hate vote victory. the closest caucus votes in iowa as mitt romney beats santorum by the slimmest of margins. on ho on to new hampshire where next week's primary hopes to put newt gingrich back in contention. rick perry is headed back to texas reassessing his campaign following a disappointing finish in iowa. this is the "cbs morning news" for wednesday, january 4th, 2012. good morning, everybody. thanks for joining us. i'm betty nguyen. if the iowa caucuses were a horse race, the result can only be described as an unlikely photo finish. mitt romney, who had just about

written off iowa, won by a nose with the recently surging rick santorum right on his tail and iowa may have claimed a political casualty. rick perry, following a fifth place finish, he says he is reassessing his campaign. here are the numbers. a record 122,255 straw poll ballots were cast last night. in a truly amazing finish, mitt romney beat rick santorum by just eight votes. ron paul finished third, followed by newt gingrich. susan mcginnis is in des moines with more on this race. some people were surprised at rick santorum. >> reporter: yes, absolutely. that was unexpected really. this was quite a nail-biter and really something to watch throughout the night. the closest vote, like you said, in iowa caucus history. in the end, mitt romney wins to be the challenger to president obama, at least so far, and he has won by the slimmest margin ever. mitt romney barely squeezed out

a win in iowa, with rick santorum trailing just eight votes behind. >> we are going to change the white house and get america back on track. >> reporter: the former massachusetts governor is pledging to keep the momentum going in new hampshire where he holds a solid lead. >> out of new hampshire, let's get that job done. >> game on! >> reporter: but santorum is also ready to compete following his surprising late surge in eye ha. >> i've been to new hampshire more times and ton more than jon huntsman and he cheats because he lives there. >> reporter: ron paul placed third but still considers himself a winner. >> we will go on. we will raise the money. i have no doubt about the volunteers. >> reporter: for some, iowa could be the end of their road to the white house. after coming in a disappointing fifth, rick perry is heading back to texas to reassess his campaign. >> with a little prayer and

reflection, i'm going to decide the best path forward. >> reporter: the rest of the gop pact is vying to move on. >> i'm convinced the republican party will pick an era of reagan committed and somebody with a track record of changing washington. >> reporter: newt gingrich is hoping to jump-start his bid today in new hampshire, while michele bachmann is heading straight to south carolina. >> there are many more chapters to be written on the path to our party's nomination. >> reporter: she is gearing up for the first in the south primary there later this month. and romney could get a big endorsement. republican officials saying john mccain who won new hampshire twice and the nominee in 2008 is going to endorse mitt romney. for now, they are all moving on to new hampshire. no time to rest. >> we will be watching. susan mcginnis in washington, thank you. cbs news questioned iowa voters as they entered the caucuses last night. 42% said the economy was the most important issue and of those who thought the economy was the most important issue,

34% cast their ballot for mitt romney. 46% of those questioned didn't decide on who they would vote for until the last few days. of those late deciders, 33% decided to go with rick santorum. our cbs news team has much more analysis on what happened in iowa and where the candidates go from here. jan crawford is with mitt romney's campaign. wyatt andrews is with ron paul and dean reynolds is following newt ging gingrich, but we begin with john dickerson who covering rick santorum's campaign. >> reporter: he has the momentum. he was expecting to be speaking to an empty ballroom but it's chaos here. he is the person mitt romney has to worry about now. he is sort of the alternative to mitt romney in the race. he, hopefully, will get some money and go into new hampshire where he has an organization and hope he can weather both the attacks from mitt romney and the

other candidates but then also press scrutiny that will come with being co-front-runner are mitt romney. south carolina is stronger territory for santorum so you could see this go on for a few more contests. >> romney really kept expectations low here for months and then the campaign started to gradually increase them over the past week. so we saw a much more confident mitt romney coming out and saying he wanted to win iowa. he said he thought he could win, i think he was talking more about th general election, but no question they thought they would do well here. they did do well here ut idn't get the big win they wanted, but he'll be able to take this momentum and go on to new hampshire where he is expected to do very well. he has a commanding lead there. this week, the tone will change dramatically. you're going to see everyone going after romney. the question is how is romney going to stand that heat. >> you have to rate this as a very, very good night for ron paul. ron paul ran especially well among young people, believe it or not. they were a big part of his base.

he ran strong among first-time caucus goers who also tend to be young people. he ran most strongly in iowa on the issue of reducing the federal deficit. ron paul clearly has the strongest message and strongest promise to tackle the federal deficit and produce a trillion dollars worth of spending cuts in his first year in office and that is a very red meat issue here in iowa. >> all of the ads that ran in iowa, 45% of them were attack ads against gingrich, so he is going to continue to complain about that and criticize romney in new hampshire and, of course, in new hampshire, they have two more debates and that is the forum in which he excelled. he is really focused on south carolina. that is a much more receptive audience to gingrich. his polling is much better there. he believes that will be his

springboard to states like florida and the super tuesday states. >> stay tuned for "the early show" this morning. we will have more analysis of the results from the iowa caucuses and continuing coverage on the "cbs evening news." the campaign now moves to new hampshire which holds its primary next tuesday and mitt romney is heavily favored. but former utah governor jon huntsman has been concentrating his efforts in new hampshire and is counting on a strong finish there. huntsman did not campaign in iowa. instead, opting to meet with granite state voters last night. president obama travels to ohio today where he will speak about the economy in cleveland. last night, he teleconferenced with supporters in iowa. mr. obama talked about the progress he said he has made during his first term and asked party activists for their help. just ahead on the "morning news," tensions rising in the persian gulf as iran wraps up war games with more threats

against the u.s. navy. but first, scott pelley with a preview of tonight's "cbs evening news." there's new research in the war against cancer and we will hear from two young survivors about their lives and their futures after treatment. that's tonight on the "cbs evening news." while still using less. its design is soft and more absorbent. so you can use four times less versus the leading value brand. ah. [ female announcer ] charmin ultra soft. v.o: the cinnabon taste you've always loved can i, can i (repeated) v.o: can now be enjoyed in your coffee ( can i, can i (repeated) ) v.o: only international delight v.o: put's the real flavours from v.o: your favourite treats inside when bp made a commitment to the gulf, we knew it would take time, but we were determined to see it through. today, while our work continues, i want to update you on the progress: bp has set aside 20 billion dollars to fund economic and environmental recovery.

we're paying for all spill- related clean-up costs. and we've established a 500 million dollar fund so independent scientists can study the gulf's wildlife and environment for ten years. thousands of environmental samples from across the gulf have been analyzed by independent labs under the direction of the us coast guard. i'm glad to report all beaches and waters are open for everyone to enjoy. and the economy is showing progress with many areas on the gulf coast having their best tourism seasons in years. i was born here, i'm still here and so is bp. we're committed to the gulf for everyone who loves it, and everyone who calls it home.

can boldly satisfy any craving. share an appetizer, then choose two chili's entrees, like our classic bacon burger or our famous slow-smoked baby back ribs. chili's $20 dinner for two. the u.s. is brushing aside iran's blunt warning to keep american aircraft carriers out of the persian gulf. the threat was made in response to tough u.s. sponsored economic sanctions against iran for its nuclear program. david martin assesses the latest tough talk. >> reporter: iran wrapped up ten days of naval exercises by warning the u.s. not to send an aircraft carrier back into the persian gulf. it may sound like an empty threat. but it's also clever propaganda. the "uss stennis" left the gulf last week headed for home and won't be back any time soon, so the iran can claim the "stennis"

didn't dare return, but the two other carries, the "lincoln" and the "benson" are on the way to the region and one is scheduled to take part in exercises inside the gulf. as they have in the past, the iranians could harass the carrier with go fast boats as it is in the channel of the two-mile channel through the strait of hormuz. over the last two days, iran showed off antiship missiles and submarines and hydrofoils to back up a claim they surely don't believe. that closing the strait of hormuz to the super tankers that carry one-fifth of the world's oil would be, quote, easier than drink is a glass of water. but it makes them stop and think what would happen to their economies if a vital choke point in a middle east oil became a war zone? it's one of the few cards iran has to play to discourage the rest of the world tougher economic sanctions against its nuclear program. sanctions already in place are taking a toll on iran's economy.

iran sent the price of oil up nearly $4 a barrel, so the threats may be empty, but they are not meaningless. david martin, cbs news, the pentagon. on the cbs "moneywatch," stocks start off on the right foot in 2012. and some coffee lovers have to dig deeper with their daily dose of caffeine. ashley morrison is in new york with that and more. >> reporter: asian stocks were mixed on monday. the first day of trading of the year on wednesday. the nikkei added 1% and the hang sang slipped back after making gains on tuesday. wall street is off to a roaring start in 2012 and the first day of trading this year points, while the nasdaq gained 43. the federal reserve will keep the public up to date on its plan for interest rates. on tuesday, the fed said it will make four announcements a year on how long it plans to keep short-term interest rates at their current levels. the move could encourage

businesses and consumers to borrow money and, in turn, stimulate the economy. carmakers announce their 2011 sales numbers today and toyota is hoping to rebound after a tough year. the auto giant could get some help from consumer reports. the publication named the 2012 toyota camry the top family sedan. the camry has been one of the best-selling cars for decades, but it slipped behind several other models last year after the tsunami in japan disrupted toyota's parts supply. the cost of a cup of starbucks coffee is going up for millions of americans. starbucks says it will raise prices by an average of 1% in the northeast and the sun belt region. here in new york, that means coffee drinkers are now paying $2.01 for a small or tall cup of joe. prices haven't gone up in those places in about five years. starbucks is raising prices to offset the rising cost of commodities. betty? >> that's a way to ring in the new year, costing us more money already.

ashley morrison in new york, thank you. straight ahead, your wednesday morning weather. and in sports, michigan tries to up-end virginia tech in the sugar bowl. >> announcer: "moneywatch" sponsored by vagisil wash, with odor block. the confident clean. [ female announcer ] fashion or food, it's all about taste. and the chefs at lean cuisine are loving tangy lemon, peppery poblano, sweet butternut. we're roasting, and grilling to create must-have meals with no preservatives. lean cuisine. be culinary chic. to create must-have meals with no preservatives. mid grade dark roast forest fresh full tank brain freeze cake donettes rolling hot dogs bag of ice anti-freeze wash and dry diesel self-serve fix a flat jumper cables 5% cashback

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time now for a check on the national forecast. the latest satellite picture shows scattered clouds in the southern plains and great lakes. while the east coast remains clear. in the northwest, rain on the coast of oregon and washington with snow in the higher elevations. from california to the higher dakotas, high temperatures 10 to 20 degrees above normal. later today, temperatures warm up from the 40s to the 60s after a chilly start in the southeast. in sports, overtime sugar bowl win for michigan. in new orleans, michigan's denard robinson and junior hemmingway hooked up on this touchdown pass and tied at 20, the hokies thought they had a td in overtime on this great one-handed catch by danny cole! look at that! but he was actually ruled out of bounds. this 37-yard line field goal won it. michigan beats virginia tech

23-20. in the nba, the lakers won their fourth game in five tries. kobe bryant led l.a. with 37 points, including seven consecutive fourth quarter points, as the lakers held the houston rockets without a field goal for six minutes! l.a. beats the rockets 108-99. in chicago, the bulls sneak by atlanta. chicago came back from a 19-point deficit led by 30 points from derrick rose, but a layup by luol deng with under four seconds left and that won it for the bulls. chicago beat the hawks 76-74. in college ball, seton hall stunned eighth-ranked connecticut. jordan theodore led the pirates with 19 points and all scored in the second half. seton hall beat uconn 75-63 and the first time that has happened since 2001. when we return, another look at this morning's top stories. and new details about the suspect arrested in a series of

fires in los angeles. plus, how police caughthim. 8% every 10 years. wow. wow. but you can help fight muscle loss with exercise and ensure muscle health. i've got revigor. what's revigor? it's the amino acid metabolite, hmb to help rebuild muscle and strength naturally lost over time. [ female announcer ] ensure muscle health has revigor and protein to help protect, preserve, and promote muscle health. keeps you from getting soft. [ major nutrition ] ensure. nutrition in charge!

on the "cbs morning news," here's a look at today's weather. frosty temperatures spreading down the eastern seaboard into florida this morning. temperatures will rebound by the afternoon. it's also chilly in the northeast. and in the midwest and west, temperatures will be above normal. here is another look at this morning's top stories. it was the closest finish ever at the iowa caucuses. mitt romney beat rick santorum by just eight votes. both candidates got 25% of the vote. ron paul finishing third, followed by newt gingrich. texas governor rick perry, who finished a distant fifth in iowa, may be dropping out of the race. perry says he is heading back to texas for prayer and reflection and to reassess his campaign. new details are emerging about the suspect in the string

of more than 50 fires in los angeles. lee cowan takes a look at who the arson suspect is and what led to his arrest. >> reporter: harry burkhart may have been his own worst enemy. the 24-year-old suspected arson was identified, not because he was caught setting one of l.a.'s suspicious 53 fires, but because u.s. marshals remember him from a tantrum he threw in this federal courthouse. the l.a. police chief charlie beck. >> i will not get into the details of any statements he made. >> reporter: the u.s. attorney office says burkhart's mother dorothee was arrested on 19 counts of fraud. the officials say her son, a german national himself, grew so agitated at one of her hearings, he had to be escorted from court. the next day, the arson spree started and when this surveillance video was broadcast, u.s. deputy marhals recognized the figure immediately. the man who nabbed him, though,

sherman lalazari is being hailed a citizen hero. pcity and the department and he i think it's just a big relief that everyone can kind of go to sleep tonight and still be vigilant but just kind of sleep well. >> reporter: he is a reserved deputy, an attorney by trade, who had been volunteering. >> i went on a ride along with the west hollywood sheriff's station when i was pretty young and loved what i saw and loved what they did. >> reporter: west hollywood's mayor says he was paid just a dollar a year. >> a dollar a year. i'm going to give him the best dinner anywhere on the sunset strip for the extraordinary work he did this weekend. >> reporter: harry burkhart will be arraigned on arson charges later on wednesday. as for that sheriff's deputy, says he can't wait to get back on the job and that dollar a year salary. lee cowan, cbs news, los angeles. this morning, on "the early show," the santorum surge and the romney momentum after the iowa caucuses. i'm betty nguyen.

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. it is four minutes before 4:00. marty is here with first morning weather. >> it is cold out here. with the windchill, it is like the honest mid teams. here is the first morning doppler, clear skies in the area. it is brisk morning. partly sunny today. here is what we are watching today -- fighting hunger. money came from a campaign contributor that did not pay his taxes to help with that

program. more on the false travel claims to the department of defense. more on the surprising results from the iowa caucuses and the tightest margin with republicans. he did not ask if he was human and i had my phone put under my dog's name. >> what has been offered to a dog? more on the first traffic report of the morning in a few minutes. ,,,,,,,,,,,,,,