry Christmas.

JOHNS: Merry Christmas to you. A chilling letter left behind by the gunman and arsonists who unleashed a deadly attack on firefighters and a newspaper publishes the names and addresses of gun owners.

(COMMERCIAL BREAK)

JOHNS: Toyota making a major announcement. Lisa Sylvester is monitoring that and some of the other top stories in THE SITUATION ROOM right now -- Lisa.

LISA SYLVESTER, CNN CORRESPONDENT: Hi, there, Joe. Yes, this is just into THE SITUATION ROOM. Toyota says it has agreed to a $1.1 billion settlement in a class action lawsuit involving vehicles speeding up unintentionally.

The Japanese automaker reportedly would install new safety equipment in affected cars. Multiple tests confirmed the safety of its control systems, but it says it wanted to, quote, "turn the page on this issue." A federal judge must approve the deal.

Former President George H.W. Bush remains in a Houston hospital ICU after spending Christmas at the hospital with his family. His spokesman tells CNN Mr. Bush is in guarded condition with an elevated fever, but says the 88-year-old is in good spirits. Mr. Bush has been in the hospital for over a month now. Doctors initially were treating him for bronchitis and a lingering cough.

And Egypt's new upper House of Parliament convened for the first time today. Under Egypt's newly approved constitution, the council will have legislative powers until a lower house is elected. Signed in to law today, the controversial charter was approved in two weekend rounds of voting. The turnout was just 32 percent. Critics say the constitution excludes minority rights and supporters say boosts Egypt's political stability.

And Russia's upper House of Parliament has approved a controversial measure banning adoption of Russian children by Americans. The legislation now goes to President Vladimir Putin for signing. This move is seen as retaliation for a law President Obama signed earlier this month imposing travel and financial restrictions on human rights restrictions on human rights abusers in Russia. And I'll have a full report on this story later in our 6:00 p.m. hour potentially affecting hundreds of families here in the United States if this ban goes through -- Joe.

JOHNS: Right, the hundreds, hundreds of children.

SYLVESTER: Yes, you know, every year they have roughly about a thousand children who are adopted from Russia by Americans, but all of that could be put on hold. And it's unclear also what's going to happen to the cases that are pending.

But again, we will have much more on this story coming up at 6:00 o'clock. So people can tune in again.

JOHNS: All right, can't wait to see it. Thanks so much, Lisa.