>> welcome to our live coverage as we await the end of year news conference. he will be speaking to reporters at 1:30 eastern. one big topic for the hacking attack on sony. we will have much more and a look ahead to the other questions the president could face in the live report from the white house. another major story they are confronting, the ongoing fallout in pakistan. they are going after militants after the taliban massacred students and teachers in the school. more than 100 militants are being killed since tuesday's attacks in the army school and

college. prayers were held across pakistan for the victims. 148 people, mostly children all lot of. another big international story, australia reeling after eight children were found dead in a home in queensland. police were called to the house and found the eight stabbed. they ranged from 18 months to 15 years old. police found a woman who was taken to the hospital with stab wounds. >> there is no identification being carried out yet. we believe she is the mother of seven of the children. >> police have taken dna from the mother and are speaking with friends, family and neighbors trying to get answers. this caps a tragic week for australias. a man took more than a dozen people hostage in a cafe in

sydney where two hostages and the gunman were killed. back here, colorado being sued by two neighboring states over the legal sales of marijuana. the attorneys general of nebraska and oklahoma filed suit with the u.s. supreme court claiming the pot is making its way across state lines which they say is unconstitutional and a violation of the federal government's right to regulate both drugs and interstate commerce. the attorney general said he will defend the state's marijuana law. we are also following those new developments in the massive sony hack. the fbi concluded what many suspected that north korea is responsible for that attack. an investigation determined that mal wear and ip addresses were traced to that communist country. this comes after sony canceled the christmas day release of the film, the interview following threats of a terror attack.

executives were sent a new message that appears to be from the hackers responsible. they wrote it's very wise that you made the decision to cancel the interview. now we want you to never let it be released, distributed or leaked in any form, for instance dvd and piracy. including the trailers and full version down from any websites hosting them immediately. pete, what evidence did they present to draw this conclusion? >> not a lot of granular detail. they can't give this away, but three main points they make. if you look at the mal wear itself, this is the computer code that was used to intrude into the system. it bears a lot of resem plans to dheed it is known they used in the past. digital fingerprints, if you will. they say embedded in that code

were certain computer internet addresses of known computer infrastructure as the fbi puts it, associated with north korea. in other words, this was the mal wear talking back to what they call infrastructure associated with ip addresses associated with known north korea infrastructure. the third point is this attack and the way it was written, back to you, ronan, sorry. >> appreciate that update. we will follow details as they come up very rapitly and we are awaiting on the president who will speak at the white house holding the annual news conference at 1:30 p.m. eastern. the events of the last few weeks give him a lot to address. that includes the new statement we discussed that north korea was behind the massive tacking attack on sony as well as the deal that freed hostage alan gross from cuba and spurred a seismic shift in relations with

that country. finally this month's blockbuster report that revealed the cia's use of enhanced interrogation techniques. joining me to look ahead to what the president will be addressing, kelly o'donnell. the president has not ended this year quietly. what do you think the toughest round will be? >> i won't presume to know what the president thinks is the toughest ground from his vantage point, but it's fair to say it will be challenging for him to address the sony hacking north korean example because of the very public nature of a press conference. he will be pressed about what the u.s. will do and what he thinks about it and how corporations should handle this sort of a breech and the impact on their employees and potentially the safety and all of those many dimensions. he has the responsibility to make some sort of a decision about how the u.s. will respond. will he tell us about it?

that's going to be one of the things that will be challenging in terms of handling this. what can the u.s. do and how strong of a message will he try to send about these events and to other actor who is might want to seize this kind of an opening to look for weaknesses in the u.s. economy or in our institutions that might put this kind of a situation not only as a one-time only thing, but as part of a new day of a potential terrorism. the other things that we expect him to talk about is trying to threat the needle on cube a. he made a new statement about a relationship he envisions for the u.s. and cuba, but it does require partnership with congress to change the embargo or put money like funding an embassy or confirming an ambassador, that will be fertile ground for questions. >> kelly o'donnell from the white house, i know you will be watching. appreciate it.

>> now to the war with isis. this is another topic likely to come up at the president's conference this hour partly because the pentagon said they took out three senior leaders over the past few weeks that includes the right hand man. he was introduced at the pentagon and they used a derock tori name for the terror group. did she. mick, what can you tell us about the use of this term? >> lieutenant general james ter whoa is the u.s. commander of all american forces there in iraq explain that he uses that term in deference to the iraqi government, iraqi military and other arabic and muslim military forces involved in the coalition. they think the use of islamic

state, isis, isil projects unfairly and unnecessarily and quite wrongly the idea that isis has somehow established legitimate nation and in terms of being a derock tori term, military officials a look, the use of did she which said they are bigots that impose their view on somebody. with the tactics of isil and mass executions, beheading hostages and all on camera and then thrown up on you tube, that organization doesn't deserve the world respect. >> a lot of potential questions that could come up in this including that loaded terminology that they described. iran flying missions over iraq. thank you so much for that update. appreciate it. >> you bet. >> we are ramping up to the end

of the year news conference. several of the subjects include the news about cuba this week and the threat from north korea. after sony canceled the release of the interview. they said that state is behind the hack attack. we have two insiders on each of these issues joining us after this break. stay with us. as many cars. how much fuel will be needed to power them? about the same as today? 50% more? 100% more? the answer is... about the same as today. by 2040, advances in fuels and vehicles could enable about 75% better fuel economy than today. take the energy quiz -- round 2. energy lives here. which means it's timeson for the volkswagen sign-then-drive event. for practically just your signature, you could drive home for the holidays in a german-engineered volkswagen. like the sporty, advanced new jetta... and the 2015 motor trend car of the year all-new golf.

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former coordinator for counter terrorism at the state department and secretary of defense. thank you both. we start with sony here. as we mentioned, talking about how north korea is in fact behind this attack. north korea's actions were meant to inflict significant harm and express themselves. it falls outside the bounds of acceptable state behavior. beyond the words, how can they respond to north korea? >> it's important they respond with an eye towards setting a long-term precedent to develop constructively norms in cyberspace. to that end, i think what we are going to see is probably work to pull together regional

partnerships perhaps in a diplomatic initiative to send a signal that this is unacceptable state behavior. >> who are the guardians of peace now that we know that the root of this attack in north korea? do we have intel about the perpetrators? >> the u.s. government and folks that i know are indicating that there is indeed pretty strong evidence, not all of which they are willing to site to protect sensitive sources and methods. i think it's fair to assume that this group is likely more sophisticated than probably a north korean agent. these are probably there does seem to be evidence that they orchestrated it and sponsored the attack.

coopting an initial breech towards their own ends here. >> ambassador, you travelled to north korea yourself. you feel strongly about calling this cyber terrorism. how big of a threat do you see this? >> i have been there and talked about getting off the terrorism list. i do not think this is terrorism. it's important that we are careful with our terminology. terrorism normal low by a legal definition incurs with death or bodily harm. this leans towards sabotage that by the way not in this case, but more serious cases could be an act of war. it's imperative they respond in a proportional way. this is about a movie in hollywood. . >> what steps can that consist of? >> they are talking about diplomatic steps.

there so many sanctions about how many more we should pour on. at some point, we will have to talk and consider responding with our own cyber or counter attacks to some of these countries. we have the best capability in the world. we can use different means to do that within a proportional way. >> having worked in the cyber policy area this this administration, do you think that's a likely response? >> i would respectfully disagree. it's a bad idea to throw rocks and pursuing frontier justice when our entire society and economy is built of glass. that offers the possibility of escalation. it's difficult to signal using cyber means and the same a symmetric advantage that is it gives an attacker which is surprise. it really doesn't -- you don't get the same advantages when you

are responding. i would counsel and i believe the administration is looking for other instruments of power to bring to bear signalling mechanisms that this is unacceptable. we don't want to keep them in the crossfire we want to get them out of the kill zone. we want to encourage more investments and this in my personal experience is something that the president and the administration take seriously. they have been working to enact comprehensive reform to address just these risks. >> two different proposals on what can be done about this challenge. we will wait to see what the president said about this. for the cuba side of this issue, another thing likely to dominate the conversation. i want to turn to michael sheehan. a lot of politicians saying this was a bad move. what tough questions do you think the president faces at this point? >> well, cuba continues to have

a very poor human rights record and how it's still one of the last communist regimes on the face of the earth. there is concern republicans will go after that, but in this case i believe this is a 50-year policy that has been a complete failure. with the president on this to try to move this forward, i always believed by opening up with cuba, the communist regime would fall more quickly. this is a good step, but he will face tough questioning and see what he can get in return and try to get a better return. he is moving in the right direction. >> ambassador, on the prisoner swap specifically for this asset that the president it in important terms and given a lot of intelligence to the united states, was it worth it? that's a question we are hearing a lot. >> i think it is. i talked to my friends within the community and we have

foreign assets that are in jail. we would really like to get out of there. these are people that are crucial to the intelligence operations and not just active agents, but people they use to do the work and just as valuable. we have to work hard as they get arrest and get them out of there. we cent a signal to those who stick with them if they work with us. >> they change the economic stakes of the issue? >> overtime they will have to loosen up. this is a 50-year-old embargo. a very expansive embargo. financial, commercial travel and he is starting to widdle away at it. yes, overtime this will break down. there is a small percentage of shard liners that support this approach. it has been so clearly a failure, it's going to get fierce blow back and overtime this is inevitable that this

policy has to change. >> and chris, when you look at the cyber side of the issue, the genesis of the alan gross case was his installing subversive access programs and is that a policy and is the broad range of policies undertaken to undermine the regime there something in need of reassessment? >> that's promoting that type of free speech and what i consider digital assembly which is what this nation stands for. certainly those types of values should under win much of our doctrine and our program development. if you are going back to the north korea case, the reason north korea is so threatened by this movie is exactly the type of free expression that made this country strong and that we have seen encourages democracy and liberalism throughout the world.

promoting free expression and internet freedom using technology and deploying technology is exactly right. we should be doing more of it. >> as an alumnus of this administration, pulling back to the big picture, what can the president accomplish as he talks to the press for really the first time he had a substantive long conversation where they can ask anything since the mid-terms. >> this president is very good at taking the longer view. he is very good at resisting calls for immediate action and instead taking more deliberate longer term measures to really address structural problems. with cyber security, i think he should use this as a way to really say hey, look, this is a problem that as a nation we are facing. it's affecting in this case our freedom to express ourselves. we have got to make sure we are making the investments so that see are not going to --

dictatorships will not have leverage over the american companies. that i think would be something that he can constructivelily do to move things forward. >> ambassador, when you pull back to that bigger picture and as people at home await the remarks, what should they look for and how to move the needle on the issues you worked on? >> he needs to be firm on north korea. i will go back to what chris said. we have our cyber infrastructure made of glass and no way we will be able to protect it all. i'm not suggesting that we take a massive cyber attack on north korea. we have to consider this and take strong measures against it. i'm not sure a talking to these people will get us anywhere. this is something we need to consider. we are extremely vulnerable and our private sector needs to increase security, but any small group of people with a limited capability can do damage to our

economy and a long time to get the security in place in our country. he has to lean forward on this and be somewhat very strong and trying to prevent this from happening. not just north korea, you about others that have more capability. >> michael sheehan, one of the other challenges that the white house is looking at, the developments in pakistan, a reminder that the border challenge is not going away. do you expect that to be something on the president's agenda and maybe a topic of conversation? >> pakistan is the homeland of the al qaeda threat in western pakistan. that threat has been able to simmer because of the a.m. bif lens of the pakistani government and going after these groups. this brutal murder could be a turning point if there is any good out of the deaths of these young children, a turning point in the resolve of the pakistani government to clean out these

groups, many have been playing footsies as proxies in afghanistan and india. they need to get these people off their territory and perhaps this is a way for the country to start again to reunionify and clean up their act with regards to these insurgent groups in particular in the western part of pakistan. >> it is a fraught relationship really complicated. a lot of anti-u.s. sentiment. some with ties to extremists and there was a period earlier in the obama administration where there was a lot of appeasement of the leaders going on. do you see this as a policy that will shift in the wake of this latest tragedy? >> it's hard to say. i have been dealing with them dreektly prior to 9/11 talking with them. about this very issue of them harboring the groups. it's hard to be optimistic. i try to be hopeful that they

will move forward and i'm sure that the administration will be pushing them as will other countries in the coalition that will be in afghanistan that is concerned about taliban action from pakistan into afghanistan and undermining the security as well. >> very real inflection points and a lot of domestic and international issues. those are likely to come up. thank you and great to have you both on. again in just a few minutes, president obama holding his final ewes conference of the year before he leaves for vacation in hawaii with his family. you are looking at the press room. i will hand over the reigns to chris matthews who will continue special live coverage of the president's conference that starts right now. stay with us. everybody.

>> good afternoon from washington. in a few moments, president obama will hold his last news conference of the year before departs for his vacation in hawaii. the growing controversy over the hacking attack on sony and most importantly, sony's reaction. the change in cuban policy and the torture report. immigration policy. the economy and of course the plummeting prices for gas. all topics the president is expected to be grilled about in an hour long back and forth with the white house press corps. nbc's kelly o'donnell joins us live from the white house. thank you for this. this is going to be one power-packed press conference. just counting the topics, so many things to cover in just an hour. >> what is so interesting is that some of these topics we have not heard from the president directly on. that would be the sony hacking north korean developments of today. we heard the president talk

about immigration and heard him talk about cuba. this is a new lane where we will be looking for presidential response perhaps forecasting a sense of how the u.s. would react to korea and north korea now that that has been identified as the culprit and may be more broadly, culturally. what should companies and consumers be mindful of with this cyber terrorism age. we have often be warned out. in this end of year back and forth. we expect him to make opening remarks where we see the year that has gone by and we will talk about good news in the economy and perhaps not as many questions on that topic. he wants to get those out as he begins the to and fro with reporters. this happens to be a year where it has been really eventful leading up to the date when the family heads off to hawaii for the 17 days and celebrating the

holiday. this is a real way to cap a year and to look ahead to 2015 when the president will be dealing with a different kind of congress with republicans in charge of both the senate and the house. that will be an important relationship when you consider things like the immigration policies that the president wants to see moved forward and the new responses to cuba and how cuba will have a different relationship. chris? >> my question would be what's gotten into you, mr. president. you seem different. no caution. it's to the winds. you are doing what you did with china on c02 emissions. the executive order on illegal immigration which is a major thing for so many millions of people. of course this opening to cuba which has been a switch from the decades of policy. you are doing it all in this sweeping motion of a couple of weeks. what's happening? >> part is legacy building and a reassertion of the power of the presidency. when we were living in campaign

2014 and you say the president's party suffered losses, that doesn't mean the office of the presidency was weakened. that's what we see with president obama. using executive power to the fullest and going too far on some. using that office to set an agenda to try to meet some of the programs and policy ideas he talked about throughout his presidency and move the ball forward. at a time when the president in terms of the electoral phase might have been set back, he is using the office in a way that will set an agenda for 2015. chris? >> great to have you on. you thank you so much and merry christmas to you. joining me is the chief foreign affairs andrea mitchell who hosts right here. andrea, it seems to me that we are behind the 8-ball with this situation. had an american government buckled to the nazis back in the 30s or 40s over the great

dictat dictator, mocking dictators like hitler, we would be appeasers at this point. >> there a number of threads here. it's clear that the united states like all other countries does have their own cyber operations and most mem reasonable and importantly the revelations that there were computer actions taken against iran. highly covert and it turned out it slowed down iran's work on nuclear weapons for at least a year. who knows what else we are doing. i have been reporting for years about other kinds of eavesdropping and computer operations, but the fact is that the u.s., no country has clean hands. what north korea did and what the fbi did in naming north korea, this is the first time that they named an aggressor. we have known about the hacking and the state department and the investment banks and the white

house was tacked in recent months. the fact is they never before have named it as they did in north korea. that will require the president to take action and puts a big burden on him because he won't say everything we are doing. a lot will be covert. >> let's look at what might be good news. let's look at the papers. the positive reaction to the opening towards cuba. countries that we had to bull tow keep up the united front against castro seemed to be very, very relaxedly happy about this thing. we are having this getting together. between the two countries. >> it doesn't get better for the president than to be praised by pope francis. the fact that the vatican was involved in the secret negotiations with that meeting that the president had with pope frances and i they had this long conversation about this very thing and that the pope followed up with letters, bringing them

together. that and the way it was handled and the fact that it is toxic in parts of the exiled community in florida and new jersey. you are seeing criticism from marco rubio and leading republicans, but menendez from new jersey. the large majority has been positive. this also opens up possibilities in latin and south america that have been close said off because of the refusal to deal with cuba. in april they will both be at the oas summit in panama. this is the first time cuba and the u.s. will be there. they are setting the stage for what could be a meeting. there will be a trip by john kerry at the beginning of february to start talking about opening up the embassy. this is all a big step that is overshadowed today. the president might have been dog a victory lap and we will have to answer questions on

north korea. a pentagon video was released showing the arrival of alan gross and john kerry simultaneously landing and arriving and their conversation. it's an interesting video that shows kerry and gross saying and conversing. you can overhear them saying i'm not -- i don't like this cuban regime. i'm not a fan of theirs. this is not stockholm syndrome. i didn't become aligned with them. kerry said neither are we. the president is hoping to leverage this kind of agreement into making them behave better. there is a nuance that you will hear from the president. he is not embracing or endorsing the raul castro regime. he said that almost 54 years of isolation has not worked. >> well said and happy holidays to you. thanks for being on at this important time. let's go to the panel.

robert gibbs is former press secretary to president obama. eugene robinson is a columnist and analyst and host to the reid report in the afternoon, maria is from voter latino. it's a team here. i want to start with you. getting ready for one of the press conferences, this is a lot of potential targets for the press. does he have a plan of what he wants the headline to be? >> as kelly said, that's why you do that opening statement. you want to put points on the board before. >> what was your batting average? >> not great. and certainly not great when the fbi announces who hacked sony definitively a couple hours before you do a news conference. those are the questions you prepare for. i think it's always the kind of broad maybe intro expectative questions. did you make a mistake.

what was your biggest accomplishment or the biggest mistake you made this year that always i think you get to see the gores move for each of these presidents. you get to learn a lot. what kelly said is important. the questions are definitely going to be about the here and now, but this is about tone setting for 2015. when the president comes back from hawaii, he will land in a city that has a much different congress. this is as much about talking to them for next year as it is about talking to us about right now. >> i would love to ask 50 questions. how many people are in the room when the president is preparing and are they on headline? nice, guys. thank you for preparing this. what is going to be the historic importance of this year? he has to put that cap on it. a vacation. he has the last chance to cap the story. >> we might hear more we expect about climate.

my understanding from folks in the white house is that this is an issue about which he has come to care in an increasingly deep way. and heard of him with his grandchildren and what world they will have. >> he is going to be alive. this will be a hotter issue in 20 years. >> she feeling this more personally now and sees it as an obligation of his presidency to really move us forward on climate. while that is down on the list in terms of urgency today, we have to hear about sewny and cube and i think he is going to talk about climate. >> latin american issues all over the board. i saw a number like a lot of us. even rod pays attention. only 47% of latino men in this country, that's a rebundancy are for hillary clinton. it's like every other ethnic

group. 75% of women who are latina are for hillary. i'm fascinated by the new political news. >> unfortunately latino men don't vote in record numbers. latina women do. for hillary that's a good thing. i also think we are under estimating the reason why. we are talking about climate and immigration and cube. what he is trying to do is teeing up not 2015, but a democratic candidate for 2016 in order for him to cement his legacy now, he needs a democrat. >> to cheer what he has done. >> and ensure it is not unravelled. he saved up all the executive orders and saying now is the time for me to act and keep reminding the american people. >> i have to go to joy. i put my list together and i'm the typical white guy. i skipped ferg and skipped eric garner. the issues have been so hot with the communities around the

country. does she to say something at the end of the year as an opinionated person to ka thap and say what it means in terms of the future and the past? >> i think he will. you have seen this launched on the office and doing a lot of aggressive work to deal with policing and kmups of color. it's not just yesterday. i think you will hear what they plan to do and how they planned to get goals. yeah, i think they will be involved, but i agree that the immigration and cuba will be important. just listening to you guys talk, one of the key features is this is a period who for the first time since he has come into the white house is unconstrained by the fears and concern dispepsia. those concerns are off the table. he doesn't have to hedge because they have a mitt term and i don't think hillary's campaign will play as much in his mind. he wants to clear things off the deck. i know that immigration was a dig deal that he wanted to get

done. you will hear a lot about that. the cuba spees about him wanting a legacy that is important to latinas. >> one of the commonalities, these are issues that the president can do without having to get permission or sign off by congress. whether it's immigration, i agree with you. you will hear a lot about climate. this is one of the great things that they can do. an agreement that gets established with nations around the world that is historic is not on the front page of a lot of newspapers. this is an opportunity to do that. what is important again, gi back to the fact that these are the things the president can do. cuba, immigration, climate without getting congress or 50 plus 1 in congress to agree with him on it. that's a big thing. that won't be the case next year and that's why this has to set out what happens. >> when are is the president's luck going to change?

that's the hope. he talks about the spooky good luck he had where the two guys disappeared overnight. most people spend their lifetime trying to be a senator. he it handed to him. the economy is am can be back and we had nothing to do with it. it's crashing. it's a big tax cut. >> to a certain extent you make your own luck, don't you? >> is it going to turn? >> i think it's better to set the agenda than have it set for you. >> he is making his luck. he will have better luck as he goes forward. >> you were very much for that. you use the phrase around here. >> par think he is better pressuring and keeping the pressure on the side. cite new ideas. >> thank you. >> and we so markedly different

from him and his policy and the majority of the americans. >> they don't know where they are going. >> the whole idea of cuba, cuba, yes, it is going to be legacy building for him. florida comes into play. everyone assume that is the majority of cubans. >> it's 50-50. a wash. it's not a wash in the republican primaries. you know about this. if you are a republican, can you bug the community in little havana? >> it's almost impossible, but you have to focus on what young people want. >> the ticket in 2016, even these two years prior have to be mixed in some way ethnically and gender-wise. joy? >> yes. i think that the democratic ticket, you will most likely have hillary clinton. that takes care of the gender piece. she would do well to think about

putting someone on the ticket. >> what about the republicans. can they again bluntly stated run against two white guys. the times and the demographics are changing. >> absolutely if you looka the the vote chair if it looks like the last one you have you have white voters at a smaller percentage than four years ago which is the lowest we had in a modern election. i will say this. you can throw a dart at a board and you have as good of luck picking the vice president. no one would pick joe biden or dick cheney and no one would have picked really any of these guys. >> i will bet that the next republican nominee trying to choose a vice presidential candidate looks at susana fernandez and nicky haley.

>> that would be amazing. south asia. the same. >> for the democrats, having hillary on the top of the ticket t bhoofs her to go for a white guy. >> like me. >> she need says a rough talk. they love that stuff. >> like a joe biden kind of guy. >> a labor kind of guy. >> i think the republicans need the diversity on the top or the bottom of the ticket to open up. >> i don't agree in a sense. for republicans, they have to pick the ethnic running mate who will be to every other member of that group. they have to pick a herman cain who most african-americans disagree with. that's about getting white suburban voters. they have a substantial share of the white vote. that's where they will go.

i don't see why or what good it necessarily does them. >> you hit on something most people -- i think you have got it. i'm not knocking it, to try to shame themselves as not racist. to pick something that suggests to white suburbanites. white suburban women don't top the vote for a racist party. they want to be known as nice people. >> karl rove strategy. they just need to skim the top. >> but you can have the women vote against you. >> it is going to be a logger aspect. when the whites say sooner or later it will come. you might as well get the logger ready to circle the wagons. >> you mentioned the fe mall governors. she has the best job in america because she is on the playoff committee. condi rice will get a lot of

look because she is an african american woman. >> you know who is ahead of that is rollins. when the seat opened up and basically ready to fill it in. she would still be there. >> i'm happy to take her position on a college football playoff. she could be the vice president. i will be the better for it. she can deal with all of that stuff. >> tonight's press conference. where is this going to go in terms of the history books? >> you will see a lot of questions, tough questions about immigration. that's what that audience of reporters is going to hit the president on. it will be ape robust defense. >> sorry he going to make a case for a law? >> i don't think he believes congress. >> if i were the republicans right now, i would actually pass up anything and put something up and pass it as fast as possible to get the wind out of executive

action. >> the politics. neutrally speaks, does he want a law so he codifies all of this? it doesn't just become guy, but the law of the land. doesn't he want a bill that deals with the immigration policy? >> the majority of americans want a law. he is addressing only 5 million people. we have close to 12 million people. >> he wants a law. all this executive action is great. all of it can be rolled back in the next election. does the president want to see something codified in addition a treaty or -- >> you will never get citizenship without a law. >> all of these things to build an embassy to a point that cuba will take something that comes out of the senate and the congress, the president when you are two years left, you think about what sentences and paragraphs are you adding to the history books.

it's great to set up the next campaign, but in two plus years, he won't be involved. adding them to the history books like the cuba decision does is the points on the board that the president wants to see. >> is the next nominee of the party going to be separating herself or himself from this administration or saying this has been a great presidency. i'm going fight to continue the policies? >> we see in the last election trying to distance yourself. >> al gore tried that too. >> it's not. it's not going to work. you have to -- >> you know who did that pretty well? george herbert walker bush said i'm the third term of ronald reagan, but i will be kinder and gentler. he found a way of nuancing away without krit sao sizing. can hillary clinton run as something a little different than obama distinctively, she is a different person, but at the same time benefiting from the

loyalties that has been established in the democratic party and among minorities toward this is president. >> the base of the party is going to require it. hillary clinton will have to distance herself. they will presume to get african-american votes, but if they want the turn out, they want to stick with this president and not try to do what al gore did and make the separation. hopefully the clintons have learned that lesson. she will attempt to bring his legacy along and not try to distance herself. >> i try to remind from all my junkie friends. all he had to do was win new hampshire or arkansas or tennessee. any of those. a lot of good things would happen instead of bad things. >> the next nominee and presuming it's hillary clinton, they have to do both. the president even after a good six weeks still finds himself at a 45% approval rating.

converting the people who approve of that president into your electoral vote leaves you 5% less. there no doubt things that hillary clinton will have to have that agenda and be distinctive from the barack obama agenda and be distinctive from the bill clinton agenda. it will be her agenda and her voice. she will be supportive of a lot of elements, but has to find ways that she disagrees. not necessarily in just political ways, but truly. >> i want to get you both. how should the president change? if they say how you have been making calls to members of congress and establishing personal rapport in a way you didn't before. is this the hall mark and will you try to be personal with your enemies? >> we know what the president wants to do. the question is, how does the white house get it done? >> will he change his manner?

>> i think it's a great -- >> we will see him do that. for the first time in a long time, he is cultivating a lot of democrats. the fact that he is realizing that that relationship building behind the scenes is scenes is o critical. >> is it too late? >> looks like it's too late for charles schumer. >> did you notice schumer saying health care should have been second or third in the list of things to do. that's a strong shot at the president by a very smart guy politically. >> if you just look at what happened to nancy pelosi and the liberals in congress who had jamie dimon and the president gaining up on them in these financial reforms. i don't see a change in terms of the weather of the white house. they have to deal this-w their own caucus's anger. >> let me ask you the question,

you've got the hot hand here. will hillary clinton withdraw as leader endorse chris van holland in order to battle with steny hoyer? >> will nancy pelosi? >> hoyer was on the other side -- >> what planet do you reside on, joy? what planet -- >> they stick together. >> no, no, no. >> gene, isn't it in the wind right now or in the water right now that nancy's going to -- she's a brilliant makeavalien politician. she has a vote for steny hoyer? who is going to win? >> chris is doing a lot of high profile stuff. on the plane to cube back and steny -- >> i just think -- >> i can see -- >> chris is smiling. >> i say february look for the

battle royale. >> it will be because he was on the other side. i think financial reform is a sleeper issue democrats are really outraged. >> joy, i suggest there's a little more. i think nancy brilliantly and perhaps treacherously left steny hanging with 58 and she took the rest of the caucus. >> that's right. i used to work on the hill right before -- right before pelosi took office and there was always this jockeying because steny wanted that. what she's done is basically brought him in as close as she can but winking at him saying, you're not as secure and he knows that. >> in the district or the caucus? >> she's so good. >> she's the best. >> let's go back to health care. the figure it is that came out, hitting an all-time low, this is

something that i think democrats and voters can give the president credit for. health care may not have been the most popular thing to do. and with 86 -- >> why isn't it? middle class have what they want? >> because 86% of the country started with health care, but it's the right thing to do. what hillary clinton probably needs to do in a way on some of these issues is find something that might not be the most popular but is the right thing to do. because i think people have to feel an authenticity to her, a willingness to poll at 70%. and i think that's true -- >> do you think she can depart her constituency. >> here comes president obama. >> got a full house today, huh 1234 well, all i want for christmas is to take your questions. first, let me say a little about this year. in last year's final press

conference i said that 2014 would be a year of action and would be a breakthrough year for america. and it has been. yes, there were crises we had to tackle around the world, many that were unanticipated. we have more work to do to make sure our economy, our justice system, and our government not work just for the few but the many. there is no doubt we can interview the new year with renewed confidence that america is making significant strides where it counts. the steps that we took early on to rescue our economy and rebuild it on a new foundation helped make 2014 the strongest year for job growth since the 1990s. all told over a 57-month streak our businesses have created 11 million new jobs. all the job growth we have seen have been in full-time positions.

much of the recent pick up in job growth has been in higher paying industries. in a hopeful sign for middle class families, wages are on the rise again. our investments in american manufacturing have helped fuel its best stretch of job growth also since the 1990s. america is now the number one producer of oil, the number one producer of natural gas. we're saving drivers about 77 cents a gallon at the pump since last christmas. effectively today our rescue of the auto industry is officially over. we've now repaid taxpayers every dime and more of what my administration committed and the american auto industry is on track for its strongest year since 2005. we've created about half a million new jobs. thanks to the affordable care act, enrollment is beginning to

pick up again during the open enrollment period. the uninsured is at a near record low since the law passed, the price of health care has risen although its slowest rate in about 50 years. we cut our deficits by about two-thirds since i took office, bringing them to blow their 40-year average. meanwhile, around the world, america is leading. we're leading the coalition to degrade and ultimately destroy isil, the coalition including arab partners. we're leading the coalition to check russia against ukraine. we are leading the global effort to fight ebola in west africa. we are preventing an outbreak from taking place here at home. we're ledding efforts to address climate change, including last month's joint announcement with china that's already jump-starting new progress in other countries. we're writing a new chapter in our leadership here in the

americas by turning a new page in our relationship with the cuban people. and in less than two weeks, after more than 13 years, our combat mission in afghanistan will be over. today more of our troops are home for the holidays than any time in a decade. still, many of our men and women in uniform will spend christmas in harm's way and they should know that the country is united in support of you. and grateful to not only you but to your families. the six years since the crisis have demanded hard work and sacrifice on everybody's part. but as a kurngts we have every right to be proud of what we've accomplished. more jobs, more people insured, a growing economy, shrinking deficits, bustling industry, booming energy, pick any metric

you want, america's resurgence is real. we are better off. i've always said recovering from the crisis of 2008 was our first order of business. and on that business, america's outperformed all of our other competitors. over the past four years, we've put more people back to work than all other advanced economies combined. we've now come to a point where we have a chance to reverse an even deeper problem. decade's long erosion of middle class jobs and incomes and make sure the middle class is the engine that powers our prosperity for decades to come. to do that, we have to make smart choices. we have to make the right choices. we have invest in the things that invest in higher paying jobs for more americans. i'm being absolutely sincere when i say i want to work with this new congress to get things done. to make those investments.

to make sure the government is working better, smarter. we are going to disagree on some things, but there are going to be areas of agreement and we have to be able to make that happen. and that's going to involve compromise every once in a while. we saw during this lame duck period that perhaps that spirit of compromise may be coming to the fore. in terms of my own job, i'm energized. i'm excited. about the prospects for the next couple of years. and i'm certainly not going to be stopping for a minute in the effort to make life better for ordinary americans. because thanks to their efforts, we really do have a new foundation that's been laid. we are better positioned than we have been in a very long time. a new future is ready to be written. we've set the stage for -- for this american moment. and i'm going to spend every

minute of my last two years making sure that we seize it. my presidency is entering the fourth quarter. interesting stuff happens in the fourth quarter. and i'm looking forward to it. but going into the fourth quarter you usually get a time-out. i'm looking forward toy a quiet time-out, christmas with my family. so i want to wish everyone a merry christmas, happy han kashgs happy new year. i hope you get a chance to spend time with your families as well because one thing we share, we're away from them too much. now, josh has given me the who's been naughty and who's been nice list. i'm going to use it to take some questions. we're going to start with kerry brown of