for "the lead." i'm jake tapper. join me tonight for a cnn special report an inside look at the three men behind the french terrorist attacks and the female suspect still on the loose. that's 9:00 eastern right here on cnn. now i turn you over to wolf blitzer in "the situation room." happening now, terror vacuum. al qaeda's most dangerous affiliate is ready to take advantage of the bloody chaos in the capital of a u.s. ally. troops stand ready to evacuate the american embassy. on the run. after bloody attacks and counterattack raids, police connect the dots across europe and the middle east looking for a terror cell mastermind. first strike. we have new details on how the u.s. broke into north korean computers long before the devastating cyberattack on sony pictures. and black box. we are hearing for the first time what was in the crucial recorder recovered from the airasia crash scene. i'm wolf blitzer. you're in "the situation room."

heavy fighting in the capital of an american ally against al qaeda. the presidential palace in the line of fire. the prime minister surrounded by gunmen. u.s. troops ready to evacuate the american embassy on a moment's notice. it's all happening in yemen, where a power struggle between the government and rebels works to the advantage of al qaeda's most dangerous affiliate tied to this month's paris massacre. there is supposed to be a cease-fire now but it's very very dangerous. the situation, extremely worrisome. our correspondents analysts and newsmakers are all standing by. we also have the only western tv reporter on the ground in yemen for us nick paton-walsh. let's begin with our pentagon correspondent, barbara starr, who's got the very latest. >> reporter: this evening, government forces in yemen are said to be in control of the presidential palace but the

surrounding hillsides are in control of the rebels. everyone is looking for a cease-fire agreement to be signed in the morning, but no one is expecting peace. gunfire, rebel fighters, checkpoints. smoke rising near the presidential palace. yemen facing chaos. many say this is the beginning of an attempted coup by houthi rebels even as there were claims of a cease-fire. >> i do not think that the cease-fire will hold. that's what my gut tells me based off of what we have been watching over the last year going on in sanaa and throughout yemen. >> reporter: shiite houthi rebels backed by iran have been challenging yemeni authority for months. yemen's information minister tells cnn's christiane amanpour the yemeni prime minister is surrounded by militias stationed on rooftops around his home. >> what is the state of control of the government?

>> almost nonexistent. >> are you telling me the government is not in control? >> yes. shocking huh? >> reporter: for u.s. embassy workers, if there is an order to evacuate they could leave by state department chartered aircraft. but only if it is safe enough to drive to the airport. if the airport closes, there is another route. cnn has learned the u.s. military has just increased its alert level. marines and special forces on board the "uss iwo jima" offshore are ready to go immediately according to a u.s. official in the region. helicopters could land on the embassy grounds and quickly airlift out everyone including nearly 100 marines already there guarding the embassy. but an even deeper national security worry, as yemen unravels al qaeda in the arabian peninsula, aqap

headquartered in yemen, and laying claim to the paris "charlie hebdo" attacks, has a dangerous advantage. >> when there is turmoil, it's great for aqap because everyone is focusing on internally on the country and aqap kind of sits in the shadows and continues to have some safe haven, continue to train. >> reporter: so against the backdrop of all of this what to do now about al qaeda in yemen. officials say there is very little they can do but watch and wait. what about more drone strikes? well first they are going to have to find where those al qaeda leaders are hiding out. wolf? >> barbara, they have to send those helicopters or those ospreys to evacuate americans from the embassy, those kind of aircraft they are very vulnerable to shoulder-fired surface-to-air missiles right? >> reporter: they would be if those kinds of weapons are in the city and i would think it would be a safe bet that at least some of them are.

the thinking is and i have to you know really qualify and caveat this the thinking is that the houthis, the rebel forces are not out to attack americans. i think that however, it is very realistic to consider if they have to go it will be a very dangerous mission for those marines. wolf? >> barbara, thanks very much. barbara starr at the pentagon. with fighting in the streets, the prime minister surrounded u.s. troops ready to evacuate the american embassy if needed. let's go live to yemen right now. our senior international correspondent nick paton-walsh is the only western tv correspondent on the ground in yemen. he is risking his own life right now. nick set the scene for us. what's the latest you're seeing on the streets of the capital? i know at times it can be misleading. >> reporter: it's 1:00 in the morning here so you would normally expect it to be terrifyingly quiet but it's a very eerie calm here. intermittently we hear gunfire but the clock is ticking on the

political process that's happening behind closed doors, and kind of the gun being held to the government's head is that the houthi militia are said to be around the residence of the prime minister and around the presidential administration of the building you see behind me. now, of course the fear is that we understand from the minister of information that the houthi's want some sort of change to the constitution in order to release the chief of staff they say in their words they detained in order to make sure the constitution wasn't put in its current form. we are really going to have to have a pretty miraculous common vision from the three or four different sides involved in this process to stop the potential for violence on the streets again tomorrow morning. we see militias on the ground here not entirely always under the control of their commanders. there were supposed to be two or three cease-fires. even the cease-fire negotiations themselves came under fire. it's a very perilous situation here and each time we see this country spiral more out of

control, that simply makes life easier for al qaeda in the arabian peninsula. >> i know that they kidnapped these rebels the chief of staff to the yemeni president. you had a chance i think to go over to the u.s. embassy. there rr whatare what 100 marines, diplomats, civilians working with ngos, non-governmental organizations. what are they saying to you? >> reporter: i have to be honest they were comparatively calm. at times, obviously, they can hear the same things we can hear the shelling in the distance and that raising a sense of alarm. but bear in mind a lot of the western embassies here are pretty well fortified and in a pretty well-protected area. the american one in particular that has a lot of defenses in place there over a particularly sprawling compound. it's going to take a lot for them to want to pull out of there. the cautions you're talking about are really a result of benghazi.

in case the situation spirals wildly out of control, one of the houthis' slogans is death to america. they don't seem to want that fight right now but the real issue is al qaeda in the arabian peninsula. all this chaos here everyone reminds us that kind of mess on the streets just gives them a better opportunity to attack at will wherever they wish. that's another threat potentially in the days ahead. >> we will check back with you. be careful over there. meanwhile, mass killings shootouts, police raids, mass arrests over the span of just a few days. europe has been rocked by terror and with troops now in the streets of major european cities there are growing concerns the threat is far larger than imagined. there's a stepped-up hunt for terror suspects foreign ministers are gathering in brussels today urgently trying to stay ahead of that threat. it's very grave. cnn's phil black is joining us from brussels with more. what's the latest there, phil? >> reporter: wolf this was the

first meeting of european foreign minister since the attacks in brussels and since police disrupted another terror plot here in belgium and in a statement that followed there was a surprise admission. only now, it said for the first time was there a real awareness by european countries of the need to work together to fight the common threat of terrorism. heavily armed security on the streets of brussels and antwerp. a sight that country hasn't seen in 35 years. officials say five belgian nationals have been charged with participation in a terrorist organization following last week's raids. but the hunt for the presumed mastermind behind the suspected terror cell continues, according to belgium's justice minister. authorities say the group which included individuals returning from syria, planned to target police officers. orders for the failed terror plot may have come from isis

according to belgian newspaper reports. france also remains on high alert while the search continues for the person whose dna was found on the kosher market assailant's gun. sources tell cnn another person whose dna was found in amedy coulibaly's car is one of nine suspects already in custody. coulibaly had proclaimed allegiance to isis. there's growing concern terror groups are directing european recruits to return home and launch attacks. european officials are meeting in brussels on monday to tackle the spread of terrorism and potential threats. >> the threat is not only the one we faced in paris but also spreading in many other parts of the world starting from muslim countries. we need to strengthen our way of cooperating together. first of all, with other countries and then internally. >> reporter: the spate of violence began when cherif and said kouachi attacked the "charlie hebdo" office.

an ongoing investigation into the gunmen reveals intelligence failures by french officials. authorities thought cherif gave up terror activities when he started selling counterfeit goods. so they stopped monitoring him. but a source tells cnn cherif used that money to buy weapons. another misstep. a delay in passing along an alert about one of the brothers' phones. by the time it reached the country's main domestic spy agency a source tells cnn the brothers were no longer under surveillance. investigators now believe cherif and his brother traveled to yemen in 2011 via oman. even though cherif's passport was confiscated a year earlier. it's believed the brothers received funding for the terror attacks from al qaeda in the arabian peninsula which has claimed responsibility for the "charlie hebdo" attack. one of the suspects in the belgium terror plot who was and survived a shootout with police today denied through his lawyer

any involvement in the planned attack against police officers here. he says that he was only delivering a pair of shoes on behalf of his mother to another one of the suspects who was killed during the police raid. so far, five people have been charged here. one man in greece two more in france. but the authorities here do not believe they have found everyone connected to this attack. >> i suspect those numbers will go up in the coming days. phil black, thanks very much. let's get the latest on the investigation. our justice correspondent, pamela brown, is joining us from paris. what are you hearing from your sources specifically about the role of isis in these various terror plots in belgium particularly? >> reporter: well it appears that with the belgian terror cell that it appears isis actually had a very heavy hand in this plot this imminent plot to attack police officers there. this is according to a senior belgian counterterrorism official we have been speaking with. the belief among officials there

is that isis was directing this plot through a point person who was in greece and that some of the suspects now in police custody and the two that were killed in verviers had actually fought alongside isis in syria so you see there is a tie there and there is a belief speaking to sources that other jihadis returning from syria who fought alongside isis are spread out throughout europe and that is who authorities of course are trying to track down right now. there is really a manhunt under way as we speak. >> what are you hearing about the concern, i assume it's significant, about the unraveling situation in yemen. you heard nick paton-walsh there, given that the paris killers, the kouachi brothers had trained there, al qaeda in the arabian peninsula, in yemen. >> reporter: yemen has been a tremendous concern among u.s. authorities for years. it's been you know there's been a pipeline over there for years where people have gone and trained alongside aqap and yemen, including the kouachi brothers as you point out.

so the situation continues to unravel and escalate and yemen, the concern is heightened among sources i have been speaking with. of course the concern here is that aqap will gain even more control, have more free rein in yemen and continue to use it as sort of a breeding ground for other terrorists. sources i have been speaking with say they are just as concerned about yemen as they are about the situation in syria with isis. >> pamela brown in paris for us thank you. let's go in depth now with cnn intelligence and security analyst bob baer a former cia operative. also joining us cnn terrorism analyst paul cruickshank and our military analyst retired lieutenant general mark hurtling. we heard phil black's reporting, authorities there stopped monitoring cherif kouachi after he began supposedly selling counterfeit goods because they believed he had given up terror activities. is that common for authorities to stop surveillance on individuals that they think have moved on and are not going to necessarily get involved in terrorism?

>> absolutely wolf. the way you have to -- a lot of people flirt with islamic jihad, show up in syria or in yemen, don't like it come home lead normal lives. it happens with hamas and the islamic jihad in israel. you know so to keep them on a list they have to appear active. what these guys i'm sure didn't do is call back to yemen or call back to known members of isis or al qaeda so they stayed off the lines. they apparently used their wives' phones to communicate with each other. it looks like they went out of country for personal meetings maybe athens or madrid. that's yet to be determined. so these guys would have gotten instructions in yemen, go home be quiet stay out of the mosques, shave your beard, don't espouse islamic doctrine or the rest of it and it worked apparently. the french have so many people to watch, 5,000 on that list as we understand that they probably moved down the list

unfortunately. >> if you are going to do significant surveillance you need at least ten, maybe 15 people per person you're watching in order to maintain around the clock surveillance. general, it's believed that cherif kouachi used the money he earned selling those counterfeit goods to buy weapons. here's the question. can authorities follow that money trail now to find others who may have aided the kouachi brothers in their attack on the "charlie hebdo" offices? >> absolutely. in fact, that's the critical piece. a smart counterintelligence guy will not go after cell they will go after the network. so the key issue is you find the arms dealers. you find the guys giving the orders. you find the financiers. those are the important pieces of the network that you go after. you have to attack that network while defending against the cells. >> paul europe as you know remains very much on high alert right now, especially in belgium. there are armed guards on the streets. this for the first time in more

than 30 years. why is belgium so particularly vulnerable? >> there has been a lot of radicalization for quite some time in belgium. but the big part of the vulnerability comes from the fact so many belgian nationals, extremists in belgium, have traveled to syria to join groups like isis. around 350 have traveled from belgium. belgiums a pretty small country so that's a big number for a country like belgium. about 200 are thought to be there right now, mostly with isis, and about 100 are thought to have returned including the gunmen who were killed in that operation against a suspected isis related cell in verviers. one of the reasons why so many have traveled is there's a facilitation network in belgium. they transported a lot of people early on to syria to join with groups like isis and so they already have people there to welcome more and more people. it was like a snowball effect. more and more people could go

because there were people to welcome them when they got there. so those are some of the reasons why belgium has got such a huge problem right now when it comes to returning foreign fighters. there's a concern as well that part of this cell they took down last week remains still at large. they feel they have disrupted the major part of the plot but some of these people may still be at large with access to weapons and may try to avenge the two comrades of theirs killed in this operation last week in verviers. >> bob baer western intelligence sources have told cnn there may be as many as 20 so-called sleeper terrorist cells in belgium, france germany, the netherlands, maybe other countries in europe. how likely is it that there are similar cells here in the united states? >> well as i have said i think it's inevitable we are going to get hit at some point as long as we're engaged in the middle east which we will be for years. someone's going to take revenge against us. now, whether they are europeans that come in without a visa or

there's cells established and i have talked to law enforcement and they believe that they're here the cells, but they cannot get any details on them. there's fragmentary intelligence. there are cells in this country. this is what i'm told. i of course have not seen the evidence. but i trust these law enforcement officials. >> paul you've got some more information you are picking up on what's going on in europe right now, right? >> that's right. i just got off the phone with a senior belgian counterterrorism official and this is in regard to somebody who was picked up in greece over the weekend. a lot of speculation that this could have been the key link person between the group and isis. it turns out it's not the guy the belgians suspect was the key link person but somebody else but they think that he may have played some kind of role. but an individual who is

suspected to be the key link person is still at large. he's a belgian moroccan isis fighter who traveled from syria to greece and you see him on screen right now. he is suspected of recently being in syria so travel to greece and have been in phone contact with the cell in verviers who were in that safe house running the show from greece being the key link person back to the isis leadership in syria and iraq. this really is a game changer, with isis involved in orchestrating a terrorist plot in the west in europe the leadership have not been involved in this way before. now european intelligence agencies suspect that they are and this individual you just saw on the screen playing the key role they believe from greece. he's believed to still be at large. the belgians brought in the cia to try to find him, but they have not been able to find him up til this point.

>> one of the problems is it's so easy in europe to cross borders. you don't need passports or documents. you just drive across the border, right? >> that's absolutely right. we have seen a lot of these people come in through greece and sort of drive into europe and you can go just about anywhere especially in most of continental europe. there are no borders anymore. this is a border-free zone. there are some controls when you go into the united kingdom and a few other countries but when it comes to most of europe it's just like the united states. you can travel anywhere you like. there are no checkpoints. the trouble is that unlike in the united states there's not as good cooperation between all the various european intelligence agencies so there are meetings going on right now where they are trying to improve this cooperation and intelligence sharing. >> i want you to stand by paul mark bob. all of you stand by. we are going to continue to follow this story. also coming up long before the devastating north korean cyberattack on sony pictures was the united states breaking into north korea's computers?

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cnn's brian todd is joining us in "the situation room" with new details on what we're learning. pretty amazing. >> it is. u.s. intelligence agencies being hammered with some serious questions about this tonight. the "times" report says the nsa started breaching north korea's hacking networks back in 2010. the north koreans have denied hacking sony but this report says u.s. intelligence agencies were able to track it back so quickly because of the monitoring they had done for at least a few years. tonight, kim jong-un knows how the u.s. government came to point the finger at him for the sony cyberattack. >> we can confirm that north korea engaged in this attack. >> reporter: how could the president be so confident just a few weeks after sony had been hacked? the "new york times" reports the national security agency america's super-secret eavesdroppers, had infiltrated north korea's shadowy cyberwarriors since 2010. >> it appears that what happened was nsa established footholds in various parts of north korea's computer infrastructure.

they basically established footholds in the chinese region and they apparently established footholds in the malaysian region. >> reporter: the nsa began spying on the computer networks after becoming increasingly concerned that the regime was bolstering its teams of hackers. kim jong-un's government has a secretive hacking team called bureau 121 and a larger cyberbranch called the reconnaissance general bureau commanded by a former bodyguard for kim's father and grandfather. >> one of the things the north koreans have done is built up effective and strong teams with skills and training designed simply to break into computers and destroy them and also to gather intelligence. >> reporter: if the u.s. intelligence community knew kim's hackers were building their capabilities did anyone in the u.s. government warn sony that it could be attacked? north korea had warned as early as last june that it considered sony's movie "the interview" an act of war. >> is that real? >> it was a gift to my

grandfather from stalin. >> in my country it's pronounced stallone. >> reporter: a u.s. intelligence official acknowledged that sony was not warned. but that same u.s. official said prior to the sony hack u.s. intelligence had not noticed north korea doing anything more than its usual run of the mill hacking activities. denial of service attacks, so-called phishing e-mails. no one had any indication that such a massive cyberattack against sony was in the works. wolf? >> what about the meeting that the director of national intelligence james clapper, had with the north koreans in early november? he went over there to bring an american back as you recall. that was before the sony hack. did any of this at all come up? >> no. the clapper meeting with that general who demands north korea's hackers, that was on november 7th. the sony hack began around november 24th. clapper, we are told did know north korea's hacking capabilities then but a u.s. official tells us he was there just to secure the release of the two americans and because of

the sensitivities of that mission, help had to focus on that. he could not derail that release by bringing up hacking. that meeting with that general was already very contentious. >> brian todd thanks very much. joining us now in "the situation room" is the "new york times" national security correspondent david sanger who co-wrote today's article in the "new york times" on the u.s. infiltration of north korea's secret cyberwar networks. amazing reporting to you and your team. not the first time you have broken a story like this. why couldn't the u.s. have warned sony pictures get ready, this may be in the works. did they have some advance indication that sony pictures was going to be the target because of this film "the interview"? >> the interesting thing is the north koreans themselves protested "the interview" as far back as last june and said if sony released it it could be an act of war. it's not clear that anybody in the intelligence community connected that with those phishing attacks and denial of

service attacks brian just referred to. in fact in our reporting it showed that when they saw the north koreans do these they thought it was the ordinary things north koreans do to many. although the fact there was so much at sony you would have thought might have raised some alarm bells. apparently it didn't. sony executives saying they never received any particular warning. >> so from president obama on down the fbi director everybody else they are convinced 100% this was the work of north korea although some outside cyberwarfare experts have their doubts right? >> that's right. there are a lot of people with a lot of doubts because the data that has been made public so far by the united states has to do with things like what i.p. addresses these came from internet protocol addresses, many of which are in china. many experts say you can fake where you're sending a cyberattack from. the difference here is as soon as we saw president obama make the statements that he made at that news conference on december 19th to accuse north korea of it

and the leadership of it you knew given his own caution on intel issues that he must have seen or heard something. we went out to try to figure out what that was, and what it was was just what we reported now. >> it's amazing reporting. really eye-opening. here's the question. did the administration try to tell the "new york times" please don't report this this could undermine national security for example, north korea and the chinese, others knew exactly how sophisticated the u.s. operation was? >> the administration is always concerned when you're reporting on national security issues. this story was no different. we try to be very careful when we do these, not only to show our conclusions back to the administration but to hear their concerns and most of the time those concerns are how specific are you about where this computer malware is put because obviously they don't want their adversaries to go after it. in this case i would say the objections were about as they usually are. we try to accommodate them on

some issues while still telling this overall story. i think in this case we have struck the balance right. but there are always going to be people who are going to disagree on that. >> on certain details you withheld? >> some details we withheld. you will also recall that some details are in the snowden documents and the german magazine published some just this weekend that dealt with north korea with some specificity as well. >> i want you to stand by. we have more to discuss. also helping us dig deeper on this story, deputy special envoy for human rights on north korea during the bush administration. also gordon chang from forbes.com author of "nuclear showdown north korea takes on the world." i want everybody to stand by. let's continue this conversation. new information coming in on north korea cyberwarfare. we will take a quick break. ♪ turn around ♪ ♪ every now and then i get a little bit hungry ♪ ♪ and there's nothing good around ♪ ♪ turn around, barry ♪ ♪ i finally found

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preloaded with the latest episodes of the top 100 shows. only from xfinity. so we now know why the united states quickly blamed north korea directly for the cyberattacks on sony pictures today's "new york times" revealed the u.s. national security agency actually infiltrated north korea's cyberwarfare network years ago. it's an amazing story. david sanger is still with us. christian and gordon are with us as well. christian, what did you think when you read the story? it was breathtaking to me but you are an expert in this area. were you surprised by what you heard? >> i wasn't. i'm a big fan of the nsa and electronics intelligence. i thought it was terrific we

penetrated these networks and know what north korea is up to know the extent of chinese enabling of north korean cybertechnology. i think there are some lessons to be learned here. we have been on the defensive in the cyberrealm. we have been on the offensive as david has also reported against countries like iran but not so much against other cyberadversaries. we focus a lot on defending u.s. government systems and maybe we need to be better at going on the offensive and proactively defending u.s. companies in addition to the government. i think the nsa is doing a pretty good job. >> gordon is it possible that north korea didn't know it was being hacked that this is all a big surprise to them? >> actually i think north korea certainly knew what was going on because the north korean authorities worked very closely with the chinese and the chinese know exactly what we are doing. so there's a cyberwar going on between the united states and china. it is much more intensified than it was in the past. so the north koreans certainly had to know what was going on in

this case. >> let me ask david sanger, what do you think? >> i think they did. after the united states attacks with israel on iran and their nuclear facility bigger program called olympic games, the north koreans had to know they would be high up on the target list. i think one of the more remarkable things is we haven't seen more cyberactivity against north korea. >> you think the north koreans, christian, actually did it or do you think that somebody made it look like they did it and the administration the u.s. government, bought into that? >> no i think they did it. i think what this reporting proves is that we really do have very good forensic tools in place. that was always probably the implication, even people like myself who have been critics of the obama administration believed the president when this happened. first of all, there's no incentive for a cover-up or for misleading the public. second of all, if you look at some of the skeptics who said this was disgruntled sony

employees, their evidence was really quite thin. it included monitoring things like chat rooms. the tools available to the nsa, to cybercommand to the fbi, et cetera are much more substantial and i think we now can conclude quite conclusively that the deniers were wrong, the government was right in this case. >> so will this "new york times" report all the reporting now about this, will it hurt the u.s.'s ability to monitor north korea down the road? >> i think the chinese certainly knew of our capabilities. they have very important capabilities of their own. you know what they've got of course was confirmation but nonetheless, this is no surprise to the chinese either. i think that this is important. the "times" reporting here is extraordinary. it confirms what a lot of people suspected but nonetheless, we learned a lot of detail here but this is of course things the chinese know day to day because they are the number one cyberhackers in the world. >> one of the most fascinating things about the report in

addition to the main headline is that the discovery, at least i learned, the so-called beacons the united states is using and the amount of money the u.s. government is spending in this cyberwarfare billions you say, right? >> that's right. now, that covers offensive work, defensive work but think about what we were discussing with the national security agency during the snowden revelations of 2013. people were focused on the privacy issues. that's not what the nsa spends most of its time and money doing. they spend most of their time and money defending systems and trying to get into the hardest to break into foreign systems. north korea has certainly been on that list. >> i want everybody to stand by. much more to assess. we will take a quick break.

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effectively, in 2013. they went after sony pictures last year. should we be bracing for more north korean cyberwarfare attacks? >> i think so. but they may very well combine it with other provocations that are from their toolkit which they frequently turn to. they sank a south korean ship in 2010. they had their third nuclear test in 2013. we are sort of due for another. people who look closely at north korea's nuclear testing facility have seen signs they are getting ready potentially for another. could also be deception. this is probably part of a phase of agitation that north korea goes through, usually then it moderates a little and tries to extract concessions from south korea or the u.s. >> what do you anticipate having next, gordon? >> well i think there is certainly going to be more cyberattacks on the united states, because there really has not been effective costs imposed on the north koreans or the chinese. the real issue is going to be what's happening inside the regime in north korea. there are signs of distress.

we have seen things that are inconsistent with the dominant narrative that kim jong-un, the ruler, has quickly consolidated control. so i expect that there is going to be more trouble probably in the next couple months ahead, especially as we head to the end of the year. >> you're talking about unrest in north korea, is that what you're talking about? >> problems inside the regime itself. where you have basically kim jong-un has not been able to exert effective control, where you have a lot of regime elements that are trying to even the score. we've got to remember there has been a lot of unexplained deaths since 2010 most of them thought to be related to the transition of power to kim jong-un from his father kim jong-il and that's why i think we are going to see problems as this distress radiates out. >> david very quickly, based on all the conversations you've had with u.s. government officials, experts, what should we be bracing for? >> you know a cyberweapons are useful for north korea in the way that nuclear weapons and missiles are not.

nuclear weapons are an on/off switch you drop one and wait for your country to be retaliated against in a massive way. with a cyberweapon, i think the north koreans believe they can turn it up or down and in this case they may have misjudged to some degree because i don't think they necessarily expected that the united states would have a national response to it. >> silly movie like "the interview" causing this commotion. excellent reporting as usual. thanks very much. guys thanks to you as well. coming up we are hearing part of what's on that cockpit voice recording from the airasia jet that crashed into the java sea. at the top of the hour we have more on the power struggle that's opening up new opportunities right now for al qaeda. you get sick you can't breathe through your nose suddenly, you're a mouth breather. a mouth breather! well, put on a breathe right strip and shut your mouth. cold medicines open your nose over time, but add a breathe right strip and pow, it opens your nose up to 38% more. so you can breathe and do the one thing you want to do sleep.

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we're learning new details about what happened in the minutes before the airasia jet crash. voeft investigators say they have listened to the voice recorder. let's bring in rene marsh. she's working the story. >> that's right. the investigators listened to what the pilots were saying and how they said it. they were listening for other sounds like gunshots and explosions. based on the recordings investigators are taking one theory off the table. investigators say they do not hear gunfire or explosions on airasia flight 8501's cockpit voice recorder. what brought down the plane still remains a mystery. >> translator: the voice from the cockpit does not show any sign of a terrorist attack. it is only the pilot sounding

very busy. >> the flight was traveling through severe thunderstorms when it crashed. the question remains, was weather, mechanical failure or human error to blame? >> you want to make certain before you rule anything in for sure or rule anything out for sure. >> a former fbi agent investigated the crash of twa flight 800. >> if it's not a tear errrorist problem, they have to look for other manifestations flight crew or airplane. there has to be a hidden danger there. >> the doomed flight was an air bus a-320 with more than 3,500 in operation worldwide. the search for bodies continues. two more found sunday. the waterlogged remains are decomposing. only 53 of the 162 on board have been recovered.

>> translator: due to currents the divers couldn't reach the bottom which constrained our operation. >> divers were able to pull up debris like passenger seats. but the fuselage remains at the bottom of the java sea. it's the largest piece of wreckage at nearly 100 feet long. is believed to hold some of the missing bodies. there are many outstanding questions like what exactly were the pilots saying? the transcript of the conversation is only halfway complete. investigators hope to finish this week. before they draw any concrete conclusions, they will compare that information with information on the flight data recorders which, of course has details of how the systems were functioning. they will look at debris. that tells a story as well. wolf as far as a big picture, we're expecting a preliminary report next week. we're hoping we get more details. >> good work. thanks very much. coming up al qaeda's most

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happening now, terror ringleader identified. we're following breaking news on the foiled plot in belgium and the links to isis. i will ask the chairman of the senate intelligence committee. americans at risk from deadly fighting and a power grab. cnn is bringing you live coverage inside the crisis in yemen. cyber secret revealed. a report says the u.s. knew north korea was behind the sony cyber attack because it hacked them first. we want to welcome our viewers in the united states and around the world. i'm wolf blitzer. you are in "the situation room." let's get to breaking news. the suspected ringleader in the belgium plot identified. this man is believed to be the link between isis operatives in syria and the terror cell

disrupted on the brink of carrying out an attack. stand by. we have details. the new chairman of the senate intelligence committee, there you see him, he is joining us as well as our correspondents our analysts in the united states and around the world. first let's go to pamela brown. she's following all of this from paris. pamela? >> reporter: wolf we have learned of the nine people in custody here in france one of the suspects's dna was found on amedy coulibaly car, another suspect is still on the run, his dna was found on one of coulibaly's weapons. as police try to hunt him down we're learning more about missteps among french intelligence agencies leading up to the attacks here. french authorities are focused on two people whose dna links them to amedy coulibaly. dna found on an ammunition magazine of his and inside the car thought to have taken coulibaly to the supermarket

where he killed four people. a source close to the investigation says one of them is already among the nine in custody in paris. his dna was found in the car. tonight authorities are continuing to search for coulibaly's partner hayat boumeddiene. but she's thought to be far away on the run in syria. >> this is obviously a larger cell that cell. >> we have today mainly more than 4,000 european union citizens or residents involved in the jihad in syria and iraq. >> reporter: a series of communication lapses and delayed by french intelligence agencies are shedding new light on why the kouachi brothers may have fallen off the radar. authorities began monitoring the brothers in 2011. but not their computers, which sources tell cnn contained several videos and sermons of american al qaeda cleric

al-awlaki. then in february 2014 one french agency received an alert about one of the kouachi brother's phones but didn't pass on the details to france's main domestic spy agency until four months later when both brothers had already been taken off surveillance. >> there's no question that i think the failure to be able to have prevented the attack that took place in paris was an intelligence failure. >> reporter: in an interview with cnn, leon panetta said europe needs to be more aggressive with counterterrorism operations. >> the problem is in dealing with those in the various european areas where there is frankly, less aggressiveness at going after these individuals when they return. >> reporter: tonight, belgian authorities are waiting for a 33-year-old algerian man arrested sunday in greece to be

extradited. several suspects believed to be linked to the terrorist cell are in custody. a senior bellgian official says there are still many on the run. eu foreign ministers met to discuss counterterrorism strategies. they want to strengthen ties with muslim countries. there is this concern right now that isis is directing recruits to go back to europe and the u.s. and launch attacks. wolf? >> pamela brown in paris. thank you. more on the suspected ringleader of the isis terror blot in belgium. so tell our viewers what you are learning paul. >> reporter: an official tells me they think the ringleader

behind this plot in belgium last week was very likely a belgian moreoccan who is thought to have travelled to syria and have connected in syria and iraq with a seennior leadership of isis. he is believed to be the link person between isis and the cell in belgium. he is believed to have phone contact with two of the gunmen who were killed in that operation by belgian officials. they think there is him that directed this and that he did so from greece where he was operating after he traveled from syria. the belgians brought in the greek police and cia to try and find him. but they have not yet been able to locate him, i am told.

separately, they are extraditeing an algerian who is 33 years. he may have had some role in the plot. they're trying to piece through whether it was a major or minor role. >> he is still at large. nobody has a clue right now where he might be? is that what i'm hearing? >> reporter: a massive international manhunt to find him. he was last located in greece. but he appears to have evaded capture so far. co-have he could have gone to turkey or perhaps to syria. a manhunt. all the western intelligence services trying to find this guy, sort of a key ringleader figure directing these people in belgium to launch what i'm now told by senior belgian officials was an ambitious plot that went beyond targeting policemen on the street. they had explosive chemicals. they had automatic weapons.

they had police uniforms suggesting they wants to gain access to a sense receive site. there may have been multiple attacks they were planning. the surveillance of the group lasted a couple of months i'm told. in the last few weeks it was 24/7. as you know to do 24/7 you need massive resources. so the belgians felt they needed to move in because these guys had bought the automatic weapons, they couldn't take chances after what they saw in paris. >> the search goes on. stand by paul. we will get back to you. breaking right now, the u.s. military is on a higher state of alert ready to evacuate the united states embassy in yemen if needed. the united states is monitoring extremely dangerous situation after fighting broke out in a battle for control of yemen's presidential palace. barbara starr has the details that are breaking right now. tell our viewers what you are learning.

>> reporter: good evening. the youu.s. military ready to move in immediately if needed. no order, no request from the state department yet to evacuate the embassy. but the military does have a warship offshore yemen that could come in quickly if the americans need to get out and it is not safe enough for them to go to the commercial airport. fighting across the capitol today. people are talking about a cease-fire. but i don't think there's a lot of hope that it's going to hold. of course, underlying all of this the major national security concern for the obama administration as yemen unravels and you see it unraveling. what is al qaeda there up to? how are they taking advantage of this situation when military and intelligence services are trying to hang on? >> trying to survive. do we know how many americans are actually in yemen right now?

>> reporter: the state department -- they said they did not have a number that they don't track it precisely. given the security situation on ground in yemen, they don't want to really offer up an estimate. it's a matter of safety concern. they don't want to say even how many americans are still at the embassy. >> we heard that this was widely reported there are 100 u.s. marines at the embassy? >> reporter: that's a rough accurate. that's accurate that there are a large number of marines because embassy is for the last several months one of the most heavily protected u.s. assets overseas. they have moved in extra ma reaprines overtime. they have increased the standoff distance so they are not next to a road not next to traffic with the potential of car bombs. still, a very fraught situation on the ground. if he they had to evacuate everyone they would take those marines along with them. >> i remember it wasn't that

long ago when the u.s. decided to evacuate everyone from the u.s. embassy in tripoli. it's clearly a failed state right now. i suspect the same thing will happen in yemen as well. we shall see. barbara, thanks very much. let's get a rare report from inside yemen. only cnn, among all western television news organizations, has a reporter on the scene, nick pay tonpaton-walsh. you have been there. i assume you have good security from what you are seeing. tell us what's going on. >> reporter: right now, it's deathly quiet. but it hasn't been the case for the majority of the day. in the middle of the afternoon, we saw the cease-fire end. loud explosions we heard all day. that began early in the morning when presidential official ss --

the chief of staff having been kidnapped 48 hours ago. roadblocks around the key buildings. that led to clashes. we do know that an artillery dual broke out before the presidential building. that was fought for for a number of hours. residential buildings around there damaged. cease-fire talks tried to slow that down. the prime minister found themselves being shot at. we see the cease-fire showing things somewhat. talk of constitutional changes. now we're hearing that militia are around the prime minister's

residence and the presidential administration. they have always had checkpoints in the city but it seems there is a tense standoff waiting for the politicians to suggest there's some compromise. >> if military and law enforcement security forces can't protect the presidential chief of staff, there really -- the u.s. can't hope they can protect american diplomats or civilians or u.s. military personnel, they can't rely on the military right? >> reporter: not really. they are struggling to i think, keep themselves together here at this point. one of their number two commanders came out with a strong statement in the past four hours or so. it's quite clear those divisions in the military divisions within the government as well. a sense, i think, that the government is struggling to show executive authority given how the president had to stay in his residence, doesn't seem like

will toylikely to go back to the presidential palace. deep concerns that anything could really spark a repeat of this morning's violence. americans in the embassy are relaxed. the consulate is still open. they have been well defended in there. it's going to take a lot. but after benghazi key to make sure everything is in place. >> it didn't take long for the u.s. to pull all americans out of libya all together and shut down the u.s. embassy, as i said earlier in tripoli and i suspect is it might happen over there in yemen. we are joined by the chairman of the senate intelligence committee. senator, thanks very much for joining us. what's your sense? will americans, whether

diplomats, marines, employees, other civilians, are they going to have to be evacuated from yemen any time soon? >> it's too early to know. we have assets in the region to take care of whatever evacuation needs to take place. we can do it by helicopter. we could go by land. we're set up for that. the reality is that we want to stay as long as we can. we want to support the government. this is a government that's not been in control of a country for quite a while now. as the fighting continues and it grows, we have to pause and ask ourselves, what is aqap up to at this time? >> the u.s. decided to cut its losses in libya and get out. it was too dangerous for american diplomats and others to simply stay in tripoli. i guess i'm hearing some people saying, what's the point?

yemen is a failed state. where risk the lives of the americans? why not get them out while you can? >> i believe that we only had essential personnel there. the majority of the individuals are probably either marine or some type of intelligence operation. we're conducting business as normal. but i think we minimized the exposure of non-essential employees. there are reasons we need to stay in the country. i feel very confident the state department will make the right decision at the right time. i think we may be close to that though. >> even if there are some marines, intelligence operatives and others there who are well trained and prepared for this kind of stuff, it looks like this is becoming -- but more so fer fertile ground for aqap to simply expand and do whatever

they want. >> al qaeda has never missed an opportunity in chaos to either carry out an act, to start planning to do something that would cause some type of trouble somewhere in the world just simply because our eye is not on them. we need to make sure that we keep it on them. >> here is a question a lot of people are asking me. maybe you have the answer. something clearly went wrong in recent months in yemen. last september, president obama said yemen was actually an example of how the u.s. had successfully pursued a counter terrorist strategy. i think he's referring to the drone strikes that killed a lot of aqap terrorists. but that's clearly -- it doesn't seem to be the care right now. it doesn't look like things are moving in the right direction at all. >> let's just admit it. al qaeda has not been decimated. it doesn't matter whether it's al qaeda in the arabian

peninsula or core. al qaeda is alive and well. the fact is that when we kill one, three new recruits come in. they are well equipped. they have unbelievable training. they are able to reconstruct really the highest ranks within al qaeda within every one of the organizations in a matter of hours. it's a temporary setback. it certainly doesn't last forever. >> i'm going to take a break. here is what worries me mr. chairman is that if the u.s. waits too long yes, there are ospreys on the ship off the coast, there are helicopters, but both of those aircraft are very vulnerable to shoulder-fired surface to air missiles unlike a plane that might go in and out and take everyone out. this is a delicate dance, delicate operation. you can't wait too long and risk the lives of the helicopter and

osprey pilots to save the americans. >> you are right. they rpgs are another weapon familiar to the region and commonly used in close quarters like we would be in could be a very effective tool as well. >> stand by for a moment. we will take a break. we have more to discuss, especially what's going on in europe right now. the terror operations that are under way, the massive manhunt for the mastermind of what's been going on. stay with us, more on the breaking news after this.

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we're back with the new chairman of the senate intelligence committee. we are talking about the terror

investigation in europe. how surprised are you to hear how poorly france tracked the kouachi brothers even after receiving a heads up about them from u.s. officials back in 2011? >> wolf you know i said early on in this we were going to learn a lot. i didn't say it would all be good. the reality is that it looks like the french went through a lot of difficulties that we went through on 9/11 or leading up to 9/11 where law enforcement didn't talk to intelligence intelligence didn't talk to law enforcement. i'm not sure we could have stopped this one, they could have stopped it. but clearly, we're going to have to rethink to what degree we sur veil people how long we keep it on them what the thresholds are, how we run names and acquaintances through the database. these are all going to be essential. >> we're also hearing that the presumed belgian mastermind of

the attack in belgium on the run, remaining at large. did this alleged terrorist, a belgian moroccan did he get orders from isis to plan this attack? >> i'm not sure that we know that today. i think that it's safe to say that by all news accounts the belgians knew as we did, about this group. their decision to wrap up a terror cell was their decision as it relates to the timing. i think it's safe to say from all accounts that this was potentially much bigger and i think that any time we have an attack like paris or we have had in belgium with the roll up we have to be worried about that accelerating another attack or sending underground people we are looking for. we have to remember this is about an ideology. this is not about an individual.

as we look for ones or twos here or there, it's still an ideology that we have to be worried about. >> one quick question on north korea. you saw the report saying the nsa was engaged in hacking and engaged in cyber warfare against north korea years ago, was monitoring what's going on as a result. they knew it was north korea that engaged in the operation against sony pictures. by revealing this information, was any damage done to u.s. intelligence collection? >> just personally speaking i don't like these types of things being in the public domain. i think it does hurt us in the future on what we're capable of doing. let me address north korea specifically. i don't think there was one piece of intelligence one intelligence node that slammed the door on the north korean involvement. i think it was everything together that gave us the confidence that this was north korea who committed this act by

themselves. i think it's important that we realize that we're trying every day to keep america safe. the tools that we use are the tools that the american people provide us with or that they finance. we've got to be as robust as we can. >> chairman, thanks for joining us. >> thanks wolf. >> the new chairman of the senate intelligence committee. we have more on the new report out there about nsa spying on north korea. could the u.s. have warned sony about the cyber attack before it happened? we will talk about twists in the terror investigation in european the missteps before the slaughter in paris. our analysts, they are standing by. [container door opening] ♪ what makes it an suv is what you can get into it. ♪ [container door closing]

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let's get more on the breaking news unfolding now. the power struggle under way in yemen and the dangers to americans as well as the threat in europe. we are joined by peter bergen analyst phillip mudd. this situation is unraveling fast. yemen now is a failed state. >> that might be too polite a term. yemen has serious -- three civil wars going on. it's running out of oil, water, cash to pay government

employees. now we have this crisis which i think helps al qaeda. al qaeda yemen has been taking hits. a lot of drone strikes have taken out leadership. that said it can now present itself as the defender of sunnis in yemen. >> this is a worrisome development. as you know this chaos will guarantee that aqap which is based in yemen, it's going to help them right? >> let's distinguish between short-term and long-term. if helps america if al qaeda is engaged in the streets, potentially the al qaeda leadership is less focused on western targets. that would not be the way i would think about it in the long-term. if al qaeda can control territory, the same as we have seen for example, with isis in syria or iraq their ability to focus more on overseas targets,

because they begin to govern areas means that we face a higher threat in european the united states. >> at what point does the u.s. say enough is enough and get the americans out of there? >> i would say pretty soon. what i'm seeing now is -- remembering benghazi you have to focus on the short-term targets, the operatives in the embassy are helping to find fix and finish al qaeda targets with drones. but you cannot risk a rerun of benghazi. there's no way you can control that compound. doesn't matter how many marines you have there. if the civil war is hitting the streets, you got to get people out. >> that's what people are concluding. general, as you well know and you have been involved in these operations is there, first of all, any military action that could stop what's going on in yemen, u.s. air strikes, for example, more drone strikes or would that be a waste of time? >> it's a waste of time. what are the targets? right now the government is in charge. they are trying to hold on to

power. the president is trying to continue to do what he needs to do. the key piece is the potential operation. i'm suggesting that that's probably not going to happen. i have been involved in several of those. they are very delicate dances between the military wanting to get people out and keep them safe and the state department wanting to stay there and continue to make connections with the local government. those are tough operations. we have forces in the arabian and red sea. we have forces overhead. we have marines at the embassy. the embassy and the americans are safe there for now. >> for now. but if you have to send in helicopters, those v-22s, as i have been pointing out, they are vulnerable to shoulder-fired missiles. it's by no means a risk-free operation. >> it never is. you have reinforcing high performance aircraft to support

those ospreys that are going in to pick up the passengers. i don't think we would have a lot of problem getting the folks out of there before it would be an untenable situation. >> you want to weigh in? >> yeah. there are risks in abandoning our post. >> the u.s. did it in libya. >> let me -- >> everyone is out of libya right now, even though the u.s. spent billions trying to get rid of gaddafi. >> sure. but go back to the founding of al qaeda in the mid '90s. we closed our embassy, we had no idea about this al qaeda thing growing at that time. we have to balance -- that embassy is not like benghazi. >> but they shut the u.s. embassy in tripoli, which was a heavily fortified compound. they concluded it's too dangerous, the americans are getting out of there. >> right. i mean you have to -- it's a tough call obviously. we don't want to be blind.

al qaeda in yemen is behind the paris attacks. do we want to be blind in yemen? >> you see libya and it's a disaster. there are al qaeda and isis training in libya right now. that's a lot closer to europe than yemen is right now. it's a serious situation. i want all of you to stand by because this is a very worrisome -- from my reporting, i'm very worried about the americans, the diplomats, intelligence operatives u.s. marines, civilians, ngo people. they will have to get those people out of there sooner rather than later. just ahead, more on the terror threats and the u.s. response including cyber spying that's been going on for year ez.s. the new report that the nsa was hacking north korea years before the sony cyber attack. shopping online is as easy as it gets. wouldn't it be great if hiring plumbers, carpenters and even piano tuners were just as simple? thanks to angie's list now it is. start shopping online from a list of top-rated providers. visit angieslist.com today.

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tonight new evidence as to why the united states was so quick to blame north korea for the cyberattack on sony. more on a report that the nsa has been breaking into north korea's internet for years. brian todd has the information for us. >> reporter: tonight the government has a strong read on just how it came to be blamed for the sony hack. "the new york times" reports the nsa had been infiltrating north korean's computer networks its hacking teams, since 2010.

the times says the nsa tapped into the chinese servers that connect north korea to the outside world, that it picked through connections in malaysia used by hackers and that it got help from south korea to tap into north korean networks. the reason the nsa had been hacking north korean hackers for that long? the times says the nsa wanted information on the nuclear program. they knew the regime was building up its hacking capabilities. he would know -- you saw the picture earlier, we know the north koreans have hackers called bureau 121. a larger branch of cyber warriors called the re reconnaissance bureau. the question is if the u.s. intelligence community knew about north korea's capabilities did it warn sony in advance that it could be hacked? north korea had warned as early

as last june that it considered sony's movie "the interview" an act of war. a u.s. official tells cnn sony was not warned. but that same u.s. official says prior to the sony hack u.s. intelligence had not noticed that north korea was doing anything more than its usual hacking activity. denial of service attack ss. no one had any indication that such a massive cyberattack against sony was in the works. >> interesting stuff. thank you. let's bring in stephen yates. also joining us gordon change a columnist for forbes.com. and phillip mudd. the software or malware that the nsa used how does that work? >> well of course the nsa didn't share that with me. i'm hoping they didn't share

that with the "new york times" either. this had to have been a very very high priority for them. basically, we have been in intense negotiations and disputed over the intelligence with regard to their nuclear programs for well over a decade. it wouldn't surprise me if they had heavy monitoring. i certainly hope the nsa was doing this and more. >> i assume this technology really helped the united states in terms gathering intelligence on north korea, right? >> this is the bread and butter of intelligence. what we could call plans and intents. you look at the programs that the u.s. is interested in nuclear, there's a significant ballistic missile program in north korea. there's three things you want to know about. number one, what's going on today? number two, can i introduce software? remember years ago when we disrupted i think it was the u.s. in israel the nuclear program. can we disrupt what's going on today?

in the event of conflict can we shut down the programs? this is critically important. >> here is the question if the u.s. had breached the north korean system why weren't they able to pre-empt or stem that sony hack? >> my question is that north koreans is compartmented. they are looking at what's going on with the ballistic missile program, what's going on with nucs that doesn't mean they know what's going on with the potential sony hack. >> gordon, you think north korea, they will retaliate against the u.s. or others for what has gone on? >> north korea always retaliates for something like this. so unless there's a real change of heart in the regime we're

going to see some sort of action on the part of the north koreans. it could probably be cyber. but they have used other means by going, for instance, atakz ontacks on american bases. we don't know when. but it will occur. >> i have been reading reports over the weekend -- stephen, the young leader of north korea is thinking of accepting an invitation to go to russia for his first visit out of north korea since taking over for his father. what do you make of that? >> number one, i would take it as a sign of confidence on his part that everything is settled well enough for him to leave. when you run a dictatorship you have to be certain you can afford to leave and come back. he seems to have i think exceeding amount of confidence that nothing is coming his way by -- from the united states or internally to contemplate that trip. >> his father as you know used

to go to china, all the time. if he decides to go to russia first as opposed to china, what does that say? >> there's a lot of scrambling of diplomatic relations right now with both the north koreans reaching out to moscow and moscow reaching out to north korea. at the same time you have the chinese who have been north koreas good friends, they have been trying to build bridges with south korea. you have different relationships being formed. it's before the dust settles. we don't know what this is going to mean. things will be different. >> thanks very much. always appreciate having you here. just ahead, a suspected ringleader now identified as investigators are scrambling to stay ahead of the terror threat that is sweeping across europe from the middle east. [container door opening] ♪

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. on the eve of president obama's state of the union address, republicans are already pushing back against some of his initiatives that don't have much chance of being passed anyway. let's discuss what is going on. joining us is dana bash, gloria borger and senior political analyst ron brownstein editor of "the national journal." gloria this new tax plan -- >> robin hood? >> yes. it's called robinhood. you take from the middle class and give. >> this is a president who feels liberated. he doesn't have to worry about re-election. he's trying to set the table for

2016. so what is he doing? he's going to increase taxes on the wealthy. by the way, none of this is likely to get past. >> that was a light bulb. >> everyone is good. increase the capital gains tax rates, increase inheritance taxes to pay for things like free community college, tax credits for the middle class education, that kind of thing. >> that's the centerpiece. >> it really has no chance of passing? >> no chance. but i think there are a couple of things interesting here. one, gloria is absolutely right, the president couldn't have done this a year ago when he had so many fellow democrats on the ballot who -- that just didn't even want to face questions about, will you support the president with tax increases. but also one of the things that i've heard from democrats, one of the many things their criticism of the president, is that he negotiates from a position of compromise to start, instead of starting out

where, you know at the far end of where he thinks he can possibly get from his philosophical position he starts out in the middle. >> this isn't the middle. >> not at all. >> the problem is going to be when he talks about substance and getting things done and compromise what this does show is such different philosophical visions of how to do the tax cuts. >> this could help democrats in 2016 if the republicans are seen opposing these tax breaks these additional credits for the middle class. >> right. as everybody said this is really about framing the debate for 2016. there's not a lot of legislation that we'll see the president and republican congress agree on. what is likely to be the central economic debate in 2016. the landscape is shifting. people are backing more polar, more optimistic about the economy. it's possible by the end of the two terms of the obama presidency the economy will have produced ten times as many net jobs as it did during george

w. bush. the big difference is that the incomes are not rising for most families. at the same time jeb bush and romney are talking about a broad range of policies from both sides in 2016 focusing on one thing worth noting though. in 1996 bill clinton cut the capital gains tax. so it will be interesting to see whether this is one of the many areas where hillary clinton has followed obama. >> the president is proposing to raise the taxes. >> right. >> and this president, from when he took office, has gornverned in a country that has been in a severe recession and you can't talk about raising taxes in the middle of a recession. well that discussion is kind of passed now. not only do people feel a little better they see starting wage increases and people are feeling more optimistic and so the discussion is shifting now to income equality and what now can the president do to push the

agenda he had when he really came into office but couldn't do it because he was hamstrung by the recession. >> i want to drill down on the whole issue of the different philosophical visions. it is so real. i mean you think about paul ryan who is going to be in charge of the tax writing ways and means de. he fundamentally and other republicans believed the way to spur growth in the economy is to cut capital gains taxes, to redo the corporate system and here you have the president proposing the exact opposite that democrats fundamentally believe that it is best to right now spread the wealth, distribute wealth which is a republican slogan against democrats in the campaign but -- >> he seems, ron, the president, to be a lot more confident. maybe because of the poll numbers. there's a new abc/washington post poll showing him with job approval percentage at 50%. our cnn poll had him at 48%.

what is driving this bounce? >> predominantly improving views about the economy. that is enormously significant because if you roll -- if the economy maintains its forward momentum through 2016 we could be looking at a very different presidential year landscape than many people expected. outgoing presidents who were popular, who were not necessarily able to ensure a victory to its successor, eisenhower in 1960 clinton in 2000 if the outgoing president is unpopular, forget it. >> forget it. >> republicans have been banking on president obama's approval rating and if it's down at 2016 he could be in a much stronger position by the end of his presidency than people anticipated. >> and it's setting the base for the democratic situation. the argument we're going to be having heading into 2016 but

if jeb bush runs and if mitt romney runs expect to hear them adopting a lot more of the discussion about income and income inequality. republicans will adopt that as their own, or try to. >> of course i think for decades -- >> who, me? believe me the last person to call stupid but just having been out on the campaign trail in the fall of last year it's something that is harder to pin down. i believe it's also leadership that people are finally like okay we have somebody who is making a decision. maybe they don't agree with him. making decisions, standing up for something that he believes in and that is almost incalculable. >> these decisions are going to have a big impact on 2016. immigration, cuba climate. >> if i were a republican running for president, i'd be

talking about reforming wall street. >> gloria borger and dana bash guys thanks very much. tune in tomorrow night at 7:00 p.m. eastern. i'll be joined by my colleagues jake tapper all of our excellent analysts. cnn's special coverage of president obama's state of the union address tomorrow night. take a look at this. a live picture of the tomb of martin luther thing junior. president obama honored him on this national holiday along with his wife and his daughters sasha a malia. this weekend i co-hosted the annual salute to greatness award dinner. there you see martin luther king iii. bernice king was there, the daughter of martin luther king

jr. remember you can always follow us on twitter. tweet me @wolfblitzer. erin burnett "outfront" starts right now. "outfront" tonight, breaking news an international manhunt for the suspected ringleader. he was poised to attack within hours and we're learning more information about how major that attack was. and the mystery of airasia flight 8501. what was on thought cockpit voice recorders. plus found dead just hours before he was to testify, was it suicide or murder? let's go "outfront." ♪ good