and aloha with a big w under his belt. president obama is expected to speak any moment now and then head to hawaii for vacation. this is a good christmas present and good kwanzaa present, a good hanukkah present for america. >> but no holiday break on the campaign trail. mitt romney goes after the president and vice president on the economy. >> i don't think they get it. i don't think they understand from fantasy land what's happening in real america. >> this hour we'll talk to mark halperin, fresh off his interview with mitt romney. plus, ron paul on the rise. he's now leading the pack in iowa. what does that say about the republican race? plus, could twin suicide bombings in syria be the work of al qaeda? and happy holidays on wall street. holiday shoppers give the struggling economy a boost. good day, i'm luke russert

live in washington. the dramatic standoff over the payroll tax cut ended with the we werer shortly after 10:00 this morning when given the chance to object to the senate bill freshman house republicans kept quiet and let it pass. earlier today senate majority leader harry reid couldn't help taking a jab at the conservatives who had led the fight. >> i hope this congress has had a very good learning experience, especially those who are newer to this body. everything we do around here does not have to wind up in a fight. >> nbc's mike joins us from the white house and mike is nbc's political director. mike, give me the state of play. a little bit less to this press, is he going to take a little victory lap before his trip to a way we? >> i think so. he's going to punctuate the events from the week. it started with president obama on the defensive.

he appeared in the briefing room just last saturday after retreating on that keystone oil pipeline coming from canada to the gulf coast of texas after explicitly saying he would not allow republicans to attach anything like that, he would reject it if they tried to attach it. he ended up accepting it. then the next day john boehner appearing on "meet the press" put the plug on the whole deal. 89 votes. not good for the house republican conference obviously dominated by the tea party freshmen. back and forth we went all week. the pressure mounted with each passing day. it was just 24 hours ago that the majority leader eric cantor as you well know invited the president to come on up to the capital saying he could bring bo along with them. they could hash this thing out. over the course of the next couple of hours after that it became very apparent. we can talk about karl rove. we can talk about various senators coming out and telling house republicans to get off the mark, to declare victory, come

back in two months and get at this again. when mitch mcconnell, the senate republican leader put out that paper statement yesterday trying to urge those house republicans forward, then the dam broke and you reported, luke, we saw conservatives in the house come over over and say they would support that short-term extension. that culminated in the anti-climax that you were talking about today, basically two senators, harry reid and mark warner in the senate, wave their hands -- >> 1:29 is all it took. >> a buck 30. >> right. >> and then over to the house where we heard a little bit from steny hoyer but that pretty much an anti-climax and republicans were in full retreat. luke? >> mark, where do we go from here? obviously the president did win this fight. the house gop did back down. is this the president's issue from now to the state of the union? will he go around the country and really try to drum this up? >> we saw the president make

this pivot and reductions when he gave that big jobs speech in zerptd september, early september of 2011 and really stayed on that message. in fact, the payroll tax cut was a big portion of that jobs bill. but, luke, you mentioned, where do we go from here? the biggest thing is this just a two-month extension? we're going to come back to this fight again. probably going to see a lot of house republicans want to stick in policy writers as well as some type of spending reductions as priced for that full year-on extension on a payroll tax cut as well as the unemployment insurance. the one problem for the house republicans is now they're now on the record advocating for a one-year extension. the question is, what are they going to be able to get in return for that if. >> it seems that president obama around christmastime always gets some sort of boost. i mean, last year it was striking the deal with the bush tax cuts and the start treaty the year before with the health care reform. he seems to get a boost around the holidays. will that taper off or will this be the wave he can ride into

november 2012? >> we've seen two patterns from president barack obama or senator barack obama since he's been on the national stage. he does well in the fall and wenter time and struggles awfully in the summertime. we saw his poll numbers dip during that debt ceiling fight back in the summer and, of course rs just like last year he has some victories where we might actually see his poll numbers go up. this is going to be an up and down affair. i think if you talk to the people at the white house they feel like there aren't a lot of other pitfalls or bumps in the road like the debt ceiling decrease between now and 2012. the biggest thing for them, of course, is what that unemployment rate is going to be particularly as we head into summer of 2012 and those attitudes about the economy are locked? >> the question has been asked on capitol hill in the last two years where are the jobs? mark murray, deputy political director for nbc news and expecting father. congratulations, my friend. have a merry christmas. for more, i'm joined by mark halperin, editor at large at "time" magazine and senior

analyst at msnbc. >> happy holidays. >> likewise. you just did a wonderful interview with mitt romney. and i want to talk a little bit about him and the issue of the payroll tax cut extension, the pol tiitics of payroll. he said, quote, if you're a candidate for president and not prepared to talk about the hottest issue right now that affects every single american, there's a concept called leadership and people sometimes think i'm too aggressive. but at least i lead. can gingrich score points against romney in places like iowa, new hampshire, south carolina by saying, look, mitt romney doesn't want to put his opinion forward at least i can actually perpetuate my opinion. mitt romney is refusing to lead. will that stick? >> i think it's a matter of pure politics romney did the right thing for himself. it wasn't just a small fracture within the republican party. you had mitch mcconnell siding with the president and the republicans on the house on a different side. romney in general has to pick his spot because he does suffer potentially a both in the

nominating fight and general election if he's the nominee for this image that he's not resolute, he's not a man who is michele bachmann says says what he means and means what he says. in this case just from pure politics not in terms of leadership i think he did the right thing because siding with either part of the republican party i think had peril to it. >> mark, you asked him in your interview about when he was at bane capital and involved in a lot of takeovers that often resulted in job losses as that business often does. and he had a very interesting answer to when you asked him could someone like him sort of have the sympathy that could show voters that he felt something when their job was lost. he goes, quote, i understand that in the way, i think a lot of people in my circumstances do not understand it, because i've served as a pastor in my church and worked with people who are out of work. i know the huge human cost that's associated with an enterprise going out of business. will this work for mitt romney? can he sort of push back on the

idea from president obama and david axelrod that he's on out of touch elitist worst hundred of millions and he has no clue of what is going on? >> i think the broad outline to that, luke, would be a narrative where romney could change that. just the bare bone of that story, church leader and dealt with people not just in one community but across the mormon community including non-white mormons in a way that as he described it to me and he's described in a few other occasions suggests someone with a great deal of empathy and familiarity with the impact it has on an individual and family that losses jobs. it needs to be more concrete. if the romney campaign and creating a narrative for mitt romney really wants to drive home that message i think we will need to hear from some of the people he counseled, not just from his own testimonial about himself but from those people.

>> that could be the strategy then, sort of selling him as this one who counseled the unemploy unemployed. that's the political ad. >> when he said that, i thought, well, this may be what he's going to have to use because he needs something to counter agent what we're certainly going to see, what we saw when he ran for senate against ted kenny in 1994, governor of massachusetts. you can bet the obama campaign, if mitt romney is the nominee, is going to out run interviews when people lost jobs and he's going to need to counter act that in some way, probably more effective than other people testifying on his behalf rather than him assert that empathy. >> ron halperin, "time" magazine and author of "game change." makes a grade holiday gift. >> the movie will be on hbo march 10th. the trailer came out the other day. you can see that all over the interwebs. >> that is appointment tv. good to see you. have a merry christmas. the state department is condemning the twin suicide bombings in syria today that

killed at least 40 people. the car bombs went off in damascus outside of two security offices. for now syrian authorities are pointing the finger at al qaeda. with me now for more on syria and the unrest in the region is michael singh with the washington institute. michael, thank you for coming here. >> thanks, luke. >> in the latest attacks we have 40 dead, 100 wounded. the government is blaming al qaeda and the protesters but i understand this happened in downtown damascus. and if that's, in fact, the truth, which we don't know it is, that would show the government's pretty weak. >> well, it's a horrific attack, luke, certainly. no matter who is responsible for it the u.s. government is right to condemn it. the syrian regime has been blaming al qaeda, terrorists, foreign elements for the protests for months now. and i don't think many people put much stock in that. same thank that home gamoammar gadhafi did in libya. it doesn't seem likely this is

al qaeda. for the reasons you said, downtown damascus, highly secure, four checkpoints to get to this building. seems very suspicious. this could be the regime possibly, we're just speculating though, coordinating these attacks. >> conspiracy theorys will abound as they always do in the middle east. could be the regime doing something to create the impression of terrorism or it could be these kind of diseffected elements of the security forces at war with one another. you know, perhaps they could get a vehicle through those checkpoints whereas the protesters or others could not. >> there's a lot going on in egypt today. massive protests at tahrir square. the violence they've shown towards women. how do you see this playing out? we had the elections a few weeks ago. the muslim brotherhood was able to fill that backing with a lot of power. is egypt in this gray area it's been in all of 2011, since february? >> i'm afraid it's worse than a gray area. it's a down ward spiral at this point because the protesters are

against military rule in a sense. the military's response to the protests in turn sparks greater protests because of the tactics they're using. and at the same time the economy is in a state of collapse and so there's no jobs. you know, the growth is -- has stopped essentially. and inflation is skyrocketing. what we're seeing is just, as i said, a vicious circle which doesn't show any signs of improving any time soon, frankly. >> michael, thank you so much for being on the show. appreciate it. >> thank, luke. you're looking live at pictures here of the white house briefing room. we're expecting president obama to speak any minute now on the payroll tax cut deal. we'll bring that to you live when it happens. don't go anywhere. christmas cheer on wall street and main street. what does it mean for economic recovery? cnbc is here next. this is [ male announcer ] this is your moment. ♪ your ticket home ♪

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strong holiday spending is helping the economy and a year end on a higher note. retail sales are higher this year. and sales have hit $32 billion. in fact, last week was the busiest week for e-commerce ever. cnbc ron is joining me now. ron, seems like holiday spending stronger than expected. are people having a little bit more money in their wallets this year to buy gifts? >> seems so. we've seen jobless gains come down, indicating the labor market maybe improving and the more lackluster monthly unemployment numbers. and it does seem -- i travel an awful lot around the country. seems like the malls are busy, airports are busy, planes are full, restaurants are full. i think the strength of the economy is slightly underestimated statistically. anecdotally it looks all right. the malls are quite busy. >> i did some christmas shopping

a few days ago and i got to tell you, it was absolutely packed. i'm with you. i saw it firsthand as well. online sales had the best week ever this past week. 6.3 billion in spending. are we going to keep seeing the online sales take a larger chunk of the market? >> traditional retailers are also in the game. they're participating as well. when you look and listen to the likes of the fedex who is seeing shipments go up because online purchases have advanced, you know, certainly companies like amazon have stolen and taken market share but there are other kind of traditional retailers who have built out rather robust online platforms. so they're selling also. it's a mix of maet share gain and just the web growing as a percent of existing sales as well. >> how does this all bode for next year? i saw a report from jpmorgan. their analysts think the economy is growing at 3.5% discord. that would almost be the double the growth from last quarter and

best since the spring 2010. are we seeing forward movement here? >> i think so. they are saying this is a temporary up draft. i think the u.s. economy is gaining momentum. real estate seems to be picking up a bit which is critical to extending the recovery and making it more self sustaining. the labor markets are improving. the u.s. economy seems somewhat immune to at the moment anyway the problems in europe and the slowdown in china. in fact, manufacturing seems to be coming home. we're seeing a variety of different both statistically notes and anecdotal notes saying the economy may have some new legs. i happen to think 2012 is going to be a pretty good year. i know we only got a temporary extension of the payroll tax cut. it's going to be extended through 2012. n that will be helpful. this energy boom has been underestimated by people. seeing 600,000 jobs according to an oil expert created in these various areas that are relying

on shale activity. so i think a lot more is going on than most people realize. i think 12 will look fine. i think wall street is happy your friends down the street have gone home for the holidays. that might be the biggest reason for the rally today. >> indeed. ron insana, have a great holiday. you're looking live at the pictures here of the white house briefing room where we're expecting president obama to speak any minute now on the payroll tax cut deal. we'll bring you that live when it happens. up next, paul's problems. his poll numbers are on the rise in iowa but can new questions about an old controversy drag him down? politico briefing is next only on "andrea mitchell" reports. staying active can actually ease arthritis symptoms. but if you have arthritis, staying active can be difficult. prescription celebrex can help relieve arthritis pain so your body can stay in motion. because just one 200mg celebrex a day

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does anybody notice, the polls have changed significantly? [ applause ] they don't say, it's impossible, he's out of step, he wants to balance the budget. that's out of step.

then how in the world can he get crowds out and get support? he wants to end the war and bring the troops home. [ applause ] >> in the politico briefing is ron paul's numbers continue to rise in iowa questions persist about racist newsletters published in the 1990s under his name. maggie is a senior political writer for politico and joins us for talking about this. i want to put a quote up here on the screen. reuters highlighted a direct mail solicitation from ron paul's newsletter, signing his name, reportedly written in about 1993. quote, i've been told not to talk, but these stooges don't scare me. threats are no threats. i've laid bare the coming race war in big cities. the federal homosexual cover-up on aids, my training as a physician helps me see through this one, the israeli lobby, which plays congress like a cheap harmonica. paul's campaign came out and said dr. paul did not write that

mail piece and disavows its content. but, maggie, that cannot be good for the paul campaign right now in iowa. >> no, it's a problem. people are just starting to tune in. what ron paul has been doing is steadily builting a base of support. he is not surging and fading back like we've seen the candidates doing. he's expanding on what he did four years ago. this also requires on getting average voters. not just his ardent core of backers. this is the kind of stuff that does scare people. even when he said i disavowed this, it had his name on it. he's trying to explain away what this is. >> i have a video of a cnn interview where he literally took off his microphone. get your reaction coming back. >> all right. >> iran is not a physical threat to us and do not have the capabili capability, about men on the version of nuclear weapons is not true. if iran gets a weapon and they don't use it? that's what they're worried about because, then, iran would

become credible and a weapon they use it and all of their fearmongering did work. >> my bad, that wasn't the interview that i wanted to show you but let's ask you about ron paul's thoughts on iran. that can't play too well with a gop electorate which is very pro-israel, right? >> that's right. i think this was a really interesting moment for him in the debate where he ended up talking. >> sorry to enter vupt you. president obama is now walking on to the podium to talk about the payroll tax cut bill that was just passed this morning. >> it was critical for congress to not go home without preventing a tax increase on 160 million working americans. i'm pleased to say he got it done. i want to thank all the members of congress for ending the stalemate and making this happen. because of this agreement, every working american will keep their tax cut about $1,000 for a typical family. and that translates into an extra $40 or so in every

paycheck. vital unemployment insurance will continue for millions of americans who are looking for work. when congress returns, i urge them to keep working without drama, without delay, to reach an agreement that extends this tax cut as well as unemployment insurance through all of 2012. last week i said that this should be a formality and that's still the case. so let's make sure that we extend this tax break and unemployment insurance for a full year. for families but also for our economy. it's right thing to do because more money spent by more americans means more businesses hiring more workers. that's a boost for everybody and it's a boost that we very much need right now. finally, i want to take a moment to thank my fellow americans for bringing their voices to this debate. i met with several here at the white house yesterday. i really think it takes courage

to believe that your voice can make a difference. and i promise you, the american people, your voices made a difference on this debate, whether you tweeted or called or wrote, you reminded people in this town what this debate and what all of our debates should be about. it's about you. it's about your lives, i about your families. you didn't send us to this town to play partisan games and to see who is up and who is down. you sent us here to serve and make your lives a little bit better, to do what's right. and fortunately that's how this weekended. so this is some good news just in the nick of time for the holidays. i do want to be clear though, we have a lot more work to do. this continues to be a make or break moment for the middle class in this country and we're going to have to roll up our sleeves together, democrats and republicans, to make sure that the economy is growing and to

make sure that more jobs are created. we've got an economy that is showing some positive signs. we have seen many consecutive months of private sector job growth, but it's not happening as fast as it needs to. and that means that we've got to redouble our efforts working together, it also means that we've got to make sure that we're rebuilding a economy where if you work hard that work will be rewarded. the kind of economy where everyone's doing their fair share and everybody plays by the same set of rules, everybody has a fair chance and everybody's acting responsibly, including those of us here in washington. so they're going to be some important debates next year. some tough fights, i'm sure, in the years to come. but that's the kind of country that i'm fighting for, one where everybody has a fair chance and everybody is doing their fair share. that's the kind of country that i think the american people deserve and the kind of country that american people want.

so i want to wish everybody a merry christmas, happy holidays, happy new year to you and your families, and that includes everybody here in the press corp. i know you have been working hard and your familys will be happy to spend more time with you over the next few days. i also want to make sure to send the warmest holiday wish toes a wish toes all the men and women in uniform serving overseas right now may not have a chance to see their families over the holiday season. we are grateful for everything that you do. thank you, guys. aloha. >> are you concerned about iraq, sir? >> mr. president -- >> and there you heard it, president obama saying aloha to the press corps in washington giving remarks about after the congress passed an extension in the payroll tax cut holidays says, quote, congress in 2012 keep working without drama, without delay, this type of extension should be a formality because it's the right thing to do. obviously as we have seen this w. this congress 12011, it is a

l lot easier said than done. maggie, the president, a little victory lap for him before he goes to hawaii. do you think his wishes about congress working together and maybe holding hands with the white house will come true in 2012? >> i think we're not quite laid out like that. i do think, though, this was such a rough moment for the house republicans that they are going to approach this perhaps a little differently going forward. the president may end up getting his wish, you know, inadvertently. i don't think it's going to be where everybody is going to come to the table and hold hands but i think this was such a bad moment that i do think you will see differences the next go around on this. >> mike, our white house koesht is there in the briefing room. mike, the president said that he's ready for a tough fight next year because that's the kind of country that he wants to fight for, presumably, the kind of fight where the deal goes forward. is that going to be a mantra 2012, this type of fight in the payroll tax cut is representative of what he values as a politician?

>> certainly going to be the mantra for 2012? already has been since he got back from labor day. the market change and tone from the president certainly more confrontational style with republicans. obviously plays to the democratic base and it's as a s salotory effect. the approval ratings trying to inch up a lot. you asked me at the top of the hour whether that's going to be a victory lap. the president going out punctuating what is an undisputed victory. the republicans won't dispute the fact that the republicans came out on top on this against all odds. a week ago appeared the president caved on a component of this. and that was the keystone pipeline. luke, the problem all along was, republicans simply were not unified in what they wanted out of this payroll tax cut. some of them wanted it. some of them didn't want it. some of them said it was a sugar high. eventually they all got on board saying they needed to extend it. it was part of a republican brand to have tax cuts but

they -- the only thing they really couldn't agree on during the course of this entire debate is what they didn't want, what they didn't want simply a two-month extension for a variety of reasons. economically and political businesses can't plan for two months. they say three months, a quarter at a minimum is what they needed in terms of an extension. look, they're fighting on losing ground here, republicans would say. they are fighting on winning ground. fighting on a tax cut to put money back in taxpayer's pockets. a resounding vukry really by any objective standard here for the the last 24 hour. i can hear the chopper blades of marine one right now, luke. he's going to be waltzing out there any minute if he isn't already on his way to hawaii. >> luke? >> maggie, thank you so much for joining me, guys, and working on the eve before the eve. grates to see you. thanks so much. the done deal is a nice big

holiday present for democrats. but will the good will last into the new year? the lasting impact of this bruising fight on capitol hill is next. don't forget you can get all the latest political news on nbc's brand new website. it's great. check it out. sometimes i even appear on there. even andrea does. where will yon you have to change your pad? now with stayfree you don't have to worry. inspired by athletic wear, only stayfree has thermocontrol to wick away moisture. so you're dry and comfortable up to 8 hours. stayfree.

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their paychecks. and that beginning of it will at least turn out for the next two months but still a long fight ahead for the president and congress making that payroll tax cut permanent. how exactly to pay for it both parties are still very much apart. can democrats turn their humbling of the house gop into a long-term win? not surprisingly steve israel, spearheading the democrats' effort to take back the house, calls the payroll tax cut fight a defining moment. >> there is a deep sense of buyers remorissetse setting in moderate voters that may have voted for a tea party candidate but they don't like the congressional extremism that they got and that, i think, very much puts the house in play. >> karen and msnbc political analyst and former xhun indications director and j.p. frar, strategist for new media strategies. thank you so much for joining me, both of you. >> thank you. >> throw out the question there.

steve israel says that this victory for the house stems as a catalyst for them taking back the majority possibly next year. karen, do you think they can get 25 seats off of this issue? >> i think it's certainly possible if they keep the momentum coming out of this we know the pattern that people have been talking about is how obama stentends to do at the en the year. but the pattern playing out over the course of the last year is the level of the confidence on the part of republicans that we haven't seen in a very long time. they push and push and push and over reach and over reach and don't have support behind them and get to this point and the president is standing there firm and there we have it once again, they completely faltered. because this is such a clear example of how egregious this would have been for the republicans to raise the taxes of 160 million people, which still could happen as you point out, based on what happens when they come back, i think democrats can ride this into the elections and really use this as a bright line contrast between

what they're fighting for and what the republicans are trying to do. >> j.p., republican shaking in their boots after this? >> no. and i actually think that this is a pretty interesting discussion. we just heard from the president who talked about how this wasn't really a political thing, this certainly should have been a form formality. now taking agent whether this was humbling for the republicans, we're talking about how flpt independents are now totally regretting their vote for tea party candidates. this is, in fact, political, which shouldn't be a surprise to no one. that's fine. there are things that the president lost on. he is being forced by congress to make a decision that he didn't want to make any sooner because it's an unpopular decision he has to make on the keystone excel pipeline. you know, it's also indicative of the failure of leadership in washington. you have karen talking about how the republicans have r. just being a punch of extremists. president obama has been in office for three years and we still have to talk about extending the payroll tax cut? let's get rid of the thing.

we're talking about the doc fix. we don't -- we can do the doc fix -- >> okay. but, wait a second, though. you're saying that republicans should be for raising taxes on middle class americans? >> no, they should be for eliminating the payroll tax entirely. that's what i'm saying. >> entirely. and what happens to the social security trust fund then? >> righted. and how do we pay for that? if we're not willing to make millions and billionaires pay their fair share, how do we pay for that, j.p.? >> but this is another interesting thing about what president obama said. he talked about how these are hard times for the middle class. it's also hard times for the poor. i mean, the fact that he keeps on bringing up the middle class. there are a lot of people with different levels of income effected. job creators, the people that need the jobs that we need to look out for. >> i'm going to throw -- i want to interrupt here and get to one thing. president obama has had a tendency on this first campaign to step in it a few times. in iowa he said the rise of a

rugula had gone up. out of touch. fund-raiser in san francisco he said that poor voters, white working class voters cling to their guns and religion. seems he may have stepped in it again. listen to this exchange he had with barbara walters about a trait he doesn't like about himself. >> what's the trait you most deplore in yourself and the trait you most deplore in others? >> laziness. >> you're lazy? >> you know, it's interesting. there is a deep down, underneath all the work i do, i think there's a laziness in me. it's probably from, you know, growing up in hawaii and it's sunny outside and sitting on the beach. >> j.p., i mean, does the ad just write itself right there if you're a republican operative? that diplomat look too bad for president obama. >> well, i would say that waiting until the last minute to deal with the payroll tax cut is probably indicative. if he had dealt with this a lot

sooner, then we wouldn't be dealing with this last-minute problem that we're having right now. but i think it's a smartd thi t for him to say insofar as constantly scheming. it's nice to see he doesn't feel the same way. >> he says there's a laziness about him. >> i think the guy was talking about -- >> trying hard for a job and he's saying he's lazy? even in the context that can't look good. >> hold on. i think he's talking about like picking up his socks. i don't think you can accuse this guy of being lazy when it comes to getting the work done. let's remember a couple of things. this this whole discussion became political because the republicans chose to make it political. at first they weren't even for the payroll tax at all. then all of a sudden -- >> no, it's politics. that's why it's political, karen. >> but the republicans turned it into a political game. they could have just said yes when they got their answer in the first place. and i think i heard the president say, again, i think he's talking about picking up his socks. i don't think he's talking about

being a hard worker. by the way, this is the guy who got osama bin laden. >> we'll let everyone go back to their corners. enjoy the holidays. sharpen up on the arguments. see you in 2012. you will never guess who is scoring the worst on a new quiz about the nation's financial troubles. we'll tell you next. former comptroller general david walker is put -- puts the fiscal iq test, i took it and scored decently well. >> from the shores of afghanistan to the hearts and homes of everyone back in new england, here's wishing you all a wonderful holiday season. go navy! tom's discovering thatg healthy can be fun. see? he's taking his vitamins. new one a day vitacraves plus omega-3 dha is a complete multivitamin for adults. plus an excellent source of omega-3 dha in a great tasting gummy. one a day, gummies for grown-ups. ♪ and just let me be [ male announcer ] this is your moment. ♪ your ticket home

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coming up on "news nation", blake throug breakthrough, the ranking member of the budget committee about congress' last-minute. and the latest on president obama's reaction. also, chaos breaking out in

stores around the country with nike's release of those retroair jordan's. customers broke down a door in indiana. shots were fired in california. we'll talk about that. and the new company policy means that some volkswagen employees won't be getting work e-mails on their blackberries when they're off the clock. should other workplaces follow suit? it's our gut check on this friday. that's up next. the federal government's former money man is wanting the nation's skyrocketing debt poses the greatest threat to america's survival. he's challenging millions of americans to get online and take a fiscal iq quiz to literally separate fact from fiction about the nation's debt. david walker is the former u.s. comptroller general, founder of the comeback america initiative, the group that created the quiz. david, thanks for being with us. >> great to be with you. thanks for taking the quiz. >> i took the quiz. i got a 90. i got 100 on fiscal wisdom but 80 in fiscal knowledge. i have to brush up on that.

but one question i did get wrong was about the total percent of debt of the united states and our gdp as compared to europe. graphic i would like the put on the screen. how badly europe is doing. usa, 3%. you hear all of these bad things about ireland, portugal, france, spain, we're up there in terms of total debt. explain the concept of the total debt is part of the gdp and why we're so bad. >> when you take federal, state, and local debt which is what you have to do to compare us to them, you compare it to the total size of the economy, we're, as you saw, as bad as and worse as some of the countries in the news in europe. we're up from oh we we had debt of 7% of the size of the economy in 1900. and now we're over 100% and rising at record rates. some debt is okay. but we're clearly beyond the point of reason and adding debt at record rates. >> the other question i got wrong was up on capitol hill that social security is sound for the moment.

that it's at an adder to the debt. that's not accurate. it actually is -- since 1983 it's added to the debt. explain that, please. >> the deficit is the issue. the deficit is a cash flow basis. cash flow in, cash flow out. social security has been in a negative cash flow position since 2010. it is therefore adding to the deficit. it's true. it has about $2.7 trillion in bonds. those bonds are backed by the full, faith, and credit of the united states government. guess what, the federal government doesn't want to count it as a liability. if you look at the financial statements you won't find a liability to what it owes social security, medicare. that ought to change. >> both parties on capitol hill seem to be at an impasse. is there any way the debt will go down unless entitlements are reformed and taxes are raised? >> there's absolutely no way that you can restore fiscal sanity and stabilize debt as a percentage of the economy in a reasonable and sustainable level unless you reform social security programs, reduce defense and other spending and

raise more revenues. through comprehensive tax reform. >> for the young people watching us right now, why is the debt the biggest national security issue the united states faces? >> because if you do not keep your tough choices starting no later than 2013. >> you have been working on the issues for the past 15 to 20 years and you had the documentary i owe usa. for someone who is young like myself and entering the job market and having a family in their 30s or 40s where they have the best years of their lives

ahead of them, what do you foresee as the america they will grow up in if we continue on the current path? >> we are mortgaging the future of our young people and reducing investments in their future at a time that they face competition. we have to face reality and engage in the reforms i talked about. if we do, america can stay great and our future can stay better than our past. if we don't, our best years might be behind us. >> i hope everyone goes to fiscal iq.net. keep holding both sides accountable. merry christmas to you, my friend. >> merry christmas to you. >> what political story will mike headlines in the next 24 hours? that's next. we're kind of a quiet couple. yes.

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>> which political stories it is make headlines in the next 24 hours? msnbc columnist jonathan cape hart will join us and i hope

there is not a story on christmas or the day after. we need a 72-hour break. >> i hope that we are not talking politics and we will spend the time tomorrow and the days ahead being thankful for being prayerful and the families that have been struggling and trying to make ends meet and provide for their families and keep the roofs over their heads. hopefully that's what we will be talking about. >> that does it for this edition of "andrea mitchell reports." have a great weekend and happy holidays. thanks for everyone who helped me out hosting "the daily rundown" and "andrea mitchell reports." follow the other shows on line and twitter.

my colleague craig melvin has a look at what's going on at "news nation" women miss you in d.c., my friend. how you been? >> merry christmas to you, my friend. ment in next hour, president obama telling lawmakers to continue to work in the new year after congress ends a week-long stalemate and passes the tax cut extension. chris van hollen will join me live. a chaotic scene at malls as customers scramble to get their hands on new air jordans. shots fired and several shoppers were arrested. millions on the move and heading home. we will get the latest on the week in travel. "news nation" is just minutes away. sh rewards card gives you a 50% annual bonus! so you earn 50% more cash. according to research, everybody likes more cash. well, almost everybody... ♪ would you like 50% more cash? no!

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the impasse is over. president obama signs the payroll tax cut bill and millions no longer face higher taxes in january and