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Newt Gingrich Speaks Out; Romney Camp Responds to Gingrich

Aired December 27, 2011 - 18:00   ET


JESSICA YELLIN, CNN ANCHOR: And thanks for joining us. I'm Jessica Yellin. John King is off tonight.

You will see it here first. Mitt Romney's campaign responds to Newt Gingrich's CNN interview and his accusation that Romney does not have the courage to debate one-on-one or defend his campaign's negative ads.

Also, Gingrich says he won't vote for Ron Paul if the Texas congressman wins the Republican nomination.

Plus, a frightening day at country's biggest shopping mall, and there's nothing to keep from happening at a mall near you.

First, we begin in Iowa and the scathing criticism Newt Gingrich just leveled at two of his Republican opponents, Mitt Romney and Ron Paul.

Just a short time ago, Wolf Blitzer asked Gingrich about the barrage of attack ads both Romney and Paul are running in Iowa, where Republican voters caucus exactly one week from tonight. Listen to some of what Newt Gingrich had to say about Mitt Romney.


WOLF BLITZER, CNN ANCHOR: Mitt Romney made fun of you today. I don't know if you heard, did you hear about this?


BLITZER: About the Virginia snafu and all of that. I will play the clip. Watch this.



MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: You know, I think he compared that to -- was it Pearl Harbor? I think it's more like Lucille Ball at the chocolate factory.


ROMNEY: So, I mean, you've got to get it organized.

(END VIDEO CLIP) BLITZER: Now, he was referring to a statement that your campaign manager said, this was like Pearl Harbor, you've learned from it, and it's not going to happen again.


BLITZER: But he's comparing you to Lucille Ball, "I Love Lucy" --


BLITZER: -- when she was at that chocolate -- you remember that scene.

GINGRICH: I have a very simple message for Mitt Romney. I will meet him anywhere in Iowa for 90 minutes, just the two of us, in a debate, with a timekeeper and no moderator. I would love to have him say that to my face.

I would like him to have the courage to back up his negative ads. I would like him to have -- back up the things his staff have been putting out. He wants to prove he can debate Barack Obama? He ought to have the courage to stand on the same stage with me.

He's buying millions of dollars in attack ads through a phony super PAC run by his former staff, paid for by his millionaire friends.

Now, I would like to have him have the courage to be on the same stage and defend his ads and explain his record as a moderate in Massachusetts, explain his record of raising taxes, explain his record of paying for abortions through state money, explain his record of putting Planned Parenthood on.

And frankly, explain why he was a -- he wasn't a job-creating governor. His current plan is much weaker than mine. So, I would like to debate the Gingrich supply-side conservative economic plan versus the Romney moderate plan, which is much weaker in job creation.

And I'm happy for him to have fun at a distance, but I would like to invite him to spend 90 minutes debating face-to-face.

BLITZER: There have been about a dozen debates --


BLITZER: -- he's been on the stage with you --


BLITZER: -- so far. He was standing on some of those debates very close to you.

GINGRICH: Herman Cain was willing to debate one-on-one, Jon Huntsman has debated one-on-one, Rick Santorum has debated one-on-one. Mitt Romney's the guy running the most ads attacking me, and he's doing it through this disingenuous, "Oh, gee, I don't control all of my former staff and all of my millionaire friends." It's baloney.

If he wants to defend his negativity, show up in Iowa, 90 minutes, face-to-face. Let the -- let the people decide whether or not, in fact, he'll back up what he's been saying, and let him back up his moderate record -- not conservative record -- as governor. And I don't think he'll do it.

BLITZER: You know, 24 hours from now, I'm going to be interviewing Mitt Romney --


GINGRICH: Well, ask him why --

BLITZER: -- here on "THE SITUATION" --

GINGRICH: -- ask him why he won't debate me.

BLITZER: I will ask him that question. But is there anything you want to say to him --


BLITZER: Look into the camera right now and talk to -- because he might be watching, for all I know.


BLITZER: He's in Iowa, we're in Iowa.

GINGRICH: He'll certainly see the video. All I would say, Mitt, is if you want to run a negative campaign and you want to attack people, at least be man enough to own it. That's your staff and that's your organization, those are your millionaire friends paying for it.

And let's be clear. I'm willing to fight for real job creation with a real Reagan-Kemp-style job creation program. You are a moderate Massachusetts Republican who, in fact, is very timid about job creation. Let's get it on together and let's compare our two plans.

BLITZER: I will play that clip for him tomorrow --


BLITZER: -- here and we'll get his reaction --

GINGRICH: All right.

BLITZER: -- that's only fair.


YELLIN: A lot to go over there.

And Russ Schriefer, a campaign strategist for Mitt Romney, joins me now for a reaction and the latest news from the Romney camp.

Russ, first of all, welcome. It sounded to me like --


YELLIN: Hi. It sounded like Newt Gingrich basically challenged the former governor to a showdown at the O. K. Corral. So, first of all, will the governor agree to a one-on-one debate with Newt Gingrich?

SCHRIEFER: Well, let's take a step back for a second, Jessica. It was sort of a drive-by shooting there. I mean, I'm not sure if this was sort of the happy warrior Newt Gingrich or sort of candidate who's really lashing out because he's had a really bad week.

He's had sinking poll numbers across the country. He wasn't able to make the ballot in Virginia. He's had to cancel half of his schedule in Iowa this week. He's gone from 44 events to 22 events, and he's lashing out in a way that, you know, really shows that he doesn't have a real campaign message other than that, you know, he doesn't like the campaign ads that are being shown.

YELLIN: Well, he did start by vowing to be positive and --

SCHRIEFER: Was that -- was that positive?

YELLIN: You know, we'll let the voters decide. Will you answer that first question? Will Mitt Romney debate Newt Gingrich one-on-one before the Iowa caucuses?

SCHRIEFER: We have debated Newt Gingrich at least 10 times. We're going to be debating him twice more in New Hampshire. You know, Governor Romney believes, you know, very strongly that he needs to debate all the candidates, that everyone has a fair shot at this, and that this -- Newt Gingrich just isn't special that should have a one- on-one debate.

YELLIN: Let's me ask you about this question of negative and negative ads. Newt Gingrich basically told your candidate to be man enough to own the negative ads from his super PAC, and that he should tell them not to go negative. He says that wouldn't be coordination. But we all know that it's illegal to actually tell a PAC what to do.


YELLIN: Is that something that Romney would do?

SCHRIEFER: Well, you know, again, Speaker Gingrich is being a little disingenuous, because there's plenty of times in the past where's he been on the record, including on CNN, where he talks about negative ads and talking about them, A, working; and he also talks about -- your own anchors have said Newt Gingrich is, you know, quote, happy to rip someone's heart out.

So I think the problem here is not that he doesn't like these kinds of ads. He just doesn't like when these kinds of ads are running against him.

YELLIN: Right.

SCHRIEFER: And I think that that's a big difference.

YELLIN: Let's talk about the word moderate, which Gingrich mentioned several times. Quoting some old video, let's -- we can play that video for you. It was Romney in 2002.



ROMNEY: I think people recognize that I'm not a partisan Republican, that I'm someone who is moderate and that my views are progressive.


YELLIN: Isn't it a fair characterization when the former governor has used the word moderate to describe himself?

SCHRIEFER: Governor Romney was running for governor of Massachusetts. As we all know, it's one of the most blue states in the country.

When he was governor of Massachusetts, he governed as a conservative. He cut taxes, he balanced the budget, he turned a deficit into a surplus and he was pro-life. He's been very conservative. And he's the first to admit that, you know, over time, has Mitt Romney become more conservative? Absolutely.

The problem is, Jessica, is that Newt Gingrich, the longer he's been in Washington, he's become more liberal. He's the guy who sat on the couch with Nancy Pelosi at the invitation of Al Gore.

He's the guy who threw the Paul Ryan spending Medicare reform plan under the bus, calling it right-wing social engineering. So I think the problem here is that, you know, yes, Governor Romney, you know, has governed as a conservative and as a conservative, and Speaker Gingrich is someone who has been moving to the left.

YELLIN: I think we'll hear more of this when your candidate, Mitt Romney, sits down with Wolf Blitzer tomorrow for an interview of his own. We all look forward to watching that. And Russ, thanks for joining us tonight.

SCHRIEFER: Great. Thank you, Jessica, any time.

YELLIN: And, ahead, you will want to stay with us. We will have much more of Wolf Blitzer's interview with Republican presidential hopeful Newt Gingrich, including Gingrich's threat to not vote for Ron Paul if the Texas congressman wins the Republican nomination.

(BEGIN VIDEO CLIP) GINGRICH: I think Barack Obama is very destructive to the future of the United States. I think Ron Paul's views are totally outside the mainstream of virtually every decent American.


YELLIN: Also ahead, the huge and growing gap between your bank account and one of the congress man or woman who is supposed to be representing you.


YELLIN: There's huge political news tonight in Iowa, where Newt Gingrich just told CNN he won't vote for Ron Paul if the Texas congressman wins the Republican nomination. That's just part of the scathing criticism Gingrich let loose during an interview with CNN's Wolf Blitzer.

Listen to what else Gingrich said about Congressman Paul.


GINGRICH: There will come a morning people won't take him as a serious person. This is -- this is a man who happened to have had a good cause, auditing the Federal Reserve, cleaning up the Federal Reserve. And I think as a -- as a protest, he's a very reasonable candidate.

As a potential president, a person who thinks the United States was responsible for 9/11, a person who believes -- who wrote in his newsletter that the World Trade Center bombing in '93 might have been a CIA plot, a person who believes it doesn't matter if the Iranians own a nuclear weapon, I would rather just say you look at Ron Paul's total record of systemic avoidance of reality, and you look at his newsletters, and then you look at his ads. His ads are about as accurate as his newsletter.

BLITZER: Now, if he were to get the Republican nomination --

GINGRICH: He won't.

BLITZER: -- let's say he were. Could you vote for him?



YELLIN: Will this interview be a game-changer in Iowa?

We're joined in Iowa by David Chalian. He's Washington bureau chief for Yahoo! News. And here with me in the studio, CNN senior congressional correspondent Dana Bash.

David, I will get to you in just a moment.

I want to start with you, Dana, because you have a statement fresh from the Paul campaign reacting to this interview. What do they say?


This comes to us thanks to our CNN political editor, Paul Steinhauser.

The chairman of Ron Paul's campaign, Jesse Benton, says: "Frustration from his floundering campaign has Newt Gingrich showing who he really is, a divisive, big government liberal."

I'm going to on to read you another quote here, insert tongue in cheek here: "If Dr. Paul will have to soldier on without Newt's vote, so be it. Fortunately, Ron has the support of countless conservatives and independents ready to beat Barack Obama and bring real change."

And it goes on and on along the same lines, very, very blunt from Ron Paul, not a surprise there. But I can tell you, Jessica, that Newt Gingrich said out loud what a lot of Ron Paul's colleagues in Congress would not say out loud, but are certainly whispering, that they can't even imagine him as their nominee.

Of course, Newt Gingrich needs to get voters in Iowa to get out to the caucuses and trashing Ron Paul at this time in that way may not be the best idea.

YELLIN: Not the best idea.

David, listen, this is a candidate who said time and again, Gingrich, that he will not go negative. Obviously, there's some bad blood between Ron Paul and Newt Gingrich. But how surprised are you at the tone Gingrich took in this interview?

DAVID CHALIAN, WASHINGTON BUREAU CHIEF, YAHOO! NEWS: Well, I was quite surprised, Jessica, just in the sense of what you're saying.

Here's a guy who was pledging to run a positive campaign all the way through. And so while I was watching the interview, I e-mailed the Gingrich campaign and said, is this a new strategy? You guys have unloaded on Ron Paul here? And they said, no, no, no, Gingrich has always said he's going to speak truth to these attacks and the truth is always more potent than the attacks themselves.

That's their line, but let's be clear. Gingrich is obviously going negative on Paul. And it's a very different calculation than Mitt Romney is making. Mitt Romney of course doesn't mind Ron Paul doing well because he thinks it only helps him going forward if someone who is not seen as likely to be the nominee comes out of here with a lot of momentum.

But Newt Gingrich is just trying to get out of Iowa. His numbers have come down a bit and so he's taking a different tack to really try to peel away support from Paul.

But, Jessica, you have to ask, why if somebody is not likely to be the nominee would you go that far to offend their supporters by saying that you wouldn't vote for them? It was sort of like a freebie question.

YELLIN: Dana, is part of this, because he even -- at the beginning of his interview with Wolf, Gingrich said I'm going to stay positive and then proceeded to say all of these things. Part of what we have seen with Gingrich historically is he has a way of capturing headlines and he knows when he's not doing well, he just -- is this whatever it takes to get in the news?

BASH: It certainly could be. It could be whatever it takes to get in the news.

Or it could be Newt being Newt and him just speaking from the heart, speaking from the gut, and saying really what he feels. I think David is actually -- is right, that he has decided -- it's hard to imagine this wasn't a deliberate strategy, very different from Mitt Romney's, to go after Ron Paul and to try to take those conservatives away from him and to remind people about electability, that Iowans want to stay relevant, they want the caucuses to stay relevant and do they really want to elect somebody or to vote for somebody who is not going to win the nomination?

YELLIN: Ron Paul's die-hard supporters are going to be changed by somebody saying he has a problem with systemic avoidance of reality?


BASH: No, I mean, there's no way, because, boy, are those supporters of Ron Paul total die-hards. The question is for people who aren't necessarily die-hards, but really like what he says on economic policy and other issues that Newt Gingrich could potentially sway, exactly.


BASH: David, we heard Gingrich saved his harshest words for Ron Paul, but he also did unload on Romney as well. So who is Gingrich's biggest threat, Paul or Romney?

CHALIAN: Well, I think he probably is trying to steal votes from each of them right now, because the latest polling shows Gingrich sort of running third to those two front-runners.

I don't think any one is more of a threat than the other.

But in the long run, he certainly sees Mitt Romney as the greater threat because Mitt Romney is the more likely nominee than Ron Paul at this stage of the game. And to Dana's point there, which is a really important one, if it's just the die-hards coming out for Ron Paul, that's probably not going to be enough for him.

He does need some of the other mainstream Republican or sort of willing Republican support to come on over to him. And that's exactly what Newt Gingrich is trying to take away from him.

YELLIN: I will do this quickly to both of you. David, you first. Do you think this interview will be in any way -- change things up in Iowa?

CHALIAN: Well, I think it's the last we have seen of Newt Gingrich as trying to run a positive campaign. He clearly is going to be sort of on the forceful attack for the next week, and that's a game-changer in and of itself.

YELLIN: I was trying to avoid the word game-changer, but what do you think?

BASH: David, he was just giving the facts. It's not about being positive or negative, come on.

No, I mean, obviously, I think any time one of these candidates at this point in time, seven days out, speaks as bluntly and as candidly and as strongly as Newt Gingrich just did to Wolf Blitzer, it's going to change the dynamic and change the narrative and potentially change votes.

YELLIN: We will see. They call it contrast. Not negative. It's a contrast.

BASH: Of course.

YELLIN: Thanks.

Dana and David Chalian from Iowa, thanks to both of you.

And we will have more of that interview coming up. And we will talk to Wolf Blitzer about all of it. Stay with us.


YELLIN: Welcome back.


YELLIN: And this one is on a much serious note -- ahead: A deadly fire takes the life of three young girls and their grandparents. CNN's Deborah Feyerick has been following that story, including the 911 calls released today. And now she has new details that she's learned next.


911 OPERATOR: Stamford 911. What is the address of your emergency?

UNIDENTIFIED FEMALE: There's a huge fire at the house next door to us. The whole house is on fire.



YELLIN: In this half-hour of JOHN KING, USA, 911 tapes reveal the desperate, heartbreaking pleas for help during a Christmas Day fire.

The Obama administration faces an agonizing decision about a man you probably don't recognize, but what happens to him could give the USA a huge black eye in the Middle East.

Plus, more from today's newsmaking CNN interview where Newt Gingrich slammed fellow Republicans Mitt Romney and Ron Paul.

We start in Iowa and the roundhouse punches Newt Gingrich just threw at two of his opponents.

First, Gingrich says, if Texas Congressman Ron Paul wins the Republican nomination, he won't vote for him.

Listen to what Gingrich told CNN's Wolf Blitzer.


GINGRICH: First of all, as people get to know more about Ron Paul, who disowns 10 years of his own newsletter, says he didn't really realize what was in it, had no idea what he was making money on, had no idea that it was racist, anti-Semitic, called for the destruction of Israel, talked about a race war, all this is a sudden shock to Ron Paul, there will come a morning people won't take him as a serious person.

This is -- this is a man who happened to have had a good cause, auditing the Federal Reserve, cleaning up the Federal Reserve. And I think, as a -- as a protest, he's a very reasonable candidate.

As a potential president, a person who thinks the United States was responsible for 9/11, a person who believes -- who wrote in his newsletter that the World Trade Center bombing in '93 might have been a CIA plot, a person who believes it doesn't matter if the Iranians have a nuclear weapon. I'd rather just say you look at Ron Paul's total record of systemic avoidance of reality. And you look at his newsletters and then you look at his ads, his ads are about as accurate as his newsletters.

BLITZER: Now, if he were to get the Republican nomination...

GINGRICH: He won't.

BLITZER: Let's say he would. Could you vote for him?


BLITZER: Would you -- would you vote for President Obama?

GINGRICH: Somebody just up and says," I don't care if Israel's destroyed. I don't care if there's -- I don't care if the Iranians get a nuclear weapon."

BLITZER: Not so sure he says Israel destroyed but and he does say he didn't think Iran represents a threat to Israel, even if it had a nuclear bomb. GINGRICH: Look, what he says is, that's a risk he's willing to take. And he just had one of his former staffs say flatly, that he doesn't -- that he said over and over again, Israel was a mistake.

I mean, I think it's very difficult to see how you would engage in dealing with Ron Paul's as a nominee...

BLITZER: Let's just get...

GINGRICH: ... given -- given the newsletters which he has not yet disowned.

BLITZER: You could not vote for Ron Paul?

GINGRICH: He'd have to go a long way to explain himself. And I think it would be very difficult to see today Ron Paul as the Republican nominee.

BLITZER: What would you do if the choice were Ron Paul or Barack Obama?

GINGRICH: I think you'd have a very hard choice. I think Barack...

BLITZER: What would you do?

GINGRICH: I don't know. I think Barack Obama is very destructive to the future of the United States. I think Ron Paul's views are totally outside the mainstream of virtually every decent American.

Now that's going to be very controversial, but I just suggest to people, before you decide that I'm wrong, read the newsletters, look at what he said, and ask yourself -- this is a very serious question for the United States. It's a very serious question...

BLITZER: So you don't accept his explanation, he never read that, he never wrote it, only years did he look at it?

GINGRICH: So he's spent ten years earning -- he's attacking me for serial hypocrisy, and he spent ten years earning money out of a newsletter that had his name, but he didn't notice.

All I'm saying I think he's got to come up with very straight, very straight answers to get somebody to take him seriously. Would I be willing to listen to him? Sure. Are there circumstances you have to weigh heavily? Yes. I think the choice of Ron Paul or Barack Obama would be a very bad choice for America.


YELLIN: Wolf Blitzer joins us now from Dubuque, Iowa.

Wolf, well done. An interview that has everybody talking here and in Iowa. I first want to ask you, when Gingrich was attacking Ron Paul, what was going through your mind? Did you think it was a mistake?

BLITZER: I didn't know if it was a mistake, but I was stunned. I was very surprised because, as you know, Newt Gingrich has been saying now for several weeks he's going to try to take the high road. He's going to defend his positions. He's going to avoid attacking the competition. He's not going with the negative attack ads, which he's getting a barrage of here in Iowa. I know that goes against his grain.

So all of a sudden when I played a clip of one of Ron Paul's attack ads talking about the serial hypocrisy of Newt Gingrich, he unloaded, as you saw in that clip right there. It took me -- it took me by surprise, I've got to tell you, because I didn't think he was going to do it.

But I think he was really moved, especially over the past 24, 48 hours, by this former aide to Ron Paul, who's written this long piece describing some of Ron Paul's views on homosexuals, on gays, on Israel, national security and all of this -- these kinds of matters. And I think that simply pushed -- that pushed Newt Gingrich over, and he really unloaded. I was pretty surprised by it.

YELLIN: Well, Gingrich even started your interview saying he plans to stay positive and then, as you say, proceeded to unload, not just on Ron Paul but on Mitt Romney, too.

I just spoke to Romney strategist Russ Schriefer who called Gingrich's attacks on Romney a drive-by shooting. Did you expect him to be so tough on Romney, as well?

BLITZER: He tried at the beginning to stay above it and not go after Romney directly. It was in marked contrast. I interviewed Newt Gingrich a few weeks ago at the Ronald Reagan Building in Washington when he was in D.C., and he really didn't go after Mitt Romney hard at all, hardly at all.

But in this interview, when I -- when I told him that Romney was making fun of him earlier in the day, because he couldn't get on the Virginia Republican primary ballot. And he brought in Lucille Ball and the chocolate factory and all of that. He was having a little fun at Newt Gingrich's expense. All of a sudden, if you listen to how that changed, he really went after him and he basically looked at the camera. And I said -- because I said to him, "Look in the camera. Speak to Mitt Romney right now. What would you say?"

And he said, "If you've got the guts to say to me in person what you're saying out there through these super PAC ads," which the Romney campaign is not directly involved with. Newt Gingrich doesn't buy any of that, by the way, but you know he really went after him. And he wants to debate him one-on-one, and he's basically suggesting that Mitt Romney's scared to debate Newt Gingrich.

YELLIN: Right.

BLITZER: And so he got into it. He got into it on Mitt Romney. He got into it on Ron Paul. He was a lot tougher on Ron Paul. I was going to ask him, you know, would you be able to vote for Mitt Romney? But I didn't. The clock was ticking, and I knew he would say, "Yes, I would vote for Mitt Romney," but there's no way he's going to vote for Ron Paul.

YELLIN: He made that pretty clear.

BLITZER: Yes, he says, "Look, Ron Paul's not going to get the nomination."

But I said, "Hypothetically, if he were to get the nomination, would you support him?" And you saw his answer. It was a flat-out no.

YELLIN: You're interviewing Mitt Romney tomorrow. May I ask you. Is there one question you're most looking forward to asking Romney?

BLITZER: Well, I'm going to play for him -- they'll have overnight. I'm sure his aides will tell him, watching right now -- I'm going to play for him what Newt Gingrich said and give him a chance to respond and ask him, does he have the guts, does he have the courage to sit down one-on-one with Newt Gingrich and debate these issues 90 minutes without a moderator?

I pointed out to Newt Gingrich, you know, they've had more than a dozen debates. They've been on the stage together. They've been very close to each other, if not right next to each other. So they've had a lot of debates, but there were six or seven or at least five other candidates on the stage at the same time.

YELLIN: Right.

BLITZER: So it would be different, obviously, one-on-one.

YELLIN: We asked Russ Shriefer, his campaign strategist tonight, and he said he's had plenty of opportunity to debate Gingrich on those stages. But we'll see. Maybe Romney will give you a different answer. We can't wait to watch it tomorrow, Wolf.

BLITZER: We'll see. We'll see what he says tomorrow.

YELLIN: We'll be watching. Great job tonight. Thank you.

BLITZER: Thanks, Jessica.

YELLIN: Wolf Blitzer in Dubuque, Iowa.

And major business news tonight. More than 100 Sears and K-Mart stores will be closing, due to disappointing holiday sales. What does this mean for shoppers? And can we expect more closings from other chains, as well?

For that, let's bring in CNN chief business correspondent Ali Velshi.

Hey, Ali. This is not good news.

VELSHI: No. Not at all. But it is, in this particular environment, it's highly specific to Sears and K-Mart. As you know, those two companies got together several years ago, and they've had a rough year.

Look, it's been a tough year for retailers. And I would suspect that this decision was made prior to Thanksgiving, but then they were looking at the Thanksgiving to Christmas sales period. And I think, you know, that's the most profitable sales period for companies.

So the sense was that if something were to turn for these companies, they would probably announce that they weren't closing as many stores or weren't closing stores at all. They've now said 100 to 120 stores. They haven't said where it's going to be.

But I want to show you sort of national sales figures for the holiday season compared to how Sears and -- Sears, which is K-Mart, as well -- has done. Sears and K-Mart are down 5.2 percent. Sears is down more than K-Mart.

The retail industry as a whole, according to the National Retail Federation, was looking a little rough, but it looks like it took a turn upward and it's looking to be about 3.8 percent. These are compared to the same period last year. So you can see, compared to the retail industry as a whole, how poorly Sears and K-Mart are doing.

So you're going to see 100 to 120 closures as soon. As we know where they are, we'll let you know, Jessica.

The other issue is, of course, things have turned a little -- you know, things turned around a little in this holiday shopping season. We had a very, very strong Black Friday; looked like it was going to be great, and then it sort of fell off a cliff.

But here's what happened. The stores saw it coming. So very, very steep discounts. We're still seeing it this week. Good weather, which is a blessing for some, a curse for others. People were able to go out and shop.

The holiday calendar was a little tricky, too, because the day after Christmas now happened to be a Monday, which is easier. When it's a Sunday, people just don't go out to shop as much.

And consumer confidence, we just got consumer confidence numbers out this morning. for the sixth straight month, they're higher, Jessica. Consumers, despite everything that's going on out there, are actually feeling relatively good. That's probably because unemployment has been going down a little bit, and we've had more job creation, Jessica.

YELLIN: All right. Always glad to get some good economic news. Thank you, Ali.

VELSHI: Yes, it's a little good.

YELLIN: Thank you, Ali. Great. Ali Velshi.

Heartbreaking is the only way to describe this next story. Just look at these images. It's all that remains of what was once a family home in Connecticut. It was burnt down in a Christmas day blaze that killed three children and their grandparents.

CNN's Deborah Feyerick has been following the tragic tale. And today we got to hear the frantic 911 calls from the panicked neighbors.

Deb, this sounds so upsetting.

DEBORAH FEYERICK, CNN CORRESPONDENT: It was horrible. Five children -- five people did not make it out of that house. There were seven altogether. Only two made it out alive, and the town's mayor appropriately calling this tragedy catastrophic.


FEYERICK (voice-over): As fire raced through the Victorian home just before dawn Christmas morning, neighbors frantically called 911.

UNIDENTIFIED FEMALE: Stamford 911. What's the address?

UNIDENTIFIED FEMALE: There's a huge fire at the house next door to us. The whole house is on fire.

UNIDENTIFIED FEMALE: What is the address, ma'am?

UNIDENTIFIED FEMALE: We're at 2241 Shippan Avenue. It's the house next door. There's a major fire and there's three kids and a woman.

FEYERICK: Trapped inside the Stamford, Connecticut, home grandparents Lomer and Pauline Johnson and their three granddaughters, 10-year-old Lily, and 7-year-old twins, Grace and Sarah.

UNIDENTIFIED FEMALE: I was calling about a major, major fire with people in the house.

UNIDENTIFIED FEMALE: We have the fire department on the way, ma'am.

UNIDENTIFIED FEMALE: Please, come quickly.

FEYERICK: The house was under renovation. It appears fireplace embers placed in an outdoor trash enclosure near the home ignited the blaze. Mom, Madonna Badger, managed to climb out onto scaffolding, frantically directing firefighters to the third floor, where she said her children were sleeping.

ACTING CHIEF ANTONIO CONTE, STAMFORD FIRE DEPARTMENT: The crew pushed through two rooms unable to find the children. They were pushed back by the intense heat and flames.

FEYERICK: Grabbing two of the frightened girls, family friend Michael Borcina, seen here on his Facebook page, reached the second floor.

CONTE: The heat drove them to get separated ,and it looks like one went back upstairs and another one was found with the grandmother.

FEYERICK: Grandfather Lomer Johnson had spent Christmas Eve playing Santa at Manhattan's Sak's Fifth Avenue. He managed to lead one of his granddaughters to the back of the house and climb onto a roof, then died before he could pull her to safety.

CONTE: Just inside the window that he came out of we found one of the young children. I guess there were a pile of books. Looks like she was placed on the books.

FEYERICK: The mother, a successful marketing executive, is said to be in shock. She was taken from the scene, sobbing, "My whole life is in that house."

CONTE: When you don't make that rescue that you failed -- and I don't think anybody wants to fail.


FEYERICK: Now, investigators are continuing to search for answers, but it does appear right now that there were no smoke detectors and no fire alarm system inside -- Jess.

YELLIN: Thanks, Deb, for that story.

And ahead, more of Wolf Blitzer's exclusive interview with Newt Gingrich.

Plus you don't want to miss this. How one family's swimming pool turned into a Burmese python's home sweet home. The amazing video ahead. Stay with us.


FEYERICK: The Iowa caucuses are one week away, and tonight anyone in Iowa who turns on a television or radio is bound to see attack ads slamming Newt Gingrich. The former speaker is crying foul. Here's more from Wolf Blitzer's eye-popping interview.


BLITZER: I don't know how much TV you've watched in Iowa, but if you watch commercials, they are hitting you hard.

GINGRICH: Oh, yes. Look, I think they will have spent $5, $6, $7 million, most of it false, and the amazing thing to me is we've held up as well as we have.

And I think now we're going to come back. This entire jobs and economic growth tour is designed to counter the negativity. We always start out to be the top three or four. I think we're going to be in the top three or four. We could end up as No. 1. It's a very confusing field right now. BLITZER: It looks like you're lowering expectations a little bit, which is understandable.


YELLIN: A little bit.

OK. Joining me now, Democratic strategist and CNN contributor, Maria Cardona; Republican strategist Rich Galen; and in Davenport, Iowa, chief political writer for the "Des Moines Register," Jennifer Jacobs.

Thanks to all of you for being with us. Let me start with you, Rich, because you know him best. You were his press secretary at one point, communications director for his political shop, for Newt Gingrich's. Did he help himself in this interview?

RICH GALEN, REPUBLICAN STRATEGIST: No, I don't think so. I think -- I mean, it was classic Newt. He went in with one set of sort of talking points or thinking points of what he wanted to get accomplished, and Wolf, who by the way, in my lifetime has only had one equal in these kind of one-on-one interviews, and that was Tim Russert. Nobody does it better than him.

YELLIN: That's nice.

GALEN: But the -- but under -- under the careful guidance of -- and fair questions -- Newt completely got off message and started lashing out, and that's the Newt that they were trying to avoid.

YELLIN: You think he did not intend to go negative? You think he intended to stay positive and got off track.

GALEN: Absolutely not. His super PAC goes up with ads tomorrow that are supposed to do the negative stuff so he could talk about, as he said, jobs.

YELLIN: Maria, he said that -- he even acknowledged that he was trying to lower expectations. At one point they thought it looked like he could win Iowa. Now he said, "Oh, if I come in third it's fine."

MARIA CARDONA, CNN CONTRIBUTOR: Yes. And I think he's got to do that now, Jessica, because he -- I think he's seeing the writing on the wall.

You know, what was so interesting is that when he was in the very back of the pack in these debates, a loot of people were saying, look, maybe he's changed. Maybe we're seeing, to use a Bush-ism, a kinder, gentler Newt. But I think a lot of people, many who know him very well, know that there is an instinctive arrogance and a mean- spiritedness that sometimes he just can't help himself. And it comes out, and that's exactly what has happened since he has surged to be one of the front-runners.

But his poll numbers are going down. He clearly doesn't have the organization. We saw it with what happened in Virginia. He doesn't have it in Iowa. So he has no choice but to sort of damp down the expectations.

YELLIN: You say as the Democrat in the group. Let me turn to you, Jennifer, because you know Iowa better than almost certainly any of us but almost better than anyone. How you think this interview will play with Iowa voters?

JENNIFER JACOBS, CHIEF POLITICAL WRITER, "DES MOINES REGISTER": Well, I know that people -- the chatter in Iowa is that they are calling out Newt Gingrich for going negative. They say if you were going to stay positive he would really just talk about his own vision, his own plans, his own record. So they really think he's going negative. So they're not letting him of the hook.

But they're showing up to see him. In Dubuque today he had 200 people, and at his second stop in Iowa today he had about 150 people. So he's almost winning the crowd wars. Here in Davenport, Mitt Romney's got about 350 to 400, so he's got almost twice as many as Gingrich. But Gingrich still has far more people than Perry or Bachmann or Santorum, who are also in Iowa today.

YELLIN: Were you surprised he took on Ron -- this is to you, Jennifer, first of all -- took on Ron Paul aggressively as he did, since he's primarily been aiming his fire at Mitt Romney lately?

JACOBS: Yes, absolutely. People, you know, I talked to a bunch of Republicans at the Mitt Romney event in the lobby, and they were talking -- you know, I was getting reaction from them. And they said it seems like he's going on the defensive now, that he seems a little bit panicked; he seems a little bit desperate. So they're saying it's a sign that he's worried, for sure.

YELLIN: What do you make, Rich, of the fact that he went after Ron Paul the way he did?

GALEN: Well, again, he can't help himself. This is what he does. But going back to the fact that he's drawing good crowds, the -- that again, speaks to the lack of a campaign strategy. If the crowds are good, why cut your schedule back by half? Why not double it? Instead of 44, go to 88 places?

YELLIN: Well, is it possible he doesn't have the money?

GALEN: All he needs is gas for the truck and us (ph). He doesn't have enough money to go on the air, but he certainly has the money to get in a car and travel around.

CARDONA: You know what's so interesting, though, Jessica, is we're here talking about him. And right now he really doesn't have anything to lose. And so maybe what his strategy was is to say something like he said, eye-popping in this interview, which he did, and who all of us are now talking about. If he got good people at these caucuses who can make the case on the economics of whatever it is his vision is, then maybe he can get those undecideds. And they are more than 50 percent. That's a lot. So maybe this is something that could, in the end, work for him.

YELLIN: He's always been brilliant about getting media attention. He just knows how to...

CARDONA: No question.

YELLIN: ... get media attention. Jennifer, the Gingrich versus Romney battle, does that, in any way, help other candidates? Does that get -- turnoff voters in Iowa and draw more attention to the other candidates?

JACOBS: Well, the Republicans I talked to today said it's definitely a distraction. Instead of, you know, focusing on a closing argument and Newt Gingrich is having to defend himself and go on the defensive against Mitt Romney and now he's on Ron Paul. So it's definitely a distraction. And yes, it will help some of those other candidates. You know, Rick Santorum today had 100 people at one of his events, you know, and Rick Perry had 120. So people are turning out to see the other candidates.

And yes, Iowans definitely are turned off by the negativity. Each though negative ads work, Iowans always say they don't like it.

YELLIN: Now, in Iowa, are you seeing momentum build, I have to ask, for any one candidate? I mean, this far out, one week to go?

JACOBS: We're seeing -- anecdotally, we're seeing a rise with Rick Santorum. He's really moving up. He's very, very tiny audiences, and now he's got, you know, around 100.

But seeing a decline for Michele Bachmann. Her crowds were just tiny today. She had only 60 people, and she was out in western Iowa. So -- but other than that, I would say that Rick Santorum is the one who seems to be moving up. And Romney seems to be going very strongly right now.

YELLIN: Quick prediction. Do you think that Newt Gingrich places better than third in Iowa?

GALEN: No, I think it will be close between Gingrich and Santorum.

YELLIN: For third?

GALEN: Yes, for third.

CARDONA: I think the same thing. I think Ron Paul can actually win this one.

GALEN: But I think the "DMN" will have a poll on Sunday, right?

YELLIN: OK. We'll all wait to see. We'll get to see a week from tonight what happens. All right.

Still ahead -- thanks to all of you for being with us. Thank you.

Still ahead, did Santa bring you any weapons? If so, you're not alone. Why so many people bought guns this Christmas.

Plus, they were headed to divorce court. Now we're learning that Arnold Schwarzenegger and Maria Shriver are spending time together. New details about who might be having second thoughts when we come back.


YELLIN: Welcome back. Here's the -- here's the latest news you need to know right now with Lisa Sylvester.

Hey, Lisa.


Well, it turns out holiday shoppers weren't just interested in electronics and toys this season. According to the FBI, they also bought record numbers of guns. Almost a half million background checks were conducted in the six days before Christmas.

The FBI didn't offer any theory on why the spike in gun sales, but the National Rifle Association tells CNN the figures show more people feel they need guns for self-defense.

And in July they announced their 25-year marriage was over. Well, now it looks like Arnold Schwarzenegger and Maria Shriver might be -- might be -- trying to patch things up.

Sources tell "People" magazine the two spent Christmas together with their children. They also attended the Lakers season opener later the same day. This news follows online reports that Shriver is now re-thinking her decision to divorce the actor and former California governor.

And a warning for the next time you take a swim in south Florida. Look before you plunge. Yes, check out this video here. Thirteen- foot Burmese python. It made its way into the home and of the swimming pool in the Miami area of a family this weekend.

The Miami-Dade fire rescue's venom unit captured the slithering predator -- I can't even read this -- after several attempts. It seemed the snake didn't want to leave the pool. Burmese pythons aren't native to Florida, but they've been turning up more often, because apparently, they get really, really big, as you can see.

YELLIN: Really big.

SYLVESTER: Yes. I almost feel like, for people who are afraid of snakes there might have had -- there should have been a disclaimer. I'm sorry, folks, if you have a phobia of snakes. So...

YELLIN: One more. One more story. SYLVESTER: We do have one more story. Apparently, this just in to CNN. Governor Rick Perry went to court today to get on Virginia's presidential primary ballot. Perry is challenging the constitutionality of Virginia's law that's keeping him off the ballot, because he didn't get enough valid signatures.

And thanks, Jessica, for keeping me on top of it. It's late in the day, but thanks for keeping me up.

YELLIN: You can go to court to challenge that story, without letting you know in advance, right?

SYLVESTER: I think it was the snake story...

YELLIN: I know.

SYLVESTER: ... that kind of, like, threw me off my game.

YELLIN: I know. That was creepy.

And now for the moment you missed. You probably remember Newt Gingrich comparing his campaign's failure to get on Virginia's primary ballot to the attack on Pearl Harbor. Well, today in New Hampshire, Mitt Romney suggested a different comparison. Listen to this.


MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I think he compared that to, what was it, Pearl Harbor. It's more like Lucille Ball at the chocolate factory. You've got to get it organized.


YELLIN: Ooh! And this is what Romney was talking about. Lucy on the chocolate factory assembly line, having trouble keeping up with everything that needs to be done. One of the best episodes ever of Lucy -- "I Love Lucy."

All right, and this programming note. Tomorrow on "JOHN KING USA," former New Mexico Governor and presidential candidate Gary Johnson joins us. Johnson had been running -- had been running on the GOP ticket but struggling, and tomorrow he intends to switch to the Libertarian ticket. How he thinks the party switch will help him and his chances. That's tomorrow right here on "JOHN KING USA."

That's all from us tonight. "ERIN BURNETT OUTFRONT" starts now.