right now, five days out and another shake-up in the iowa race, monday among republicans, romney is still out front and ron paul is close behind but gingrich has nose dived and rick santorum is the new king of the surge. >> folks are coming to the guy that has the best and strongest record and strongest plan to get this country going. >> but could the santorum boom go bust when independence who can register on caucus day are counted? they'll show up in our new poll tomorrow. how does newt recover after dropping 20 points in 20 days? buy describing himself as a latter day giper. >> it is exactly the fight that reagan was in with the establishment in '80xo it's amazing how none of the fault lines have changed. >> and turncoat politics, only

hours after showing up with michele bachmann, bachmann's iowa chair defects to ron paul. >> we're going to take ron paul all way to the white house 2012. >> in the direct conversation that i had with him, he told me that he was offered money. he was offered a lot of money by the ron paul campaign to go and associate with the ron paul campaign. no one else knows about that conversation other than kent sorenson and myself and i know what he said to me about that. >> have you spoken to michele bachmann, she said you personally told her you were offered money. >> that's not true. >> not true at all? >> no. >> were you offered any sum of money? >> absolutely not. >> iran on the strait of hormuz as the u.s. announces a sale to

long fighter jets so saudi arabia. no more mystery about mitt's hopes in iowa, he is all in. announcing he'll stay in des moines on caucus night and do the morning day after interviews in the hawkeye state not new hampshire. romney is launching a new ad today. >> generations of immigrants looked up and saw the statue of liberty for first time. one thing they knew beyond any doubt, they were coming to a place where anything was possible and in the campaign to come, the american ideals of economic freedom and opportunity need a clear andç unapologetic defense and i intend to make it because i have lived it. >> but while the campaign's television ads are all soft and fuzzy, the pro-romney super pack continues its deadly assault on newt gingrich. >> ever notice how some people make a lot of mistakes. >> mistake. >> i made a mistake. >> made mistakes at times. >> haven't we had enough

mistakes. >> chris cillizza managing editor of post politics.com and chris, first to you, thank you. thank you, marathon man. >> thank you. >> for giving us a couple of days off. >> what are you seeing in the poll? >> the thing that's most striking is rick santorum up 11 points -- >> how real is that? >> because newt gingrich is down 19 points and rick santorum is picking up the lion's share of that support. you know, the social conservative vote in iowa has gone from michele bachmann to herman cain to newt gingrich and at least right now it appears that a portion of it is now moving to rick santorum. question is can enough move to him so he could be a modern day mike huckabee? he beat mitt romney. i think it's unlikely because perry bachmann and gingrich,

they are still all in that field and taking some of that vote, splintering enough that frankly mitt romney may wind up winning with 26% which is remarkable. >> that is the point susan page, you're in des moines, we'll join you there tomorrow. the whole point is that mitt romney is benefitting from this division of theç conservative libertarian evangelical wings of the party. >> he sure is. i interviewed mitt romney yesterday on his campaign bus. i have to say he is about as optimistic as i have seen him. i remember four years watching his campaign collapse at this point with the surge of huckabee, there's none of that sense now. i think the romney people are in this to win. we've never had someone who won the iowa caucuses and then the new hampshire primary and then failed to get the nomination. >> susan, also usa today and gallop have a poll an political ideology, this is your poll on a

scale of 1 to 5 with 1 being very liberal and 5 being conservative, respondents rated themself as 3.3 slightly to the right. they rate mitt romney as closest to their idealogical views and president obama 2.3 and michelle bachmann at 4.0. mitt romney is sort of in a sweet spot. >> he is if you can get to the general election. mitt romney's problem is to get through iowa and then in south carolina, which is a conservative state, a history of picking the winner. i interviewed newt gingrich for a package we're running tomorrow and he was of course upset at his fall in the polls. he says all he needs to do is survive until south carolina because that's where the electorate will be friendly to him and not mitt romney. >> the question is did he have the money?

they have pushed back the fact that they are running out of money, that the fourth quarter willç show they are in the red. they say they are in the black. but they need the money for new hampshire. >> and beyond. >> to get to south carolina. then florida, an expensive state. >> what we know andrea that is always true, money follows momentum. if you win, you will get money. if you look like a winner, you will get money. the converse of that, if newt gingrich finishes a distant third in iowa, maybe he comes in fourth in iowa, raising money starts to become a lot more difficult. one thing to add, newt gingrich's campaign said they raised $9 million in the last three months of 2011. they have -- they have $500,000 on tv vastly outspent. what does that tell you? if she had more it will be on television right now. >> any don't have it. >> susan page, let's talk about ken sorenson, this somewhat amusing change of pace. it's a he said, she said as to

whether money for a campaign organization or ground troops was on the table. but the bottom line is he's following the momentum. >> yeah, this could have been a little bit of a boost for ron paul but now it's kind of one of those political muddles and so i think it makes it a little bit of a side show. michele bachmann although campaigning hard here and won the aims straw poll does not seem to be in the mix for the top tier. >> to susan's point, michele bachmann, $162,000 spent on television advertising this year in iowa. and has not run a single television ad since august. i understand she's back up now but that just speaks to can't raise money,ç can't run tv and get your message out. the story of the campaign may wind up being mitt romney is is the candidate best able to raise money and put together both television and organizations in iowa and new hampshire and south carolina and florida.

given the competition, no one else is going to be able to match him unless they come up fast. no one has emerged yet. >> chris, see you later. susan, thanks so much. with new polls showing him leading in iowa and new hampshire, mitt romney's campaign is buying television time in south carolina, the third state in the primary election calendar. eric finnstrom sitting somewhat pretty today, eric. your polls are holding and i think i would say you guys aren't unhappy to see ron paul coming to the floor. >> well, andrea, we're pleased with the state of the race but we're not naive enough to believe the republican primary comes down to a single contest. it's a series and we will win some of those and do less well in others. but at the end of the day, we hope to have the requisite number of delegates that would allow us to win the nomination.

>> what about these attacks, the romney and gingrich campaigns going at each other. this was newt gingrich following up on mitt romney's attack over the lucy and desi chocolate fakry analogy. >> i just want to say, here i am in the chocolate factory. [ applause ] and now that i have the courage to come to the chocolate factory, i hopeç governor romn will have the courage to debate me. >> why from governor romney's perspective, why is newt gingrich not the most qualified former speaker of the house, the best qualified to lead the republican party this year? >> well, because mitt romney believes he's the best qualified to be the republican nominee. this election is going to be a referendum on barack obama's handling of the economy. i think republicans do best when they put up a nominee who has

strong experience in the private sector and has the skills and capabilities to lead this nation out of its doll drums, that person is mitt romney. newt gingrich is a fine person. but there are some questions about his reliability as a conservative. as you know when republicans in 2008 were fighting cap and trade, newt gingrich was on the coach with nancy pelosi talking about global warming. when paul ryan put forward a strong entitlement reform plan for medicare, virtually every republican in the congress took a tough vote in favor of that plan and then they had the rug pulled out from underneath by newt gingrich who called it right wing social engineering. it's -- that record -- that reevaluation of newt gingrich's record that i think more than anything else explains his drop in the polls across the board. >> across mitt romney has his own explanations for his changes of opinion, abortion being the

most prominent one that's been playing very widely in iowa. >> well, as you know andrea, several years ago the governor announced that he was firmlyç pro-life. he's not going to apologize for that. there have been many politicians before him who have traveled that same path, ronald reagan and henry hyde and george herbert walking bush. when folks go the other way and switch from being pro-life to becoming in favor of abortion rights, that's celebrated. and but as i said, mitt romney has nothing to apologize for as president. he will govern as a pro-life president. >> eric, the candidate has also been very tough on ron paul on foreign policy, wanted to play a little bit of that. >> one of people running for president thinks it's okay for iran for a nuclear weapon.

i don't trust the eye ayatollas or ahmadinejad or those who back hamas or hezbollah. >> do you and mitt romney think he's outside the mainstream of both democratic and republican foreign policy positions? >> well, you're right he has a very committed and passionate group of supporters but his views on foreign policy are completed hypothetical cal to the republican party. willing to tolerate a nuclear armed iran and unfriendly to israel and wants to cut off foreigv%mi?ik aid to that coun. and recently, he was raising questions about the presence of u.s. troops on the korean peninsula. imagine if we would suddenly withdraw and what that would mean to our ally in south korea with a very blij rant neighbor to the north that is bent on forcedç reunification. i think those issues as they

relate to ron paul and foreign policy are at the end of the day going to prevent a lot of republicans from joining his or getting behind his candidacy. >> one quick question, the decision to stay in iowa and do the morning after interviews rather than going back to new hampshire, does that display a great deal of confidence that you think you're going to win? >> we'll be campaigning in new hampshire the day after the iowa caucus but we want a well rested candidate. four years ago we made a midnight flight from iowa to new hampshire and it was draining for not only the candidate but the press. and everybody else that was traveling with the governor. so we'll leave at a more sensible hour in the morning and we'll be campaigning that afternoon in new hampshire. >> okay, eric, thank you very much, we're looking forward to catching up with the governor tomorrow in des moines. we'll have that tomorrow at 1:00. thank you for being with us. we'll be in iowa on the campaign trail interviewing mitt romney

tomorrow morning. up next, escalating tensions with iran. is the threat serious or just bluster? this is "andrea mitchell reports" only on msnbc.

north korea had 13 days of morning for kim jong-il. tens of thousands of people governed in pyongyang's main square for a memorial service. at the event the president of north korea's parliament officially declared kim's third son, kim jong-un the supreme head of the nation. iran is rejecting a warning from the navy. the warning that it will respond if iran blocks the strait of hormuz, that critical choke point.

a top official said the u.s. was not inç a position to tell tehn what to do. they have been staging ten days of exercises near the strait. the passage way for one-sixth of the world's oil supply. michael is now managing director of the washington institute. thanks for joining us. we've seen this sort of dance before a lot of bluster from iran. this time some u.s. officials particularly at the pentagon are taking it more seriously because iran is responding to the toughest economic sanctions ever. europe is poised to go after the central bank. greece and italy and spain have new governments less friendly to iran and the u.s. is now in this situation where the president is about to sign a bill with an amendment he did not want, which is a real crackdown on iran's oil trade and central bank financial industry. zpl that's right. as we get closer to really targeting iran's oil exports and oil makes up 70% of iran's

budget and 50% is gdp. they are trying to communicate this is a red line for us and we're not going to simply sit back while we're targeted in this way. it begs a question could they actually do this, close the straits of hormuz, the answer is no, not really. it's questionable as to whether they would try to do that. it could spark a bigger confrontation which would end in their own demise. could she do other things to lay mines and those things, absolutely yes. >> they've done it before. >> and they've done it before and in the lay '80s there was a conflict in the gulf between the u.s. and iran and the iranians have taken lessons and applied them today. the u.s. navy has done the same thing. >> i remember we were at a

that uncertainty gets priced in the markets now and in the future. >> there was a vote of 100-0 in the united states senate, that never happens. this after the deputy secretary of state, wendy sherman and

people from secretary warned that this is the wrong way to go. these are not the right kind of sapgss, we should have rach eted sanctions. the president has to sign this bill because it's the defense authorization bill. it's an amendment he cannot get rid of. he can waive the sanctions but the republicans would be all over him, you're soft on iran. he's in a no-win situation here. >> iran may have a weapon of 6 to 12 months and theç thought the administration's policy is not getting the job done. let's force their hand. >> a lot of pressure on all sides. thanks so much. >> republican candidates going after ron paul's foreign policy. the politico briefing is up next. but first, the countdown is onto the new year in times square. today organizers conducted the official confetti air worthiness test in preparation for the release of one ton of confetti

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msnbc is the place for politics. right now the candidates are fanning out across iowa. mitt romney's bus has taken him to mason city. he's about to speak about the economy there. you can see people are gathered. rick santorum is holding a town hall near davenport and newt gingrich is about to speak in storm lake at the local restaurant. and ron paul's republican rivals are going after him on his foreign policy positions, describing them as dangerous and

naive. charles is a national politics editor with politico and joins us from des moines. hey, charles. first of all, iran, that's front and center, israel, i mean basically is ron paul too isolationist in his fundamental positions to end up as the republican uñnominee? >> well, shaping up as a real problem. in many ways the party has grown closer to ron paul and ron paul has run more mainstream marked by campaign atd ads and robust ground ç5uá the one sticking point when you talk to voters in iowa is the discomfort or unease over the foreign policy positions, whether talking about iran or iraq or 9/11 or various sorts of national security positions and that right now is a big stumbling block for him in iowa. and certainly it's going to be a bigger stumbling block going forward out of iowa. >> and in fact, if he gets

through iowa and then has traction perhaps his libertarian policies or his budget policies in new hampshire, he hits south carolina, a strong military state. a lot of veterans and military installations, that's going to be a problem for him. >> that's a great point, iowa and sk sg are different in many ways. one important difference is that iowa is a historically dubbish state and south carolina is a hawkish state. he's another big difference he will run into in south carolina, the field will be much more narrower than he's facing in iowa where the ee vvangelical a social conservative support out there which is very wired into the israel issue, that is going to be much more component of the vote in south carolina and there are going to be less candidates for that vote to splinter across. that's another hurdle he's going to face going forward. >> we shouldn't underestimate at least in iowa that ron paul

organization and the enthusiasm of his supporters. he's been at this a long time. thanks, charlie, thanks for being with us. >> thanks. up next, president obama or mitt romney? we'll look at the polling. and have aç question you wt me to answer, join me for a live web chat from iowa between 2:15 and 2:45 right after our show. 2:15 and 2:45 eastern online at andrea.msnbc.com.

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saudi arabia 84 new jets with advanced raid after equipment is part of a larger strategy to build up the military strength of the allies to better counter threats from iran. turkish officials say many of the 35 people killed in an air strike across the border in iraq were civilians. the strike led by turkish war planes was supposed to be aimed at kurdish rebels, they are investigating the possible intelligence failures that led to the attack. prosecutors are preparing the first felony charges against bp employees after the explosion which left 11 people dead and created the worst oil spill in u.s. history. the wall street journal reports prosecutors are focusing on engineers who may have provided false information about the risks of drilling. democrats are trying to derail mitt romney's progress by

tripping him up in the iowa caucuses. archie is vice chair of the democratic national committee and surrogate for the democrats in iowa. see you in java joe's, wonder what's happening in minneapolis that you were able to get away for the iowa caucuses. >> lots going on. i'm down here to talk for democrats and i think right now we see it as a primary that is very much mitt romney's to lose. he's ahead in the polls and said today that anything but aç fir place finish would be a loss. after spending five years and many millions of dollars here and still not being able to win the hearts and minds of iowa ns if he can squeak through it could be a victory. >> he has spent so many months lowering expectations and now he's clearly all in in iowa. the fact is the white house has

obama campaign thought from the beginning that mitt romney would be the toughest competitor. >> the fact of the matter is mitt romney may have been trying to lower expectations. he spent millions himself. his surrogates spent many millions more to attack others. he spent many millions four years ago. the fact of the matter is he has not been able to connect with voters. what's significant with not just mitt romney but all candidates, all of conversations that you've had you haven't heard a single word about these are the people that supported keep americans from getting a payroll tax cut at the holidays. these are the political quote/unquote leaders who wanted people to not get atax cut at the holidays and more important who supported tax cuts for the very, very wealthy. that was the only strategy. i think what's important is that none of them are addressing middle class issues and i think that's going to catch up with them here in iowa. >> while we're talking mr.,

mayor, we're seeing live pictures from mitt romney in mason city, with ann romney on the campaign trail. he does seem to be getting a lot of traction. he's finding his rhythm as a retail campaigner, don't you think? >> i think if mitt romney would have found his rhythm he would haveç iowa four years ago and with all the time he spent here, let's hope he's got some support. that's fine. the fact of the matter is he has had trouble connecting with voters and thoz not just about his style. that's about the fact his entire political life there's only been one thing mitt romney has been consistent on, that he thinks those at the top end should pay less so everyone else pays more. that's the only single thing he's been consistent on. rightfully people are confused. maybe this week as he says very conservative extreme things to iowans, maybe that will be enough and that will be enough to maybe come through caucus or

primary. but the fact of the matter is, america can't figure out what mitt romney is and the president has to make decisions and stick with them. he hasn't been able to stick with an idealogy from one state to the other, let alone one country. >> mayor rybak, thanks develverh for joining us. republicans have staked out conflicting opinions on one issue. mark murray is the deputy political director and joins me here. you've been working on all of these issues but immigration is really a troubling one for the republicans because they were on all sides of it. in the general election, we've seen all of the republican candidates really brandish their officials, some talked about building a wall on mexico and they are against comprehensive immigration reform. newt gingrich had a more moderate position wanted to have

immigration reform for people who have been here for 25 years or more. weç saw rick perry about in ste tuition for children of illegal immigrants but for the most part they had a system where they want to layout their anti-illegal immigration credentials which could hurt them in a general election. >> where the hispanic vote is increasingly significant fact of life. and since the george w. bush days, it has really gone down in its support for republican candidates. >> the exit polls in 2004, george w. bush got more than 40% of the latino vote. john mccain got 31, 32% four years ago. remember john mccain was a supporter of comprehensive immigration reform and someone who supported latinos, you had a significant erosion. a lot of experts who follow the politics of immigration have told me the republican brand has been hurt. it was back in 2010 when meg

whit man moved to the right and by the time of the general election, she had a very hard time against jerry brown when it kamz to politics and immigration reform and democrats are cramming for the same type of effect that could help out president obama in states like colorado and nevada. >> we saw what happened in arizona since the last election cycle. so the tougher positions by governors, by republican governors on immigration is going to really hurt whoever the republican nominee is in trying to get more votes. >> it goes back to the brand. you look at latino voters and they are able to differentiate between democrats and republicans and in our wall street journal poll, 63% of latinos said mitt romney would be unacceptable to them. 67% said newt gingrich would be unacceptable. unace tough numbers for those two if they become the republican nominee. >> thanks so much, mark murray, great to have you here. >> for more on how hispanic voters could turn this ee lks,

i'm joined by janet merg ya with the largest national hispanic civil rights and advocacy organization. a poll shows big changes in terms of what hispanic voters are thinking about in 2012. janet? >> yes, andrea, that's true. that comes to no surprise to us at the national council or to many latino voters. i think we know that president obama made significant promises when it came to immigration reform and we've obviously not seen that. we understand that that requires bipartisan support but what is really peaked i think the anger and disillusionment with latino voters has been the high level of deportations. it has caused real tragic circumstances and so many families and communities across the country that really this reaffirms what we've known all

along. i will say president obama and department of homeland security have made it very clear in recent announcements that they are taking steps to try to make adjustments to those deportation numbers only in the sense that they are trying to make them more practical and?óoçkçwi pri those individuals who are really tied to kind of criminal criminal felony charges. for us, that will be interesting to see, if he can make that work. next summer if those deportations have gone down, there will be a strong corps larry toç how he's doing with e latino vote, only because i think we want him to prioritize his enforcement efforts. we understand that's part of the law. he needs to prioritize it so we're not seeing cooks and bottle washers and nannies affected in a way they shouldn't be. >> these numbers are really pretty striking in this pugh vote, only 49% of the voters support the president. as you point out that is largely

because of this deportation policy. yet in a hypothetical matchup with mitt romney, the president gets 68% of the vote and 23% would go to mitt romney. the point is that they -- obviously when given that choice they would choose president obama if they vote -- >> no question. >> will people stay home? >> that's absolutely right. i think when people are looking at obama versus his record, we see that he's not been able to attain some of the achievements that we would have had liked and he's been disappointing on the deportation level. but when you compare him to the alternative and we have seen candidate after candidate among the republican alternatives that have been offered so far, they have only done -- made statements that have been extreme and hard line that have served to alienate latino voters at a time when our power to swing elections has only grown.

so i think -- candidates like mitt romney are in trouble because they are going to have a harder time pivoting to the center and trying to make that broad appeal to latino voters in the general election. >> do you think the president and his team have takenç latin voters for granted given these numbers and showing the basic support and who the republican opposition is going to be? do you think they are not working hard enough to meet your needs? >> well, look, i wouldn't say he's not working hard enough. i think he's working very hard. the problem is he's dealing with a lot of big issues out there. and the economy and jobs are important to latino voters as they are to the rest of the americans. but there's no question that we'd like to make sure that he is a dressing this deportation issue. it is something that matters tremendously to the latino vote in this country. and so for us, we understand that that's going to be

important to see those types of changes in his policy but i will tell you that the republicans have an opportunity here to step in and they have simply not done it. if anything, they have really again served themselves to alienate latino voters at a time when our power to swing elections has evenly grown. for us, i think we have to look at the choice we'll be offered ultimately. it's president obama and his record but also the republicans and their rhetoric which has been extreme and hard line. and i think by next summer and in the months to come, we're going to have a better sense of how we'll come down on that choice. right now, president obama has work to do and the republicans have a lot of work to do to make sure that they are appealing to latino votes. >> we'll have to leave it there. janet, thanks, great to see you. >> and what is mitt romney's plan for turning around the economy? that's next here on "andrea mitchell reports." from coverg. the news? it's eye shadow with primer built-in.

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coming up on news nation, a surprising study reveal half of the injured vets returning from iraq and afrg are not taking advantage of the va benefits they are entitled to. we'll find out why they are reluctant and what's being done to change that. u.s. prosecutors are reportedly preparing to file the first criminal charges against the bp employees for the oil disaster in the gulf. there's no controversyç over t death of cheetah the chimp. mitt romney touts his record as a businessman, and says the biggest threat to prosperity is the government. it's a theme he's talked about this morning in cedar falls. >> i've been in the private sector. i know how jobs come and go. i will use the skills i've learned to get government out of our lives and get the budget balanced and to restore the principles of freedom and

opportunity that make us such a great nation. >> and we want to disclose that nbc universal and bain capital are each part owner of our weather channel. david whitford has written about bain capital. how realistic are romney's promises about what he should accomplish were he elected? >> well, i think the question of how realistic they are is exactly the question to ask. romney has a prescription for restoring economic prosperity that is pretty much classic re-republican prescription. he talks about lowering corporate taxes and he talks about reducing regulations. these are are the kinds of things that you will hear people complain about in board rooms and that would be welcomed by many business owners and many

corporations. but the more interesting question to me is whether this would actually be sufficient to restore prosperity and turn the economy around. i think that's a more complicated question. >> it is a more complicated question because they soundç le great bullet points or bumper sticker ideas that would be very appealing to business and a lot of people across america. but in practice, when you see how hard it is to turn this thing around and how difficult it is given the gridlock on capitol hill and all of the commissions that have been ignored, it's -- and the legitimate confusion among economists as to what the best approach is. is stimulus good or not good, where do you go? >> right, andrea. when you talk about the economy, you're talking about something at least as my indicated as the weather. there's all kinds of influences. if we look at taxes, for example. we look at the period of greatest economic prosperity in

recent american history, the post-war period, 1950 through 1963, the marginal tax rates for the wealthiest americans never fell below 91% during that period. yet, that was a period in which the economy economy boomed. if you looked at something more recent, we see the tax rates were higher under president clinton than they were under george w. bush and yet we have more economic growth under clinton than bush. i'm not saying lower tax may not play a role whether they are corporate taxes or income taxes for the wealthy. creating a climate that may be more conducive to economic growth. it's not the whole picture. for us to imagine that simply lowering taxes or wiping away regulatio regulations, to grow isç naive.

it's much more complicated. >> it is more complicated, but they are catering to the audience and what they think are simple sound bytes that have resonance and when they get into office, it is a lot tougher. >> that's true and what we have seen this time around with romney is that he is focusing more on his business background and less on social issues. this vote of confusion that exists with where romney stands on issues like gay rights and issues like climate change. he has been clear in terms of pro business agenda.

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>> which political story will make headlines in the next 24 hours. i'm betting it's iowa. >> it is. not only because the "andrea mitchell reports" team will be traveling out there, but it is four days away. they were asked if there was a situation in which they dropout of the race, he said i don't want to quote directly, but that was up to god. >> it might be an out come that he decides i wouldn't go on. >> that would be fourth, but i'm not the lord and savior. it's going to be tough for him if he finishes fourth and it's all about money. if you don't have the money, you won't be able to run ads. >> when asked is god caucusing,

perry has not lost a sense of humor. he said i'm pretty sure he will be. from iowa it will be with mitt romney. that does it for this edition. we will be reporting live with romney. my colleague richard louie is here with a look at what's next. >> thank you. in our next hour, santorum surge with five days to go until the caucuses. jumping 11 points in the new poll. can he maintain the surge past january 3rd? we will check in with our campaign across iowa and cutting ranks, the pentagon downsizes, reducing the number of generals and admirals for the first time since the gold war. live next on "news nation." that's good morning, veggie style. hmmm [ male announcer ] for half the calories -- plus veggie nutrition. could've had a v8.

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>> santorum's turn with five days to go. rick santorum