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War of Words With Iran Continues; South Carolina Race Tightening?

Aired January 13, 2012 - 18:00   ET


JOHN KING, CNN ANCHOR: Good evening, everyone. I'm John King.

Tonight: Protesters in Iran chant "Death to America," and the Obama administration draws firm red lines in an escalating war of words.

New numbers tonight suggest a tightening Republican race in South Carolina, but an encouraging national balance for the front-runner, Mitt Romney.

And outrage in China as consumers line up for new iPhones and then get told, sold out.

We begin in Mississippi, where today CNN tracked down one of the murderers pardoned this week by the former Governor Haley Barbour. Just before leaving office on Tuesday, Barbour issued a total of 199 pardons, including 14 murderers.

One of them is Anthony McCray, who killed his wife back in 2001.

In an exclusive interview with CNN, McCray says he is sorry, says he has found God, and says he has changed his life. McCray worked in the governor's office as part of a prison program for three years and talked with the governor he says every day.


MARTIN SAVIDGE, CNN CORRESPONDENT: Your pardon, though, as you probably know by now, has triggered a lot of outrage. Not just yours, of course, but pardons of other prisoners.


SAVIDGE: What do you think about that?

MCCRAY: If the lord laid on the governor's heart, and the inmates who have been working around the world, who have been working at the government mansion did -- whatever they have been doing in Charleston, yes, I think they should be pardoned. Everybody deserves a second chance in life.


KING: It was CNN's Martin Savidge who tracked down McCray and conducted that exclusive interview. Martin joins us now from Mississippi.

Martin, explain more on how he described his relationship with the governor and how important he thinks it was to his release.

SAVIDGE: You know, he said it was really significant to his release. He describes the trustee program where he gets to be in the governor's mansion as pretty much a given. Once you get into that program, it is known you will get a pardon.

Look at the cozy relationship he has with the leader of the state of Mississippi, the man who has his fate in his hands. He gets to talk to him on a daily basis. The average Mississippi citizen has no access like that to the governor. But a convicted murderer, a man who murdered his own wife, shooting her in the back, apparently gets to talk to the governor every day and make a point about how changed a man he is.

KING: Martin, we were talking last night. The state was trying to find and track down these guys who had been pardoned and been released because now there is a question about whether they will be rounded up and returned to prison. You were able to find Mr. McCray. How is the state of Mississippi doing finding the others?

SAVIDGE: They're doing better than they had been in the past couple of days. They now say of the four murderers that were pardoned and then released on Sunday, three of them are now back in custody. Or at least they have been served the orders that they have to now appear in court.

One is still missing, Joseph Ozment. His whereabouts are unknown. Another one of those murderers was actually found out of state in neighboring Alabama. But Ozment is the one they're worried about. They're asking for the public, if anybody knows or has seen him, please notify the authorities.

And as for those pardons, those several hundred of them, the attorney general's office says most of them now, they believe, did not meet the criteria of the Constitution of the state of Mississippi. Many could be going back to jail.

KING: It's a fascinating story. This one will continue, Martin Savidge doing wonderful reporting on the ground in Mississippi. Martin, thank you.

This afternoon, U.S. military officials confirmed -- this is dicey -- Navy and Coast Guard ships have been harassed by high-speed Iranian boats in the Straits of Hormuz. Look at this video just obtained by CNN.

The U.S. Navy and the Coast Guard ships, two close encounters with the smaller high-speed Iranian boats you see there just last week. The Iranian boats did not respond to initial warnings, creating some tense moments when those small Iranian boats got pretty close. In the end, though, cooler heads prevailed in what is a critical transit point for the world's oil supply. Let's take a closer look. I want to go over here and map this out for you. Increasing security stakes in the Straits of Hormuz, 17 million barrels a day. That's roughly one-fifth of the daily oil trade goes right through here, through the Straits of Hormuz. Let's take a closer look. You see Iran right here, the United Arab Emirates, the Gulf of Oman, the Persian Gulf.

This is what we're worried about here. Let's look why they're worried. See the red lines? This is what is known to be the range of surface to ship missiles from Iran could come out into the water. The blue line here is the end of the barrier, the maritime waters boundaries, and these yellow lines, those are the key shipping lanes, where so much of the oil goes through.

Another concern, especially, as you just saw those small boats buzzing, the Navy and Coast Guard vessels, the United States and others know Iran has been working on its ability to use mines, to drop mines in here. You could disrupt shipping and you could certainly disrupt U.S. military exercises, U.S. military ships in the area as well.

High stakes here.

CNN Pentagon correspondent Barbara Starr joins us now.

Barbara, if Iran does something more provocative and what we just saw was pretty provocative, what is the United States willing to do in response?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, the president and the defense secretary have said they will do what it takes to keep the Strait of Hormuz open.

So does that mean in terms of military action? The U.S. Navy is keeping warships, aircraft and troops in the region. The president would have to order them into action. But the military clearly has the ability on the high seas, from the skies to take that military action to keep the strait open.

But, you know, John, when you look at that video, you see an equal concern. What if one of those speedboats comes right for a U.S. Navy ship? As you said, that's plenty provocative enough.

KING: Barbara Starr at the Pentagon tracking this developing one, and it's a nervous one, Barbara, thanks so much.

In just a few moments, we will get some more perspective from CNN's Fareed Zakaria. He says, as Barbara notes, the escalation, in Fareed's words here, could be dangerous.

The Iran crisis surfaced on the presidential campaign today. It was the very first thing Mitt Romney brought up when he started criticizing President Obama at a stop this morning in Aiken, South Carolina.

(BEGIN VIDEO CLIP) MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Internationally, the greatest threat this nation will face over the coming decade is a threat of a nuclear Iran.

And he failed to put in place crippling sanctions against Iran. He failed to speak up for the people in Iran when they were in the streets, asking for freedom. He was silent. He failed to put in place a series of military options that would convince Iran that the course they're following is not one that will be acceptable to the world or to us.


KING: In other campaign news, Governor Romney is not directly responding to his opponents' campaign on his business record, at least not today.

But in Florida today, Newt Gingrich kept hammering away, challenging Romney to prove his claim that while the CEO of Bain Capital, he created 100,000 jobs.


NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: To question a presidential candidate's claim that he created jobs is not to attack capitalism. It is to question a candidate. And the idea that some candidate can make a claim and then yell foul the minute you ask him to prove it is just silly.

I mean, if he can't stand up today and defend his claim, how is he going to stand up to Obama in the fall?


KING: Getting a little testy, as you can see there.

South Carolina's presidential primary just eight days away. A brand new poll indicates the race there is tightening. The ARG survey shows Governor Romney leading Gingrich 29 percent to 25 percent. Ron Paul also in the hunt, a strong third at 20 percent. But a new CNN/ORC poll of Republicans nationwide shows Governor Romney with a more comfortable lead, 34 percent to Gingrich's 18. Paul and Rick Santorum tied at 15 percent. The national polls showing a boost for Romney.

It's those state polls that matter most at the moment.

Our chief political analyst, Gloria Borger, is here.

You could hear Speaker Gingrich there and you look at this on the ground in South Carolina tightening. The Romney campaign says its polling shows it is not that tight, but tightening. We will have a pretty interesting week.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Right. It shows that, first of all, the negative ads against Romney are probably having some effect if you believe this poll. And don't forget, South Carolina, 9.9 percent unemployment. Newt Gingrich is saying that Romney is essentially a corporate raider, that he did not create 100,000 jobs; in fact, he killed jobs.

And he is trying to put Romney on the defensive there. And in fact Romney went up with ads talking about Bain Capital and how in fact Bain Capital created jobs.

KING: We're watching this race. Momentum matters in these negative ads you talked about.


KING: Gingrich went down a lot when he was hit with the pro- Romney group's negative ads in Iowa and you see it starting to show up in the polling.

In our polling, we asked Republicans favorable or unfavorable. We mentioned the name of a candidate. Do you have a favorable or unfavorable view? Look at this. Look at this right here. Just Romney and Gingrich here. Now Governor Romney has a 67 percent favorable rating, 67 percent. Two-thirds of all Republicans rate him favorably, and that is up from 55 percent in November. And look at Speaker Gingrich. The flip side. Only 49 give now him a favorable rating, 61 percent unfavorable.

Number one, Governor Romney is getting a bounce from winning and number two, Speaker Gingrich is seeing a definite toll from the attacks.

BORGER: But it's interesting because Gingrich tried to have it both ways and it didn't work for him either way. When he was positive in Iowa, it didn't work for him. And when he was negative in New Hampshire, it didn't work for him. Now it may be working for him a little bit more in South Carolina, but it's funny because Gingrich branded himself and then rebranded himself.

And people did not like this sort of negative Newt Gingrich that they saw, although it may in fact be having an impact in South Carolina. So it's very hard to tell right now.

KING: And we will watch. It will be interesting to see if our new national numbers change at all based on the South Carolina results.

BORGER: Right.

KING: But our national numbers right now suggest that Governor Romney is benefiting again from winning. People like to support a winner, especially as the race moves on.


KING: Big issues, the economy and the budget deficit. Those matter most to Republicans. What you would think might be Governor Romney's greatest vulnerability among conservatives, health care. He has Romneycare, the individual mandate in Massachusetts.

But if you look at the polling, who can best handle the economy? Governor Romney wins that one quite handily. If you look at the polling, who can best handle the budget deficit, Governor Romney followed by Ron Paul followed by Newt Gingrich, a decent lead there for Governor Romney.

And here's the one that surprised me, frankly. Who can best handle health care? This is a poll of Republicans, remember -- 30 percent say Romney, 20 percent say Gingrich. So it's actually been a while since they have been sharply critical of Romney on health care.


KING: But at the beginning of this season, that's what it was about.

BORGER: If you would have asked me a year ago whether Mitt Romney at this point in a campaign was going to be attacked on capitalism or health care, I would have said to you, are you crazy? Of course he will be attacked...


KING: Would have lost a lot of money betting capitalist.

BORGER: Exactly. He will be attacked on health care.

Now if you look at the poll, Mitt Romney has supported mandates. Newt Gingrich is second in that survey and he at one point in his career supported health care mandates. What do Tea Partiers hate the most? Health care mandates. But suddenly this shows that Romney is successful and that people are beginning to trust him a little bit more on the issues, and that they believe him when he says, what I did at the state level, I wouldn't have done at the federal level.

KING: Perhaps we will learn. Let's let a few more states vote. The Tea Party less influential this year than it was in the 2010 cycle.

BORGER: Think so.

KING: Gloria Borger, thanks. You have a great weekend.

A quick footnote on the presidential race. Just this afternoon, a federal judge rejected an effort by four of the Republican candidates to get on Virginia's March -- March 6 -- excuse the Boston accent there -- wow -- primary ballot.


KING: Only the Mitt Romney and Ron Paul campaigns submitted enough ballot signatures to qualify. The judge says the Gingrich, Perry, Santorum and Huntsman campaigns knew the rules months ago and in essence, played the game, lost and are now complaining the rules were unfair.

The Pentagon warns Iran not to cross what it calls red line. Up next, Fareed Zakaria on the dangerous stakes.

Plus, Monday is Martin Luther King Day. But, in Washington, the celebration began today.


CHILD: I have a dream this nation will lies up and live out the true meaning of its creed.


KING: More on this special tribute coming up.


KING: Today, angry chants of death to America and death to Israel during the funeral for an Iranian nuclear scientist who killed this past week in a bombing that the Iranians blame on the Israelis. The Israelis admit nothing.

During a speech at Fort Bliss, Texas, the defense secretary, Leon Panetta, said the United States was not involved in that killing. But Secretary Panetta gave the Iranians a very clear warning.


LEON PANETTA, U.S. SECRETARY OF DEFENSE: That means we have to keep all options on the table, all options on the table. And clearly there are those areas that for us are red lines. Number one, we cannot allow them to develop a nuclear weapon. That's a red line. Number two, we cannot tolerate Iran blocking the Straits of Hormuz.


KING: Let's check in now with CNN's Fareed Zakaria, the host of course of CNN's "FAREED ZAKARIA GPS."

Fareed, this back and forth has gone on and escalated for some time. But when you draw red lines, that means you better be ready to enforce them, especially when it comes to the immediate talk over the Straits of Hormuz. Where is this headed?

FAREED ZAKARIA, CNN WORLD AFFAIRS ANALYST: There is no question we are seeing an escalation that could be dangerous.

There's an old saying in international relations. There are two things that are very expensive, threats when they fail and promises when they succeed. And what you're doing with a red line is, in effect, you're doing a bit of both. You're saying if you cross this red line, we guarantee that there will be an American reaction.

I think that the feeling on the Straits of Hormuz is that we would be able to reopen the straits, but at considerable cost and with a considerable amount of international tension. So oil prices would go up to $200, $250 a barrel. It would be a very, very complicated thing.

Now I think that the Iranians understand that and they are backing down. And they understand that closing the Straits of Hormuz would be madness for them because it would shut down effectively all of Iran's imports and exports. It would make impossible any kind of Iranian trade, so they would be the country most hurt by it.

But we are also ratcheting up the pressure in a way where it isn't clear what the end game is here, because Iran is not going to cry uncle and simply say, all right, we surrender.

KING: And when the administration talks more tough on this side, you know we have a president of the United States and a defense secretary. We have one voice of the government.

In Iran, there is always the question. Does Ahmadinejad have the full support of the ayatollahs and vice versa? What are the conflicting pressures within the Iranian system? When you have a warning and a blunt warning from the United States, is there a risk that it could play out differently within the competing factions inside Iran?

ZAKARIA: For precisely the reason that you describe, John, it is very unlikely that you will see some kind of major concession, because the minute one of these actors makes a concession in Iran, let's say Mahmoud Ahmadinejad says maybe we should talk to the Americans, maybe we should negotiate, maybe we should freeze, his opponents within the system will say that's appeasement. That's selling out.

The system is too fractured, too divided to imagine them making a big strategic decision like that, that we are going to make major concessions. I think there is a desire to find some way out within the Iranian system. And we have to see if we can find an effective and clever diplomatic way to meet with that desire, in other words, keep the pressure on, but try to chart some path out, because otherwise you're just building up pressure.

And the whole thing could explode because of one miscalculation, a ship in the Gulf in the Straits of Hormuz that somebody stops either advertently or inadvertently. This is a very high-stakes game. The price of gas at the pump could go up to $5 or $6 a barrel very easily.

KING: And it is that economic reason, is that the lever here? Because both sides have the interest. As you noted, there is no love lost between the two governments. There is no senior level communication directly between the two governments.

But you do have these pretty cold facts, 35 percent of all seaborne traded oil goes through that strait, 17 million barrels a day in 2011, 1.1 million of that comes to the United States, 14 crude oil crude tankers through the strait. Do both sides maybe step back or try to find a quiet way to step back because both sides know their economies would be crushed if this escalates? ZAKARIA: I think so, that that's what you have to hope. This is a kind of version of mutual assured destruction, because were the Iranians to try to block the Straits of Hormuz, every buyer of Iranian oil would be allowed to cancel their contracts.

There is something called force majeure, a legal term which basically means these are now unforeseen circumstances in which we do not have to pay you any more money. And that would be a huge blow to the Iranian economy. It would also obviously be a crippling blow to the American economy.

KING: A complicated and consequential mess, you might say.

Fareed Zakaria, as always, thank you.

ZAKARIA: Pleasure, John.

This was supposed to be day Apple's latest iPhone went on sale in China, but things didn't go the way anyone planned.


UNIDENTIFIED MALE: Security are running down here now, and the mob are continuing to follow them.


KING: Coming up we will tell you just why everyone is so angry.

Plus, candidates often talk about their roots. What about where they live now. Ahead, how does your house match up?


KING: Welcome back.


KING: You may have noticed we haven't shown you any of Ron Paul's campaign stops today. That's because there weren't any -- coming up, where and just what he's up to.


KING: This half-hour: the truth about President Obama's new plan to streamline the federal government. Let's just say timing is everything.

Also, Oprah Winfrey explains why we won't be seeing her on the campaign trail with the president.

And if you have ever forgotten your change at the airport checkpoint, the TSA says thank you. It all adds up to big bucks.

First, though, a rare black eye for Apple. Today's launch of its iPhone 4S in China literally turned into a riot. CNN's Stan Grant was right there, shows us what happened and why.


STAN GRANT, CNN CORRESPONDENT (voice-over): It wasn't supposed to be like this, eggs pelted at the Apple store, people furious, then tempers reaching boiling point.


GRANT: Angry potential Apple customers viciously attacking security.

(on camera) Security are running down here now. And the mob are continuing to follow them. This is what happened when they didn't open the Apple store. The crowd are getting angrier and angrier. Punches have already been thrown. They're still following security. Run, look over here.

(on camera) This store in a popular Beijing shopping center was supposed to be open at 7 a.m. As the time ticked past, the mood turned south.

(voice-over) Then an announcement. The phone would not be sold here today. As people refused to leave, police moved in.

(on camera) So we're here in the middle of the crowd. The police have been putting them out slowly. And as you can see here now, they're moving in. They're shouting on the megaphone for people to leave. If you look over here, they're trying to force people away right now.

(voice-over) Those who wouldn't leave peacefully were hauled away by force.

Some people here blamed Apple. Others even holding the United States to account. But anger also directed at China itself. A country, they say, too quick to attack its own people, too ready to use force to impose order.

What should have been a day of celebration has backfired for Apple, its customers, even the state itself.

Stan Grant, CNN, Beijing.


KING: Great reporting by Stan Grant.

Back here in the United States tonight, about 150 conservative Christian leaders gathering at a Texas ranch to discuss the presidential race and whether they can agree on backing just one candidate.

Tony Perkins of Family Research Council tells CNN this definitely, he says, not a meeting about stopping one particular front-runner.


TONY PERKINS, FAMILY RESEARCH COUNCIL: This is not an anti-Mitt Romney weekend. It's not a Bash-Mitt weekend. But having said that, it's clear that this meeting wouldn't be taking place if conservatives, social conservatives were comfortable with Mitt Romney.


KING: CNN's Ed Lavandera is tracking all this. Ed, if it's not a bashing-Mitt-Romney weekend, it's a "can we find somebody else we all agree on" weekend.

ED LAVANDERA, CNN CORRESPONDENT: You get that sense, right, John? You know, that clearly you get the sense that this meeting wouldn't be taking place if everyone was on board and, you know, ecstatic about a Mitt Romney nomination of the Republican Party.

So what we've been told is that many of these people, more than 150 people gathering at this ranch just outside of Brenham, Texas, at the home of a Southern Baptist leader. And they will be talking about who to support. We've been told not to expect any kind of clear consensus but that some of these people might be coming out and issuing their personal endorsements. We'll see how it plays out after this meeting ends tomorrow.

KING: It's fascinating to watch. We should tell our viewers, those are live pictures of Governor Romney campaigning as we talked to Ed Lavandera about this meeting.

We know that there are some evangelical leaders who don't trust him. We know there are some evangelical leaders who don't like the fact that he's a Mormon. But Ed, is there a credibility for these leaders that Romney seems to be -- right now has considerable momentum. If all of them were to come out and say, "We want somebody else," and then Romney goes on to win the nomination, wouldn't their credibility, which some say is in decline anyway, be diminished rather significantly?

LAVANDERA: You would suspect that that's probably something they're, you know, personally, each individual is taking into account. And it's not exactly clear if, who, if some of these guys were to come out and make these endorsements, just how much influence that will particularly have at this point in the campaign.

Some have turned down the invitation to come down to this meeting this weekend. And so we'll see. And one of the other things we've been told to expect, as well, John, is maybe some of these folks coming out, not necessarily endorsing someone but maybe pushing other candidates out of the race. So that might be something interesting to look out for here in the coming days.

KING: Important meeting. Ed Lavandera on top of it. Ed, thanks. The latest polls show the Texas congressman Ron Paul in third place both nationally and in South Carolina. But if you're looking for him on the campaign trail today or tomorrow, you won't find him. Our senior congressional correspondent Dana Bash is covering the Paul campaign. So Dana, where is he?

DANA BASH, CNN CORRESPONDENT: He's not in South Carolina, John. In fact, he hasn't been on the campaign trail since a quick stop in South Carolina on Wednesday. He won't go back there until Sunday. Now, you may think a candidate hoping to capitalize on that big second-place finish in New Hampshire would basically move into South Carolina until its primary. Of course, that's the next contest on January 21.

But he's home in Texas. His campaign says that he's raising money and getting ready to what they say will be six hard days on the trail starting Sunday. But John Paul certainly is a big presence in South Carolina right now.

Check this out. It's the spending in the Palmetto State. Romney leads with more than $500,000. But Ron Paul's campaign is spending about $200,000. It's actually a lot of money for a state that doesn't cost very much to advertise. And also, his campaign says, in fact, his chairman told me a couple of days ago, that they intend to spend total about $1 million in that state.

KING: And Dana, it's been an interesting sub plot. Ron Paul says he still thinks he has a path to the nomination. He is still campaigning for that, but he's often on the trail with his son, the freshman senator, Rand Paul. And you hear more and more ramblings about Rand Paul in higher office. Right?

BASH: Absolutely. I talk to people who know the Paul movement, and they tell you -- tell me that it's not a question of whether Rand Paul runs for president. It's when he does it.

In fact, just yesterday Senator Paul was back home in the state of Kentucky. A reporter asked him if he would consider running as the vice-presidential running mate. He didn't shut it down. Now, he did say he wants to push for conservative principles. And of course, right now that means fighting for his father's campaign.

But you know, he did spend time on the trail with his father in Iowa and New Hampshire watching them, at least from my perspective it was clear there was a lot of grooming going on there. It wasn't just him as a surrogate.

Ron Paul, of course, is 76 years old. He has suggested he's going to retire from Congress after this presidential run, and he spent decades creating this movement, John, that is obviously really gaining steam this year. And people who know him say that Rand Paul learned from his father's mistakes, that he's a more vivacious and savvy politician.

And you know, we have been -- both of -- you and I have asked Ron Paul whether or not he would run for a third term [SIC]. One of the reasons I'm told why it's probably very unlikely is because, if he does, it could take votes away from the Republican nominee and potentially help elect Barack Obama. And that would mean anyone named Paul would be a pariah in the Republican Party in the future.

KING: Establishment doesn't like them, but they are a fascinating family in this campaign and perhaps into the future. Dana Bash, thanks so much.

Now, you see this in every campaign. Candidates for every office try to portray the image of just being an average Joe just like you. You see them on the campaign trail. Blue jeans, open shirt collars.

But their bank accounts very often tell us a different story. And sometimes, when the politicians are asked to explain their wealth, well, they stumble. Case in point, John McCain, 2008.


UNIDENTIFIED MALE: How many houses do you and Mrs. McCain have?

SEN. JOHN MCCAIN (R), ARIZONA: I think I'll have my staff get to you. Condominiums -- I'll have them get to you.


KING: So how would this year's Republican presidential candidates answer that question? Some of them have luxury homes. CNN's Kate Bolduan back with us now to take a look at the 2012 real- estate primary.

KATE BOLDUAN, CNN CORRESPONDENT: The real-estate primary, John. You know that then-candidate Obama, he really jumped on John McCain trying to jump -- jump on that statement. Trying to say that he -- he's out of touch, you know, with the common man. Well, thanks to our friends at CNN Money, we were able to take a look at the current crop and the homes behind the current crop of Republican candidates.


MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I just don't think that President Obama understands America.

BOLDUAN (voice-over): Candidates often talk about their roots, saying where they came from tells you a lot about who they are.

GOV. RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: I grew up in a house that had no indoor plumbing. I didn't know about what I didn't have. What I did know was what I had.

BOLDUAN: But while they try to relate to the common man on the campaign trail, what they go home to may not seem so common.

Multimillionaire Mitt Romney owns several properties, including this beachfront home in La Jolla, California. Real estate Web site Zillow values the Spanish-style house at just under $10 million.

Jon Huntsman purchased his D.C. townhouse for over $3.5 million while he was still living in Beijing serving as the U.S. ambassador.

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: The only debt I've -- Everything I have is paid off. My home, my cars, everything.

BOLDUAN: And that everything for former speaker Newt Gingrich includes this four-bedroom pad in McLean, Virginia, currently valued at $1.3 million, 30 percent above purchase price.

GINGRICH: We have one rental house in Wisconsin. It has a very modest mortgage.

BOLDUAN: Sharing a Virginia address, Rick Santorum. He purchased this four-bedroom, five-bath home with a heated pool in Great Falls, Virginia, for $2 million back in 2007.

PERRY: So I told people, I said, "I was an original conservationist." In the wintertime we didn't spend a lot of time in the water. We didn't waste too much water with the number two wash tub on that back porch.

BOLDUAN: Rick Perry hangs his hat in a rental property in Austin right now while the Texas governor's mansion is undergoing $20 million in renovations.

You'll find a very different set-up, though, for Congressman Ron Paul in Lake Jackson, Texas. He's currently selling his four-bedroom house for $325,000, though Zillow values the property $60,000 less.


BOLDUAN: And of course we don't want to leave President Obama out of the fun. The Obamas purchased their home, their Chicago home, back in 2005 for about $1.6 million. It is estimated to be worth $1.3 million now.

Of course, thanks again to CNN Money for helping us compile that.

Of course you're wondering, John, what about the house that they all want to upgrade to? The White House. Zillow even tracked that.

KING: And?

BOLDUAN: If you want to try to purchase that, the estimated value of the White House currently is over $261 million. But as one of my favorite producers pointed out, you could also just rent it, if you're not in the market for buying, for $1.6 million a month.

KING: It's got an occupant at the moment. He hopes to keep it for four more years. We'll see how that one plays out.

BOLDUAN: Yes. But he's not paying that.

KING: We'll watch this one. Kate, thanks very much.

Ahead, President Obama wants to streamline government. We're going to put that promise to the truth test. Plus, tonight's "Moment You May Have Missed."


PIERS MORGAN, CNN ANCHOR: If you could be any animal, which one would you be?

GINGRICH: If I could be any animal? Probably an elephant.


KING: You heard that right. Newt Gingrich wants to be an elephant. But his reason -- trust me -- might surprise you. Stay right here.


KING: It is a daily applause line on the Republican campaign trail.


ROMNEY: This president is making the federal government bigger, burdensome and bloated. I will make the federal government simpler, smaller and smarter.


KING: The idea of shrinking the government also, unfortunately, for one candidate has been the biggest laugh line of the Republican debates.


PERRY: There's no doubt about that.

UNIDENTIFIED MALE: You can't name the third one?

PERRY: The third agency of government, I would do away with Education, the -- uh -- Commerce and -- let's see. I can't. The third one, I can't. Sorry. Oops.


KING: Well, today a call to streamline the government made a surprise appearance at the Obama White House. The Democratic incumbent wants Congress to give him the power to shrink and merge federal agencies.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Let me be clear. I will only use this authority for reforms that result in more efficiency, better service, and a leaner government.

(END VIDEO CLIP) KING: Well, here's tonight's "Truth." This president is more than a little late to the leaner, meaner government game. But make no mistake. This is smart politics.

If some of the president's rhetoric sounds familiar, well, that's because it is. Just a year ago his State of the Union speech included this bow to the big Tea Party, shrink Washington, mid-term election surge.


OBAMA: In the coming months, my administration will develop a proposal to merge, consolidate and reorganize the federal government in a way that best serves the goal of a more competitive America. I will submit that proposal to Congress for a vote, and we will push to get it passed.


KING: Sounded promising. Never happened. And these numbers don't lie: 4.2 million federal workers the year before President Obama took office. More than 4.4 million at the mid-point of his term. Federal spending, $2.9 trillion in 2008, $3.45 trillion in 2010.

So Republicans have plenty of evidence to support their skepticism the president means it this time. But truth is, this is a deft political move and a reminder of the power of incumbency. The Republican challengers can only promise to do something about the size and the cost government. President Obama, if he follows through, can actually do something about it.

Cynics can rightly ask, why did you wait three years, Mr. President? But his political team believes putting the issue front and center in year four -- that would be the campaign year -- is perfect timing.

Let's assess the president's initiative and the day's other big campaign moments. CNN contributor Democratic strategist Paul Begala is with us, and Republican strategist, senior Mitt Romney advisor Kevin Madden.

Paul, Bill Clinton was a different kind of Democrat. He reformed welfare. He had Al Gore take charge of reinventing government. There is a lot of snickering among Republicans when they see President Obama say I'm going to streamline the government. Does he have standing, credibility on the issue or does that matter?

PAUL BEGALA, DEMOCRATIC STRATEGIST: Well, let's see that he delivers. Let's see if the Republican Congress will give him that authority. He asked for it a year ago, and the Republican House still hasn't done that.

But I would also add President Clinton, who I served and you covered, reduced the federal work force in absolute terms to the smallest null of federal workers since Eisenhower was president. So if you want something said about streamlining government, vote Republican. If you want something done, vote Democrat.

KING: Bill Clinton is not running.

BEGALA: No. God, I wish he were. But we have President Obama. And I do think he's -- look, I just got back from four days hunting in south Texas. Nobody came up to me and said, "Gee, I really hope we streamline how trade authority is done." I mean, it's fine, it's good but it's not actually where voters are now.

2010 was about cutting government. 2012 is going to be about fighting for the middle class. And that's where President Obama has made the smartest pivot possible. He's now focused on the middle class. That's where the election is.

KING: You hope your guy's the nominee. But if you're any Republican running for president, or even if you're Mitt Romney, you think he's going to get the nomination. It's a reminder, though, when the president has this big event, he gets covered on live television. He's talking about what most people think is a Republican idea. The president says, "You know what? I have the bully pulpit." Bang.

KEVIN MADDEN, MITT ROMNEY ADVISOR: Well, you know, I think -- you said it was deft politics. I think it's very obvious politics. I think that the public is still going to remain skeptical, because what they're going to be judging President Obama on is performance and whether or not he really believes this. And I think his performance has been at odds with the American public's wishes.

And ultimately, the American public is going to ask themselves, not even so much the metrics and numbers, right, about cutting government jobs. But is the government working efficiently? Are they doing what they're expected to do in Washington?

And I think that is a bigger problem right now. And I don't think any Republicans are going to run on government efficiency. But I do think that the problem that the president has is that Washington doesn't seem to be working, and that is the malfunction that he tends to own right now. And that's something that we're going to continue to draw a contrast with. Whoever the nominee is.

KING: We've got a week now. We may find out who the prohibitive favorite is. If your candidate, Governor Romney, can win in South Carolina and open three and oh, he's pretty hard to stop. You can tell in recent days that he's gotten under the skin of Speaker Gingrich.

I want you to watch. This is a Web video put up by the Gingrich campaign. Remember Speaker Gingrich has said he would be positive, but he doesn't mind if those outside political action groups get a little nasty. This is directly from the Gingrich campaign.


UNIDENTIFIED MALE: Massachusetts Governor Mitt Romney, he'll say anything to win. Anything. And just like John Kerry...

JOHN KERRY, FORMER PRESIDENTIAL CANDIDATE: Laissez les bonnes temps roulez.

UNIDENTIFIED MALE: He speaks French, too.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Bonjour. Je m'appelle Mitt Romney.

UNIDENTIFIED MALE: But he's still a Massachusetts moderate. And a Massachusetts moderate cannot beat Barack Obama.


KING: It's funny, Kevin Madden, to a degree. But it's also getting personal. And it's no accident that the Gingrich campaign is trying to associate Governor Romney with John Kerry. I assume Michael Dukakis is next.

MADDEN: It is personal, but I think more than anything, it's silly. And the problems and the anxieties that people have right now related to the economy there are serious. Newt Gingrich has a very small window right now to persuade Republican voters. The No. 1 issue that they care about is the economy. That doesn't speak to anything of that.

KING: Is he right in the sense that you see a lot of Republicans, though, Kevin, who are saying, you know, I'm torn between Gingrich and Romney, but I think Romney's more electable? So they go into the electability. If you make him into John Kerry, do you undercut the electability?

BEGALA: I guess, but I think it would be smarter if he stuck to issues. Some of our greatest presidents spoke French. Thomas Jefferson, James Monroe, both Roosevelts. Herbert Hoover spoke Mandarin. We used to kind of like it if presidents were educated.

You know, and this sort of ignorance that a professor like Gingrich is running on, it's -- it's embarrassing for Newt. He could point out, as he should, like apropos government reform, spending went up in Massachusetts under Romney. Taxes went up. Fees went up. These are things that would really bother Republican primary voters and more honestly situates Romney as a liberal.

MADDEN: Yes, you look at the metrics of all the polling, and there's just a rash of polling out there. It's like 55 percent of the public says right now that their No. 1 issue is the economy. Everything else is in single digits. And I guarantee you that me having a problem with a candidate speaking French is 0.007 somewhere. So...

KING: And when we looked at that earlier, the economy, the budget deficit, two big issues, especially, with Republicans, Governor Romney was leading in our new national poll, leading with a decent margin. He's also leading on health care. Does that surprise you in the sense that, I'm sorry. I think even you would concede, in a Republican primary, if there's one vulnerability that you thought they would be hammering at from day one until now, it would be a mandate. MADDEN: It does not, and we could go back to the tape here. I probably was here a year ago. I said health care will be an issue. It will not be the issue. And what people do care about on health care is they want to know what the future of health care is going to look like under President Romney.

And he's made very clear what he would do to fix the ills of Obama care and what it's doing to our economy. He's made that relentlessly clear in his campaign. And I think that's why voters are responding, and he's also talked with command and control of the issue, that none of the other...

KING: You're a very (UNINTELLIGIBLE) politics guy. You like attack politics. If you were advising one of these Republicans and you had a choice, go after Romney on health care or Bain Capital, what would you tell them?

BEGALA: Actually, the Bain Capital attacks hurting him with Republicans. It's going to kill him with independents in the general election, should he get there. I promise. I'm advising a pro-Obama PAC. OK. You can write it down.

But I'm surprised and impressed. Among Republican voters, how troubled they are by this -- what Rick Perry even calls vulture capitalism. It's Sarah Palin weighing in the other day, saying this isn't fair. This is not just some lefty thing. If you make Romney, not just a country club Republican but a yacht club Republican, he's through.

KING: Eight days till South Carolina left to see how this gets litigated. Romney starting to push back on that one.

Kevin, Paul, have a great weekend. We'll see you soon.

"ERIN BURNETT OUTFRONT" coming up top of the hour. Erin, you just finished an interview with Speaker Gingrich. I understand you got him to make a bit of a correction on some job numbers he's been talking about.

ERIN BURNETT, CNN ANCHOR: Absolutely. You know, I don't know if you -- today in Versailles, Florida, where he's already going try to campaign in Florida, he said that he created a part with Ronald Reagan, of creating 1.3 million jobs in the United States in one month. It didn't happen, and you're going to hear exactly what went wrong there.

Also, you all are talking about Bain Capital and it was interesting. You're talking about whether you're country club Republicans to a yacht club Republican. There's obviously an ad that Newt Gingrich is running in South Carolina that has John Kerry speaking French, and then Mitt Romney speaking French, trying to draw those comparisons. And we had, I will say, a little bit of a back and forth about that particular issue.

Also talking about the polls and why Mitt Romney is polling very well among women. Newt Gingrich is struggling with that group, and he has a theory as to why.

So all of that coming up, top of the hour. Pretty excited about it.

KING: See you in just a few minutes, Erin. Thanks.

Still ahead here in 2008, Oprah was one of Senator Obama's biggest champions. Now, she says there's no reason for her to endorse the president. We'll tell you why.

Plus, at airports, you know the drill. Shoes off, empty your pockets. Turns out the TSA is making a killing off all that loose change we're all leaving at the airport. Kate Bolduan will be back with the details.


KING: Welcome back. Here's Kate Bolduan with more of the latest news you need to know right now.

Hello again.

BOLDUAN: More news. Oprah news. That's always news. Got to cover that, of course.

Oprah Winfrey tells CNN she is not planning to campaign with President Obama this year and won't be formally endorsing him this time around, but she says it's because she doesn't need to.


OPRAH WINFREY, MEDIA MOGUL: I don't need to endorse him, because I am a 100 percent supporter of him, And I've already endorsed him. And I've already -- you know, everybody always asks, you know, are you going to do what you did in 2008? What I did in 2008 I did because people didn't know, really -- my own friends didn't know who he was at the time. They're like, "Who's this guy?"


BOLDUAN: He'd accept the endorsement. I think anyone would from Oprah Winfrey, with her approval rating.

Moving on. Ever walked -- walked off from the airport security checkpoint without gathering up all of your change? If you do carry change any more, which I can't, because I don't like the way it sounds. Well, you aren't alone. Exactly, thank you, John. The Transportation Security Administration reports in 2010, it collected $409,085 -- and as John points out, the ever-important 56 cents -- in change, including $32,000 in currency from other countries.

Why, oh, why would you walk away without picking up your change?

KING: I always pick mine up. I say, "I'm sorry, guys. It's the college fund." All right. Finally, tonight's "Moment You Might Have Missed." Ever had someone ask you, you know, if you were a tree, what kind of tree would you be? Or what kind of animal would you like to be? Piers Morgan, our great colleague, tried it out on Newt Gingrich. But he wasn't quite ready for the answer.


MORGAN: If you could be any animal, which one would you be?

GINGRICH: If I could be any animal?

MORGAN: Yes, you love animals. That's why we're in it.

GINGRICH: Probably be an elephant.

MORGAN: An elephant?



GINGRICH: They have 105,000 muscles in their trunk.

MORGAN: Really?


MORGAN: Unbelievable.

GINGRICH: It is unbelievable. It's cool.

MORGAN: You want 105,000 muscles in your trunk?

GINGRICH: And they're big, and they last a long time. They live a long time, and they're smart. And they're social animals. You know, and so, very few things can attack them.


KING: My rule for this program is if I don't learn something every day, we have failed. A hundred and five thousand muscles in an elephant's trunk.

BOLDUAN: Of all the people -- of all the people who has an easy answer on that one, that was all a bit strange. His name's Newt, for goodness sakes.

KING: He's running for president. You don't say newt.

We'll see you Monday. "ERIN BURNETT OUTFRONT" starts right now.