from the wife of a mail carrier of 20-plus years. in the next hour drew driven will talk live with the post master general about those latest changes. drew is taking over right now from studio 7 in atlanta. >> should be interesting what he says, suzanne. going to be very hard sell up on capitol hill, i think. let's get right to the news. thank you. i'm in for randi kaye for the next hour or so. inside a month before the iowa caucuses, the gop race for president is getting more interesting now. the current front-runner, former house speaker newt gingrich, due to brief reporters in new york city this hour. his 50-state strategy is the topic. earlier today gingrich met with donald trump who flirted with his own white house run, and who now plans to host a republican debate, after christmas. then there is ex-candidate herman cain whose endorsement could go to gingrich eventually. though he now says he's going to take his time. stay with us, we'll bring you those comments live at 1:45

eastern time. also, president obama, we are told, is going to have some sort of statement or briefing in the briefing room of the white house. the subject is going to be taxes. a lot of talk of that up on capitol hill. we'll hear what the president has to say this hour. and what does first class mean to you? to the debt-laden u.s. postal service it would mean two to five days instead of one to three days. trying to help trim $20 billion a year from the postal service by 2015. it would mean closing more than half the agencies' 463 mail processing facilities across the country. going to mean a lot of layoffs, too. i'll have some questions for the post master general in our "face time" segment just minutes from now. saving the euro could mean rewriting the rules of the your on. ahead of yet another eu summit this week in brussels, the president of france and chancellor of germany today agreed the 17 nations in the eurozone should face strict new

caps on deficits. violators could face sanctions. the french and german leaders are rejecting a common eurobond as a means of cutting borrowing for costs from member states who are now in trouble. testimony resumed in washington today in the hearing on whether that guy who tried to assassinate president reagan should be allowed to live as an outpatient. lawyers for john hinckley are asking a judge to grant him longer unsupervised visits with his mom who lives in williamsburg, virginia. the justice department lawyers are fighting that effort, arguing that hinckley still poses a threat. hinckley has been confined to a hospital for decades after being found not guilty by reason of insanity in the attempt to kill reagan back in 1981. hinckley's brother, scott, expected on the witness stand today. after weekend elections in russia, vladimir putin's ruling party is expected to maintain a majority but will likely lose a chung of its power in

parliament. those losses come even as an international watchdog group says election violations that favored that party were in place for this election. presidential elections take place in the spring and under new rules, prime minister putin could again take up the role of president, potentially keeping him in charge until 2024. a legal victory for the founder of wikileaks. the british high court has ruled julian assange can fight his extradition to sweden. he's wanted in questioning for a sexual assault allegation. he denies that claiming the case is little bit clay motivated. today the fbi and the georgia bureau of investigation have joined the hunt for a missing 7-year-old girl who vanished on friday. no witnesses have come forward. no description of a suspect. still, police are treating it like an abduction.

here's why. she left her apartment bringing drinks to her friends on the playground. she never made it to that playground. canton police, about an hour north of atlanta, are looking for any tips. they have a number -- 404-326-1988. there is the girl there. a one-block area has been evacuated in miami beach after that showed up on shore. the miami beach fire department says this object is six feet long, two feet wide. they called the bomb squad to investigate. the u.s. navy and coast guard also helping. we'll keep you informed once we or they figure out what it is. the top man at federal aviation administration was arrested over the weekend. faa administrator jeff roam babbitt charged with driving while intoxicated. fairfax county virginia police say he was seen driving on the wrong side of the road saturday night. released from jail on a personal recognizance bond. with christmas coming up fast, here's an idea to consider for parents who spend a ton of money on toys only to have the

kids lose interest within weeks, days or even hours. there is toygaroo on the website. parents can rent toys for a lot less than it costs to buy them. when the kids get bored with them, box them up, send them back. people just aren't mailing things like they used to and the post office is still running out of money. on the chopping block. next-day delivery and jobs. the most master general joins us next. newt gingrich has a news conference in new york city. but first, the halftime announcement for the super bowl, if anybody can hold their own against the best football players, probably her. madonna will be the center of attention during football's biggest night at the most watched musical event of the year. she's sold more than 300 million records. she's a rock and roll hall of famer and is eight years older than the super bowl itself. madonna is 53. to perform at the 45th super

bowl.

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liberty mutual auto insurance -- responsibility. what's your policy? this is a first class financial disaster. business is down, losses are up, and cut-backs, price hikes, any of the usual remedies, are virtually off the table. the u.s. postal service is what we are talking about. in fiscal 2011, it loss $5.1 billion. in 2012 expected to loss $14 billion. mail volume expected to fall another 6% on top of a 20% decline since 2006. rain or shine, the agency has to prepay its retiree health benefits $5.5 billion a year.

when it wants to raise prices or close offices or cut saturday deliveries, it needs to get permission and often doesn't, so now comes a new proposal -- promise less, deliver first class mail in two to five days instead of the current one to three. joining me now to explain is the post master general himself, patrick donahoe. you are in a world of hurt, sir. i'm just wondering, explain to the american public how what is perceived to be a decrease in service is going to help the postal service. >> well, what we're faced with, drew, is this -- we've got a substantial budget shortfall like you talked about and we have a game plan to take $20 billion out of the expenses of this organization, including e prefunding health care, are eliminating saturday delivery. service going from one to three

days in the domestic u.s. to two to three days. that's due to the fact that we have lost a substantial volume of mail in the blue mailboxes. >> mr. donahoe, i don't know of a single business that was able to survive once it started cutting the quality of its service. are you simply out of ideas orr on what you can possibly do to improve service to get people back interested in the u.s. mail? >> well, what we're doing is we're looking ahead to get a good idea of what the proeftal office will be delivering for america in the future. what we see is this. business first class mail, advertising mail and packages. what's happened to us is no different than any other company. it is affected by big changes with the internet. in 2000, 5% of americans paid their bills online. today, 60% pay their bills online. so what we're looking to change is the service standards of the mail that you would collect out of the blue mailboxes where

people pay their bills. we just can't wait until it is down to zero. like any other business -- we are a business, 100% self-funded with taxpayer money. we have to make these changes. >> but unlike a lot of businesses, your direction an mandate comes from congress. and today in congress, you got blasted for this plan today by a congressman on the floor who says, look, this is the exact wrong time that the u.s. postal service is going to cut jobs as many as 100,000. take a listen to this. >> this guy, this so-called post master general, should be fired because of a lack of any imagination for initiative is proposing the death nail for the great united states postal service. 100,000 people laid off. whoa, that's just what we need in america today. let's lay off 100,000 people. great idea! >> mr. post master, your response to the congressman? >> here's the thing. if you take a look at what's

happened with the postal service, we've had to make a lot of changes as our business models change. matter of fact, since the year 2000 we've reduced the head count of this organization by 250,000 people. our people are very productive. they do a great job. but like any other business you have to change. i'm working with congress right now to get some laws changed that require me to prefund retiree health benefits to the tune of $5.5 billion a year. we've put over $20 billion into that fund in the last three years. as a matter of fact, that would have turned a profit if it wasn't for that. i also am working with congress to resolve the five and six-day delivery proposal. things have changed in our business. like any other responsible business you've got it react to that and react in the way to keep your finances solid. >> is this though in fact a dying business? i'll be quite honest with you. when the first five-day delivery plan came up a couple of months ago. i took note of what mail i get in my mailbox. i can tell you honestly, i think i could drop it down to about

once a week to get any value of what's coming in my mailbox. are you looking for anything that drastic just to try to preserve the post office? >> here's the thing, drew. this year we will deliver about 165 billion pieces of mail. we're not going anywhere, away, any time soon. we will continue to be delivering bills to customers, people mailing first class bills out, like to reach out so they have a connection with their customers. advertising mail. advertising through the mail is the best way to get and keep a customer and we also will be delivering packages. with e-commerce today, e-commerce portion of our business has been growing by 15% a year. so we have a lot of growth. the problem is when you deal with some things like changes in the internet like we are, you have to make the responsible decision to move away and cut the losses in order to keep the rest of the business healthy. >> is the 100,000 job-cut figure accurate? >> here's the 100,000.

it boils down to a couple things. number one, we've got the change in the network. number two, we've got some changes in delivery routes. i told you, our people are very productive. we've reduced 20,000 delivery routes in the last five years, another 20,000 in the next two years. we'll have no delivery on saturday but we'll keep post offices open. we have to reduce the head count in the organization in order to get the finances in order. >> thanks for taking the heat today, coming on. we really appreciate it, sir. thank you. what started out as a high school science fair project is now an invention and it could ease the pain of wounded vets. pretty good. the inventor -- there she is. she's going to join us next. also, awaiting two live events. newt gingrich has a news conference in new york city, and the president is going to be talking about taxes. he meets at 1:45. brad, where we going?

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we want to let you know woo are expecting the president in about 12 minutes at the white house to talk about taxes. we'll bring that to you live whether it happens. first, this inspiring story. my next guest really a go-getter out there. her dad got treatment at an army medical center. her name is katherine bo o nkamp. she started chatting with other vets there while her dad was being treated. many amputees they were complaining about this phantom limb pain which is really crippling pain when somebody loses a limb. for her science fair she invented a prosthetic design to ease phantom limb pain. what did people say to you?

katherine, are you there? i'm hoping you are. >> i can hear you. can you see me? >> yes, i can hear you and i can see you. tell me about your phantom limb. how does it work? >> okay. so i invented and patented a whole lissic prosthetic device that can hopefully eliminate phantom pain in amputees. this heat -- i incorporated the thermal biofeedback into the socket and the heat stimulates the nerve endings and residue limb and it forces the brain to focus on this heat rather than to continue to send signals and commends down to a limb that's no longer there, essentially elimb thating this pain that the person experiences. >> wow. how did you come up with that idea? >> well, my father was a veteran. he's a 20-year -- spent 20 years in the air force.

his last duty station was the pentagon and my family lived right outside of washington, d.c. and i would go with my dad to walter reed army medical center. and basically just walking in the door i would see very young amputees. many who weren't much older than myself who had return from iraq an afghanistan and sitting in the waiting rooms, i would talk with them and hear their stories and i would go home and do research on the things that we had talked about. and this phantom pain kept coming up in our conversations. i started doing research and found there is no medication approved on the market for phantom pain. the most amputees are commonly prescribed antipsychotics and barbiturates. drugs that are both expensive and have a high addiction rate. for my 10th grade science project that year i decided to see if i could somehow eliminate this pain without the use of these drugs. >> we're awaiting the president's news conference. we have to go. but i assume everything is going well and we look for good things from you in the future. thanks so much for joining us. >> thank you.

also we are waiting a newt gingrich who is supposed to have a news conference today. a lot of discussion today about whether or not herman cain would be there. looks like herman cain will not but perhaps the donald will. that's where the newt gingrich news conference is going to come, and also we're waiting on president obama who is going to make some kind of statement about taxes. wolf blitzer and gloria borger will join us right after the break. to pick up some accessories. d a new belt. some nylons. and what girl wouldn't need new shoes? we talked about getting a diamond. but with all the thank you points i've been earning... ♪ ...i flew us to the rock i really had in mind. ♪ [ male announcer ] the citi thank you card. earn points you can use for travel on any airline, with no blackout dates. rx plan gives you the lowest plan premium in the country...

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we have been told that just about six minutes from now, president obama is going to speak on the tax battle, going on in congress. he's going to do that from the white house. right now in washington, d.c. we have wolf blitzer and gloria borger who are going to weigh in on what may be happening taking us to the president. thanks very much, drew. this is a huge issue, gloria. i want to go to the white house for a moment. brianna keilar, set the scene for us. this is a late addition to the

president's schedule. he's about to walk into the briefing room where you are right now. and make a statement. i assume putting pressure on congress to pass legislation that will extend the payroll tax cut. >> that's exactly right and the way the white house is framing it, wolf, is that president obama will come in here and his message will be to urge republicans to make sure that taxes do not go up for americans, because the payroll tax cut is something that about 160 million americans have had for the past year. the white house wants to extend that and expand it. this new compromise proposal coming from democrats just extends the tax cuts that's already in effect. very much the white house has felt that it's had some moment tul with a strategy that we've seen lately last week when the senate failed to pass the payroll tax cut extension in two different ways. you heard the president -- you heard white house officials saying certainly president obama said in a statement following that vote that it's essentially

republicans who are looking out for wealthy americans at the expense of the middle class. sort of couching that argument in such a way that they feel really resonates with voters. >> do they think at the white house that the democrats on this issue -- it is a sensitive issue, because in effect, if they don't let the tax cut continue for another year, that effectively would be a tax increase on millions and millions, as you point out, tens of millions of middle class working families. do they think they can effectively split the republicans in the house and the senate and get enough votes when all the dust settles? because so far they haven't been able to do that. >> they do. that's why they feel that this argument resonates, because you've seen -- you've seen certainly republicans who have stuck to no tax increase pledge. they feel like they're cornering republicans in that way because if congress were not to take action on this, then people would see essentially their

taxes go up by seeing this tax cut expire. so that is sort of where they've tried to pin republicans down and say you would be allowing taxes to go up. of course, republicans have had issues with the way that this is paid for and you will certainly expect that to continue, wolf, as we've learned the details of what the democrats are proposing ss a compromise. >> brianna, stand by. gloria borger, our chief political analyst is here. the devil is always in the details. in this particular case, how do you pay for continuing this tax cut for millions of middle class families for another year? >> it is a question of whether you put a surtax on millionaires. if you're democrats that's what you want to do. now some compromise version may be not to keep it in perpetuity but to keep it for ten years. the interesting question about republicans is, there is kind of a split in the republican party. there are some republicans who say, you know what? you never should have to offset a tax cut, because in the end

the tax cut will bring more in to the american economy. so you don't -- you shouldn't have to offset. but there are lots of fiscal conservatives now in the republican party who say, you know what? you shall have to offset a tax cut. and we need to figure out a way to do it, or we're not going to vote for it. so the republicans are the ones who are really right now trying to figure out how to come to terms with this, and ironically, it is the democrats who are saying, okay, let's extend the tax cuts. so the parties have kind of reversed roles, in an odd way. >> everybody remembers the bush tax cuts of 2001 and 2003, they weren't offset by spending cuts elsewhere. they were just tax cuts. >> right. there is a new sense against these tea party conservatives that you need to offset every tax cut. and some republicans say, no, you don't. and the democrats are saying, okay, we're going to offset it with the surtax on millionaires which of course republicans

don't like. >> because the republicans make the argument that these are job creators, people who make a million dollars, small businesses that file as individuals, if you will. and if you raise taxes on them, that will undermine the ability to create jobs. >> that's right. and there are other republicans who make the argument that these payroll tax cuts that we have seen actually haven't work as well as they would have liked them to work, because we're still in this recession, and so some are also skeptical about it. but it is kind of an odd situation when you've got democrats for the tax cuts and republicans saying no. >> harry reid, senate majority lead, says he's got a compromise. last week the democratic version and republican version failed, both designed to extend the middle class payroll tax cuts but how to pay for it was the issue. he's got a new version he wants to release. >> according to our congressional correspondent kate bolduan, one of the things he is going to do is propose extending the tax cuts on employees, but no longer on employers.

that would save some money. and also on the surtax on millionaires, not making it permanent but rather saying that it would phase out after a decade or so. but it's clear, wolf, that the democrats believe that they have the better side of this argument. our polling shows that the american public is really with them, wolf, when it comes to raising taxes on millionaires. >> this whole notion -- it's fascinating. this is really important. because they have to resolve this by the end of this year. otherwise, it will lapse and that $1,000 per middle class family or 1,500 tax cut will simply disappear and it will go up to the higher level. >> you also have a republican presidential primary going on, don't forget, wolf. you have most people participating in that primary saying, we ought to extend these tax cuts but some say you feed to pay for them. >> it's not going to be an easy thing as you point out. the middle of the presidential

race right now. it will be fascinating to see how the republican candidates deal with it. obviously very sensitive issue, raising taxes on the middle class. >> which they don't want to do. and you know, it is har for them to make the argument that we want to keep the bush tax cuts for the wealthy but we don't want to keep these tax cuts for the middle class. that's why the democrats believe they've got the better part of this argument. that's why we're going to hear from the president. >> we'll be hearing from the president momentarily. i wonder if brianna keilar, are you still available? are you still there in the briefing room in can you talk to us? brianna, are you there? >> reporter: hi, wolf, yes, i am, sorry. >> i was wondering if we have any word from white house officials whether or not the president will simply make a statement and then leave or whether he'll stick around and start answering reporters' questions. if we get an answer on that, that would be interesting. let's stand by and see what he actually does. i suspect it won't be a very long statement. it is always important when the president decides to add his

weight. there's a lot of the republicans, at least, have been accusing president obama of being m.i.a. on some of these issues. he's busy campaigning around the country, he's not getting his hands dirty, if you will, on these negotiations that are obviously involved with the congress. >> this is one of those situations, wolf, where the president can really use the bully pulpit. when the president goes into the briefing room, he makes a statement to reporters. all eyes are upon him. he's not out on the campaign trail, and clearly -- don't forget, the argument of the wealth gap in this country is going to be the key argument playing out in the upcoming presidential race. and this is something that's going on in congress right now that's about to expire, and the president believes that he's on the right side of this issue, so he can take to the podium today and make an awful lot of news without having to be out on the campaign trail. it's one of the advantages of incumbency, obviously. >> we are estill wastill waitin

president. those are live pictures from the briefing room. we are told momentarily the president will come in and make a statement urging congress to extend the payroll tax cuts for at least another year. otherwise there would technically be -- effectively be a tax increase on tens of millions of american families. brianna keilar is over there. do we have any idea whether he is going to answer questions, too, or just make a statement? unfortunately, we don't have brianna. she's already sitting waiting for the president of the united states. we do have will cain and roland martin who are standing by watching all of this. what goes through your mind, will, as you get ready to hear the president make what's certainly going to be a predictable statement urging congress to go ahead and do the right thing, let all these millions and millions of middle class american families have this $1,000 a year, or $1,500 a year tax cut continue? >> you know, wolf, i think what goes through my mind is what we are all wondering, how he will

suggest that be paid for. that's the cliched term of the moment -- how will it be paid for. gloria is right, it does put republicans in a tough position to defend extending the bush tax cuts but be opposed to extending the payroll tax. i think you'll find they won't be opposed to extending the payroll tax cut. entire argument will be about how it will be paid for. i think to respond to one thing gloria said, i think it is a tough argument for democrats to make as well and we want to extend this payroll tax cut but we don't have any room -- anywhere -- within the government spending budget to cut anything back to pay for that. republicans on their side suggested we ought to just freeze government wages to pay for this. why is that is not a legitimate thing? >> a lot of republicans are saying there is so much bloat and so much fat in the government, roland, that go ahead, if you want to continue this tax cut for the middle class and everyone seems to want to continue it, then go ahead and start cutting. i interviewed ron paul, the republican presidential candidate, the other day and he said basically, bring home thousands and thousands of american civilians from iraq.

now that all u.s. troops are about to leave, thousands of american diplomats at the world's largest u.s. embassy in baghdad, that alone could pay for a lot of this. >> wolf, all of that being taken into consideration. but to gloria's point and what will has said, the reasons republicans are stating this is because they will not admit that the bush tax cuts contributed to our deficit. they have been trying to deny this over and over and over again and if you look at the cbo number, congressional budget office, it shows during those eight years, some $5 trillion added to the federal deficit. and so all of a sudden they don't want to say that, so what they say, it is because they recognize that was part of the problem. so democrats have them in a bind because they're saying, wait a minute. grover norquist is your guy about. you guys love tax cuts but now you are seeing the reality that when you cut taxes, you are taking in less revenue and it adds to the deficit. that's why they're stuck in this

conundrum because they don't want to own up to that real hard fact. >> it is a sensitive issue. will, stand by because gloria wants to weigh in. >> you have republicans essentially saying tax cuts pay for themselves. so why do we even have to pay for it? because in the end -- >> but that's not true. >> -- it is going to pay for itself. well, that's the disagreement between the democrats and the republicans. by, there are now -- there is now this split in the republican party. some republicans continuing to say, like scott brown of massachusetts, for example, you don't need to pay for it now because it will pay for it psel and other republicans saying we do actually need to pay for it because it is not going to pay for itself. >> that's not true, gloria. republicans are dancing around this because their argument is simply not true. the numbers are the numbers. we can't have optional facts. when the cbo says, when they scored, when they say the bush tax cuts contributed to the deficit, we saw this whole argument play out in december

when president obama had the extension, when they said let's cut the $700 billion of the richest folks in the country because it adds to the deficit. so they don't want to say tax cuts are contributing to the deficit but this is their way of saying, oh, no, we need to have offset as another way of saying it. they want to deny reality. >> will cain, react to that. >> i want to agree with one thing gloria's saying. the very important split here is the split within the respect party. men involved in the bowles-simpson commission for deficit reduction are the same guys saying we have to pay for these tax cuts. they aren't the guys making the argument that every single tax cuts leads to economic growth and will therefore contribute to deficit reduction. then you have guys from the grover norquist vein who make that exact argument. but the argument is how do you really pay for it? the argument all republicans make simultaneously is pay for it with plenty of government waste, plenty of government spending to cut back on.

why must you trade one tax for another tax? why is that the only solution to paying for things? why can't the government -- >> real simple, will. because they don't want to have to tuck those pork barrel projects, the republicans don't want to have to touch defense and democrats don't want to touch social security and medicare, the three largest areas of our budget and our deficit are dealing with entitlements, also dealing with defense. both sides refuse to touch it but no one wants to put it on the table because they know that they don't want to appeal -- they don't want to hurt those key voters who are going to be going to the polls in primaries in the general election next year. that's the real truth. >> if you're a true believer and you are a republican who believes that the tax cuts will pay for themselves, the question really is -- not how do you pay for it, but why do you pay for it? right? i mean why pay for it at all? the democrats, ironically, are acting much more like the conservative republicans here. it is kind of an odd alliance

but they are actually saying we want the tax cuts but we also believe we need to pay for them. that's where the surtax -- >> i want to take a quick break, gloria. the democrats want to pay for it by raising taxes on rich people. on people earning $1 million a year or more. couple hundred thousand people fit into that category. republicans are saying they're not going to be increasing taxes on even millionaires or billionaires, as the president likes to say. we are waiting for the president. he's obviously running a few minutes later. he it was supposed to be in the briefing room ten minutes or so ago. we'll take a quick break and get ready for the president. also, newt gingrich met with donald trump earlier in the day in new york. newt gingrich is getting ready for a news conference in new york city as well. we'll hear what the republican presidential front-runner has to say. lots of news happening today, as always, right here in the "cnn newsroom." if you've just signed up for medicare or will soon,

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at a competitive rate. so don't wait another minute. be sure to call today. call now for your free medicare guide and information kit about aarp medicare supplement insurance plans, insured by unitedhealthcare insurance company. we're back, waiting for the president of the united states. he's about to walk in, we're told by his aides, into the white house briefing room to make a statement on trying to extend the middle class tax cuts. extension of the payroll tax cut for another year unless congress takes action, it will expire at the end of this year. and for tens of millions of american families, working families, there will be about a $1,000 a year tax increase for many of those families of $1,500 a year tax increase. the president will urge congress once again to go ahead and pass this legislation. congress failed to do so last

week. the democrats wanted to offset the tax cut by increasing taxes on rich americans, those earning more than $1 million a year. republicans rejected that. so it's going back and forth. brianna keilar is at the briefing room in the white house. our white house correspondent. brianna, what's the guidance that you are getting? will the president just make his statement an then leave or will he also answer reporters' questions? >> we're expecting that he just makes his statement and then he leaves, then white house press secretary jay carney will continue with his normal briefing, wolf. but this is a concerted effort that we're seeing between congressional democrats and the white house. democrats unveiling -- we got all of these details about compromise legislation, as they are calling it. i know republicans take issue with that label. then the president coming out, and in one word, what he's going to be saying is that republicans need to get on-board and not increase taxes on millions of americans. this is a payroll tax cut.

it has been in effect and if it were to expire, then you would see many americans who would see less money in their paychecks. so they would at least feel it in a small way but overall we are talking about $1,000, maybe $1,500 for certain families. but that's going to be the president's message that republicans need to get on-board and that's really what he's going to emphasize. there are certainly some new details that we are learning about this legislation. i think also what's interesting, wolf, is that talking to some republican sources on the hill, last week when you talked to sources, there seems to be this sense that it was inevitable that the payroll tax cut would be extended. i would say that there's no one saying it is definitely not going to be extended, but certainly there's more uncertainty about it at this time, wolf. >> it certainly would be a bitter pit for a lot of american families to have to swallow coming on the eve of chris lass. it is a tough political time to tell tens of millions of

american families your taxes effectively are going to go up next year and here's why. it is going to be a potent political argument in this presidential election season as well. brianna, stand by. once you get that two-minute warning from the officials at the white house the president is about to walk in to the briefing room, let us know. we'll come back to you obviously. gloria's here with us as well. and you know, the season right now on the eve of christmas to go ahead and tell a lot of american families your taxes are going up next year. that's a tough one to have to sell. >> it's for families, say, earning around $50,000. you'd see about a $1,500 increase which is not easy for the republicans to sell which is why i agree with brianna that i think in the end, they're going to get something through. but there's another question also, wolf, which is the extension of unemployment benefits will be coming up if they -- they expire at the end of the year. this is something that the

democrats are really pushing for. and so far, republicans seem to be holding out on that. it seems to me much more likely that you would get some kib nd extension on the payroll tax cut than the extext of unemployment benefits, but again i wouldn't be surprised if we heard the president talking about both. >> you're absolutely right, politically, continuing the tax cuts for middle class, that's obviously going to be a much greater political issue than keeping the 99 weeks of unemployment benefits going for a longer period of time. that's going to be the subject of debate, whether that actually helps or hurts the economy. we'll take another quick break. we're waiting for the president of the united states and also for the former pespeaker of the house, the republican presidential candidate, newt gingrich. he met earlier today with donald trump. coming up live right here in the "newsroom."al to watch it for us.

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we are standing by for the president of the united states. these are live pictures from the white house briefing room. he's about to walk in, we're told, fairly soon. he's running about 20 minutes later so far. walk in and make a statement on extending the payroll tax cuts for at least another year. the democrats coming up with some new so-called compromise proposals to try to sell it in the house and the senate. the president will make a statement. we'll take that live. we are also standing by for newt gingrich, the republican

presidential standing by for ne gingrich, getting ready to hold a news conference in new york. he'll make a statement and answer reporter questions as well. there you can see a live picture from new york. as we await the president, let me bring back will cain and rolen martin. i want to talk to you briefly about gingrich. will cain, first to you, what an amazing comeback story out of nowhere, i think he's now, together with mitt romney, it's fair to say the republican presidential front-runner, doing amazingly well right now. but a lot of his enemies, critics, say he's fully capable of going back down if he says something, if he explodes or implodes or whatever. what do you think, will? >> when, not if, wolf. when? when does he implode, not if? when do all of his skeletons, substantive problems, he's just as guilty as being a wino as romney, he's got just as many character flaws as cain. not if, it will be when. will it be before or after he

wins the nomination these are legitimate questions. i don't know how gingrich will hold on for the long haul. i suspect he won't, i'm sure concerned about when this might happen. >> being a rino, republican in name only, i want you to explain. i've known newt gingrich for a long time. he's only been a republican. why do you think he's a rino, republican in name only? >> no, i didn't say that. he's more like ae's known as th republicans romney gets called a rino for being on both sides of the abortion issue, the health care issue in massachusetts. gingrich has been on both sides of the climate change, he championed the health care mandate itself. he has many of these flip-flop issues on substantive policy as many as mitt romney in his past.

the issue is, wolf, i think many conservatives are placing style over substance. newt gingrich is combative. he's going to take it to president obama. so a lot of poll takers or voters are willing to overlook these charges against gij rich in a way they won't with romney. >> wolf? >> hold on, roland. newt gingrich supporters are probably watching right now. we're getting ready to hear from gingrich and the president of the united states. probably many of them are saying, wouldn't this be nice if this simply continued into the presidential general election season next year? go ahead and weigh in from what we heard from will. >> first of all, in 2008, republicans were saying john mccain wasn't conservative enough. look at his track record. my god, the kind of criticism he got, no doubt you're going to hear that. lshgs i this think part of the problem, the washington, d.c., media elite needs to stop sitting here saying, oh, americans already know everything about newt gingrich.

look being he wasn't on the national stage. people weren't talking about him as being the commander in chief, president of united states. i do believe we can't dismiss his statements, dismiss his personal issues, his financial issues, the $300,000 fine he had to pay to congress, and so we have to do our job to say, this is who this man is who wants to be president. there's no doubt they'll look tough at him, but i think we fail to say it's a gingrich/romney deal when in the latest des moines register poll ron paul is sitting it in second place. it's unfair to overlook the person sitting in second and look at fist and had third. we've done that far too often. i'm not saying ron paul can win the nomination. but it's unfair to look at who's sitting right behind gingrich. >> ron paul doing great in the early states, iowa, new hampshire, south carolina, florida. no doubt about that. gloria borger, as we await the president of the united states,

he's getting ready to kol into the briefing room, make a statement on extending the payroll tax cut for middle class families, you know, for the fist time in recent days, i don't know about your conversations with obama supporters, democrats, white house officials, i'm beginning to get a sense, you know what? they always thought it would be mitt romney and only mitt romney, he was the inevitable republican challenger, nominee. but now i'm hearing, well, maybe it could be newt gingrich. >> well, it's interesting. i think you're right. i went to a focus group last week with 12 republican primary voters in virginia, and i watched them talk about mitt romney, and it was very clear to me they had absolutely no emotional attachment to his candidacy whatsoever. h they respected him but had no affection for him. with newt gingrich they seem to have a lot of affection for him and they were very unaware of the history that roland martin is talking about. when when you talk to people inbe side the romney campaign

they'll say to you, we want that history to come out. but is there enough time to let the american public know about it, to let the iowa caucusgoers know about it before the iowa caucuses in less than a month? so now timing becomes very, very important here. >> four weeks from tomorrow, january 3rd, the iowa caucuses. our white house correspondent brianna keilar is still over there. do we know why the president is running 25 minutes late or so? >> reporter: no, wolf. we have -- although i think here he komz. here his binder comes i should say, which is an indication he'll be here in a couple of minutes. we expect president obama's message to be pretty -- i guess he's trying to keep it pretty simple, and that is, don't increase taxes on middle class americans. this is his message for republican ares. he's urging them to join with democrats on this plan that has been unveiled today to keep that

payroll tax extension in place. and of course the way that democrats are proposing to pay for it would be an increase on the wealthiest americans, sort of a somewhat adjusted millionaire surtax as democrats called it. that's a message the white house really thinks resonates certainly when they look at public support and they feel they've sort of boxed republicans a bit into a corner with this message, wolf. >> are we now formally in the two-minute warning or they haven't done that yet, brianna? trnch >> reporter: it's unclear. i expect the president shortly, he's definitely running late but i haven't heard the two-minute warning. >> we'll stand in close touch with you and all our producers at the white house as well. gloria still watching what's going on. you know, the whole notion, though, the republicans are not going to vote for increasing taxes on really, really rich people, people making more than $1 million a year, but the president and the democrats

continue saying this surtax is definitely the only way to go. >> right. >> how do you get over that? >> well, they say you've got to do the surtax on millionaires, but they're not going to make it permanent. they would sort of sunset it in a decade or so. and also they are going to propose some kinds of cuts in nonhealth care, mandatory spending soflt they aspend i ing. so that he are going to attack the spending side of this. because they're not included employers anymore in the tax cuts, wolf, the price tag goes down from 265 million to about 180 million. so they don't have as much to pay for as they would have if they included employers. but i guarantee you republicans, if they're going to go for this extension, will want to include employers as well, and that will cost more money. >> all right. so we're now in that two-minute

warning, we're told, meaning i think we're about a minute away from the president walking into the briefing room over at the white house. you'll see it live here. and later i just want to remind other viers newt gingrich, the republican presidential front-runner will be holding a news conference in new york. you'll see that live here in the "cnn newsroom." a lot of news happening on this day. but the focus right now is on extending the payroll tax cut for at least another year, unless congress takes action and passes legislation in both the house and the senate in the coming days, that continued lower tax rate for middle classes families will simply disappear and it will cost, wind p up costing, tens of millions of american families about $1,000 a year, maybe even $1,500 a year. that would be very bad news anytime, but especially coming on the eve of christmas and new year's, this holiday season that's going to be politically very, very difficult to sell. right now republicans and democrats on the hill say they're ready to extend the middle classes tax cut, but the

debate is how to offset what it would cost the u.s. treasury, that tax cut. that debate is intense. democrat s want to raise taxes n millionaires. republicans say that would simply undermine the economy, it would destroy the job creators, if you will, people out there creating jobs. they're going to vote against that. that did last week, they will down the road. right now harry reid, the democrat leader in the senate, he's suggested that maybe the there's compromise, maybe a way out and maybe we'll hear one of those proposals from the president when he walks into the briefing room in the next few seconds. you see his aides there bringing in some documents, taking some documents away. the president will walk in. you'll see some of his aides walk in with him. and we'll listen to hear what he has to say. gloria, as we wait for the president -- i think he should be westbound literally a few seconds if you believe that two-minute warning that the white house officials gave us -- once the president walks in, i don't know why he doesn't simply stick around and answer

reporters' questions. what's the problem? why does he just walk in, maykea statement and then let jay carney answer reporters' questions. >> he may. he clearly has a very concerted questions he wants to give the american public, which is he's for extending tax cuts for the middle classes and the republicans, if they oppose, do not want to do that, but they want to extend the tax cuts for the wealthy. it's a pretty simple message. now, he may take a question or two, but it's clear they want to control this very much. they don't want the president to be asked questions, for example, about newt gingrich doing well in upcoming primaries potentially. so i think they want -- when you want to control your message, you put the president out there, you have him talk about it, and maybe take a couple of questions but then leave and have your press secretary do the rest of the work. >> it's always a sensitive issue when with the president -- but you know what? if he's in the briefing room, as opposed to a rose garden setting or an east room of the white

house, a formal setting, if you will, if he goes into the press briefing room and there are dozens of reporter s sitting there, as a former white house correspondent i'd get frus tated -- >> you would get if a question. >> i'd shout one out, but the president would ignore it or not. >> it depends on the question. if it was about what he wanted to talk about, he'd answer it. >> you should answer reporters' questions when you go into the briefing room. in the east room, maybe not, the rose garden, maybe not, as a formal setting. that's just me speaking a's a former white house correspondent. >> i'm with you. >> i covered presidents for a long time. kate bolduan is waiting. obviously that two-minute warning has turned out to be a little erroneous, kate, our congressional correspondent. i may interrupt you in the middle of your answer if the president does walk into the briefing room, kate. >> reporter: no problem. >> what's the latest you're hearing on this harry reid proep proposal, this compromise proposal that he says could win over enough votes to pass an extension of the middle class

payroll tax cut. >> reporter: i assure you democrats hope it would be receive d as a compromise offer on the part of their republican colleagues in in the senate but it doesn't sound like it's receiving the kind of reaction that would indicate that it is the kind of compromise that will be the final product. i know you and gloria and others have discussed the elements of this new compromise offer that has been put on the table, but, just to reiterate, it includes some of the details from the original senate dealt ick offmo offer. they want to extend and expand actually the tax cut for employ employees, kushtly employees taxed at 4.2%, they want to extend it and expand it and cut it further to 3.1%. but to bring down the overall cost of the package, wolf, they are not including -- they're dropping the provision that would extend the payroll tax cut to employers. so the cost of the package is about one-third of the cost, about $180 billion. this of course would be paid for over teb years. and the pay-for has been a big

issue, not the only issue that republicans have had with t, buy for it democrats are still including, albeit they call it a much-scaled down version of the millionaire surtax, they're including that surtax in this to pay for at least part of this proposal. no details yet on how much more scaled down it is quite yet. they also will be including some spending cuts as well as a provision that senate republicans had actually included in their plan that would bring in a small -- they acknowledge a small at of money but would actually prevent millionaires from being able to claim unemployment, look to try to get unemployment assistance or food stamps if they were ever if if the position of being unemployed. but this is the next offer i think we can call it, kiechbd the next step in this back-and-forth volley that often happens p up here on political irks an very important issues. we are hearing? quick reaction, wolf, from

republicans. right away i heard from two top republicans saying, when i asked for the reaction to this bill, they kind of fired back really quickly that republicans do not support paying for this. they do not support paying for really any measure by including a tax hike on job creators. i did receive a statement from the a house republican leadership aide, house republicans themselves are facing their own set of issues among conservative members of their party trying to push forth a tax extension. from house leadership, i was told that this proposal does move in the right direction, according to the republican aide, but the inclusion of the small business tax hike is, quote, a poison pill that makes it look like senate democrats are aiming to fail, in this person's view, so obama can attack republicans. >> very quickly, kate, how divide, in all your reporting if in the house and senate you've done over the past several days,

are republicans on hthis issue? >> reporter: it seems over time there are real divisions over republicans. it runs the gamut of where republicans fall in terms of what issue they have with extending the payroll tax cut. for some, it has to do with paying for it, how this would be paid for. republicans say if they're going to extend this tell praer tax cut, it needs to be paid for. that's one issue. but on top of that, as we started to learn late last week, it's not just how to pay for it but among some republicans whether to extend it at all. many republicans do not see that this tax cut has helped to stimulate the economy enough to continue it. at the same time there are concerns it is draining money from social security where the revenue from this tax goes to, goes to the social security -- to fund social security. so there are those issues. late last week there was a meeting of house republicans where republican leaders were talking about how they were going to position them sfs and

move on this issue of extending the payroll tax cut and conservative members came out firing, wolf, saying they could not be able to support the exte extension of payroll taxes. they said it was meant to be temporary and they're frustrated with what they call budgetary gimmi gimmicks. they say it's not worth a one-year tax extension over a period of ten years. they sthat's a gimmick they cant support. i heard from conservative republicans say it's time to take on serious tax reform and time to look seriously at entitlement reform instead of continuing these piece by piece one-year extensions that they say are not helping to stimulate the economy, wolf. >> stand by, kate. we're going to come back to you. you'll have a busy afternoon the next several days. the clock is clearly ticking because if congress does not pass legislation in the house and senate that legislation that the president would have to sign into law, the tax rates for those middle class families

would go back, that payroll tax cut, to where it was, and that would be about $1,000 a year tax increase, net tax increase, $1,500 net tax increase for techb tens of millions of american families, middle class working families. so the stakes are right now clearly enorls. brianna keilar is our white house correspondent over there. she's already in her seat getting ready for the president of the united states. brianna, a lot of viewers are just tuning in right now near the top of the hour. set the scene for us. what do we expect to see and hear from the president? >> reporter: we're expecting the president to put forward a message that says taxes should not be increased on middle class americans, and obviously supporting this idea of pay forge this payroll tax cut extension by taxing the wealthiest americans. this is an idea that he's been pushing of course for some time now. and, wolf, you're obviously well aware with, we've been waiting for some time, i have to tell

you last time we spoke the president's binder, the binder for his remarks had just been put out. we were given a two-minute warning. and then the binder was taken away, presumably for some changes. and here at two minutes, the two-minute warning again, wolf, as we await the president and his new remarks being put out there. unclear exactly what the change is at this point, but i want to mention to you that i had spoken with the democratic source who said it was really the white house who had pushed for some of the changes that we heard our congressional correspondent kate bolduan talk about that had been added to this so-called compromise plan which of course republicans take issue with the label. but some of the ideas of pay-fors that were included in the super committee process, obviously the idea is that cob gregsal democrats and the white house wanting to push this forward as having some republican ideas in it, although obviously wolf we're expecting republican opposition and are already starting to see that. >> you can see harry reid is on

the floor of the senate announcing what he said earlier would be his so-called compromise proposal on xeni iexg the payroll tax cut. as we await the president, let's listen in briefly to harry reid. >> like our previous proposal, this scaled-back version will cut taxes for 160 million american workers including 1.2 million nevadans. this proposal will allow the average family to keep an extra $1500 to spend on necessities next year. like our previous proposal it won't add a penny to the deficit. it will be paid for by cuts republicans have agreed to and a s surtax to the top two-tenths of the american taxpayers. it was agreed to by a bicameral group of republicans on the super committee so we know they support these cuts or they should support these cuts fltd

a. and in an effort to make the proepszal more palatability to republicans, we've conceded significantly to cut the tax on income above $1 million and make it temporary. democrats know how important extending expanding the payroll tax cut is to working families. it's also important to our economy. economists of every political persuasion agree. >> here's the president. >> going to provide more security for middle class families and those trying to get if into the middle class. at this moment, that makes sure that more than 160 million hardworking americans don't see an increase in their taxes on january 1st. a year ago at this time both parties came together to cut payroll taxes for the typical american family by about $1,000. but, as soon as this year ends, so does that tax cut. if congress fails to renew this

tax cut before then, that same family will see a tax hike of about $1,000 a year. there aren't many folks either in the middle class or those trying to get into the middle class who can afford to give up $1,000. not right now. that's why congress must act. although the unemployment rate went down last month, our recovery is still fragile and the situation in europe has added to the uncertainty. that's why the majority of economists believe it's important to extend the payroll tax cut. and those same economists would lower their growth estimates for our economy if it doesn't happen. not only is extending the payroll tax cut important for the economy as a whole, it's obviously important for individual families. it's important insurance for them against the unexpected. it will help families pay their bills. it will spur spending. it will spur hiring. and it's the right thing to do.

that's why in my jobs bill i propose not only extending the tax cut but expanding it to give a typical working family a tax cut of $1,500 next year. and it was paid for by asking a little more from millionaires and billionaires. a few hundred thousand people paying a little bit more could have not only extended the existing payroll tax cut but expanded it. last week virtually every senate republican voted against that tax cut. now, i know many republicans have sworn an oath never to raise taxes as long as they live. how can it be the only time there's a catch when it comes to raising taxes on middle class families? how can you fight tooth and nail to protect high-end tax breaks for the wealthiest americans and yet barely lift a finger to prevent taxes going up for 160 million americans who really need the help? it doesn't make sense.

now, the good news is i think the american people's voices are starting to get through in this town. i know that last week speaker boehner said this tax cut helps the economy because it allows every working american to keep more of their money. i know that over the weekend senate republican leaders said we shouldn't raise taxes on working people going into next year. i couldn't agree more, and i p hope that the rest of their republican colleagues come around and join democrats to passes these catax cuts and put money back p into the pockets of working americans. now, some republicans who have pushed back against the idea of extending this payroll tax cut have said that we've got to pay for these tax cuts. i'd just point out that they haven't always felt that way. over the last decade, they didn't feel the need to pay for massive tax cuts for the wealthiest americans, which is one of the reasons that we face such large deficits. indeed, when the republican ares

took over the house at the beginning of this year they explicitly changed the rules to say that tax cuts don't have to be paid for. so forgive me a little bit of confusion when i hear folks insisting on tax cuts being paid for. having said that, we all recognize it that we've got to make progress on the deficit, and i'm willing to work with republicans to extend the payroll tax cut in a responsible way. what i'm not willing to do is to pay in a way that actually hurts the economy. as measures are well aware, this sufler i signed into law nearly $1 trillion of spending cuts with another $1 trillion with cuts in the pipeline. it would be irresponsible to now make additional deep cuts in areas like education or innovation or our basic safety net that are critical to the economy in order to pay for an extension of the payroll tax cut. we're not going to do that, nor

are we going to undo the budget agreement i signed just a few short months ago. finally, with millions of americans still looking for work, it would be a terrible mistake for congress to go home for the holidays without extending unemployment insurance. if that happens, in january they'll be leaving 1.3 million americans out in the cold. a lot of families this emergency insurance is the last line of defense between hardship and catastrophe. taking that money oust the economy now would be extraordinary harl harm to the economy. if you believe government shouldn't take money out of people's pockets, i hope members of congress realize it's even worse when you take it out of the pockets of people who are unemployed and out there pounding the pavement looking for work. we are going through what is still an extraordinary time in this country and in this economy. i get letters every single day,

and i talk to people who say to me, this unemployment insurance is what allowed me to keep my house before i was able to find another job. this is what allowed me to still put gas in the tank to take my kids to school. we cannot play games with unemployment insurance when we still have an unemployment rate that is way too high. i've put forward a whole range of ideas for reform of the unemployment insurance system, and i'm happy to work with republicans on those issues, but right now the most important thing is making sure that that gets extended as well. this isn't just something that i want. this isn't just a political fight. independent economists, some of whom have in the past worked for republicans, agree that if we don't extend the payroll tax cut and we don't extend unemployment insurance, it will hurt our economy. the economy won't grow as fast,

and we won't see hiring improve as quickly. it will take money oust the pock -- out of the pockets of americans just at the tile they need it. it will hurt businesses just at the time when the economy is trying to get traction frin in e recovery and it will hurt all of us. it will be a self-inflicted wound. so my message to congress is this -- keep your word to the american people and don't raise taxes on them right now. now is not the time to slam on the brakes. now is the time to step on the gases. now is the time to keep growing the economy, to keep creating jobs, to keep giving working americans the boost they need. now is the time to make a real difference in the lives of the people who sent us here. so let's get to work. thank you very much. >> so there he,the president of the united states making a statement urging congress to go

ahead and pass and extend and in his words expand the tax cut for middle class families, the tax savings plan. gloria borger, you just watched the president. i didn't hear aloft compromise there. he was still insisting there has to be a surtax, an increase on taxes in millionaires and billion iras, in his words, though so many republicans are saying, if that's the way the democrats are going to continue to so-call pay for this tax cut, they're not going to vote for it. >> right. well, he made the point that, we just had a serious round of deep spending cuts, that he doesn't want to constrict the economy any more than he already has. sew doesn't want to offset these things with more substantial spending cuts, though i will say harry reid's bill does have some spending cuts in it, and then he made the point, of course, wolf, which is how can replicans take the pledge not to raise taxes on americans when, in

fact, if they let this payroll tax cut expire that is exactly what they will be doing on middle class americans? so clearly a political statement there. >> kate bolduan, our convict grelgsal correspondent, kate, what are republican ares saying on this specific point, in effect, if it expires, it lapses this payroll tax cut at the end of the year, that effectively would be an increase in the tax rate for millions an millions of middle class working families? >> reporter: a couple things on that, wolf. we have heard from some republicans that they do not believe extending that payroll tax cut has helped to stimulate the economy to this point. they do not think that it needs to be extended, especially it shouldn't be paid for in their view by a permanent tax hike on job creators to pay for temporary stimulus. but i will tell you there is acknowledgement here amongst republicans that democrats seem to have a winning message here. politically, if we could talk

mrit kmri as things often are up here, they do seem to have the upper hand. i mean, when wiyou hear the president say, congress should keep your word to the american people and not raise their taxes. for a democratic president to be targeting that message to congressional republicans is quite a change of fortune, if you will. after a closed-door meeting of house republican s late last week, i spoekz with several republicans, one of them being congressman, well-known republican from new york, and i asked him, if you do not vote to extend the payroll tax cuts, what does that say? and he acknowledged that if republicans in both the house and senate do not push forward to extend this tax cut, it that democrats have a winning message here. that's what he said, at least -- that's what he believes at this time in this economy where people are still hurting and of course knowing the politics at play, he thinks that the payroll tax cut need to be extended. and i'll tell you, amongst

republican leadership, they do agree that this payroll tax needs to be extended. how that's going to happen and what the details are going to look like, wolf, of course is really where they're fighting now. and it's a bit of a mess. they're getting out their political messages right now, but in the end there seems to be agreement that it should be extended, at least amongst leadership, wolf. >> that christmas/new year's congressional recesses hovering over all of these members, kate, as you well know. that will put enormous pressure on them to get the job done between now and then. we'll see what happens. kate bolduan, thanks very much. there it is, president of the united states making his statement. you saw harry reid there, democratic leader in the senate, make his state. lots of news happening. i want to throw things back to brooke baldwin at the cnn center in atlanta. brooke, you'll have a couple of busy hours because on top of all of this, newt gingrich, a republican presidential front-runner is talking to reporters himself right now.

>> right. you can see the bottom right side of the screen. we've within watching as it's been dueling people speaking. you took live senate majority leader harry reid. now we see former house speaker and the man hoping to be standing at that precise podium where we saw president obama speaking moments ago, newt gingrich. a man you know, wolf, when you were chief white house correspondent you covered him under clinton be administration. we'll talk this live in just a moment. wolf blitzer, you stand by. we'll be right back with more on newt gingrich. ♪ [ woman ] i know my kids are growing up.

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the good news is, you don't have to pay your deductible. with vanishing deductible from nationwide insurance, you got $100 off for every year of safe driving, so now your deductible is zero. the other good news ? i held on to your coffee. wow. ♪ nationwide is on your side ( laughing ) it's actually a pretty good day when you consider. that's great. welcome bashgs. i'm brooke baldwin. as we were listening to the president speaking live, what was also p happening from new york at the union league was ute gingrich speaking to a crowd there. let's play that from moments ago. >> some of you look familiar, some of you look different from

the last -- as i said earlier today, we were partially coming to new york to make a case that, if i do become the nominee, that we will run a 50-state strategy because i believe the -- can be so wide in the gap between the most effective -- president in american history and a candidate who wants to create jobs and paychecks that we really will have an opportunity to have a dialogue in every single state in the country. in addition, i was invited this morning to meet with donald trump. and let me set the stage. i've been talking a little bit about the importance of work, particularly as it relates to people who are in areas where there is public housings, where relatively few people go to work. this has been an interestingly exhorted information that some suggest that the working poor by definition know how to work, which is true. that's why they're called the working poor. i'm talking about people who come out of neighborhoods why

where they may not have that experience. i'm curious, how many of you earn soed some money doing something by the time you were 10 years old. whether it was babysitting or cutting grass or doing something. the reason i ask that question is, it's fascinating when with i go out talk with very successful people that, it might have been their parents or grandparents, the neighborhood, in a variety of ways shlgs surpri s surprisi to learn something between the relationship between work and income and pretty rapidly understood their nrgsing of it. we're looking at hejds to help the poorest children in america to a bridge to learning to work, this this morning i suggested to donald trump that he adopt a program of apprentices and take one of the poorest schools in new york city and create ten

apprenticeships that would be paid for part h-time work. he liked the idea a lot. heunderstood what i was getting at. it fit his own past, childhood. heed said he would be glad to do that. i hope to convince another major businesses and small businesses that may only have one or so person, but to begin to create a model that says, we really want to create a pathway to work for people -- when you have 43% black teenage unemployment, there's a very, very serious challenge making sure the people get the work habit and learn the skills and the requirements of being successful. so i thought that was a positive step forward and i'm delighted to be here, and glad to take your questions. yes? >> you said relatively few people -- speaking of those in public housing. but on what -- have you been to say that? have you been to a housing project and know that nobody works there? >> fist of all, i ran a project

called earning by learning in the summertime and pay poor children $2 a book for every book they read in the summer. we did it all through the 1980s. one of our first experiments we had a young lady in georgia who was 8 or 9 years old and she read area books that summer and got $166. so i've been to a fair number of housing projects. if you look at the large he urban housing projects you'll find areas that have remarkable few people who have work experience. yes? >> you sometimes want to say -- personalities and you don't want it to be -- romney the other day. there are two areas of issue that -- importance of others making the choice. >> well, i think the way i'm provoing social security, which is to create a younger american's right to choose a personal social security savings account, which includes

basically the it chilean experience and the galveston, texas, experience is i believe, based on what little i've seen of the program, dramatically bolder and more oriented towards individuals empowerment and individual choice than what he was doing. if i read correctly his program. sec second, i would say that the -- issue going rebalancing the judicial branch and the fact that i'm prepared to call for abolishing the office of judge berry in san antonio because he is sufficient a bigoted anti-religious judge that he violates the american tradition and the american system, i think that's probably the bolder position than romney would take. but i think -- i think you'll find our platforms different. another example, i am for abolishing capital gains tax. i think he caps his cut at

$200,000, which i think would be a lower cap than obama has, which i thought was unusual. >> you said there were -- differences between you and mitt romney. do you think -- >> well, i don't know that you ought to count running for the senate in 1994, running for governor, then running for president for six years. i don't know if that makes had him a arcareer politician or no. i'll let you decide. being a successful candidate a number of times, it's fair to say as a citizen i've been very clear and proud of the fact that i started working as a citizen at 15 years of age because i think citizenship is very important. i would hope that governor romney would think of himself as a citizen. >> -- talking about an attack on

the wealthy as far as this month. they're talking about raising the tax on the wealthy as well as lowering the tax on others, maybe not as high as the rate is now, but it would be a tax increase on high income earners. would you comment on that. >> sure. if i were on the floor in chamber of commerce, i would encourage him to do it. somebody didn't say -- >> what does the -- your campaign is sort of an unusual barebones operation, apparently one of your dshg told the "new york times" you're running by the seat of your pants. do you feel like your campaign has the wherewithal to go into a long, drawn-out campaign, go through a number of primaries -- that's necessary to run that kind of campaign? >> i find it fascinating. we have all of these articles about how businesses are getting leaner, how they're flattening their hierarchies, doing all

sorts of things, people now work from home, you have virtual organizations, all of these cutting-edge ideas. then you have a group of consultants that who -- expenses. if you were the consultants you'd feel that way, too, because that's your money. we run a very descent ralized campaign. the two top people in our finance operation have not seen each other for 11 be months. we actually got together the other day in new york. didn't affect them at all because they know what -- look like. they're able to call each other as often as they want. they e-mail each other 400 times a day. and the system works. i run offices -- in the operations i ran in recent years before i decided to run for president, we had extended offices in it atlanta, miami, charlotte, st. louis, and washington, and one time also in california. and it didn't bother us at all. we just kept moving forward.

so i'm used to running very are exte extended operations. i don't know -- we're certainly -- by the seat of our pants by the sense that when we saw the american ambassador of belgium had give be an anti-semitic speech in israel, we immediately shifted and talked about that. when i saw this morning mr. trump to be generous and help us make the point about work, we shifted and moved to that topic. but i think in other areas, for example, much confusion about what we're doing in missouri, which is not a mistake. we have never participated in beauty contests. we didn't participate in ames, we didn't participate in presidency five. and the missouri primary doesn't have any delegates attached to it. so this was conscious decision. this was not an oversight. >> mr. speaker, earlier today nancy pelosi said she relished the idea of dredging up ethics investigations when you were speaker of the house. what would you say to americans

who don't want to go back to that time? >> first of all, i want to thank speaker pelosi for what i regard as an early christmas gift. >> in what sense? >> well, she's suggesting -- she's been using the terms of what she developed on the ethics committee. that is a fundamental violation of the rules of the house and someone should file charges against her the second she does it. i think it tells you how -- be political that was. it tells you how tainted the outcome was that she was on it. and i think what she said today should explain a great deal about what happened in the ethics process when nancy pelosi is at the heart of it and is prepared to totally abuse the house process. it will be useful education to the american people to see what a tainted political ethics operation nancy pelosi was engaged d and i hope the house condemns her if she uses any material while she was on the ethics committee.

it is a violation. we turn over a million pages of material. we had a huge report. the total -- 83 charges were repudiated as false. the one mistake we made was a lawyer written by a lawyer. that is the only mistake in the entire pro sels. every other charge against me was found false in the long run are. the course was totally legal. the work we did was totally legal. but, as you know -- 17. >> last question. >> newt gingrich in new york moments ago. i want to bring in had chief political analyst gloria borger. gloria, if i may just begin with the comments he was making with regard to leader pelosi. i was trying to make out the question. i know it's tough to had hear with the flashes, et cetera, in that small room. but pretty damning comments it sounded like toward her and the house ethics committee. can you put that in context?

>> well, he did go up against the house ethics committee when with he was a member, and it had something to do with a book he wrote and the royalties he got for the book. he clearly -- what he was saying today was, okay, nancy pelosi, you say you have an awful lot to say about the ethics charges, i'm going to give it right back to you. and if you want to raise that, i'm going to make you the issue. and i think what newt gingrich is gambling on here, quite frankly, is that if it's a race in the republican party between newt gingrich's word and nancy pelosi's word that he's going to win that and that, in fact, it would benefit him and the republican party, as we saw in the primaries, to be running against nancy pelosi. so he is all too happy to engage with her. >> okay. i want to also ask about something you've written quite a bit about. the crop of candidates and which candidate the establishment republicans like, right? so you have these republicans. they're struggling with the

notion of gingrich getting the party's nomination, if that happens, and we talked last week -- i was talking last week to candy crowley about former congressman guy mall nary, i know this goes back to a grudge, who was calling gingrich evil, senator tom coburn talking about gingrich. this is from conservative columnist george will -- gingrich embodies the vanity and repassty that make modern washington repulsive. there's the quote. how deep, gloria borger, is this anger, this opposition to gingrich among the establishment? >> newt gingrich is one of the most interesting political figures i've ever covered because, of course, he brought about the revolution of republicans finally taking back control of the house from the democrats after more than 50 years in the '90s, and he was a hero to republicans.

within, you know, a handful of years, newt gingrich left the house in shame, having failed to lead the republican party to what he said was going to be a real transformational shift in the party to republican domination in this country and left the house because they had lost congressional seats. he was up on ethic s charges. so here's a man who was at the very height of sort of political popularity who went to a very low depth and didn't even run for reelection. so, you know, he is somebody who is so controversial, whose leadership really disappointed republicans, and the rap on newt gingrich is he is somebody who calls himself publicly a transformational figure, that newt gingrich is too in love with himself. and, when you talk to other politicians who say that, that's

saying something. because generally politicians like to hear themselves, so when you hear it from other politicians you really have to kind of listen, and they worry about how he would be as a political leader in this country. you know, it's -- he's a controversial guy. >> they're wondering how he'll be, but then we're hearing from some of the potential caucusgoers in iowa, they so far seem to be a dpan. the des moines register now showing him as a solid number one lead there. how does that square with the fact that his rifles have been slugging for months and there's gingrich with a burst of momentum. >> here is the interesting thing. i went to a focus group in suburban virnl virginia last week with twoefl republican voters. couple of things very interesting to me. first of all, there's not a lot of affection for mitt romney. they respect him but they don't really love him. newt gingrich, they don't really know that much about him. there's a lot of history to newt

gingrich, but for a lot of voters, including iowa caucusgoers, he's very new in the scene. he's put up an ad in iowa -- >> first ad. >> -- introducing himself very positive to the iowa voters. what the romney campaign is telling me is, there's not a lot of time here. we need to educate people just about the negatives of newt gingrich, but we're not sure we have enough time to do it before the iowa caucuses. >> 26 days. >> well, and we're going to have to see whether romney starts getting really negative, more and more, about newt gingrich or whether are surrogates will do that to take on gingrich before the caulks uses. >> right. romney has been focusing so much on obama, but perhaps we'll hear more on gingrich. gloria borger, thanks so much. >> sure. still to come here, it's something that affects just about any working american, and this time, time is running out for congress to extend the

payroll tax cut. if it does not, pretty good chance your paycheck, taxes will be going up. just a short time ago, a major development, including a surprise announcement from president obama. is a compromise coming? chief white house correspondent jessica yellin standing by. that's next. what is that? it's you! it's me? alright emma, i know it's not your favorite but it's time for your medicine, okay? you ready? one, two, three. [ both ] ♪ emma, emma bo-bemma

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well, we heard it again from the president from the white house daily breefg briefing. he says he cares about you, your money and family. he thinks republicans need to get on board. minutes ago, he spoke about the fight over whether or not to extend the payroll tax cut, which expires at the end of this year. now, the president put it in pretty extreme terms. republicans are willing to give tax cuts to the rich but not the middle class. here he is.

>> now, i know many republicans have sworn an oath never to raise taxes as long as they live. how could it be the only time there's a catch is had when whes to raising taxes on middle class families. how can you fight tooth and nail to prevent taxes going p up for the richest americans but not the 160 million middle class americans. >> let me go to our chief white house correspondent jessica yellin. asmentioned, this extension expires at the end of the year so if congress doesn't act and quickly, this goes away. as the president pointed out, families could see at least $1,000 less in their paychecks, and he said it is the right thing to do. >> reporter: that's right. and the white house has also maintain all along that it is likely to pass in the end, brooke, because they believe

that republicans know as well americans can't afford to get hit with this kind of increase in this economic environment. it would hurt both parties if the payroll cuts were extended next year. it would hurt the economy as well. the big question is how they pay for it. we're playing a bit of chicken before the very end before congress goes on recess on the question of how to pay for it. so you're seeing this last-minute fight, each side holding out on how they'll negotiate. big surprise we'd push it to the very end right before christmas break before we figure that out, huh, brooke? >> yes. i'll be talking about the game of chicken playing out on the hill with kate bolduan. stand by, jessica. let's talk about the other president's economic push. he's making this major effort to get this man confirmed by the senate. who is he? richard cordray, nominated to head p up the consumer protection bureau.

it's been ready to do business since last july but there's been no one in charge. the senate votes on cordray's nomination. republicans are vowing not to confirm him. they say he would have too much power over the financial industry. but, without a chief, a director, the agency cannot regulate thing likes payday lenders, mortgage brokers and consumer finance companies, some of the worst offenders in the housing meltdown if you remember. so who is richard cordray are, again, i ask? here is background. he was attorney general of ohio from january of '09 to last january. before that, cordray was ohio state treasurer for two years. he also served four years as a treasurer of franklin county. and then back in the early '90s, cordray served in the ohio state house. the white house says they are taking cordray's nomination, quote, directly to the american people and they are. you're going to see the

president this upcoming week, tomorrow in kansas and targeting seven other states as well, jessica back to you in terms of the political stakes for president obama and this whole nomination fight over richard cordray, what does he have to gain in terms of the timing by doing this right now? >> reporter: this is a fight the white house loves to have because it hits right at the president's sweet spot, going into this election. they are looking to emphasize that the president was trying to work for regular americans, working americans, consumers against faceless corporations that would try to rip off regular folk. and cordray could be the face of that in a sense, brooke. and so this hits -- this aligns the president with, in their view, those regular americans and against the evil, dark practices of folks who started, for example, the foreclosure crisis with illegal foreclosure

and mortgage kinds of efforts. so, in a sense, without seeming anti-business, it's a way for the president to align himself with the better elements of sort of the forces behind the occupy wall street movement, if you see it that way, without overtly aligning himself with occupy wall street or being on the side of consumers without overtly aligning himself with excessively liberal elements of the democratic party. so it's a way for him to be a warrior for the working people without being too excessively fringe or extremist and risk alienating independent voters. i think it's a message you'll see the president carry forward throughout the campaign, brooke. >> and it's a name of someone we wanted to get out ahead of the curve, seven different states, the president taking menl e inio the people. over the upcoming week, thursday is the senate voting on this man's nomination.

jesss ka yellin for us at the white house, jessica, thank you. developing right now, the u.s. admits a drone is missing. the iranians claim they shot it down. perhaps the most disturbing part of this story? the possibility that this drone may be revealing american secrets. we'll go live to senior international correspondent nic robertson, next. for a hot dog cart. my mother said, "well, maybe we ought to buy this hot dog cart and set it up someplace." so my parents went to bank of america. they met with the branch manager and they said,

"look, we've got this little hot dog cart, and it's on a really good corner. let's see if we can buy the property." and the branch manager said, "all right, i will take a chance with the two of you." and we've been loyal to bank of america for the last 71 years.

iran's military still insists it shot down an american spy plane, an unmanned reconnaissance drone. officials say it's possibly in iranian hand, but they're disputing how it possibly got there. want to go to london to nic robert son. nic, what is nato's side of the story, first? >> well, nato say they were operating a surveillance drone on the border of afghanistan and iran and they say they lost control of it as it was coming in in to land. based on that, that seems to tally with what the iranians are saying that they shot one down and brought one down and have it intact. the iranians are saying it's a stealth drone, the rq-170 sentinel.

they haven't offered any proof, they haven't put out any pictures of the stealth droef drone aircraft. that's sort of where the disconnect is at the moment. do they really have it? how much of it do they have? and exactly what aircraft is it? that was nato's side. they he were flying it along the border. >> whether the drone crashed or whether it was shot down, obviously it's a big deal if iran has it. but why? what exactly can one glean from this thing? >> well, the great thing about drones they're cheap to build, cheap to operate, you don't lose pilots, but this downing could be really costly and expensive if the iranians has it. not just to the united states but its allies. look, think about iran. iran is a known state sponsor of terror. they're believed to supply hezbollah and lebanon with weapons. iran has its own drone technology. they launched earlier this year and demonstrated publicly a bomb

carrying drone. when hezbollah, believed to be with the help of iran, fought a short war with israel in 2006, hezbollah was using drones. so potentially here you have iran getting highly sensitive equipment, knowing what sort of lenses, viewing capability, perhaps how to replicate this stuff, and giving it even to hezbollah. this puts israel potentially in the crosshairs as well as many other countries. or they could sell this technology on to, say, china. these are the issues, brooke nic robertson, thank you. coming up next, we'll talk about not just one, two celebrity moms both of whom are troubled women. mindy mccready, we talked about her recently. police found her hiding in a closet on the run with her 5-year-o 5-year-old. also, brooke mueller spotted dounsing the night away right before police arrested her for drugs and a bar fight. these two women have had their fair share of problems, but they're also mothers. does that change the way their cases are handled? back in 90 seconds.

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look, no parent is perfect, but how messed up can a mother be before the state steps in to take her children? you know, people are asking the questions after the troubles of these two different celebrity moms -- that's what you're talking about. it's trending today -- this weekend arrest of charlie he sheen's ex-wife brooke mueller, the mother of twins. mueller is charged with assault and possession of cocaine with intent to distribute. she had more than four grams of stuff on her according to police. now look at this, tmz got the surveillance video of mueller dancing in a nightclub in aspen after she allegedly attacked a woman. then case number two, country

are singer mindy mccready went against court orders and took his son from his legal guardian, mccready's mother. that boy is now headed to florida to be with his grand be mother. we're going to bring in doctor of psychology wendy walsh who has done extensive research on mother/child bonds, what's at stake here. wendy walsh, want to begin with brooke mueller. reportedly her ex, charlie sheen, bailed her out. do you think she should be able to take care of twin be boys? >> now we're talking about the world of drug dealing potentially. this is four grams of cocaine and law eep forcement has long known this is not healthy for children because of all the ancillary activities that come along with drug dealing. it could be dangerous she's got an assault charge as well. she could be physically violent. from a psychological perspective, this would be a terrible attachment injury for 2-year-olds.

so what does the court do? they look to protect them physically first. >> that's brooke mueller. mindy mccready, they find her and this little boy in this closet. her mother who has custody of this child obviously wanted the child whack. what does mindy mccready have to do to show she can be a full-time mom? mind you she is pregnant with twins. >> she has to mind her ps and qs and do whatever the court says, abstaining from drugs and alcohol, following all the court visitation exactly as it says in the documents. i fully believe, brooke, the thing that prompted her to take her child is the fact she's pregnant and the pregnancy hormones make attachment issues come up high in women. my heart goes out to her, but she has to follow the court if she wants the child back. >> do you think it's more difficult or not if you're famous?