check out this pick. a visit with santa anything but jolly. it's the cheatham family from south carolina. the triplets not enamored with santa. not everybody is, though. greg: we leav jon: we leave you with a laugh today. jenna: thank you for joining us. "america live" starts right now. jenna: greetings from iowa. we are less than three weeks now to the first votes in the 2012 elections and just a day away from the final debate before that happens. welcome to "america live," everybody, i'm megyn kelly. seven candidates ready to make their final push in the hawk-eye state. newt gingrich has seen a surge in the polls, but that support may be fading, folks. take a look at the "real clear politics" poll out of iowa. it shows gingrich leading with 29% but that number is down from just a few weeks ago when he was polling well above [no audio]

megyn: thanks for being here. here i am at the convention center in souix city. this is where it will all take place thursday night, the last showdown between the gop candidates. what do you think the gingrich camp is thinking about this down tick. >> you hit the nail on the head when you talked about it was rolling so good, it was so hot for gingrich, he was so far aw away. he thought he could have the primary within the primary that we were talking about. it looked like gingrich had it locked up to stand toe to toe with mitt romney. it hasn't accrued to romney's benefit but it's the result of the fact that romney has been attacking gingrich again and again very brutally and he's

been joined by people like ron paul who have a lot of conservative credentials who question whether gingrich is the right standard bearer for the right. megyn: it's all about timing. when you peak, do you peak too early, obviously rick perry peaked to early. there is a question about gingrich, doing so well in the polls at the beginning of december, at the end of november. is it still, possible, chris that he has peaked too early three weeks before these critical caucuses go off in iowa? >> they are obviously very concerned about that. you can tell because the speaker, former speaker is empathizing from himself and from his organization, stay calm, stay steady. keefe it togetherkeep it together. don't let the rivets pop out of this thing until the end. after this debate that you're going to help conduct on hurst they have to sit on the shelf

for a while, people will have their christmas holiday, the last impression they give on thursday is what people carry with them over the next couple of weeks. megyn: an interesting thing is going on. we saw christine o'donnell come out and endorse mitt romney which his campaign touted. she was somebody the mainstream republicans didn't understand, they continue understand why they nominated her in delaware. they said they were handing the seat to the democrat. that proved to be right. we are seeing the same thing with newt gingrich. they are saying, you don't know newt gingrich, trust us, he's not the guy. yet the republican voters seem to be saying, we'll make up our minds for ourselves. the polls for him have been phenomenal lately. there is a little down tick now, but over the past couple of weeks it's been something to behold.

>> the best thing that mitt romney has going for him is an elect built argument, that he's going to tell voters don't go with gingrich, you may be smitten with him right now but he's not going to stand up under pressure with obama. that is his closing argument on thursday, that's what he'll be saying. megyn: we'll find out just over 24 hours from right now. we are here in beautiful souix city. it's a little rainy. that's why i got stuck inside and chris got stuck outside. i mean, you know, the big hair. all right, chris, thank you. again, as we mentioned, tomorrow night right here on the fox news channel it is the next gop debate, and it is the final big debate before the iowa caucus right here in souix city iowa. 9:00pm eastern time. set your dvr's right now, folks. looking forward to sharing that mont with you. in the meantime today there are new calls for attorney general eric holder to step down. arizona congressman ben quayle now the 57th house member demanding mr. holder's

resignation. he says his testimony before the senate judiciary committee proves he knew more about fast and furious. now it seems mr. holder is getting some support from an unlikely source. former attorney general alberto gonzales. i sat down with mr. gonzalez for an exclusive interview, and i asked him whether eric holder should resign. does he need to step up and say the buck does stop with me and this is what i'm doing, i'm resigning, or i'm firing this person, or somebody is going to lose their job? well his answer may surprise you. we will play it for you coming up later. >> reporter: i'm allison cal allison camarota. we will be back with megyn as

soon as we figure out audio in a pesky rainstorm. >> reporter: they've been way off on the number of u.s. homes being sold for the last five years. stewart varney of the fox business network is here with more. stu way off, what does that mean. >> it may be that we have overstated the number of homes sold up to 20%. we have not been using reliable information on the part of the economy that is of great importance to everybody. in other words, the housing crash was worse than expected. all the way back from january of 2007 to the present we may have overstated the number of sales of existing homes. back in the boom years, 05 06 we were selling 6 million homes every year in the united states. during the crash we moved that down to about 5 million homes a year. now, if we restate the actual

real number of homes sold it's going to be below 5 million. that means the housing crash was worse than we initially thought, that the real estate industry is in worse shape than we thought. >> reporter: when you say we haven't been using rye liable information, who responsibility is that. >> reporter: the appears they may have been using a home sold in one police, duplicated in another list, therefore that sale over coun counted. that may have happened numerous times. an outside organization looking at the numbers says you've overstated sales by 20%. that is an enormous overstatement. that makes five years worth unreliable. >> reporter: how does this new information affect the overall economy? >> it means that the economy was performing worse than we thought, but it makes no difference to the current state of the housing market, or to

current prices. we may be able to restate and back date the right numbers, but that is not a fix for the housing crisis, period. >> reporter: just unbelievable. so what are they going to do going forward to fix this? >> they are going to use a different model, a different software in fact to sort out this duplication and come up with reliable numbers. the actual overstatement is going to be detailed next wednesday. that's when we'll find out, is it an overstatement to the tune of 20% or not? wednesday is the real number. after that we'll get more reliable numbers, so says the national association of realtors. >> reporter: unreal. thank you for explaining that to us. in washington new questions about the final days of the new defunct brokerage giant mf global. former ceo john corzine telling congress that he has no idea how nearly $1.2 billion in customer funds disappeared shortly before the firm's october collapse.

now fox news has learned the one-time governor of new jersey may have known more than he led on to the investors about the company's condition. chief washington core dent james rosen is following this live. >> reporter: tomorrow afternoon john corzine will face his third stint in the witness chair on capitol hill. he will face questions from the house services committee on a statement he issued october 25th less than a week before mf global attached. in the statement corzine expressed nothing but optimism about his firm's future, quote, over the course of the past year, corzine said, we have seen opportunities in short-dated european sovereign credit markets and built a fully financed lad erred security portfolio that we actively manage. we remain confident that we have the resources and expertise to continue to successfully manage

our european sovereign exposures to a positive conclusion by september 2012. corzine was reaching out to top federal officials including william c. dudley. sourcers tell fox news that despite the optimism he had projected the day before corzine already new mg global was sinking rapidly and seeking a buyer for it. in the last chaotic weak of the life span of mf global the records show ten phone calls between core stkoeupb and dudley, and two emails and other contact he had with top dudley aids. tomorrow investigators will want to know whether his statement of october 25th misled investigators and regulators. the chairman of the hearing spoke to peter barnes earlier today. >> reporter: james, thanks so much. investigators don't like to be misled. we will see what happens with this story. thank you. let's go back out to iowa where

i'm cold that megyn kelly has now plugged back in the satellite. megyn: isn't this fun. you thought you were just going to sit there. get to work. >> reporter: will do. megyn: we love allison, but we hope not to be back to her. if it happens it means another technological meltdown. we'll look forward to that. coming up later, a bit of a surprise today, dennis cardoza a democrat ripping into the president. up next why he's doing it and what it could mean for the president's re-election honest. time magazine has named the protester as its person of the year for changing global policies. which protestors do they mean? we'll debate. and denver bronco's quarterback tim tebow has been mocked for his demonstrations of his christian faith. what if he were not christian, would that still be happening?

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megyn: wear in iowa today folks where so much attention has been focused recently. why? well iowa has been first in the nominating process in this presidential contest since 1972. so the rest of the country really watches what goes on here. in an election that is so focused on the economy iowa's unemployment rate is among the lowest in the country at 6%. compare that to the national rate of 8.6%. iowa's hispanic population, traditionally democratic voters has almost doubled in the past decade. be sure to join us live tomorrow night in the souix city

convention center where we are at this moment for the big, big debate, 9:00 eastern timeor the last presidential debate before the caucus. we are hearing a new and scathing assessment of president obama's leadership coming from dennis cardoza. after observing president obama for the last three years it has become obvious to me that the president might prefer to be a university professor rather than the job he holds today. he says the administration suffers from, quote, idea disease, projects a quote, i'm right, you're wrong demeanor, and favors lectures over listening. all this from a four-term congressman who has supported president obama's initiatives more than 90% of the time. monica crowley is a fox news contributor. tara dowdell is the founder of

the tara dowdell group. does this cause you any alarm. >> it's not good to have one criticizing one of your own. i find it interesting that he called the president arrogant. one politician calling another politician air gran arrogant is like pot meet kettle. there has been a long-standing feud between the blue dog democrats, which card was one. megyn: he's not a blue dog. on his voting record he doesn't sound so moderate. >> he did support it much of the time, begrudging lee so. he was the chair of the blue dog caucus and dragged by the speaker and former speaker nancy pelosi into supporting the president's agenda. what i find interesting about his criticism is it sounds like

the republican talking points. i find that to be quite interesting, his choice of words. megyn: what do you make of it monica? this guy is retiring next we are. maybe that is leading to more candor on his part a. but do you believe he's speaking for other democrats that a maybe retiring and can't say such things? >> i think the fact that he's not running for re-election actually gives his words more credibility. he has nothing to lose. he has no fear of the white house or retribution from anybody in his caucus or from the president. i think what he says carries extra weight. i think there are a lot of democrats on capitol hill who believe that from the beginning of obama's presidency he's essentially thrown them under the bus. by that i mean he gave them all of the hard work to do of writing the stimulus, putting the stimulus together, writing healthcare, putting that together and essentially said to the congress, look, put something on my desk i'll be happy to sign it. i don't want to do any of the hard work.

they did all the hard work, they took all the political slings and arrows with very unpopular things with the american people, from stimulus to healthcare, you name it, they've taken all the criticism. their poll numbers are going down. the blue doug democratic caucus almost not wiped out. obama waoeupld his hands of it. he doesn't care about his own caucus and whether or not they are getting wiped out by the far left agenda. and they've been left to twist in the wind and i think that's what he is pointing to. >> this puts you in an uncomfortable position, you have to choose between the democratic congressman and the democratic president. i'm interested in seeing if any of these are valid in your view. >> reporter: he projected a demeanor that alienated many potential allies. he says he squandered good will when he took office and lacked focus. he goes onto say that people in the white house don't talk to real people that they have an

arm's length attitude, and president obama is protected by his inner circle and it's leading him to be out of touch. >> there is one criticism i actually agree with. overall they are way off base. not in touch with regular people? president obama has consistently sought to insure that a safety net is in place for hard working americans who lost their jobs, through no fault of their own by the way, who paid into the unemployment insurance fund and he's fought to insure the den fits are ther benefits are there for them when they need them most. today all of the troops are coming home to beith their families. it's a stretch to say he's not in touch with regular people. regular people wanted their family home from iraq, they wanted them out of harm's way. now the criticism that i think is valid is on the communications front. it is true, and this is a consistent criticism among many democrats that the democratic party and president obama has had a communications issue.

but beyond that these other criticisms are completely baseless. to point out what monica said to respond to that about the president leaving the -- leaving his democrats twisting in the wind, it's their job to write legislation, that is the job of congress. he was showing them respect by giving hem the opportunity and learning from the mistakes that hillary clinton made. megyn: i'm up against a hard break. monica i'll give you 20 seconds. >> i think what the congressman was pointing to was leadership style and the fact that he seems disinterested and disengaged not just with his own caucus on capitol hill but also with the american people at large and that he's sort of taken a very cold sterile approach to leadership. that's the complaint. megyn: monica, tara thank you so much. new threats from iran could take a toll at the gas pump. why they say some controversial war games could be at issue. why a group of atheists once a nativity scene out of a california city that is named

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california. these scenes are not from the nativity at all. a group of atheists won a santa monica city lottery and took over almost every spot available. people are wondering if traditional displays are becoming ghosts of christmas past. trace gallagher has more. >> reporter: the christian congregation has 14 different churches in santa monica. for the past years they have been telling the story of jesus

using 14 different displays. the city of santa monica allocated those spots in the park, palisades park using a lottery system. the congregation put in one bid and got two spots. the atheists put in 11 bids and they got 18 spots. the nativity scene has been cut from 14 displays to three. but they only have the atheists have two signs up and three potted plants in all of their 18 spots. so they really were not intending to use the face, they were just making sure, those by the way are the potted plants they put up, they were making sure that the christians did not get a chance to use the space. listen. >> i think that shows bad faith. i think that shows an attempt to deprive us of our first amendment rights. we don't object to them being here. that's fine if they want to be here and have a view that is different from ours, we have no objection to that. they seem to have an objection to us being here. they don't want us here at all. they would like us out.

>> reporter: but the atheist groups say for 60 years it has been all about the christians, and they say it's about time that changed. here is somebody who agrees. listen. >> i think it's about time, personally, that people who have no religion and don't believe in god get a little bit of a voice. >> reporter: yeah, but now that the christian congregation knows how the whole lottery system works in santa monica, you can bet next year they'll be putting in a lot more bids. i just want to point out that the atheists have 90% of this park now, megyn, but the numbers show 80% of the united states citizens call themselves christians, only 2.1% identify as atheists or agnostics. megyn: i hear that they are now on their way right here to the convention center because of -- that way, because of what is over my right soldier. uh-huh, you know what it is, they call it a christmas tree. >> reporter: i hear it, yeah.

megyn: there it is. look at it, live on national television. we just busted the lid off that one. trapbgs, trace. welcoming up time magazine declaring the protester as its 2011 person of the year saying they made the decision because events in the middle east and the wall street protests show the strength of people power. really? we'll have a lively debate on that just ahead. for the first time ever attorney general alberto gonzales, on operation fast and furious eric holder, and what he believes will be the future for the now embattled attorney general. >> do you think that this is a situation that he can survive, and that president obama can survive politically? are you receiving a payout from a legal settlement or annuity over 10 or even 20 years? call imperial structured settlements. the experts at imperial can convert your long-term payout into a lump sum of cash today.

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shut down a vital water way for the delivery of oil to world markets. iran claims it plans to close off the straight of ormuz as part of a military exercise. critics warn this is really political retribution against the u.s. the strait connects the persian gulf. more than 15 million barrels of oil are transported through there every day. shutting it down would lead to a catastrophic disruption of the world's oil supply. f.b.i. director robert mueller facing questions on capitol hill regarding the botched fast and furious operation which a loud thousands of weapons from here in the united states to wind up in the hands of some bad guys down in mexico. mueller denying that the f.b.i. was involved in any sort of cover up and shooting down claims that a third fast and furious gun was found at the scene of border patrol agent brian terry's death. >> i do and am familiar with the suggestion that there was a

third gun at the scene. there was no third weapon found at the scene. there were two weapons that were found at the scene, not a third. megyn: as we reported earlier in the show there are now 57 republican congressman calling for attorney general eric holder to step down over claims that mr. holder knew or should have known about this investigation and did not stop it. mr. holder has testified to congress four times now, he says he has no plans to step down. recently i sat down with alberto gonzales, who served as u.s. attorney general under president bush. mr. gonzalez spoke openly about whether it is possible that eric holder did not know all of the facts regarding this botched gun running program, whether he should have, and if this investigation will eventually lead in his opinion to eric holder stepping down. >> information that we provided to you has been responsive, has been i think fullsome and unprecedented.

>> well, unprecedented would be an attorney general who knew nothing about something where his own president chief of staff was intimately familiar. >> have you spoken to president obama about fast and furious. >> i don't think that i have. i see the president -- >> that's okay, if you haven't you haven't. have you spoken to the president of mexico about fast and furious? >> no. >> you have routinely argued that you've been oblivious and disengaged in this operation, and i buy that to a large extent. but we have a dead border patrol agent. >> the thing is is if we don't get to the bottom of this. and that requires your assistance on that, there is only one alternative that congress has, and it's called impeachment. megyn: attorney general eric holder under fire for a botched federal gunning running scheme linked to hundreds of crimes in mexico and the u.s. including the murder of border patrol agent brian terry exactly one year ago today.

did mr. holder know about operation fast and furious run under the bureau of alcohol, tobacco and firearms which justice overseas. did he read the memos about it which were specifically addressed to him? he says no, now an unlikely ally emerges, former attorney general alberto gone tpwopb who served under president bush. megyn: the attorney general is a busy man. he has a lot of memos coming to his desk. he says just bause they were addressed to me, some of these memos from fast and furious doesn't mean i read it, doesn't mean i knew about it. do you find that valid with you're experience as attorney general. >> absolutely. there are multiple memos flowing up to the office of the attorney general every day. sometimes you actually don't get to see them. the fact that a memo was addressed to the attorney general doesn't mean that he actually saw it. now, we all understand, general holder understands, i understand if a memo is addressed to me i am tagged with knowledge of it,

even if i didn't see it. but it is certainly the case that there could be operations on going within the department of justice, like any other department, any other agency within our federal government where the top official just simply is unaware with it. not because he's out to lunch but simply because there are so many competing interests. megyn: democrats have stressed that fast and furious was preceded by another gun running program called operation wide receiver. that took place while mr. gonzalez was in office. unlike with fast and furious mexico cooperated with wide receiver, but mr. gonzalez claims little memory of it. >> i don't remember the specifics of that operation you just mentioned. again, i'm very much aware of the fact that president bush asked us to look to see what we could do, what measures could be taken, working with the mexican authorities to stop the flow of guns from the united states illegally into mexico. i don't -- i don't remember the

specifics of this operation that people are i wil alluding to. megyn: gonzalez resigned after two years in office, a tenure marred by controversy. today he is in private practice and believes he knows what mr. holder is going through. >> i think he knew, like i did. you know you step into these jobs, it's hard. the attorney general is always involved in the most difficult and controversial issues, that's just the way it is. if you can't stand the criticism, you know, if you can't stand the scrutiny, and if you're afraid of making a mistake then you shouldn't be doing this job. megyn: he offered this prediction on mr. holder's future. do you think this is a situation that he can survive, and that president obama can survive politically? >> if i had to guess, and again, i have no inside information, is that he will stay for the remainder of this term, and during the next term, if president obama is reelected we'll have a new attorney general. i suspect that general holder is

probably tired, he's tired of the scrutiny, tired of these attacks, but who knows what is going to happen. i just don't know. megyn: again, eric holder has declared that he will not resign over this investigation. last time the president spoke to it he said mr. holder had his full confidence. coming up bronco's quarterback tim tebow has had a rough year of taking criticism for his public expressions of his christian faith. what if he were not christian? would the critics have been as rough? is any of this fair? bernie goldberg in a must-see interview after this break. we are waiting a vote on the middle class tax cut passed in the pous house, but this battle is far from over, stay with us. >> here we are a few days before christmas and the silliness continues. if my friendly majority leader is socon vinceed that the house bill can't pass the senate i would say again talk to the speaker and workout something

that can pass both the house and the senate, time is awasting.

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megyn: fox news america's election headquarters. this is not mitt romney's first rodeo. he knows how important iowa is in this contest. back in 2008 romney had the best financed campaign in the entire republican field which consisted of mike huckabee, fred thompson, ron paul and rudy guiliani. he spent a total of $10 million in iowa yet he fell short to mike huckabee. a baptist minister rallied the conservatives. those conservative voters may be key to the election. the final debate before the iowa caucuses takes place tomorrow night right here on the fox news channel 9:00pm eastern time.

maybe mike huckabee will be there too. we have reason to believe he may attend. well, he's being called god's quarterback, the denver bronco's tim tebow. he is also being mocked steadily for his strong expressions of christian faith, by some in the media, some fans and even other players. if tebow was not christian would he be the subject of such criticism? would we even be having this discussion? it's a double standard that has sparked a nation-wide debate. bernie goldberg is a fox news analyst and he joins me now. you can follow him on twitter at bernard goldberg. thank you for being here. it's an interesting question. we've seen so much mocking of tim tebow, i thank my lord and savior jesus. a lot are saying, yeah i get it, his reference to jesus christ. some are weighing now wait a minute, is this right? where do you come down? >> it's fascinating that tim

tebow is probably the most polarizing figure in the entire world of sports, not because he once killed defenseless dogs, not because he drove drunk and killed somebody crossing the street, not because he beat up his girlfriend, or used illegal drugs, or shot himself in the leg in a nightclub. tim tebow is the most polarizing figure in the world of sports because he's got a squeaky-clean image and mostly because he's not afraid about his faith and he makes no apologies for it. what am i missing here? i mean there is something very wrong when people are more upset with a guy who goes down on one knee to thank god, and less upset with a wide receiver who gets into the end zone, does a dance and thanks -- doesn't even thank the quarterback, but tells everybody what a wonderful guy he is for catching the ball, that's less polarizing than a

guy who gets down on a knee and thanks god? something is wrong with this picture, megyn. megyn: you know, there are some write ups talking about the press coverage of this. talking about how his public expressions of faith have elicited anger and vitriol by some. you can be somebody who doesn't believe in those expressions of faith. you can be somebody who says, all right he's thanking jesus christ but i don't believe jesus christ had anything to do with this. but what do you make of anger and vitriol toward the guy? >> you know, i think what we are seeing here with tim tebow and the reaction to him is a kind of microcosm of the bigger culture war going on in america, not exactly a red state-blue state thing, but something very close to it. on the one hand people of faith, on the other hand secular people who don't have faith. and in both cases when it comes to religion i'm going to offend both sides by the way, when it comes to religion there is intolerance on both sides.

i sit o said on this network's air once that it's ridiculous to think that the earth is 6,000 years old than that dinosaurs walked around at the same time that people did. it's ridiculous, and it is ridiculous. the earth isn't 6,000 years old, and if the bible says so the bible is wrong. by the way i'm going to get a thousand emails for what i just said. there is that kind of intolerance where people expect you to believe what they believe. what is interesting on the other side is the side that is always telling us how tolerant they are are intolerant of people who profess their faith in a public way. now, look, i don't want tim tebow or anybody else -- megyn: but the question, bernie, excuse me for interrupting you. the question is whether they are intolerant of all people expressing their faith or is it just christians? because, you know, more and more folks are starting to ask, if this were a muslim expressing --

>> exactly. megyn: expressing his belief in islam would he be mocking him the way they are doing or would they say that is intolerant and inappropriate. >> i can't be for sure but i have a strong suspicion if a muslim made some thanks to mohammed or to allah in a similar way that tim tebow is. in other words he's not calling a time out to do it, he's just doing it in a kind of quiet way, i have a feeling that the people who don't like tim tebow doing it won't have a problem in our hypersensitive world if a muslim did it. however, again, to be fair about this. i think a lot of people who see no problem with tim tebow doing it might have a problem if a muslim did it. so, again, there is intolerance and here pock crazy on both sides when it comes to religion. not all people on either side, but a lot of people on both sides. megyn: now, you're a guy, you're the perfect person for this

segment, not only are you a media analyst, you're a sports guy. you've covered sports for years. what do you make of it? do you think this sort of expression, celebration of god or one's faith after scoring a touchdown or giving an interview, when giving an interview to the media is appropriate, or can it be too much? >> well, those are two questions. can it be too much? yes it can. but i don't think it is. i don't see what he's doing wrong that offends these people so much. what is he doing? he's taking a knee, he's taking a knee and thanking god. again, that is not okay to these critics, but the guy who does the dance in the end zone and thanks himself, that is okay. now can it go too far? yes, if tim tebow ever said, i'm not going to throw to my receiver no matter how open he is, because he doesn't have the same faith as i do, then i would despise tim tebow, and its root against him.

but he doesn't do that. if it gets to that point, and it won't get to that point then we can have a gripe against tim tebow, a legitimate complaint. but so far this is telling me a lot more about tim tebow's critics than it is about anything he's ever done to warrant the criticism. megyn: bernie goldberg always a pleasure, sir, thank you. >> thanks, megyn. megyn: $1.2 billion vanishes and no one seems to know anything. we'll tell but new accusations against john corzine that may be changing all that. it is the next step in u.s. space travel. we'll tell you about an aircraft the size of a football field that may change the future of technology for all of us. and wall street protestors say they are fighting for the 99%. but we'll tell you how demonstrations in new york just cost nearly a hundred people their jobs. my doctor told me calcium

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megyn: we want to update you folks that we put a little graphic on the air earlier in the hour that as it turns out is incorrect. it identified mitt romney with a picture of president obama. they are not the same man, not philosophically, not in any way. here are the proper graphic for those running for the republican nomination. you'll notice mitt romney is there, he's got dark hair, blue tie, that's what we meant to put on the screen about an hour ago. our apologies for that. that is the field minus i guess jon huntsman is not on there, that is only because he's not polling in the top percentage. he is still running as are some others.

okay, moving on. does anybody remember new york's milk street cafe? that's the restaurant near zuccotti park whe employees were laid off during the protest. now they are closing up shop all together. the owner says the 99% are not the only ones to claim for this. trace gallagher has more. >> reporter: the owner blames the city of new york megyn for putting up the barricades in the first police and leave them up. this milk street cafe is about a block and a half from zuccotti park. they put them up there because they had to keep people away from the areas. for the past two and a half months the owner of milk cafe went to the city and said would you please bring the barricades down. the city would take down the barricades for a short time. business would pick up. they would put the barricades back up and business would go back down. here is the owner a few weeks ago. >> i hope we can move from a physical protest to an honest

debate within our country, because i think the most important thing is to create jobs, that's why i opened up. >> reporter: yeah but he's not creating jobs he's losing jobs, 90 people out of work because that closes down tomorrow. he says he simply didn't have the cash to keep up. we don't know his finances, megyn before the occupy protest began, so we can't say that definitely was the factor, but it didn't help, and now 90 people are out of work, megyn. megyn: wow. all right trace, thank you. a big story developing here in iowa, as ron paul gets some good news from some new polls. could it be enough for ron paul to win the caucuses here? answers next. and a virtual fistfight on capitol hill over the payroll tax cut bill. lawmakers are taking shots at each other instead of getting down to business. we are live in washington, up next.

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megyn: a fox news alert on a political brawl getting truly ugly over a middle class tax cut and who gets to play the grin of. i'm megyn kelly here in iowa where we are 24 hours away from the next big gop debate. we are watching actions in the senate that would possibly give a tax break to every family in this country. the who is republicans say we can't wait, claiming it's the countdown to a middle class increase. the tax cut extension led to this exchange between ed henry and jay carney. >> the american people don't want you to play games in washington. >> the president decided they will lose leverage. you seem to be trying to.

>> i have made clear that the president and senator reid agreed that we cannot take the word, unfortunately, through past experience, we cannot take promises by republicans that don't get that payroll tax cut extended for 10 million americans at face value. we have -- we know from past experience that we can't. megyn: joining us now is ed henry. what is going on there? >> reporter: i was quoting jay carney when i said the american people don't want you to play games. jay carney just told another reporter that. he said the american people don't want them playing games with this important business. the facts are democrats and republicans late this weekend appeared to have a deal to move forward object a budget deal to keep the government open not

just through this week, but through next fall. and at the last minute, president obama called senate majority leader harry reid and basically put the breaks on that. why, you say. we have been pressing about what their beef is with that budget bill. they say they are concerned about pieces of the budget bill that would cut funding on the implementation of wall street reform. but republicans suspect the real reason they put the brakes on that budget bill is the president is afraid once that budget bill goes through the house republicans will go home for the year and say they passed their version of the payroll texas extension which the president doesn't like. and if he doesn't sign their version into law, maybe the president will get the political blame for not signing it.

holding up the one budget bill until the president gets his version of the separate payroll tax cut extension bill. if the white house insists they are not holding anybody hostage. hanging in the balance is not just the payroll tax cut extension. the government is running out of funding. it will close friday night if they don't get a deal. the republicans are saying why would they hold up that budget bill when they essentially have an agreement here. the white house is saying let am not play games. they said that back in the summer when we had the fight about extending the debt ceiling. now it appears the white house is holdings things up and the government could shut down friday if they don't get a deal, megyn. megyn: back in iowa, folks -- it means more. it's morning interesting when we

have that big animation. back here in iowa, folks. ron paul is seeing a big increase in his popularity. the poll in just the last 24 hours showing him puerto rican cally even with newt gingrich. the poll shows ron paul with 21 per of the vote compared to gingrich's 22%. that puts congressman paul within 1 points of the front runner. we have the political editor of the "des moines register." what we are looking at in iowa could be anybody's game. a lot of people act nation are thinking romney-gingrich. don't count out ron paul. >> absolutely. ron paul has run a very, very smart campaign in iowa. and it started four years ago. he came in fifth in the iowa caucuses and his campaign never ended. he had his campaign during the

interim between the two campaigns. he put key campaign organizers on the state central committee. and so the republican state central committee. so he has been building up to this for a long time. he has been sort of running a stealthy campaign because people are underestimating him, now there is surprise he has been in shouting distance of the top. megyn: he's got great organization. that's something newt gingrich is said not to have. could that make the difference? ron paul has been cite sized by a lot of folks on foreign policy. he says a lot of things conservatives don't like. do you think his ground game will be enough to overcome some of the objections his constituents have? >> what the ground game does for ron paul is allow him to run the campaign strategy which he has

run. he's not necessarily appealing to the died in the wool activist republicans you see at caucuses. he's bringing new people into the caucus process. people who never caucused before. you need to have a great organization to get those people out on january 3. you don't just show up in the booth and pull the lever on caucus night. you have to physically go at a certain time and maybe brave bad weather. he needs to have that great organization. but it's still a risky group of caucus-goers who have never been there before. megyn: as you look at it now. mitt romney not that far behind. is there any way to handicap it historically, if you look at where the polls were at this point historically? >> if you go by what happened historically you give gingrich a good edge because he was leading

the polls in december. the early december polls is where mike huckabee started to make this move. so it's a good position for him to be in. but he does have to deliver. he's scrambling to put together an organization that can back him up. that's a key moment in these final weeks. then you have got all the other campaigns with their knife out for him and he will have to survive into the window of the caucus season where everybody has to be nice and seeing visions of sugar plums dancing in their heads. megyn: i can't get you go without asking you about rick santorum. michele bachmann claims to be a local. what about those two, in particular santorum to win over iowa voters and yet they are still not registering in the polls. >> rick santorum has spent more time in iowa than anybody else.

normally you would see a candidate get rewarded for that, especially a social conservative like him. michele bachmann did win the iowa straw poll. she is picking up some endorsements from social conservatives. she is doing better. but you have got to have -- you have to be perceived as a change candidate in this environment. i don't think rick santorum has made the case that he is a change candidate. michele bachmann has to make the case that she's electable. and she is struggling with that. megyn: we watch and listen as the candidates vie before the last big debate before the caucuses take place. it's all great to win iowa, but what they want is to win the nomination. they include gerald ford, bob

dole, and george w. bush back in 2000. that's out of six contested iowa republican caucuses since 1976. stay tuned to the fox news channel tomorrow night. we'll bring you the debate 9:00 p.m. eastern time right in the convention center. some of our viewers are emailing in saying your voice sounds echoey. it's because we are in this large sort of convention center. nobody is here. nobody is here. the debate isn't until tomorrow night. so we are just setting up. we got the christmas tree up but that's about it. tomorrow night will be a different story. in the meantime some are sending a warning in the growing fight between the feds and the states over voter i.d. laws. the justice department is literally bringing out the big guns. megyn: why the u.s. mail may not slow down as soon as we thought.

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megyn: the postal service putting the brakes on plans to close postal centers. it will give congress time to pass legislation to overhaul the cash-strapped agency. many lawmakers opposed the closing saying it would hurt people living in rural areas. they have been riddled with rapes, murders and mayhem, crimes and mayhem, mixed with squalid conditions and battles

with the working class. but today the protester is "time's" person of the year. they cited the arab spring and dissent that spread from the middle east to the u.s. claiming demonstrations this year have redefined people power. christopher hahn and chris plant, we have to distinguish between what we are talking about. we are talking about domestically there haven't been any murders in the occupy wall street protests. overseas different story. but they have been riddled with crime. there is blowback on "time's" selection of the protester as the person of the year. inappropriate? >> it's a high reward. it's stirring controversy and people are interested in what they have to say. it shows they are still relevant. we have been talking about protests almost since the

beginning of the year, whether it was wisconsin in the winter, the arab spring, then occupy wall street in the fall. protests have dominated the news. so they are obviously a group of people who have been dominant in the news. that's the times criteria. who dominated the news this year. megyn: that sounds reasonable. we have seen some questionable choices in the past. not that this necessarily is. but what some are saying why not the tea party? why were they never nominated? >> the tea party and "time" magazine are not birds of a feather but the rowdy street protests -- and there was a murder at occupy oakland. there have been suicides and a rape of a 14-year-old girl, a 19-year-old special needs girl in cleveland. >> these are horrible things. >> and they define the move

fundamental you are paying attention. >> that's like saying the guys carrying the racist protests in the tea party are defining that movement. >> signs like all my heroes kill the cops at oakland. this is about redistribution of wealth. it's a group of occupy protesters were moved to a homeless shelter. and it's from cai with the sexual asielts in the street there, to the rise of the muslim brotherhood and the salafists. and the murder of a pregnant woman because she was in a bank when they fire bombed it. hitler and the. >> i toe peninsula khomeini were also chosen.

megyn: they chose the protester. they are focusing on wok pie wall street as well. -- they are focusing on occupy wall street as well. they called attention to certain issues. have they changed results in this country? >> we'll see next year. the tea party in 2009 didn't achieve anything yet either but they wear poignant force in american politics. it wasn't until 2010 that they accomplished anything. megyn: did they wind up on the cover of "time" magazine? >> i think they are part of this protester movement. occupy wall street is a reaction to the tea party. it's the people on the left saying what about us. people who identify with real issues. occupy wall street, they have changed the debate in this country. we are talking about the disparity in income levels among the 1% versus the 99% in this

oneo country and it's a real problem in america. >> the left wing mob has reached the street. this is barack obama's movement in the street it's about the redistribution of wealth iting the partist redistribution of wealth. we used to have a one-word name for that, it's called socialism it's messy, sloppy, it's incoherent. there is no cohesive message other than the redistribution of wealth. >> they are saying this government has been for the rich for many many years. it's time for people to have a voice in government. megyn: let me ask chris plant this. do you think there is hypocrisy on the part of "time" magazine as selecting the protesters as person of the year when they did not select the tea party. in 2010 they did achieve real

results. look what happened in the 2010 elections. it was mark zuckerberg who won. >> the message of the tea partive self-reliance and constrained government is not the cup of tea if you will of ""time" magazine. fecal bombs and the incoherent violent attacks on capitalism. when the question -- when the problem is the disproportionate distribution of wealth in the united states, the only solution which you are not saying out lot quite yet is the redistribution of wealth in america. if there is a message from government -- >> it's from all the people, not just the people who can afford -- let's remember, you are painting a broad brush, isolated incident that happened in occupy wall street. all the racism that was prevalent in the tea party movement.

>> completely blown out of proportion. the anti-semitism at the occupy movement is out of proportion. i plate audio all the time on my show. on the corner of wall street. >> every day was a peaceful thing. it was a little loud, about it was peaceful. megyn: got to go. it's been real. thanks, guys. >> enjoy iowa. megyn: you should enjoy iowa, too. set your dvr, the fox news debate. 9:00 p.m. how does $1.2 billion simply vanish? there may be new evidence about what oncorzine knew in the days leading up to the money disappearing from a fund he was running. microsoft cofounder paul allen putting up his own money because

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megyn: one man's vision of man in space giving new meaning. he's putting millions of dollars of his own money on the line to make it happen.

>> reporter: this is very cool. paul allen wants this thing flying sometime within the next five years. the reason he wants this thing fast tracked because nasa no longer has shuments to ferry astronauts back and forth. it will carry a rocket into orbit and the october the will carry -- and the rocket will disengage from the plane, and the rocket fuel will propel it into the lower orbit of the earth's atmosphere. but if you are going to have a plane that carries a rocket, it has to be a big plane. the stratolaunch, look at size of this thing to scale. it's almost twice the size of a 747 and it has two fuselages.

here is paul allen. >> it will build an air launch system with greater safety, flexibility and cost effectiveness for cargo and manned mission. >> reporter: paul allen says his main goal is to some day get every day humans like us up into space. and he thinks they would be a lot less intimidated if they were to get into this plane and climb into the rocket than climb into a capsule. five years, 2016. we are signed up. megyn: that's incredible. with the big success you have big dreams and big thoughts. that us unbelievable. >> reporter: and big money. megyn: we are 20 days away from the iowa caucuses and 20 hours away from the fox news debate.

it happens tomorrow night at 9:00 p.m. eastern. one group in iowa is throwing its support behind one of the candidates who will be on that stage. why they say voters should send the minnesota congresswoman to the white house. protecting your rights to vote. the justice department threatening new action along those lines. attorney general eric holder on the mission. but is it a good one? >> when a state passes a new voting law and meets the burden of showing it's not discriminatory we'll follow the law. when the state cannot meet the burden we'll object. ♪

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is your cholesterol where your doctor wants? ask your doctor if crestor is right for you. [ female announcer ] if you can't afford your medication, astra zeneca may be able to help. megyn: fox news is america's election headquarters and all eyes are on iowa where a group of christian leaders are trying to drum up support for michele bachmann. this group says if caucus-goers are not going to vote for her january 3 they should take the night off. we'll carry the debate live here from sioux city, iowa. the fbi director is on capitol

hill. robert mueller challenging lawmakers on terror detainees. catherine herridge is live in washington. >> reporter: this morning the fbi director told the judiciary committee that he cannot support all terrorism suspects going to military custody unless the executive branch gives a national security waiver. he says the lines of authority are not clear enough. >> my concern is we do not want to have fbi agents and military showing up at the same time on a covered person. >> reporter: jeff sessions says there is room for the fbi to assist but he says they should not be treated like common criminals. >> providing them within hours

arrest, allowing them to make phone calms to their coconspirators that civil law prosecution requires is not helpful in a war. >> reporter: on the killing of al-awlaki. this mugshot is from 1997 when he was arrested for soliciting an undercover cop. he was asked if he supported the release of the memos that authorized the killing of al-awlaki at the hands of the u.s. government. >> mueller clearly punted to the justice department and sit was their call to release the memos. despite the fact that senior democrats, including the chair of the intelligence committee has urged the admin surprised release them in some form.

megyn: catherine herridge, thank you so much. the justice department just issued a new warning on new state voting laws. attorney general eric holder talking about recent changes to voting laws in various states during a speech. mr. holder's concern is minority participation will be reduced. now he's calling for a tough review. >> though i cannot go into detail about the ongoing review of these and other state law changes, i can assure you it will be thorough and fair. we'll examine the facts and apply the law. when the state passes a new voting law and meets the burden of showing the law is not distriple florida torry we'll approve the law. and where the state cannot meet its burden we'll object. megyn: jailan epstein -- julian

epstein. this is not without controversy. on paper people want the voting laws enforced. they don't want fraud or any of that stuff. but there is controversy, jay in the attorney general's announcement. tell us why. >> he's saying he wants to prevent fraud and voter intimidation. but he really is focusing on voter identification. and the idea someone will be required to show proof of who they are, that's how you protect the electoral system. so this idea of suing the states or threatening to sue the states for trying to make sure their process is followed and it's thorough and fair including voter identification shows the misplaced nature of this justice department' the idea that they are taking taxpayer dollars to look at this when they let the black panther party, the new black panther party off the hook when they were staning in front of voting areas in chicago and

other areas, where they actually had clubs in their hand and were threatening people, that they don't prosecute. but they will make sure texas can't have a voter i.d. system that lets them have a picture i.d. of the person to make sure the person voting is the person with the i.d. that shows the misplaced nature of what is a waste of department of justice time. megyn: julian? >> let's take the issue jay is talking about, voter identification laws. we know the number of in person voting fraud cases is exceedingly rare. ohio did a statewide study that found out of 49 million vets cast there were on 4 incidents of voter fraud. over a period of 14 years, only 200 cases in florida. contrast that with the fact that you have 21 million voters that

don't have government i. dvments. in the neighboring state of wisconsin, 15% of african-americans don't have government i.d.s. so an argument can be made, an argument can be made that the effect of this law will be to discriminate against elderly young and african-americans and hispanics. if you look at wisconsin, for example, the number of hours the department of motor vehicles is open. 25 per of the dmv offices in wisconsin are open for one hour a month. over 50 per of them are open for fewer than 20 hours a month. you think of a mother of four and the burden it puts on them when you are not solving the problem. >> so increase the hours that they are open and issue an i.d. i think it's implausible to sit

here and argue that in fact the idea that you are requiring voter identification with a picture i.d. is a violation of the constitution. that's what they are saying with the voting rights act. the idea that you are going to make sure the person voting is that person, you say 200 like that's not significant. there was an election a couple years ago where it was a couple hundred people. the fact of the matter is i cannot understand for the life of me the idea that the justice department -- they are already suing over the immigration law, they are defending the obama-care legislation that's now the law -- but to go after these states -- the supreme court put a stay in place on the redistricting issue. but to say voter identification is violating the voter rights act, this is not a poll tax. megyn: julian, let me key up the question, then i'll give you the

floor. what about that argument. voter i.d., requiring people to show voter i.d. has been shown about it supreme court. what is the argument? that it is applied in a way -- >> that was upheld by the supreme court in indiana when the government i.d.s were in fact free. but a couple of points first is to jay. the number of cases in ohio were four out of two million. in kansas it was 200 over several years. you are not fixing the problem that exists. the down side of this and the reason why the justice department has an interest. if you were to apply this nationwide, you could disenfranchise 21 million voters who don't have government i.d.s. many of whom live in states where it is difficult to get a government i.d.

the third point is this. >> i don't think this is a federal mandate. >> there are lots of ways to check votesser integrity at voting booth. there are partisan voter checkers. >> what about a fingerprint? >> fingerprints -- i would have less of a problem with fingerprints because it don't think it imposes such a problem. i think there is a better argument on that. megyn: let's end it on that happy note. >> jay has lots of good ideas. megyn: thanks, guys. coming up on the money trail on the mf global money scandal. what did jon corzine really know about what happened to $1

billion of missing customer funds. >> i never gave any instruction to misuse customer fund. i never intended anyone at mf global to misuse customer fund. those first young men.

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megyn: holiday shoppers are hitting the malls and stores in search of the perfect gift. the sales for the week that ended saturday rose 10% from the previous week. $1.2 billion of customer minivan i shalls and no one seems to know anything. mf global ceo and form u.s. senator jon corzine on the hot seat at a senate hearing. but he insists he never told anyone at mf global to misuse customer funds.

but the chief financial officer and chief operating officer said don't look at me. >> if i could ask to you provide an example of how $1.2 billion of customer fund could be transferred and disappear without any laws or regulations being violated -- give as you hypothetical scenario how that could happen without breaking laws or existing regulations. >> i never directed anyone at mf global toisuse customer funds. >> i do not recall participating in any conversation about the use of customer funds. >> i did not authorize approval of any transfers of customer funds for in-house broker

purposes. megyn: a financial executive claiming mr. corzine knows more than is admitting about the improper use of customer money. >> he participated in a phone call with senior mf global employees where one employee indicated mr. corzine knew about the loans made to the customer segregated accounts. megyn: are we any closer to finding out the truth? senator pat roberts, a republican from congress is on the committee. thank you for being here. do we know? you sat through it. do we know anything more right now than we did yesterday morning about how that money went missing and who did what with it? >> basically you heard the question by senator thune and the long pause and answers even

to the point that the chief financial officer said he was delegating responsibility but not authority. an couldn't answer that. we asked all three who could. they went down to the operations officer, the global operations officer, the chief financial officer. the treasury officer. at that particular time i asked if that person could sit in the empty chair and tell us and we got no answers. so we'll have to drill down. we have this allegation out there and we'll have to drill down and find out what the situation is. money just doesn't disappear. somebody has to be responsible. megyn: does it look like we have gross incompetence or do it look like we have malfeasance.

covering funds with a side of the business that never should have been used? or do you think somebody made a major math error and we are look at incompetence. >> you can't make a majorrer roar i'm this with $1.2 billion missing. somebody legally or illegally and there is a lot of speculation, did something that aloud that glass to be broken between the customer segregated fund and the company funds. those customer segregated funds, that's a fancy word for a lot of people out in farm country and for that matter in business who are short because their assets are frozen. the good news is the trustee is sending out checks. the people won't be made whole until we get to the bottom this. but 72% will be made whole. we still do not know what happened and the three that testified yesterday were like hear no evil, see no evil, speak

no evil. megyn: there was testimony by one guy suggesting jon corzine knew about the improper transfer of some customer money from one side of the business to the other side of the business. that he knew of $175 million of that at a point at which he told you guys he didn't know. do you find that testimony credible? do you believe you are getting the truth from corzine and these other executives? >> we just have to drill down. that was an auditor who listened to a phone call early one morning. and said that that is what they heard. so we have got to find out -- well, i think we know who that is. i think law enforcement is on top of it. if that's the case he committed perjury. we don't know that that's the case. but they were remark reply all the way through this. governor corzine indicated he had anyone tension of doing

things. that seems a little bit yesterday. but intentions is the road to bankruptcy and frozen accounts. we still have to drill down and get answers. we are still getting information from a lot of people who i think are reliable source. and this doesn't end here. we'll continue until we do find out. megyn: are you surprised these folks are talking to you as opposed to asserting their fifth amendment rights? >> there was a lot of discussion about that, why on are they here when they are not saying anything. that's a good question. i'm not a lawyer. one of the few in congress that is not a lawyer. but at any rate i'm not a lawyer, i'm not giving them advice. i was happy they did appear. i'm not happy with their responses. i had a series of questions as everybody did, and one led to the other. we are now going over those

responses with a fine tooth comb. megyn: my apologies for cutting you off, we are up against a hard break. folks, we'll be right back after this break. or annuity over 10 or even 20 years? call imperial structured settlements. the experts at imperial can convert your long-term payout into a lump sum of cash today. : plus veggie nutrition. could've had a v8.

megyn: it was like a scene from the wild west. the cameras were rolling. one of them snagged a beer off a bar and it starts with brawl. no, no. it is 2011 with a taser. trace gallagher live with the

west coast newsroom. >> reporter: a lady on a horse walks into a bar. she goes into the bar and she wouldn't give the we are back and that's what sparked the brawl. then she had two other guys with their horses. they went in and the brawl broke out. this is post brawl, apparently. this is when they are trying to get everybody out because these three horse riders rode down the street and the cops gave chase in cars. and where did they get them? at train depot. what happened? well, one of those cowboys with the cowgirl, he refused to listen to the cops so he cause tased. and before they rode into the bar they rode through the safeway and the vfw and a local sandwich shop. the only thing that many not old west about this is the taser

gun. can you imagine with wyatt earp had a taser gun? megyn: i would like to see these facilities. >> reporter: you have got to go to steamboat springs. megyn: i might have been there one time. is that where they pan for gold and they have a casino. >> reporter: it is. it's a great old western town. it's got a lot of old saloons. it's a great place. megyn: who would want to hang not you those bars? the horse not tasered, just the riders. >> reporter: as far as we know the rider was the only one tased. megyn: thanks, trace. coming up new questions surrounding the fed's call for an allout ban on cell phone use

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