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THE SITUATION ROOM

Looming Strike Threatens U.S. Ports; Obama Returns for Year-End Showdown; Terror Plot Targets Oil Giants; New Push to End Syrian Civil War

Aired December 27, 2012 - 17:00   ET

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


CANDY CROWLEY, CNN ANCHOR: You're in THE SITUATION ROOM.

Happening now, a deadline that hasn't been getting much attention, but if dock workers go on strike this weekend, there may be a dramatic impact on almost everything you'd like to buy.

Also, President Obama comes back from Hawaii for the year's final showdown with Congress.

And Syria's government unleashes its most sophisticated weapons of the civil war -- missiles from Iran.

We'd like to welcome our viewers here in the United States and around the world.

Wolf Blitzer is off today.

I'm Candy Crowley.

And you're in THE SITUATION ROOM.

I want to begin with a crisis you probably don't know is coming, and, of course, is just about to hit. Barring a last minute deal, union dock workers at more than a dozen major American ports will go on strike this weekend, meaning just about everything we buy, from clothes to cars, can't be unloaded. The strike would impact 14 ports along the Eastern Seaboard and Gulf Coast, including the Port of Baltimore.

And that's where we find CNN's Brian Todd now live -- Brian, the potential impact of this is pretty big.

BRIAN TODD, CNN CORRESPONDENT: It's huge, Candy. Right here, this is one of the most crucial ports for commerce in this region, the Seagirt Terminal here in Baltimore. Over my right shoulder, you can see these three massive container ships just sitting in port. Over my left shoulder here, this is the port terminal with its bustling operations, containers still being moved in and out of here by a truck that are being offloaded from the ships here at the -- at the terminal.

About 600,000 containers move through the Port of Baltimore every year, billions of dollars worth of commerce. But that could all come to a grinding halt if the dock workers and the shipping companies can't reach a deal.

(BEGIN VIDEOTAPE)

TODD (voice-over): They move everything from our clothes to toys and electronics through the ports and into the marketplace. But a lot of those goods won't be making it to our stores if longshoremen at more than a dozen ports from Maine to Texas go on strike. That's what could happen by Sunday if a deal can't can be reached between the major shipping companies and a union representing nearly 15,000 longshoremen.

RICHARD SCHER, MARYLAND PORT ADMINISTRATION: The impact would be great, obviously, on the dollar value side, on the cargo handling side, but also on the job side, because, again, these ports are major economic generators.

TODD: Richard Scher of the Maryland Port Administration, and others, say the economic damage from a strike would reach well beyond the docks.

JONATHAN GOLD, NATIONAL RETAIL FEDERATION: Everybody from your mom and pop retailer to your farmer to the trucking company who has to go in and pick up the containers at the ports. So this is going to be felt not just at the local economy at the port, but nationwide, for everybody else who relies on these ports to move their commerce.

TODD: Coming at the same time as the fiscal cliff impasse, it's a potentially devastating one-two punch for the U.S. economy. Neither the longshoreman's union nor the alliance representing the shipping companies would give us anyone to speak on camera. But officials with knowledge of the negotiations say it boils down to one issue.

(on camera): The key sticking point is over those large containers and the payments that longshoremen get for them. The shipping companies pay royalties to the longshoremen for the containers based on their weight. But the shipping companies now want to freeze those royalty payments for current longshoremen and eliminate them completely for future hires.

(voice-over): The longshoremen say those royalties are designed to make up for jobs lost to automation. A strike would only affect ports that handle containers, not other cargo, like automobiles.

But if the shipping companies lock out the longshoremen...

SCHER: That would impact more than just containers. That would impact all cargos at -- at ports. So that would have, obviously, a much more impactful reaction.

(END VIDEO TAPE)

TODD: Just how impactful?

Scher says that East Coast and Gulf Coast ports handled about $55 billion worth of cargo in an average month this year -- Candy. CROWLEY: So, Brian, I have to imagine that retail companies and others who want those goods off the ships and in their stores have to be plenty worried.

Do they have a -- a Plan B to move those goods if there's a strike?

TODD: Yes, some of them do. Clothing companies, footwear companies, other retailers, some of them have arranged to have their goods, their merchandise, shipped early this year to -- to maybe minimize the -- the cost of this. Others have arranged to use West Coast ports and then get their merchandise by rail or truck to the East Coast.

But both of those alternatives would drive up the costs to consumers of all of these goods.

CROWLEY: Yes, that always seems to be the fallout on a lot of these things.

Brian Todd, thanks a lot.

Now for the crisis we all know is coming, the fiscal cliff. That combination of tax hikes and spending cuts hit in just five days.

But you need to take a deep breath.. You probably won't notice much, if any, change right away, even if President Obama and Congress can't make a deal.

CNN's chief White House correspondent, Jessica Yellin, is keeping up with the negotiations -- Jessica, I have not talked to a soul in the past week who believes they're actually going to get a deal before January 1st.

What is the temperature at the White House, at this point?

JESSICA YELLIN, CNN CORRESPONDENT: Negotiations, Candy, what do you mean by negotiations?

I can actually report right now, thanks to our own Ted Barrett and Dana Bash that Harry Reid, the Senate majority leader, and Minority Leader Mitch McConnell, are meeting right now, as we speak. So perhaps there could be some incremental progress.

But as you well know, time is running out. And the president today spent his day behind closed doors. He did cut his vacation short, after he came home from Hawaii, to at least be here and try to prod all sides to get toward some agreement or at least be here when we go over the fiscal cliff, so all sides seem to be working hard when the nation does that.

The president did speak to all four Congressional leaders from Hawaii last night and tried to get a sense of the temperature, where we are.

And now it sort of sits in the hands of the Senate to see if they can reach some agreement in the next two days, before the House comes back into session on Sunday, before they can get it through in the final 24 hours before we all go over that cliff.

CROWLEY: So what's the role of the president into all of this?

I mean, what do you expect from him in the coming days?

YELLIN: Right.

CROWLEY: What's he doing to get this resolved?

YELLIN: Well, today was quiet from him publicly. But, you know, the role he could play, there are two. One is he could bring the leaders together, either bring them here to the White House, force them into a room and try to get them to some agreement; or just cajole them privately on the phone, nudging each into some middle ground.

But the other bigger role, as you well know, is the bully pulpit. He used that very effectively in the payroll tax cut fight, lobbying the American people to pressure Congress to take action.

But with such little time, we're not sure it can have much of an effect. And given what Senator Mitch McConnell said today, we're not sure how much room there is, really, to negotiate.

Here's a little bit of what Senate Minority Leader Mitch McConnell said earlier.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: Republicans aren't about to write a blank check, or anything Senate Democrats put forward, just because we find ourselves at the edge of the cliff. That wouldn't be fair to the American people.

That having been said, we'll see what the president has to propose.

(END VIDEO CLIP)

YELLIN: And, Candy, all day, Republicans have been clear they need more details be -- from Democrats before they make a decision.

Perhaps Senator McConnell is getting those from Senator Reid now.

CROWLEY: OK, Jessica Yellin at the White House.

What can I say?

Happy New Year Jessica.

I'll see you tomorrow.

YELLIN: Right here, right?

CROWLEY: All right. Thanks. The year is ending with new worries about international terrorism. Today, the official news agency for the United Arab Emirates reported members of a suspected terror cell have been arrested for plotting attacks in the Emirates and Saudi Arabia.

CNN national security contributor, Fran Townsend, joins us.

She's a member of the CIA External Advisory Board.

She was also President Bush's homeland security adviser -- so, Fran, how unusual -- like from what we know -- and I don't feel like we know quite that much -- but how unusual is this cell that we're um---- we're hearing about?

FRANCES TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: You know, Candy, they -- while there is a discussion, they were -- there was a statement put out by the Emirates, we don't know very much about the details.

Typically, the Emirates is a -- an infrastructure place, right?

It's where they provide support -- the terrorist groups look for support, that counter proliferation, banking. We don't often see operational terror cells. And that's what makes this different.

The Emirates has got a very capable counterterrorism force and they work very closely with Saudi Arabia and the Mubahalas there. And we have to presume that there was real cooperation because the targets were supposed to be both in the Emirates and Saudi Arabia.

But we don't know very much beyond that.

CROWLEY: You know, I want -- I want to get this quote exactly right, so let me read it, because this is from the official Emirates News Agency talking about the terror cell. And they said that the terror cell had, quote, "exported materials and equipment, aiming to conduct terrorist attacks."

So this is not a region you want people exporting, you know, material and equipment for terrorist attacks.

How concerning is that part of the operation?

TOWNSEND: It's very concerning, Candy. And, in fact, the statement itself suggests that the targets may have been -- also been inside the Emirates. That's unusual.

We've -- as I said, we've seen the Emirates used as a staging ground. We've seen it used for support to terror cells. But -- but it -- it would be unusual to actually see a target there inside the Emirates.

CROWLEY: And this is an important banking and money hub, certainly, the UAE is, for these terrorist organizations.

So if this is al Qaeda, if this is the work of al Qaeda, does it make sense for them to draw attention to themselves this way?

TOWNSEND: No, for just that reason. Look, I should -- we should be clear, the authorities in the Emirates have been tremendous allies of the United States, of their regional allies, like Saudi Arabia, in fighting terrorism.

But you're quite right, the Emirates has been used by terrorist groups like al Qaeda for infrastructure and banking and that sort of thing.

So for them to draw attention to themselves is sort of counterproductive on their part. And, again, it makes this unusual.

CROWLEY: CNN national security adviser, Tan Frown -- Tan Frownsend -- Fran Townsend.

(LAUGHTER)

CROWLEY: I didn't get enough sleep over the Christmas holiday.

Thanks, Fran.

Appreciate it.

TOWNSEND: Sure.

CROWLEY: And a dangerous new escalation in Syria's civil war -- U.S. officials say the al-Assad regime now is targeting its opponents with some of the most sophisticated weapons we've seen in this civil war.

And if you think Harry Potter's invisibility cloak is just a children's story, just wait until you hear about the high tech future of military camouflage.

(COMMERCIAL BREAK)

CROWLEY: A U.N. peace effort is underway to end the civil war in Syria. So far, though, it's had no impact we can see. Opposition activists say at least 180 more people died today.

CNN's Mohammad Jamjoom is monitoring the situation from Beirut, Lebanon.

What can you tell us?

MOHAMMED JAMJOOM, CNN INTERNATIONAL CORRESPONDENT: Well, Candy, Lakhdar Brahimi, the joined U.N./Arab League envoy wrapped up his trip to Syria today. He spoke to reporters before he left. And he actually said that there was no U.S.-Russia backed plan for political transitions in Syria.

There've been a lot of reports the last few days that, perhaps, the U.S. and Russia were trying to come up with a plan that would lead to a path of political transition in Syria rather than this deadlocked diplomacy we've seen for so many months. Lakhdar Brahimi said that is not the case. He also called for a transitional government in Syria to be created with broad executive powers.

Meanwhile, that wasn't just the only bit of diplomacy today. You have Syria deputy foreign minister in Moscow meeting with Russian officials trying to find some sort of political or diplomatic solution to the crisis in Syria, although, a lot of details were not yet released about the outcome of that meeting. What's happening is more diplomacy, more flurry of diplomacy as things seem to be spiraling more out of control on the ground.

And even if there is any kind of agreement for a political transition when it comes to Syria, the fact of the matter is the opposition in Syria tells us they're not going to negotiate with anybody who belongs to the Assad regime, and they will not agree to any kind of a plan that would see Bashar al-Assad remain in power for any much longer -- Candy.

Crowley: Mohammed, we see the death toll today quite high again. Is there any sign that this flurry of diplomatic activity is making any difference on the ground?

JAMJOOM: Unfortunately, there is not. Today, over a hundred killed, according to opposition activists. Yesterday, you had at least 140 killed, according to activists, the day before that, 170, the day before that, close to 200.

In the nearly two years since the crisis there began, over 40,000 people have been killed, and as we've seen so many times when there are delegations or envoys in Syria trying to form some sort of path to peace, the fact of the matter is it doesn't make a difference on the ground there. No attempt at ceasefire has ever taken route there. The fighting has not ceased. It only is getting worse.

And opposition activists, for that reason, question Brahimi and question his role as an envoy, because they say he has not made a difference and they believe that the Bashar al-Assad regime is only stringing all these diplomatic envoys along, trying to buy more time in their crackdown against the Syrian people -- Candy.

CROWLEY: CNNs Mohammed Jamjoom, thanks so much for your time tonight.

While the peace effort is moving at a glacial pace, we're seeing reports the Syrian government's deployed its most high-tech weapons of the war. Here's our CNN Pentagon correspondent, Barbara Starr.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Candy, we are seeing this. This week, U.S. military officials are telling me that Syria fired at least two Iranian-supplied short-range missiles called Fateh (ph) A-110. And here's why it's so interesting that they are using this Iranian supplied weapons.

This missile is much more accurate than a scud, and it's a real tradeoff on the part of the Syrians between the longer range scud and the shorter range missile that's more accurate at striking rebel targets. What are we talking about here? This missile, the Fateh (ph) has a range of 125 miles, scud, 185 miles, longer range. But the Fateh (ph) is much more accurate within about 300 feet or so of its target while the scud can hit with an accuracy of about 1,400 feet within a target range. So, what we are seeing now Candy as another turn by the Syrian regime for a much more precise targeting against these rebel strongholds.

CROWLEY: So, can we expect to see more of this?

STARR: Oh, absolutely. I think everyone believes we will see more of these ballistic missiles, both these, the scuds, whatever they can being launched and this is why NATO using U.S., Dutch, and German patriot missile batteries, putting them in Turkey by the end of January because the concern is so great.

These missiles get launched. They have ranges that could hit inside Turkey. That draws NATO in. It would be very difficult at that point. So, you're going to start seeing this layer of protection being put into place.

CROWLEY: For a while, I thought what really we were worried about was Syria unleashing these chemical weapons on its own people, and now, it just seems --

(CROSSTALK)

CROWLEY: It could be more deadly. It's just escalating.

STARR: Exactly.

CROWLEY: Barbara Starr, thanks.

In the day since the tragedy at Sandy Hook Elementary School, many of you have given your support and money to the victims of this horrific shooting. But next, why one woman's alleged call for donations has put her under arrest? Stay with us. You're in the SITUATION ROOM.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Well, the next 50 years, we need more food produced in the last 10,000 year combined. And it's a staggering to think, where is it all going to come from? We're already pushing the limits on land. We're already seeing food shortages in some parts of the world. So, we need to really pick up the pace, I think, and really take it to the next level offshore and kind of open up new frontiers for the farming.

(END VIDEO CLIP)

CROWLEY: After the shooting at Sandy Hook Elementary, the community of Newtown has received so much support, it's getting overwhelmed. Lisa Sylvester is monitoring that and some of the other top stories in the SITUATION ROOM right now. Lisa, what's the latest?

LISA SYLVESTER, CNN CORRESPONDENT: Right, Candy. Well, the town has actually received so many gifts since the massacre almost two weeks ago that one local official is kindly asking people to stop sending them. They're having trouble managing the volume of mail they're getting.

Newtown's first (INAUDIBLE) says the community is very grateful for the support but is asking people to donate items to families in their own communities, instead, in the name of those killed at Sandy Hook.

And if you like to make a donation to Newtown, watch out for scams. Federal authorities arrested a New York woman accusing her of claiming to be a relative of one of the victims and soliciting donations for the child's funeral. Now, she spoke with CNN and claimed she did not try to taking donations and is the victim of what she calls digital artists.

Former Egyptian president, Hosni Mubarak, is headed back to a military hospital. His lawyer says doctors discovered he fractured three ribs when he slipped in a prison's hospital bathroom this month. Mubarak is serving a life sentence in prison for his role in the deaths of protesters during the uprising that pushed him out of office.

And imagine being four times harder, yes, to get a job as a flight attendant than it is to get into Harvard? Looking strictly by the numbers, it is true. Bloomberg reports 22,000 people applied in just one week for 300 positions posted for the job of flight attendant for Delta Airlines. The company's CEO says applications were coming in at a rate of two per minute.

And if you travel to France, speaking of traveling, and you get a craving for whopper, well, for the first time in 15 years, you'll be able to find one. Burger King has opened a branch of its fast-food chain at the Marce Airport. The company left France in 1997 after failing to turn a profit. Its biggest rival, McDonald's, is popular there with more than 1,200 restaurants.

So now, if you're traveling to France, you can have a whopper, although, I don't think -- you're a vegetarian, aren't you?

CROWLEY: Yes, I am. So, no whopper. But you've got to wonder what they saw in their research that made them go back to France.

SYLVESTER: I think it's just globalization. I mean, you've got more people who are traveling -- Americans all. I mean, it's widely known Americans are all over the market. So, bigger market and place to go. So, not too terribly surprising.

CROWLEY: Lisa Sylvester, thanks.

New Englanders are shoveling snow while southerners are shivering. We have the latest on what already is a record-breaking winter storm and what's coming next.

(COMMERCIAL BREAK)

CROWLEY: A powerful winter storm has dropped record-breaking amounts of snow, burying sidewalks from Arkansas to Maine, and it's not done yet. Skiers may be delighted by the fresh powder, but in the midst of a busy holiday travel season, travelers are not. CNNs Ines Ferre is in Syracuse, New York.

Ines, more snow is in the forecast for where you are. I don't know how you get ready, but are they ready for more?

INES FERRE, CNN CORRESPONDENT: they are ready for more in the next couple of days, but I will tell you, take a look at what you see behind me. This is just part of what the storm left behind, and even though this area is used to snow, the storm caused chaos for many people trying to travel this holiday week.

(BEGIN VIDEOTAPE)

FERRE (voice-over): A powerful winter storm blanketed the northeast, leaving thousands of passengers stranded as airports across the region faced delays and many downright frustrated with winter.

UNIDENTIFIED MALE: It's just stressful. You know, I've been to six different storms. Everyone is out of shovels, out of salt.

UNIDENTIFIED MALE: We've been here at 3:30. We got on a plane and sat for three hours. We're trying to get home. Or plan B, we go spend more time with the grandkids here.

FERRE: Airports suffered numerous cancellations across the board and passengers are still facing hurdles. According to tracking Web site flightaware.com, more than 400 flights across the country have been canceled today. In Columbus, Ohio, as planes de-iced passengers used the time to catch up on much needed rest.

Conditions elsewhere are equally dangerous. In Pittsburgh, Pennsylvania, plows hit the ground but it wasn't enough to keep the heavy snow off the streets. Greyhound buses were forced to cancel many of their routes. In Hamburg, New York, mixed feelings about the weather. Commuters are frustrated.

UNIDENTIFIED MALE: I drove from (INAUDIBLE), it's about a 25- minute drive usually. And tonight it's an hour.

FERRE: And skiers are delighted.

FEMA is urging people to update their vehicle's emergency kits for cold weather. The kits should include blankets, gloves, first aid materials, a shovel, and a battery-powered radio.

But in snow town like Syracuse, New York, this storm is no match for residents who are used to inclement weather.

UNIDENTIFIED FEMALE: I think it's business as usual. I mean it may be a little off because I think there's a lot of people on vacation for the holidays. But I mean, usually it's good travel until you get, you know, too many people on the road.

(LAUGHTER) That's usually the bigger problem, is the people -- you know, trying to drive in it.

(END VIDEOTAPE)

FERRE: And the roads could have been worse because it's a holiday week, a lot of people didn't go into the office. Also schools and universities are off making it that much easier for cleanup crews to do their job -- Candy.

CANDY CROWLEY, CNN ANCHOR: Ines Ferre, I'll tell you it sure is pretty if you don't have to travel through it. Thanks so much for that report.

For parts of the northeast, this winter storm isn't done yet. I want to bring in CNN meteorologist Chad Myers.

Chad, there's a lot of snow that we're talking about here but it is winter in the northeast.

CHAD MYERS, AMS METEOROLOGIST: Sure. Correct. And in Syracuse, the snowbelt. You can expect that. You know, and I think, I think you can draw the line at about 21. It's pretty until you're 21 because then all of a sudden you have to stop playing in it, you have to go to work in it. Except maybe you can take some time off and enjoy the higher elevations. Because there will be quite a bit of great snow for sometime to come. It's not going to be melting for any time soon.

Tonight, Candy, I guess the big story is still main part of New Brunswick, a foot of snow still to come here. Not so much along the coast because that would be mixing with rain and snow, kind of mix them together and not piling up quite as much. But can you imagine now, waking up tomorrow in (INAUDIBLE), into part of New Brunswick, with another foot to shovel. After you've shoveled a foot at least already.

For Vermont, though, the winner, or the loser, depending on your point of view, 21 inches of snow.

Now the snow didn't hamper New York City airports today but the wind did. At least an hour to an hour and a half delays at every single airport and there are still delays out there right now -- Candy.

CROWLEY: Wow. Again, it's really pretty. But that's a lot of snow to try to get through.

Thanks so much.

MYERS: And winter just started.

CROWLEY: Yes. It's true. It's true. Thanks so much.

MYERS: You're welcome.

CROWLEY: A family-owned businesses facing fines of more than $1 million a day. Details of its fight against Obamacare.

And it's like the invisibility cloak from Harry Potter only this one is real and the U.S. military want it.

(COMMERCIAL BREAK)

CROWLEY: A Christian-owned firm is about to pay a steep price for fighting Obamacare. The fight centers on certain contraceptives such as the morning-after pill.

CNN's Lisa Sylvester has the details.

LISA SYLVESTER, CNN CORRESPONDENT: Hi there, Candy.

This is a case that's actually being watched very closely by businesses. What happens when a for-profit company, which religious ties, doesn't want to comply with all of the provisions of the Obama health care plan.

(BEGIN VIDEOTAPE)

SYLVESTER (voice-over): Hobby Lobby is a chain of craft stores that started as a mom and pop shop in Oklahoma City. It has grown to a $2 billion operation with 525 outlets across the country. But it is still privately held with a corporate culture rooted in the family's Christian faith. The stores all are closed on Sunday.

Now the owners are in court over their beliefs. They are fighting the new federal health care mandate, staunchly opposed to providing coverage for employee use of the morning-after pill which they say is tantamount to abortion.

KYLE DUNCAN, HOBBY LOBBY ATTORNEY: Our basic point is the government can't put a company in a position of choosing between its faith and following the law.

SYLVESTER: The case may sound familiar. Religious institutions also asked for a similar exemption from providing contraception to its workers.

ERIC MARRAPODI, CO-EDITOR, CNN BELIEF BLOG: During the health care legislation fight, there was a big debate over who should get exempted. Churches have always been exempted from this, but other religious organizations have not. Early on, the fight wet back and forth and the administration finally said that religious colleges, universities, hospitals would be included in the exemption for religious groups to not have to provide contraceptives as part of the new health care law.

SYLVESTER: But for-profit companies, even those with strong religious ties, have not been exempted by the mandate. Hobby Lobby's case is pending before the U.S. Tenth Circuit of Appeals. But the company is up against a deadline of January 1st when its health care plan kicks in for the new year. In less than a week, Hobby Lobby is facing incredibly steep fines. MAUREEN FERGUSON, CATHOLIC ASSOCIATION: The government is about to start imposing fines of $1.3 million a day. I'm just going to repeat that, $1.3 million a day are the fines that Hobby Lobby is facing from the government.

SYLVESTER: The company's lawyers asked the U.S. Supreme Court to issue a temporary injunction to avoid those fines. On Wednesday Justice Sonia Sotomayor, who handles emergency appeals for the Tenth Circuit, denied the injunction request, saying the applicants failed to meet the demanding standard for the extraordinary relief.

The White House did not comment on the Hobby Lobby case. President Obama has consistently said contraception is a private issue between a woman and her doctor, not a woman and her boss.

(END VIDEOTAPE)

SYLVESTER: And late this afternoon we've received a statement from the lawyers for the Hobby Lobby company, saying that they will continue their appeal and reiterating that they do not have any intention of paying for the morning-after pill.

There's actually really no precedent for this. It's not clear exactly, Candy, how the IRS will collect these fees, how they will be levied. So we're at brand-new territory -- Candy.

CROWLEY: We are. And there'll be lots of things coming into play this year and next year from the health care. So it's going to make for some interesting news about it.

Thank you so much, Lisa, appreciate it.

An invisibility cloak made Harry Potter disappear. We'll show how the next generation of camouflage could do the same for U.S. troops.

And a dying mother leaves behind an emotional message to her young children and the world.

(COMMERCIAL BREAK)

CROWLEY: A terror group in Pakistan carries out a daring attack.

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

Lisa, what's the latest?

SYLVESTER: Candy, militants in Pakistan have kidnapped 21 security personnel in a huge attack. A government official says more than 200 people suspected to be members of the Taliban swarmed two military camps in northwest Pakistan around 2:00 a.m. They came in both on foot and in vehicles and a gunfight followed that lasted more than an hour. Two security forces were killed and one was injured.

Also in Pakistan today, the son of the late Benazir Bhutto stepped into the political spotlight today exactly five years after she was assassinated. The 24-year-old spoke at a rally with his father, President Asif Ali Zardari. The president said his son's education is finished and his training has begun.

Two-time prime minister, Benazir Bhutto, at an attack at a campaign rally in 2007.

And it's not all doom and gloom for the U.S. economy. New home sales rose in November, moving at their fastest pace in more than two years. Sales rose nearly 4.5 percent. The highest rates was April 2010. Back then sales were inflated by a temporary tax credit for homebuyers.

And Ford announced today it is investing more than $773 million in its manufacturing plants in Michigan. The company says it will update and expand production lines at six plants in the state and creating more than 2,000 hourly jobs. It's all part of a deal Ford made with the United Auto Workers union to invest more than $6 billion in U.S. plants by the year 2015.

And a mother who hoped to spend Christmas with her husband and two children turned to the online community for help. She had been diagnosed with a heart condition and was facing mounting bills and a major surgery.

Matt Grant of CNN affiliate WFTX has her story.

(BEGIN VIDEOTAPE)

MATT GRANT, WFTX REPORTER: In this four-minute YouTube, Jennifer Johnson doesn't say a word but yet says so much as she tells a story about the heart condition that would kill her just two months after she recorded this video.

Choking back tears, the 30-year-old mother uses flash cards to describe her fear of leaving her two young kids behind, calling them her heartbeats.

ROBERT JOHNSON, JENNIFER JOHNSON'S HUSBAND: She had a very big heart.

GRANT: Robert Johnson proposed to Jennifer on Valentine's Day when she was five months pregnant. The next day a routine checkup revealed she had hypertrophic obstructive cardiomyopathy, where your heart hardens restricting blood flow.

JOHNSON: She was a fighter, so she was ready to tackle this head on.

GRANT: She describes the moment she learned of her condition, saying, I just had two beautiful children. Why me?

Johnson found inspiration from this 18-year-old from Texas with the same heart condition who recorded this flash card story that went viral a week before he died last Christmas.

JOHNSON: And she was very inspired by his story and it touched her.

GRANT: Two months ago Johnson set up a camera and told her story.

JOHNSON: I think it's more powerful than her actually speaking.

GRANT: Her emotions are raw as she talks about a series of bumps in the road, including having a pacemaker installed and the need for open-heart surgery.

She ended the video smiling, optimistic she'd be, as she put it, fixed so she could love and care for her other heartbeats.

JOHNSON: I miss her.

GRANT: Jennifer died a week ago.

What was the last thing she said to you?

JOHNSON: I just want to go home.

GRANT: Johnson now having to raise their two kids on his own, finding strength from her and hoping her story can help others.

JOHNSON: Heart disease is serious. This could be a message to a lot of other people. Get your heart checked out.

(END VIDEOTAPE)

SYLVESTER: That was from our affiliate Matt Grant of WFTX.

You know, Candy, those stories, they always make me tear up, especially, you know, having those two young children so our hearts really go out to the family -- Candy.

CROWLEY: Yes. Absolutely. And just, you know, it also just reminds you of how powerful the Internet can be for good as well as for bad. But certainly it shares a lot of stories. That's a sad one.

Thanks so much, Lisa.

We have some new information about Secretary of State Hillary Clinton who's been recovering from a concussion.

CNN foreign affairs reporter Elise Labott joins us now live from the State Department -- Elise.

ELISE LABOTT, CNN FOREIGN AFFAIRS REPORTER: Candy, well, as you know, Secretary Clinton has been recovering at home. She had a terrible stomach virus that she had caught on a trip earlier this month then she unfortunately fainted due to dehydration. She's been recovering at home under doctor's orders but now we understand Secretary Clinton will be back at home next week. Her spokesman, Philippe Reines, tells us the secretary is looking forward to resuming her schedule back here at the State Department.

CROWLEY: Wow. So, and also, I know that there had been some talk of one more foreign trip for her. But is that out or in?

LABOTT: Well, Philippe Reines says that she's not really ready to travel any time soon as per her doctor's orders but there are a lot of questions about whether Secretary Clinton would have been up to testifying on the -- on Benghazi affair. As you know, she had her deputies Tom (INAUDIBLE) and Bill Burns sitting in for her because she was under doctor's orders not able to come to work.

But now we understand that plans are being made for her to testify and I think for Secretary Clinton she definitely wanted the chance to have Congress hear from her a lot of congressmen and women looking forward to hearing her side of the story, how she approached the attack in Benghazi that killed Ambassador Stevens and three American so I think she's looking forward to that.

Whether there'll be a farewell tour towards the end of January, I'm not sure. But definitely not planning to travel any time soon -- Candy.

CROWLEY: All right. Thank you so much, Elise Labott, at the State Department telling Hillary Clinton after an illness back to the State Department, no foreign trips, but she will be testifying on Benghazi some time in late January.

Thanks a lot, Elise.

This year, many of the top business stories aren't just about dollars and cents. See how many also involve good old-fashioned power politics.

(COMMERCIAL BREAK)

CROWLEY: Here's a look at this hour's "Hot Shots."

Here in Washington, Marine one approaches the White House lawn, carrying the president. In Brazil, beachgoers soak up the record heat wave sweeping the coast. In New York, workers installed bulbs on the New Year's Eve ball in Times Square. And in Germany, an animal keeper holds a tomato frog in her hand.

"Hot Shots," pictures coming in from around the world.

The military puts tremendous time and resources into designing camouflage, and it could soon make them disappear.

Here's CNN's Pentagon correspondent Chris Lawrence.

(BEGIN VIDEOTAPE)

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT (voice-over): Camouflage can be the difference between a soldier getting shot and going home. So a lot's riding on the next generation designed to outfit troops. It's only been eight years since the Army spent $5 billion on camo that critics say didn't fool anyone. Soldiers complained to the point the Army abandoned its one-size-fits-all universal pattern. (On camera): So they were looking for camouflage that they could use everywhere?

GUY CRAMER, HYPERSTEALTH/ADS: Correct. And it didn't work anywhere.

LAWRENCE (voice-over): Guy Cramer is one of the designers competing to win the Army's next multi-million dollar contract. This summer, he showed us the science behind every shape, size, and shade of these pixels.

CRAMER: You now have your camouflage. So we're trying to trick the brain into seeing things that aren't actually there.

LAWRENCE: Digital patterns re-create shapes already found in nature. And 3D layering creates depth and shadows where none exist.

That's today's design. But developers already have one eye on tomorrow.

CRAMER: What's coming up down the road and very quickly is the Harry Potter cloak.

What is that?

LAWRENCE: With that fictional cloak, Harry isn't just camouflaged, he's invisible.

DANIEL RADCLIFFE, ACTOR, "HARRY POTTER": My body's gone.

LAWRENCE (on camera): How invisible are we talking here? If I walked into a room with a soldier wearing one of these cloaks --

CRAMER: You wouldn't see him at all. He would be completely invisible to you.

LAWRENCE (voice-over): This isn't make-believe. The military has seen this so-called quantum stealth technology. It works by bending the light around an object, even concealing most of a person's shadow. Imagine what that could do for a sniper, hiding in a field, or the American pilots who ejected over Libya when their fighter jets crashed last year.

CRAMER: They could actually pull out, very similar to what they carry with a survival blanket, throw it over top of them, and unless you walked right into them, you wouldn't know that they were there.

LAWRENCE: So what was once firmly in the world of make-believe, could quickly become quite real.

(On camera): And the science is in the special fabric, so you don't need a power source or some instruction manual to make it work. Theoretically, any soldier, even in the most remote location could quickly put it on and put it to work.

Chris Lawrence, CNN, the Pentagon. (END VIDEOTAPE)

CROWLEY: This week, we're looking back at 2012's top stories.

CNN's Ali Velshi and Christine Romans put together a review of the year's top 10 business stories, and you're going to notice a pattern. With only a few exceptions, the year in politics heavily influenced the year in business.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, HOST, CNN'S YOUR BOTTOM LINE: Number 10, Apple. The first year without Steve Jobs and a company that's trying to prove under a new CEO that it can still invent things we didn't even know we needed that we would buy, faster than anything's ever been sold in personal technology before.

Number nine, the U.S. stock market. Despite all those worries about the fiscal cliff and maybe slower growth in the U.S. economy, the stock market has had a great year. Too bad you missed out. The smart money has been in the market. The rest of us have been worried about the fiscal cliff.

ALI VELSHI, HOST, CNN CHIEF BUSINESS CORRESPONDENT: Number eight, Facebook's IPO. Hundreds of millions of people like Facebook, but investors did not on its first day as a public company. Trading glitches at the Nasdaq and questions about the company's ability to make money on mobile users pummeled the stock, which has yet to climb its way back to its IPO price.

ROMANS: Number seven, mother Meyer. The new CEO of Yahoo! who announced that she was just going to take a two-week maternity leave, as she try to turn this company around. Thirty-seven years old, it looks like a mother's touch is just exactly what Yahoo! needed.

VELSHI: Number six, Mother Nature. An intense drought in the Midwest that scorched the corn and soy crop, sending prices sky high. And who can forget Superstorm Sandy. Neighborhoods along the northeast swept away, millions without power and damages as high as $50 billion, raising lots of questions about U.S. infrastructure and whether we should be spending some money to fix it.

ROMANS: Number five, China. Is China slowing or is China leading the world? We do know that China will be the biggest economy in the world by 2020, for sure by 2030.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: China.

MITT ROMNEY (R), FORMER PRESIDENTIAL CANDIDATE: China.

OBAMA: China. China.

JOE BIDEN, VICE PRESIDENT: China.

ROMANS: China also getting more than a few mentions during the presidential campaign, probably because it's pretty clear that China is both a competitor and a partner.

VELSHI: Number four, Europe. The European Union was fractured by too much debt and the austerity plans to fix it. That saga is far from over.

Number three, the housing market. Finally, finally bottomed out. The combination of low home prices and continued record low mortgage rates set off a building and buying spree. Well-healed investors began buying entire neighborhoods, but first-time buyers were also able to get a home of their own for the first time in years. As long as they had a hefty down payment.

ROMANS: Number two.

WOLF BLITZER, ANCHOR, CNN'S THE SITUATION ROOM: CNN projects that Barack Obama will be re-elected president of the United States.

ROMANS: The election. More than just about Obama and Romney, it was about socialism and capitalism, about spending and cutting, about what kind of role government should have in your life.

VELSHI: Number one is the fiscal cliff. Lawmakers saw it coming, but didn't bother to pay any attention to it, until after the election. Had they put politics aside and dealt with it earlier, who knows how strong the U.S. economy would be right now.

(END VIDEOTAPE)

CROWLEY: Don't miss our "TOP 10 OF 2012" special.