>> reporter: casey wian reporting from camp pendleton in california. back to you. don't forget a special documentary, a soldier's story. jason carroll brings us the story sunday and saturday at 8:00 p.m. eastern. follow what is going on in "the situation room" at facebook. i'm suzanne malveaux in "the situation room." john king usa starts right now. good evening, everyone. a huge friday here in the nation's capital. the president signed into the law the nearly $900 billion tax compromise and it speaks volumes about our politics that he felt compelled to take a minute to find just what compromised means. >> yielding on something that each of us cares about to move forward on what all of us care

about. all of us care about. it's growing the american economy and creating jobs for the american people. >> also the congress is on the verge of making history. our vote counts shows more than enough support for repealing don't ask, don't tell in the senate. we'll talk to the senator leading the effort. joe lieberman explains why he can't sway his good friend john mccain. >> because he's so stubborn, of course. >> katherine miller says that she's stubborn, too. she joins us with her thoughts at this historic moment. let's begin with your money and a truly remarkable signing ceremony. there was humor. >> i was going to say it's a big deal but an important deal. >> there was candor and there were democrats and republicans mingling amicably. and the president signs

legislation that extends them two more years. that's the compromise thing. the package also adds about $900 billion to the federal deficit even as both parties say that it's urgent that washington stops drowning it self in red ink. does this add up to more jobs, more compromise, and to a second obama term? we're joined by david gergen and here in washington, roll land martin and dana bash. and to that point, yes, it's a big tax cut. your taxes are not going up next year. however, by the time the state of the union and all of the politicians in washington say, we have to cut the deficit and the president knows that that is coming. even as he celebrated today, he sounded somewhat sober note. >> there will be moments, i am certain, over the next couple of years in which the holiday spirit won't be as abundant as it is today.

moreover, we've got to make difficult choices ahead when it comes to tackling the deficit. in some ways this was he'ssier than some of the tougher choices we're going to have to make next year. >> so, david, was this give out candy now and tough choices later or was this necessary candy for the economy and then we'll still have to do the tough choices? >> well, it sure was give out candy now. i don't think the president had much choice but to agree to the extension for upper income. but he got a lot in return, john. and in the white house, they are surprised. they are calling the stimulus, too. it's as big as what he got the first year and nobody thought he would get another stimulus bill like this. >> david makes the point, alex, that this is a stimulus bill in the white house and the price tag is a little bigger than the last stimulus bill. it's either tax cuts or not tax increases for people and then the payroll tax which is a little bit of a tax cut. >> it's a little bit of a tax cut but you nailed it. it's not a tax increase.

we're not taking something away but we're not really adding anything stimulative to the economy now. so, yes, we are not hurting people. we decided not to rob taxpayers and call it a gift. we're raising expectations beyond what i think this so-called stimulus is going to deliver. >> i want to take a closer look at the package. i want to break it down for people at home that have not been following the debate. let's take a look at the compromise package. $860 billion that all gets added to the deficit. the state tax provision, liberals thought that was a big away to the wealthy. extending tax cuts nearly $550 billion. $463 billion for those $250,000 a year and below. $82 billion for the higher incomers, unemployment benefits, and payroll tax, the social security. that's taking your payroll tax out of the social security trust fund. that's $117 billion. among those $8.3 billion is

ethanol. it gets its subsidies. the question is, on a day like this, mitch mcconnell, the senate republican leader, right there for the president of the united states has not gotten a signing ceremony. is that a merry christmas let's go back to fighting? >> i wish i could tell thaw it is a down payment. just for the idea of compromise and that people in congress can do the thing that voters want wanted them to do. but right after he came back and right after he was there it was the same old, same old. republicans and democrats fighting in a very partisan way over foreign policy, the s.t.a.r.t. treaty and everything else. i thought it was very interesting that mitch mcconnell, the senate republican leader was there, the democratic leader wasn't there and none of the democratic leaders were there in the house. that is very telling as to how the democrats feel about what the president did. >> this bill is truly hope that you can believe in, because they are hoping that it stimulates the economy.

the first stimulus bill, one-third of it was tax cuts. you talk about a lot of money going towards infrastructure and building. they are hoping that this bill was somehow going to create jobs. no one can actually explain how it's going to happen. they are saying we think it's going to create jobs as per the economy. >> who would have thought that the man was liking president because he was not george bush just made the bush tax cuts the obama tax cuts. i think george bush -- >> we'll call it the bush tax cuts. >> a pair of cowboy boots. >> come back in, david. >> i want to disagree with my good friend alex about the stimulus aspect of this. there are a wide array of economists who believe that this is going to add a considerable amount of growth. mark zandy and others. they are saying about as much as half a percent. that could translate into jobs, real jobs, lasting jobs. so i think the president got and i think the republicans got a

much bigger stimulus than expected. the disappointment, john, is that they haven't done anything hard about the deficit. it was not accompanied by any action to show that they are serious. now that we've had the candy, what about the castro oil we're going to have to take next year? it's going to get tougher on the middle class next year. by the way, i think the rich are going to have to pay more, too, as they should. >> and that is the question. what a lot of democrats think, for the next two years, you're not going to get a tax increase so when you get around to dealing with the deficit, where does that money come from? >> the people sitting here who are dealing with homeless issues, foreclosure problems, going after food stamps, trust me, come february, they are going to feel this is where the cuts are going to come from. if you're secretary arnie duncan, and democrats are saying that they are going to have the very same program with the president that you want to protect. you explain how you're going to

protect them with republicans controlling the house. >> it's hard to wrap your mind around the fact that it's an $800 billion program that is not paid for. some believe tax cuts will help the economy so it's not so bad but i would say what david said about the fact that moody's and other economists say that it will help the economy, that for sure was what put many, many democrats under -- i heard so many democrats in the halls of the capital saying -- >> one of the most interesting things to leave is the second charles calling it a in a week or so is got snookered here. he writes this, if barack obama was re-elected in 2012 as is now more likely than not, historians will mark his comeback on december 6th, the day of the great tax cut deal of 2010. alex? >> his comeback began earlier. it began on election day when

democrats lost the house and he was freed from that ball and chain that was pulling him left. he's needed to keep the liberal democrats in check in the senate so he has a case for his re-election. so barack obama was re-elected when. s won the house. he's got a very strong hand to play. >> washington, d.c., when last week he actually screwed up and now he's the prince of the city. this whole notion that he's guaranteed victory, i'm sorry, the map has absolutely changed. what took place on november 2nd is still there. how will the tea party folks coming in in january change the dynamics of washington, d.c.? >> if this juices up growth just a bit, if the president can get up to 2 1/2, 3% growth, forget

anything else. go by historical models, the state of the economy, gdp. you can fairly, without fail, predict presidential elections just on that. >> he's still got a very steep hill to climb on unemployment. getting it down to the numbers that he needs. even half a percent growth is not going to bring all of the jobs that he needs for re-election. if you wake up today and see a poll that says 27% of people, only 27% think that he's going to get elected. another poll shows that he has only 40% approval. this is not his only problem. but you have to say, if anybody told us back on the election day that he was going to have this kind of lame-duck success, not only with taxes but with don't ask, don't tell, and there's a good chance on the s.t.a.r.t. treaty, too, there's a turn around that i don't think anybody expected to happen. >> at that point, hold that thought. let's take a quick break. when we come back, we'll dig deeper and explore the process of history.

on the point that david just made, we found at the beginning of the week that we thought it was dead. well, tomorrow the vote in the senate could soon set it to the president's desk. ician but i knew that i was going to need a day job. we actually have a lot of scientists that play music. the creativity, the innovation, there's definitely a tie there. one thing our scientists are working on is carbon capture and storage, which could prevent co2 from entering the atmosphere. we've just built a new plant to demonstrate how we can safely freeze out the co2 from natural gas. it looks like snow. it's one way that we're helping provide energy with fewer emissions. yeah. aww...that oj needs alka-seltzer plus. fast powder packs are a taste-free fizz-free way to transform your drink into a powerful cold fighter! there's a cold front moving in, but relief is on the way. with three seafood-and-steak combinations, all under $20! like succulent lobster and wood-grilled sirloin,

or new chardonnay shrimp and sirloin. ends soon at red lobster. has the biggest hotelimp deals we're offering the big deal guarantee. book a hotel with name your own price and if you can find a lower published price anywhere else we'll match it and pay you $25. book now and save up to 60% on hotels. only at priceline. [ male announcer ] you know her. we know diamonds. together we'll make her holiday. that's why only zales is the diamond store. where you can get up to $1,000 off now through sunday.

we overuse the word historic in washington. it will be poised to make history. the house has already passed legislation allowing gay americans to serve openly in the military. the repeal of don't ask, don't tell policy that was put in

place 17 years ago during the clinton administration. just a few days ago it appeared unlikely that it would succeed this year because of republican objections but supporters pushed and pushed for a stand-alone vote on repeal. and our cnn vote count, which has at least four republicans now voting yes, shows that barring some last minute hiccup, the legislation will be on the president's desk by early next week. i spoke with senator lieberman before sun down so he could observe the jewish sabbath. >> it's a set back for a minute. this policy has been in place for 17 years and it would mean that americans and are capable of doing so can do so without fear of being pushed out simply because of their sexual

orientation, not because they were ineffective soldiers or because they violated the code of military conduct. in fact, 14,000 members of the american military, the last 17 years, have been discharged only because either they admitted it or somebody said that they were gay and lesbian and that's just wrong. but in a larger sense, i think really this is a civil rights action. and in the best sense of america, this will allow gay and lesbian americans to be called what they are, what they want to be called, which is americans. not gays or lesbians. americans who want to serve our country. i think we've come to a point where neither your race, your gender, nationality, your religion, or sexual orientation should deprive you of the opportunity and honor of serving our country in the military and being called what they are, patriots. >> it is controversial at the

moment, as most big things are. when we look back now on women's rights, including the vote to right, the civil rights movement and african-americans, they looked at very differently with ten, 20, 30 years of hindsight. will people look back and look at this as a big of a civil rights step as those? >> yeah, i think they will. also, people will look back at 20, 30 years from now and say, i can't believe that there was a time when americans were not allowed to serve in the military because of something very private like their sexual orientation. attitudes have changed in america. in my life i would say probably the last two or three decades of my life, the most significant change in attitudes on a social question like this has been about gay rights. and sexual orientation. i think that the country is ahead of the congress. and congress by repealing don't ask, don't tell, is going to catch up with the rest of the

country. >> as you know and know well, not all attitudes have changed. your close friend, senator john mccain, was with us here last night and said that he would vote no and this is why. >> it's going to cost lives of marines. the chief of staff, the army, said it would cause destruction and he's opposed to doing it at this time. they said at least wait until 2012. >> you're as close a friend that john mccain has. why haven't you been able to convince him that he is wrong? >> well, because he's so stubborn, of course. look, we've had good conversations about this, john, and he is my dear friend. we just disagree. every evidence says that this change can occur without any negative effect. some of our closest allies in the world allow gay and lesbian soldiers to serve, the united kingdom, canada, australia,

israel, just siting a few examples. also, the study done of 125,000 people, military answering questions, are they clear that more than two-thirds are supportive of this. even among some who felt worried that it would have an effect, more than 90% of those who have actually served with gay and lesbian colleagues in the military and in their own unit as opposed to those who haven't said it has no affect or a positive affect. >> if you search through the blog goss fear, you will see a lot of people questioning the president's and then things not going well, he brought in colin powell and did it again. sure, he's on the record for repealing don't ask, don't tell but where is the public pressure on the united states congress? is that a fair criticism?

>> i don't think it is. i know because i've worked so hard on this that president obama fully supports the repeal of don't ask, don't tell, that he's been on the phone talking to senators who were questionable and had an effect with that and it was the president and senator reid who decided together notwithstanding the president's desire to ratify the s.t.a.r.t. treaty, get it done, don't let anybody hold it hostage to their votes on the s.t.a.r.t. treaty and then go back to the s.t.a.r.t. treaty. i think the president has shown leadership on this. listen, he's the one who has helped make this repeal possible by saying that he was for appeal as commander in chief. >> we've known each other for a long time. i'm going to ask you to letdown your guard and reflect on a man, senator joseph lieberman, knowns

as a pa rye yeah, and then you came back and won that race as an independent, many liberals do not like you and you know that and then it's joe lieberman carrying the don't ask, don't tell to the finish line in the senate. there's a little bit of irony there? >> well, there is in which people -- if you don't agree with him 100% of the time, they don't agree with you any of the time and that's just not the way our politics should be. in this case, right from 1993 when don't ask, don't tell was first proposed, i voted against it on the arm's services committee. i felt it was unfair and bad for our military. so i'm very lucky and fortunate to have played a leadership role and now ending this injustice and doing something that makes the american military even greater than it is today and, frankly, make our country even greater than it is today. >> senator joseph lieberman of connecticut, thank you. >> thank you, john. when we come back, back to

our feisty group and the controversial politics of don't ask, don't tell.

how big of a deal is the don't ask, don't tell in washington and in the history books? you were in the white house when this all started i covered them in and couldn't get that through, don't skrks don't tell was the compromise. how big of a deal is it now that it is poised to come off the books? >> it's a big deal, john. i have to think that you have to go all the way back to 1948 when harry truman was threatened with a resignation possibly by marshal and truman might have lost the election due to that but the armed forces are the most magnitude. i was in the room with president

clinton made this decision back in 1993. very late at night. over a dozen of us in a circle. how do you vote? 11 to 1 for don't ask, don't tell. the person that really wanted the repeal all together was al gore. but he lost. i think everybody in that room today would say, it's time to repeal this. and it's the right thing to do and thank goodness for joe lieberman. he deserves a lot of credit for this. >> so why, alex, is it so hard for senate republicans to do this? >> because some think it's going to weaken the armed forces and because it's a social issue. the base of the republican party thinks that it's an opening for gay rights. however, republicans have hidden behind a wall for a long time and that wall is, well, we will defer to the military. thinking that will never happen. guess what, the wall has gotten so short now that they can't hide behind it any longer and

actually now it's an economic agenda, and president obama can do this now and pay no political price i think. so i think you're going to see this go through. >> i certainly believe that the economic conditions of this country, over the past four years, has contributed to this vote that's actually going to take place. because when you -- i think back to howard dean talking about gays, god, and guns, not necessarily in that order, that was a dominating issue for so many people in terms of how do my religious views play in this? i don't care. plus, the extent of this war play as role when you say we are kicking people out who we need in the military because they are gay? forget that. if you can serve, serve. i don't care what you are. all of that combined play a role in not only the republicans but the conservative democrats. >> you mentioned in the lead-in

just last week we all thought because republicans were able to block the defense but which had this repeal in it that it was pretty much dead for the year but it was really just late yesterday that harry reid said, including president obama, we want to wait. let's get the s.t.a.r.t. treaty done. they said we're going to schedule it and do it before the s.t.a.r.t. treaty. that's what sealed the deal. >> and the four republicans, originally it was, we are not going to do anything else until we fund the government but now they are on the record saying, you have our vote no matter what. >> i've talked to all four aides and they said it's unconditional

at this point. they realize the government will be funded in some way, shape, or form, the money runs out on saturday night, there is going to be a short-term fix to that. they are on board and i'll tell thaw senator lieberman and other supporters think that they may get more than 60 votes at this point. it is giving a little time to the marine corps to get this done right. most of us who have watched the military believe with great confidence that the military will get this done quickly. secretary gates is fully behind this and head of the joints chief are behind it. they are leaving the timetable to the military and that's very important. >> it also helps to have a republican secretary of defense leading this in terms of bob gates. but also, david, on one thing,

thurgood marshal was deliberate speed. trust me, the integration, there are still issues today, 50-plus years later. watch the whole issue of, take their time. >> it is as a policy matter, a moment of history, whatever your views at home may be, it's a moment of history. the president has been criticized by some on the left saying, why are you not doing more high-profile public events. even today, we've known for 72 hours, senator murkowski, collins, we know that the votes are there and suddenly today, obama's political organization says, call your senator. but then david gergen, up where you are, saturday in boston, rally to pressure senator brown. why would the democrats rally to rush senator brown when he's already disclosed that he's on your side? >> i don't know. i don't get that at all. this is -- i think for -- everybody thought that this

was -- the people on the left were very fearful senator brown was going to be a complete he'd logical conservative. he's turned out to be a pragmatic senator. here he comes up and votes for it i salute him for it. >> let's show we're doing something but scott brown is already on the record. >> that's good. this ties into what david was saying about the fact that secretary gates and others are not going to do this overnight. during a hearing, a very important hearing a couple of weeks ago, senator brown got assurances that he would not implement this until he was absolutely sure that they are worried about is taken care of. it's important to know that when the president signs this, it could be some time.

>> as long as they are activating their grass roots on policy issues, this ties into it. >> just a fire drill? >> absolutely. even when you look at histories and in '64, they say we trust your word john f. kennedy, lbj, we're not going to back off the pressure until we actually see it get done. >> this presidencies himself, this one will express their opinion and lee stand above it all and bring them together at the end to work it all out. powerful intellectual ability. but that's not leadership. i think that's sometimes why you see his base disappointed saying, you should be out there on this issue and other issues. >> they told him, congress, you must change the law yourself to get this done. >> time out for me right now. we'll continue the conversation. david, thanks so much, al electric, roland, dana. we're going to stay on this issue because we're going to go

one on one with a woman at westpoint. she was a cadet. she was there for two years and she was a lesbian and tired of living a lie. also, a new look at the 2012 field. where would you put sarah pail? and pete on the street, well, it's going to talk calendar girls. you'll like it. [scraping] [piano keys banging] [scraping] [horns honking] with deposits in your engine, it can feel like something's holding your car back. let me guess, 16. [laughing] yeeah. that's why there's castrol gtx... with our most powerful deposit fighting ingredient ever. castrol gtx exceeds the toughest new industry standard.

don't let deposits hold your car back. get castrol gtx. it's more than just oil. it's liquid engineering. ♪ [ male announcer ] open up a cadillac during our season's best sales event and receive the gift of asphalt. experience the exhilarating cadillac cts with a direct injection v6. it's the one gift you can open up all year long. see your cadillac dealer for this attractive offer. backed by the peace of mind that only comes from cadillac premium care maintenance. the season's best sales event. from cadillac. from cadillac premium care maintenance. three. two. one. ♪ don't cha wish your work phone was hot like me?... ♪ the droid pro by motorola knows you need business on the go. with its powerful 1 gigahertz processor... ♪ da da da don't cha... ♪ its globetrotting wi-fi hotspotting swagger... it knows you want a rich web experience with adobe flash and access to over 100,000 android apps.

finally a work phone worth taking home. [ man ] i thought our family business would always be boots. until one day, my daughter showed me a designer handbag. and like that, we had a new side to our business. [ male announcer ] when businesses see an opportunity, the hartford is there. protecting their employees and property and helping them prepare for the future. nice boots. nice bag. [ male announcer ] see how the hartford helps businesses at achievewhatsahead.com. whoa! that achy cold needs alka-seltzer plus! it rushes multiple cold fighters, plus a powerful pain reliever, wherever you need it! [ both ] ♪ oh what a relief it is!

the official policy of keeping homosexuals from serving in military dates back to the 1950s. in 1979, malcolm x tried to repeal that policy. and that brought the debate to the 1990s. bill clinton voted on a promise to repeal it.

and then, of course, in 2006 the supreme court up held that in 2008 barack obama campaigned on his promise of repealing it. allowing gay americans to serve in the military who many say it was discriminatory and demeaning. >> on my final day, i was given a police escort from the bases as i was a common criminal. >> so what was it like to serve with don't ask, don't tell in place? katherine was a westpoint cadet until she felt like she could no longer sit in a class where homosexuals were called disgusting. take us back to your time at west point? what was the worst? >> lying. i knew i would have to hide my

sexuality but that i would have to actively portray myself as a heterosexual. so i think lying to my classmates while i was living under an honor code that a cadet will not lie, cheat, tolerate those who do. that was contradictory to the west point's morals. >> and when the issue of whether gay and lesbian americans should be allowed to serve came up in classes or discussions at west point, what were they like? >> i mean, for the most part they were apathetic but some said it was disgusting, that it was a sin. i had to be very careful about how i went about arguing that. >> let me ask this question. playing devil's advocate, even

though it's a small majority that has those views, sour views towards homosexuals, do you worry that general casey has a point where he might find it disruptive to make this change or do you think it's so small that they can deal with it? >> well, the fact of the matter is, there's already 60 or 70,000 gays and lesbians serving without any disruptions to unit co-heegs as we speak. don't ask, don't tell -- the repeal is not going to be a distraction. we're service members first and we're going to adhere to that. >> when you say we're service members first, at the moment, you are not. what is next? what would you like to do? >> i will be reapplying to west point and optimally the senate will repeal it and i will be able to enter west point with the class of 2013. >> is it as simple as that? because you resigned your commission? >> i do have to go through the

exact same process that cadets trying to enter for next year's class have to go through but i would rejoin and pick up right where i left off pending i was readmitted. >> what do you think the most difficult part of the transition, assuming the senate passes it this weekend, the president signs it into law, there would be a transition period. what do you think is the most difficult part for everybody involved? >> i think people are going to -- i think actually it's not going to be a very difficult transition. like i said, there's already a number of gays serving in the military. i don't anticipate a number of those to actually come out. we've seen prior models of don't ask, don't tell, like laws appealed and they were terribly uneventful. in terms of difficulty, i don't foresee any problems occurring. >> and if there was an incident, a few people say, i refuse, i

refuse to stay in this unit and sleep in the same area, should special accommodations be made or should they be told, too bad, get out? >> it would be the same thing as a racist being in a unit and saying, i don't want to serve with the black person. i mean, it's a very comparable experience. you know, you're not in the military to be comfortable. you're in the military to do a job that transcend yourself. so i think of a service member cannot live under those conditions, then it's he that needs to leave. >> put it into context. you're young, obviously. so you weren't around in the civil rights movement and when people got to vote. but many members of the repeal mark that as a landmark united states of america. is that how you view it? >> i mean, i see this as a matter -- not of lbgt quality but as a matter of, this is in the best interest of the military to resemble the society it serves. and like i said before, the gays are already in the military.

by repealing this law, it's going to allow them to maybe just write home to their family and their significant other without fear of losing their job for doing so. >> in the senate, our past count shows the 60, the 60 that they have to get over and repeal this, but a third will vote no against the repeal. what do you have to say to them? >> they are on the wrong side of history. you know, i'm sure there are people who opposed desegregation of schools when brown v. board of education occurred in the '50s but they are on the wrong side of history. >> and no doubt katherine miller we'll see you return to the military? >> yes, sir. >> all right. katherine miller, we appreciate your time tonight. best of luck in the days and weeks ahead. when we come back, big holiday news for ponzi victims of bernie madoff. [ male announcer ] this is lara.

her morning begins with arthritis pain. that's a coffee and two pills. the afternoon tour begins with more pain and more pills. the evening guests arrive. back to sore knees. back to more pills. the day is done but hang on... her doctor recommended aleve. just 2 pills can keep arthritis pain away all day with fewer pills than tylenol. this is lara who chose 2 aleve and fewer pills for a day free of pain. and get the all day pain relief of aleve in liquid gels.

with listerine® whitening plus restoring rinse. it's the only listerine® that gets teeth two shades whiter. and makes tooth enamel two times stronger. get dual action listerine® whitening® rinse. building whiter, stronger teeth.

welcome back. another cnn debate to put on your calendar.

among 2012 candidates labor day weekend next year. mark it down. let's go to joe johns with news that you need to know right now. >> the widow of one of bernard madoff's victims will return $7.2 billion. 2,000 marines and sailors reunited after seven months overseas. john king usa continues right after this. rice production in india affect wheat output in the u.s., the shipping industry in norway, and the rubber industry in south america? at t. rowe price, we understand the connections of a complex global economy. it's just one reason os beat their10-year lipp. t. rowe price.invest . request a prospectus or summary prospectus

with investment objectives, risks, fees, expenses, and other information to read and consider carefully before investing. how's it going in there, hon? um, almost ready. [ car alarm blaring ] [ blaring echoes, fades ] oh! [ male announcer ] relax. pam helps you pull it off. [ male annoso i takeelax. one a day men's 50+ advantage. as a manager, my team counts on me to stay focused. it's the only complete multivitamin with ginkgo to support memory and concentration. plus it supports heart health. [ bat cracks ] that's a hit. one a day men's.

now is the time to take action. are you reconsidering your medicare coverage? call unitedhealthcare medicare solutions today. you only have until december 31st to make sure you have the coverage you need. consider a medicare advantage plan. it combines medicare parts a & b, which is your doctor and hospital coverage and may include prescription drug coverage for as low as a $0 monthly premium. you only have until december 31st to enroll. call unitedhealthcare today.

when you try to breakdown the potential 2012 prospects, there are many ways you could do it. governors versus members of congress or northerners versus southerners. ron brownstein uses this divide. populist versus managers. john is here to talk it over with us and we're joined by a man plugged into what the right thinks of he's each of these prospects. eric eric son. so populists versus the managers. and when you stack them all up, you have mitt romney as the top

manager. he was a ceo. and then you have sarah palin. she's the ultimate populist. is it a substance issue or a style issue? >> i think it's more a style and tone than substance but there is obviously some substance there as well. and largely, you're talking about a difference in style. mitt romney is the clearest example of this but mitch daniels, their economic competence. they are there. it's their resume, their agenda, and their record. they are selling much more cultural affinity, a posture towards elites and towards washington, a tone of rebellion and rejection that is much more anti-elite whereas the managers spring from the elite and each of them fundamentally swing to a republican party which is roughly balanced equally in size

between a traditional suburban republican and blue color more populist joe the plumber that has been growing for the last 20 years. >> so as you track this and you get on your website every time one of them says something, i love it, i hate it, and somewhere in between, it's a roughly even split if you go through the demographics and the polling and the like. is there an asen dent versus a descendent, in your view? >> the manage yell, the bob mcc. this is one of those wild card years. very much like a 1980 to a degree where you are going to see someone much more populist, much more connected to the base than an ideological gut level than you would in other years, which is why i think looking at the field i think there's an opening for other people. someone like a mike pence. >> what about electability. does that matter? we always talk about primaries

are about ideology. republican primary voters, i do want a manager? do i want a populist? the top manager, mitt romney polls better than sarah palin. does that matter to a republican primary voter. >> if you are going to make a cold, calculating decision, many of the republican strategists would argue for a manager on the ground that the opposition to obama and democrats among blue collar whites seems pretty deeply set. and the white colar white, the college educated white suburban vote is more of a swing constituency for 2012. if that was your primary focus you'd look at a manager with more ability to reach up scale than a palin or mike huckabee. but that isn't the only -- obviously, that is not the only consideration. that isn't the way it works. right now by the way, even in the early polling you see a really clear divide among republicans without a college degree, palin and romney are even or pail sin ahead whereas in gallup and quinnipiac polling, romney leads palin, 3

to 1 almost among college educated republicans. this wine track/beer track divide we've seen in the past in democratic races is already showing up in this republican early skirmishing. >> when you consider that and look forward. you do a great job in the magazine of breaking down differences on issues. college educated republicans, noncollege republicans. roughly even on some issues like social security privatization. change the constitution to end citizen birthright. that's close. there's a disagreement on bush tax cuts, gays in the military. where do you see this going forward or can we answer the question now? does it all depend on will the dividing line be the state of the economy, a tax cut? >> i think we're going to start talking about more foreign policy in the next year, not just the economy. it's going to matter more than most people right now think. i would say that, yeah, there is a dividing line right now. and trying to get a pulse on it, the best way i can describe it is there are candidates on the managerial end of ron's list, or

in on the populous end that tap into something at the gut level with the base of the republican party that most of them don't. it tran skends regions. it transcends their views on certain issues. but overall, i think at the base, at the grass roots level, the blue collar worker if you will, as long as someone says they're good on life and marriage, they'll focus on the economy. they just want to be comfortable with those issues. it's going to be a sense of trust. take mitch daniels. he's now made two consecutive statements about a truce on abortion that's going to hurt him with a lot of the grassroots social conservatives who aren't going to want to support him in the primary. ultimately, though, everyone in the republican party wants to beat barack obama and it doesn't really matter who the nominee is as long as they have basic trust at some of these core principle levels. >> we're seeing the reverse of what we're 19the democratic party. over the last 20 years as we've lived through this class inversion where democrats have run better upscale. the democratic primary has

itself moved more toward a college educated affluent voter. that helped obama beat hillary clinton. the republican party is nufg a position where the blue collar, noncollege, culturally conservative, conservative on foreign policy, not as focused on tax cuts. they are growing in importance. even in '08. already 55%, 60% of the vote. you have to think the balance could tilt even further because republicans have done so well with those voters. they can participate in the primaries. that helps the populists have a -- the managerial candidate usually wins but the balance of power is shifting that it may not be guaranteed anymore. >> if it's this crowded. they view obama as vulnerable. you get more candidates who say why not? i have a one on one shot. does that matter if you have three managers and a populist and three people a little bit of both. >> one, as you say, there are more viable managers dedividing

up the college educated side or more voweler inable pop lifts. second, who can cross over? right now both palin and romney would seem to have problems. palin faces a lot rev ziftance among upscale republicans. among the blue collar republicans, romney is not an easy sell either. the third big factor is what are we talking about? if the election is fundamentally about who is best positioned to revive the economy, to kind of manage the economy, that's an inherent advantage for the managerial candidates. if it's more like 2010 republican primaries where it's about who is more anti-washington. who is going to go break more windows in the capital, who is going to challenge the elite more, then that's an advantage for the palin/huckabee side of the equation. >> there's an extra dynamic. from what i hear from a lot of tea party activists. goes beyond antidote to being data i hear it from so many people. grassroots activists are saying to themselves, who are the karl rove/bushies going to go with and the mccain sneem whoever they go with, the tea party

activists will go in the other direction. there's this visceral reaction to both of those. >> visceral reactions matter in politics. eric erickson and ron brownstein. still looking for the perfect holiday gift for the political junkie? pete dominik joins us using an early stocking stuffer we sent his way. uh, a little help... oh! you know shipping is a lot easier with priority mail flat rate boxes. if it fits, it ships anywhere in the country for a low flat rate. plus, you can print and pay for postage online. and i can pick them up for free with package pickup. perfect! cause i'm gonna need a lot of those. wow! i knew i should have brought my sleigh. priority mail flat rate shipping starts at $4.90 only from the postal service. a simpler way to ship. if anything, i thought i'd get hit by a bus, but not a heart. all of a sudden, it's like an earthquake going off in your body. my doctor put me on an aspirin regimen to help protect my life. [ male announcer ] aspirin is not appropriate for everyone.

so be sure to talk to your doctor before you begin an aspirin regimen. to my friends, i say, you know, check with your doctor, 'cause it can happen to anybody. [ male announcer ] be ready if a heart attack strikes. donate $5 to womenheart at iamproheart.com, and we'll send you this bayer aspirin pill tote. you know what, tell me, what makes peter, peter ? well, i'm an avid catamaran sailor. i can my own homemade jam, apricot. and i really love my bank's raise your rate cd. i'm sorry, did you say you'd love a pay raise asap ? uh, actually, i said i love my bank's raise your rate cd. you spent 8 days lost at sea ? no, uh... you love watching your neighbors watch tv ? at ally, you'll love our raise your rate cd that offers a one-time rate increase if our current rates go up. ally. do you love your bank ?

pete dominik hasn't been too naughty this year. emphasis on too. we decided to send him an early christmas present. i see you got the picture there. open it up. goingets today. now this is from you or from everybody at "john king usa." >> from the collective group. >> who wrapped this dana bash? >> she's not a very good wrapper, no. >> mama grizzly's