putting on the final touches of the state of the union address. and newt gingrich's stunning surge has made him a lightning rod for a new wave the criticism. can we keep up the momentum in florida? i'm wolf blitzer. you're in "the situation room." 6o. just a few hours from now, the president of the united states goes before congress and the american people to record on how the nation is doing. his state of the union address will certain by as important glimpse. . . will focus on job, income equality and taxes and a whole lot more. as mitt romney reveals his own mounta multimillion dollar -- cnn's jim acosta is covering the campaign for us. he's in florida. romney, he did well in that debate last night, everyone seems to agree. is he back on track? >> reporter: wolf, we'll find out. right know his 'campaigning in front of the a foreclosed home. you could say he's hitting the reset button today. he's a taking the president and his rivals, but he's finding out hitting the reset button is nots exactly hitting the reset button. >> mitt romney played the role of candidate in chief, delivering a blisters pre-buttal to the president's state of the union address. >> record unemployment, home foreclosures, debt that's too high, opportunities that are too few. this is the real state of our union. >> it was an attempt to -- he releases the 2010 and estimated 2011 tax returns. they show over the last two years he made nearly $43 million, almost entirely on investment income and paid an effective rate of 14%, lower than what many middle-class americans pay. the disclosure was welcomed at the white house, which announced warren buffett's secretary would on sit in the first lady's box at the state of the union. team romney was ready for that one. >> the unemployed don't get tickets to sit next to the first lady. >> reporter: his advisers were throwing punches at newt gingrich. that he reveal more. >> we released more tax returns than he has released, and his questionnaire is what is his relationship with freddie mac all during those years, people in florida are getting crunched. what vitt was he giving to freddie mac. >> gingrich has moved on. ties romney to, who left the republican party to run as an independent for the senate guess marco rubio. some of kris's former staffers in and out work for rom romney. >> noises, if that makes him a moderate in massachusetts, but it makes him pretty liberal in a republican primary. >> team romney was too busy resurrecting this image as a cry baby over thinks threat to skip upcoming debates if the audiences are asked to keep quiet. the crowd was told at monday's debate. romney's advisers say he sounds like he's running for pouter-in-chief. earlier today a romney adviser told reporters florida is not a must-win state. that's a sign that polls may be showing soon that newt gingrich may have a sizable lead in this state. just a few moments ago, i can tell you that romney has launched a new line of attack, that he hasn't seen too many his turkey that make as much money as newt gingrich for freddie mac. >> let's listen in briefly, listen to what he has to say. >> if we were to reelect barack obama a year from now he would stand up and talk about the things he's done, cap and tread, car check and stopping solyndra and obecamacare, stimulus, all those things and how they're working just fine, how they're taking a little longer, but they're working just fine. we would hear more of the same. the candidate who campaigned on change would be talking about how he's keeping things the same. this same policy has not worked. if i'm the president of the united states, i would be talking about a new way forward, we'll have a new president with new excitement in america, we will get america on track with jobs, with home prices rising again. it is my commitment, i will use every ounce of my energy to make sure we're fighting for your job, not my job, your home, not my home. i love this country i love this country. it's so much fun to see folks like yourself that, as a boy i got taken around by my parents to the national parks. they took me in a rambler. it's amazing we maid it. i felt in love with the beauty of the land. my mom used to sing some of the beautiful hymns. for purple mountains majesty above the fruited plain. i got to see those mountains. i was in awe. >> we've heard this part of his speech many times before. earlier he was directly going after the president of the united states. jim acosta is on the scene. is he getting a big crowd there? set the scene for us. >> it's a good-sized crowd, wolf. one of the things we should mention is the backdrop. he's standing in front of a foreclosed home. earlier today he was standing inside a abandoned drywall factory. these are postcards from the edge of the weak american economy right now. it's a signal that perhaps the campaign has reached a turning point, realized these days and days of going after newt gingrich may not be working, so getting back to the economy, the bread and butter issues may work well. a voter appreciates mitt romney coming to this house and standing in front of it, addressing this crowd, because he's seen squatters pulling out the copper wiring, the plumbing, that sort of thing. it's one of those bread and butter issues that people feel prchlly on the ground in places like southwest florida. i talked to one gentleman who was glad toss him out here today, wolf. >> it certainly underscores the opportunity to once again hit newt gingrich on that contract he had from freddie mac and the whole housing industry, gives him an opportunity to talk about that. jim acosta, thank you. gingrich is in a knockout dragout fight with romney and throwing some sharp jabs at president obama today. gingrich is working the crowds himself in florida. cnn's shannon travis is covering him. what's going on? >> reporter: that's right, wolf. mitt romney isn't the only one throwing jabs today. newt gingrich is as well. i'm here in an airport sang garr in sarasota, florida. just a short while ago this was packed with throngs of loyal newt gingrich supporters. obviously in this area of florida and the south-central coast there's a lot of conservatives and tea partiers, so it was a friendly crowd, and they took a chance to pre-but the state of the union address and listen to the crowd reaction as well. >> gathered as we are on the day that the president is going to speak about the state of the union. [ booing ] >> i thought i might suggest a few things that might improve the state of the union. you always have to wonder when obama speaks which country he thinks he's talking about. >> reporter: wolf, you hear some boos here. that might not be ordinary in ordernary times for americans to boo, but obviously a lot of conservatives here have little love for the president and feel like the speeches have become increasingly political. one thing of note, gingrich is also striking hard against romney. we heard a bit of that in jim acosta's report. he also talked about the debate last night as romney was going after newt gingrich with political attack after political attack. apparently a new debate coach has hired to teach him untruths as fast as he can. and the question out there is why did newt gingrich lie down, if you with, and not respond to the amazing response. shannon, stand by. we'll have much more. in last night's debecame mitt romney really went after newt gingrich. he didn't hold back at all. listen to this. >> i worked very hard to promote a coven servety agenda. we cut taxes 19 times. we balanced the budget every year, put in place a rainy day fund of over $2 billion by the time i left. we were also successful in english immersion in our schools driving our nations to be number one in the nation. >> i helped pass the reagan economic plan and worked on the collapse of the solvesh and spent 16 years building a majority in the house for the first time since 1954, the fehr rye electioned majority since 1928, developed the conservative opportunity sewed. 6 trying to develop a conservative movement. mitt romney came out swinging and hit him hard, but he almost played dead. i don't want to get into a big fight. who won that debate? >> this was a battle of mirror mirror on the wall, who is the most conservative of them all. i would have to say newt gingrich did a better job of explaining the roots of his conservati conservatism. i think mitt romney still has a bit of a problem explaining just hot deeply conservative he is. and i think it points to why lots of republicans are kind of skeptical about mitt romney, because the question is, okay, will he defend our conservatism if he gets to the white house. >> but the first 20 minutes of that debate and newt gingrich was not responding, which is unusual. i had thought he learned his lesson from iowa. and he collapsed in iowa. this time he just sort of turned the other cheek, if you will. >> at first he said he's not going to respond to every little thing and after the exchange went on and on, it enthe for the evening and they went on to other things, but i think romney did exactly what they came there to do, which is to lay a gloef on newt gingrich. >> gingrich last we're released his taxes. is this issue in and out put to rest? >> and gave $7 million away. look, this is an interest that ended the republican primary to say i had unearned income, i paid a low rate. that's okay. that's fine. >> that's the law of the land. >> newt gingrich even suggested in this debate that mitt romney should pay no taxes on it, because newt would like to get rid of capital gain taxes for everybody. romney seemed surprised about that, because that's not his proposal. so i think it's okay the question is hi still seem difficult. my question is, will he become comfortable, and will he be able to say, look that doesn't keep me from relating to middle-class americans and from the paint you're feeling, fundamental. newt gingrich did release some documents about consulting with freddie mac, but that is not going away. >> no, it isn't, and you heard jim acosta talking about the housing situation. romney now uses the phrase "influence peddler." he was still on the payroll of freddie mac, and you can be sure he's going to hit him over and over again and try to shy newt gingrich to the shaky mortgages that were handed out by fred yik mac and helped cause the decline of housing market. gloria, thanks very much. i'll be moderating cnn's next republican presidential debate thursday evening, 8:00 p.m. eastern, just days before the pivotal florida primary, only here on cnn. the state of the union speech still a few hours away, but the house speaker john boehner isn't waiting to release sharp new criticism, including one thing about the president that boehner calls, quote, almost un-american. and his super pac is spew fear and loathing, a rare access to the group founded by karl rove. stay with us. and she suggested i try boost complete nutritional drink to help get the nutrition i was missing. now i drink it every day and i love the great taste. 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[ male announcer ] another reason more people stay with state farm. get to a better state. ♪ jack cafferty is here with co"t cafferty file." george soros is warning that a class war is coming to the united states. he said the occupy wall street movement will eventually become violent, week strong-armed tactics to, if things go far enough it could bring about a repressive political system in this country. it might be a stark view, but this idea of class conflict is growing these days. when president obama pushed for higher taxes on the wealthiest, he insisted those tax hikes were not class warfare, but not everybody agrees. you can bet the same income inequality will be a theme tonight. the president is set to talk about a government that should ensure, quote, a fair shake for all, unquote. mr. obama said that the system is rigged against the nailing's middle class, and he wants to work for an america where everyone engages in fair play, gets a shot and their fair share, unquote. a recent poll shows a large majority of americans see class warfare with two thirds saying they're very strong or strong class conflicts that currently exist. here's the scary part. the clash between rich and poor now ranks as this country's greatest social conflict, topping conflicts between immigrants and native-born americans or even conflicts with blacks and whites. something to think about. here's the question -- how concerned are you about class warfare in this country? go to cnn.com/caffertyfile, post a comment on my blog or go to our post on "the situation room's" facebook page. wolf? >> thank you, jack. good question. president obama will certainly be in the spotlight tonight, but john boehner did grab some of the spotlight today. he met with reporters in his office and release d dana, the speaker will be setting directly behind the president along with the vice president during the speech tine. they've had a rather run year. >> reporter: actually on a personal level he said that you would be surprised at our back and forth. look at what he said about the president. speaker boehner said it was like negotiating with someone who never negotiated anything. he went on to say at some point someone has to say yes. ite thing i thought was interesting is he says he hasn't spoken to the president since december 23rd, more than a month ago. yes, congress was gone for most of that. but if they have a good relationship, why haven't they spoken? >> i think if you speak to folks over there, they agree that the president likes john boehner, they have a good relationship on a personal level, about you he feels that boehner can't deliver, he can't control his own caucus? what are they saying there? >> i asked john boehner that question, about the fact he has been speaker for a year now, and he has had some interesting times with his own conference. the fact of the matter is there are lots of people who are elected and not to compromise and say compromise be damned, we came here on principle. he told. a lot of people are really angry at congress right now. >> reporter: of course. we talked about congress has the lowest approval rate in history. washington does as well. i certainly didn't leave this breakfast thinking that we'll get a lot done this year. he did say he has told his members they have to try to find a way to get common ground, but wolf when we tried to get into the specifics, it didn't sound like a lot would happen. he blamed the president that, quote, he's been awol since labor day, and even that his speech tonight was written by the presidential campaign. >> republicans being those for the wealthy, here's what he said about that. john boehner said -- this is a president that ed i'm not going to be a divider, and running on the politician of divides and envy is to me it's almost un-american. pretty tough stuff from the house speaker about the president. i think they were upbeat at the white house that it may be ugly, it may be bloody, but by the end of february they will extend the payroll tax run, extend unemployment benefits when they coot get they year-long payroll tax cut down, which is the fact they want to cut spending to pay for that they're having the very first meeting, say they're hopeful, but it's hard to imagine it won't go down to the wire just like last time. >> dana will be busy tonight in the chamber for the president's address. thanks very much. and please be sure to watch cnn for special coverage. our coverage will begin live here 8:00 p.m. eastern on cnn. did a change in format change the outcome of the latest debate? they're both standing by live for our strategy session. plus new concerns about the cruise ship disaster. [ male announcer ] this was how my day began. a little bird told me about a band... ♪ an old man shared some fish stories... ♪ oooh, my turn. ♪ she was in paris, but we talked for hours... everyone else buzzed about the band. there's a wireless mind inside all of us. so, where to next? ♪ ♪ [ multiple snds ng melodic tune ] ♪ [ malennounc ] at northrop grumman, makthworld a feplace. th's value performance. northr gruan. let's get back to our big story. romney yielded to growing pressure, and released his income tax returns, revealing a relative low tax rate. weeknights 7:00 p.m. eastern here on cnn. nothing illegal about this. all above board, very legal. what jumps out at us? >> it was a pain to go through, but we commissioned six former i.r.s. attorneys and go through various parts, from the swit bank accounts from the offshore accounts to blind trusts. first, in terms of the blind trusts, not something that's standard for wealthy or nonwealthy americans, but is standard for politician or people that wasn't to run for office. it gives you the ability to say, look, i didn't make a decision on whether to bet against the housing market. i'm not saying he did, but that would be an example. that's a standard part of what a politician might do. one thing that stood out to me, interest, that i've been curious about. what it is is that when someone for private equity fund, you wolf blitzer invest in that fund and the person managing the fund gets a 20% cut of whatever money he makes for you. that cut is taxed at the capital gains rate of 15%. there are some in the industry who defend it. but mitt romney benefited from it significantly. $12.9 million of his income came from that carried interest alone. he paid $1.9 million this taxes on it if it had been taxed at the income rate, he would have paid $40 million. very above boor and in line with the rules, about you it raises questions whether it's a loophole. according to the obama administration's numbers how much it would raise eliminated that loophole, 1.5%, $20 billion so raising serious issues perhaps for mitt i don't remember any, but not something that would move the needle at the federal level. >> most of the income was rather dividends, regular interest, stuff like that, but the capital gains long-term rate. >> the same as carried interest. most of that right around that 15% rate, but it was just from carried interest. there are a few people in this country that benefit significantly from that one particular provision, and mitt romney is one of them. >> erin will have more on this setting the stage for the state of the union. thanks very much. >> all right. see you, wolf. appreciate it. let's dig a bit deeper on our "strategy session." paul begala and the republican strategist mary matalin. one thing about that explanation. >> this is erin's background, she knows this stuff better than i ever will. i know she's right about it. what's interesting political is we saul earlier a live shot of mitt romney speaking, and he has this phrase, i love america. of course, he does. roars, so does my mother, we're not going to make her president, but his political opponents can say if you love america so much, why were you investing in the cayman islands, in swiss bank accounts, in luxembourg, in ire listen middle-class folks don't have swiss accounts, so if you love america so much, why weren't you investing. >> what about he had a blind trust and investors were doing that. >> about you you can give parameters and say only invest in america. he has to explain that. and by the way, what about before he had this blind trust? wee won't he release earlier tax returns? were there some years he paid less or any years when he paid zero? this thing is not just going to go away. >> mary, what do you think? the other two republican candidates, they haven't released anything. santorum says he has to go back home and good et it from husband personal computer and ron paul makes no bones about it. he says, none of your business. >> the republicans should top taking this bait. it's political contrifance. but what romney -- and as wonderful as erin burnett is and that was a great explanation, i doubt the selection will be held on carried interest, except to the extent there are all sorts of neech loopholes. republicans are saying close all the loopholes. we need a big debate on the tax for the republican it is to win that. romney should pivot to reforming the tax codes instead of getting in the weeds about what's in his reports. >> paul, you watched the debate last night. mitt romney came out swinging. newt gingrich not so much. in fact at one point he said this. >> i'm not going to spend the evening chasing governor romney's misinformation. he just said at least four things that are false. i don't want to waste the time on them. >> was that a blunder on his part? >> yeah, rising above it will never be newt's strength. neither is being the attack puppy that mitt tried to be. neither of them were in their wheelhouse last night. i think mitt dumped the entire opposition research file on newt's head. i think part of it was that the audience was caused to be quiet. when the mob was silent, i think he might have lost his nerve. >> the fierce attack from mitt romney on newt gingrich, mary, was very intense. >> no, it's part necessity, as paul says, but it's also strategic. >> the rules were basically brian williams, the host of that debate, he didn't want any applause, and there was no applause, no cheering, no cries, nothing along those lines, but the rules are if you're attacked, you can attack back. in this particular case, he decided not to attack back. >> let me be moor clear. the way he has been attacking, as paul has suggested, is in the theatrical way, which would have been by virtue of that hall and those rules would have been discordant, so it just would have not worked, so paul's exactly right on that. but more strategically and a greater imperative is after several debates of unleashing the fury, he as his campaign has said he needs to go into the presidential motor, that he can be temperate, steady and get in that quiet room where big discussions and adults have conversations. so it was part strategic, and finally what's he going to say? there isn't just any for any republican who was involved in it, and the other attack is you're unreliable. what is he going to say? no, i'm not and fly off the handle? i think strategically he did not make a blunder, and mitt has other issues he has to deal with. everybody did great last night is my bottom line for the debate. we'll see how they both react thursday night in jacksonville. i'll be moderating the next republican presidential debate right here on cnn. stand by, guys. it's certainly one of the big moments of his presidency, so what does president obama need to stay in tonight's state of the union address. our "strategy session" with paul and mary will continue. 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[ male announcer ] buy unlimited messaging and get free unlimited calling to any mobile phone on any network. at&t. let's get back to our strategy session with both of whom have worked in the white house. in the scheme of things, how important is tonight's state of the union address, paul? >> it's huge, it's big. the biggest thing you know is going to happen. presidential campaigns always turn on these moments of strength. sometimes they're unpredictable, you don't know when they're going to happen, but sometimes they are. tonight the president has the chance. for an old white house aide like me, and maybe for mary, this is the super bowl of the world series and willie nelson concert rolled all in one. >> a lot more americans will be watching the president deliver this 45 minute or so speech tonight as opposed to watched last night 'republican debate or any of the republican debates, for that matter. >> yeah, that's right, although they are big speeches and they are the political junky's super bowl -- go giants, didn't want to miss that opportunity -- no one will make their decision tonight how they'll vote in the fall. no matter how great the speech, and i don't doubt the president will give yet another speefl, they're looking at their lives, and three quarters of americans think their future will not be brighter. by definition, state of the unions in a campaign year in are a frame-up, and he will do that and do it well. i don't know that it's going to have legs beyond next week the way this campaign has been unfolding. >> we'll soon find out. thank you both. it's a super pac founded by karl rove dedicated to beating president obama. we're about to get a rare look inside. coming up next, we'll hear from two republican lawmakers who say they field newt gingrich was lobbying them. new voices in the ongoing debate that's dogging gingrich's campaign. end a forest may seem like the stuff of fairy tales. but if you take away the faces on the trees... take away the pixie dust. take away the singing animals, and the storybook narrator... 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[ male announcer ] the new citi simplicity card. no late fees. no penalty rate. no worries. you know, typical alarm clock. i am so glad to get rid of it. just to be able to wake up in the morning on your own. that's a big accomplishment to me. i don't know how much money i need. but i know that whatever i have that's what i'm going to live within. ♪ ♪ democrats may be even more worried about the powerful republican fund-raising groups than they are about any of the republican presidential candidates. all week we're going in depth looking at the powerfulp pacs on both sides, how they get their money, how they use it and how they impact the campaign. our chief white house correspondent jessica yellin reports. >> reporter: he's the man democrats love to hate. >> two groups funded and advised by karl rove. >> an interesting group can give millions to karl rove secretly. >> reporter: what's up with that? president obama will have the cash. >> reporter: he's the most public face on american cross roads. outside spending groups devoted to electing republicans. the man who rupp it all is steven long. his offices are just a few blocks from the white house. >> shockingly spare, really. we have holes in the wall. it's not particularly a high-end kind of place. >> don't let that fool you. >> our roll is to race between $240 and $300 million. >> because the obama campaign is so good at raising money, he's convinced as soon as there's a republican nominee the democrats will -- >> try to make them unelectable. our nominee will not have resources and groups like america cross roads can fill that gap. >> for donors who don't mind giving publicly there's american crossroads, the super pac can made hard-hitting political adding. for donors who want no fingerprints, this is crossroads gps. contributions here are kept secret. they have to make so-called issue ads, meaning they could say for or against a candidate, but can you tell the difference? >> shovel ready was not as shovel ready as we expected. >> 14 million out of work, america drowns in debt. >> gps does more than tv. they also invest in other groups on the right, kind of a venture capital fund for politics. we should expand the playing feel, make sure the groups are getting money. >> reporter: in 2010 they wrote fat checks to organization fighting tax increases. cross roads also hosts a regular lunch here to coordinate strategy with other super pacs on the right. >> it's totally appropriate for us to communicate with other groups like that. >> law says cross roads was created to counter the influence of labor unions on the left, but one watch dog sees big differences. >> i think labor unions improve democracy. america crossroads simply isn't the kay. they represent a very small number of billionaires. that's less democratic by definition. >> reporter: if labor unions also object to the comparison for another reason. labor unions have much more rigid disclosure reels. they also have to report it to the department of labor. but you know what steven law points owl, if labor unions and other democratic groups don't like how secret crossroads gps is, they can start a group themselves, and guess what? democrats are starting those kinds of groups. >> bill burting, together with our own paul begala, they have a very similar group to this one. >> reporter: that's just one camp of the new democratic groups like that, exactly. >> >> jessica, thanks very much. the search continues, but another untilant concern off the coast of italy. and a painful reality is slowly setting in for storm-ravaged residents. 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[ all ] i'm with scottrade. lisa sylvester is monitoring the other top stories in "the situation room" right number you what do you have? >> this just into "the situation room." some eye-popping new numbers from apple. the company is reported a quarterly profit of $13 billion an all-time revenue record, and no surprise that apple has its wildly popular i phones and i pads to -- another body has recovered. two bodies were found yesterday and two more over the weekend. environment risk is also becoming urgent with 2400 tons of fuel oil still aboard the stricken ship. washington is one step closer to becoming the seventh state to legalize gm. giving it enough votes to clear the senate. a majority of state house members already support it. wolf? >> lisa, thank you. your e-mails is coming up. jack cafferty is coming up. and at the top of the hour, what the president will say in the state of the union address. we're getting the details. jack's back. >> how concerned are you about class war fare? richard writes -- worried? you bet i am. a divisiveness that feels like the racial and civil underpinnings. it's very much out there. i for one have been waiting and fearful for a class that will take to the streets, something on the order of the occupy movement but something a whole lot worse. tom writes no one has ever survived the division we have now in this country. if we don't start paying attention, pitchforks could be replaced by weapons. george soros is right. keith writing -- what is old becomes exaggerated again. it appears to be a beefed-up term for reorganizing the inequities that exists. i don't believe most americans begrudge those who are wealthy or those who work within legal parameters to keep their wealth. thus del son have class warfare concerns, about you who advocates for the average american. dee in texas writing -- it's been obvious for some times. sarah writes there's a fine line between hard-working middle-class silt zen and people who freeload off state and federal social service programs. i hope it would sink the titanic. i think this is truly liberal rhetoric destructive to the value of all americans. we all should have an equal opportunity to be successful. why take the incentive out of the equation. no one should be targeting the success or the opportunity to be successful in american. john writes it's about time, bring it on. go to my blog, or throw our post on "the situation room's" facebook page. wolf? >> we'll do, jack. thank you. to our viewers, happening now, the stage is said an important political speech by the president of the united states. just four hours from now, the state of the union address before a joint session of congress. we'll tell you what we know. a teenage girl, one of two people killed in devastating storms ravages the southeast. now family and friends share the heart-wrenching story of a life cut dramatically short. president kennedy's last conversation before being assassinated, some of the secrets revealed for the first time in stunning new audio tapes. breaking news, political headlines and jeanne moos all straight ahead. a big moment for president obama, less than four hours from now, almost certain to kick the battle off for the white house. some already dismissing speech. >> high unemployment. record home foreclosures. debt that's too high, opportunities too few. this is the real state of our union, but you won't hear stories like those at president obama's address tonight. the unemployed don't get tickets to sit next to the first lady. under his administration, 9 price of gasoline has doubled. under his administration, the environmental protection agency has a proposal to add another 25 gents a gallon to the price of gasoline. >> but the reply balance blood certainly does stop on capitol hill. one republican congressman, representative doug lambborn of colorado now going so far not to attend the speech. our chief white house correspondent jessica yellin and candy crowley, they're both standing by. >> in this speech, the president will put meat on the bones, laying out specifically how he will enact the fair shake economy, so to speak, that he talked about earlier in the december. that's what they are promising here at the white house and by his aides. this is framing his campaign message looking ahead to this election that we're facing. the president's campaign believes this election cannot be a referendum on the president and his stewardship of the economy. instead, it has to be about two competing visions on how the middle class will fare in the future economy. one vision would be, in their view, a middle-class that would be governed by a republican presidency in which so-called recklessness and the wealthy only get ahead, sort of the wall street vision. versus a democratic vision, as they would paint it, where there's opportunity for all. so tonight you will see the president attempt to outline a case in which he's defining those terms for the upcoming election debate. >> what are they saying about all this? >> take everything that jessica said and turn it on its head, and you will see the other side of this coin. among those who had breakfast with the speaker this morning, he talked about the very thing that jessica is talking about. they call it at the white house a fair shake. what republicans are saying is, look, this is the politics of division and envy pitting two classes of people against one another. speaker boehner said it's not going to work, democrats have been trying to do it many years over many campaigns. he says no matter how much the president trying to make it something else, this is an election, a referendum on his policies, and the economy, so everything that the white house is trying to push, the republicans are pushing back. >> jessica, we can see in the locations where the president is going, we can read something into that, right? >> right. he's going to five battle states. they have also suffered from very high unemployment or housing problems, with the foreclosure crisis, or they've also seen some growth as a result of policies that he's enacted. so he'll be able to push proposals that can help in the future, but he'll also i expect be able to or try to make a case that he's already helped the economy a bit and his aides believe that in his next campaign he has to convince the voters that what he started is helping so that all they have to do is believe enough that it would help more in the future. >> candy, every president up for reelection, they always make a point of going to battleground states for so-called nonpolitical events. >> yeah, it's crazy. they always do. look, you can call this what you want. even if there is policy intent, there certainly is political implication. and there's just no denying that. so the fact of the matter is i counted up these states, 48 electoral votes, where he is going. jessica is perfectly right. michigan maybe not so much, but it's been so hard hit by this economy, and it is a place where he hopes to, i'm sure, though he will talk about education in ann arbor, in michigan -- at least that's where the university of michigan is, certainly his presence there is a reminder he did help steady the auto industry. this is clearly political, as is what the republicans are doing. you cannot get away from that in a illustrate political year. >> guys, thanks very much. plez be sure to watch cnn for special coverage of the president's state of the union address. it all begins live at 8:00 p.m. eastern right here in washington. let's go to jack cafferty right now. he's got "the cafferty file." >> here's some more. president obama wants for you more years in the white house, but if he wins a second term, and that's a very big if at this point, it's unclear what a second term would look like a piece in politico describes it as blur are, a good word. it's a far cry from 2008, in addition to hope and change and "yes we can" he a long list of issues. and of course, promised a new era of bipartisanship in washington. anyway, the entire country as well as washington may be more bitterly divided today than at almost nids time in our history say since the civil war. here's the thing about a potential second term. unless the democrats win big in congress, it's likely the next four years will be only more divisive. that's why the message may be more about stopping the republicans than about what he can get done. there are some items on the president's to-do list, long-term budget deal, and with a divided washington, it ain't going to happen. other than that the president is expected to campaign on the proper role for government, creating more fairness in society. that's the class war fare stuff we were talking about last hour. meanwhile, don't bet on getting too many answers in his state of union tonight. here's the question -- how do you these president obama's second term would look? how would it be different from his first? go to cnn.com/caffertyfile, post a comment on my blog or go to our post office on "the situation room's" facebook page. >> one line jumped out at me. they say the country you believe is as bitterly divided as the civil war? is that what you're saying? >> probably as divided as it's been since the civil war, harkening back to the civil rights xaent, the anti-vietnam war stuff. there are some deep, bitter feeling on both sides of the political divide in this country, and what the political gridlock in washington, nothing is being done to address them. nothing. so they just get worse. >> jack cafferty with "the cafferty file." thank you. mitt romney reverses course, revealing the long-awaited details of his tax returns. we're dissecting the numbers for you. also, as congress prepares to welcome president obama for the annual state of the union address, tom foreman looks back at the promises and pledges he made last year. did he keep them? here's one. >> republicans have never liked the president's health care reform plans, no secret there. he invited them last year on how this should be changed. >> if you have ideas on how to improve this law by making care better or more affordable, i am eager to work with you. we can start right now by correcting the flaw in the legislation -- >> that part about giving small businesses a break, republicans, democrats pretty much everyone liked that at least enough to pass a bill to remove that requirement for expanded reporting to the irs by such companies. the president signed it in april. that's a proposal accepted and a promise kept. ♪ ( whirring and crackling sounds ) man: assembly lines that fix themselves. the most innovative companies are doing things they never could before, by building on the cisco intelligent network. that's how it is with alzheimer's disease. she needs help from me. and her medication. the exelon patch -- it releases medication continuously for twenty-four hours. she uses one exelon patch daily for the treatment of mild to moderate alzheimer's symptoms. 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[ female announcer ] ask the doctor about your loved one trying the exelon patch. visit exelonpatch.com to learn more. a dramatic effort to regain the top spot, mitt romney shifting course, just days before the critical florida primary. but there's controversy in the numbers. let's bring in cnn's lisa sylvester. she's taking a closer look. what are you finding out, lisa? >> just a recap. newt gingrich released his joint rick santorum says the tax records are on the computer at home. ron paul says he doesn't want to release his taxes. he says he didn't make that much money and frankly would be embarrassing for him, and mitt romney changed his mind. here's what we're learning. if there was any doubt before, romney is a very rich guy. in 2010, romney and his wife reported $21.7 million in income. in 2011, $21 million. they paid about $3 million in taxes each of those years. romney's effective tax rate -- 13.9%. a lot less than the highest tax bracket for income at 35%. >> it's because the tax code favors investment income. his $21 million in income most came from either capital gains or carried interest, which is the compensation from his private equity dealings. >> reporter: everything on romney tax says perfectly legal according to tax experts, but there are a few things that reporters have pounced on, including his investment as broad, particularly in the cayman islands, and whether or not the investments were made there to limit his u.s. tax liability. his campaign and trustees say absolutely not. >> the blind trust investment in the cayman funds are taxed exactly -- exactly the same as if governor romney owned his shares of investments made by the funds directly and in the united states rather than through cayman funds. >> david connection johnston is reuters's tax columnist and author. he says romney was able to transfer millions into his kids' trust funds without paying taxes. >> they paid no taxes, because this carried interest is considered to been a profits interest and not ownership, so when you give it away, you can value it at zero. >> the romney campaign has said the value of the trust fund is now at $100 million, but the romney team says that's largely attributed to gains in the stock market since the fund was established in 1995. and all contributions have been under the irs limit on lifetime gifts, including tithing 10% of his income to the church of latter day saints. romney's supporters say he has nothing to hide. >> he released two years' worth, and this el reflect a guy who has been very successful. he's been aself made guy. he's paid all the taxes that were due, and he derived his money from the private sector. >> now, mitt romney released his taxes for 2010 and 2011. now there's a call for him to disclose more particularly during his time at bain capital. his father george romney made public 12 years of tax returns. in 2008 then senator obama released returns going back to 2000. in 2004, senator john kerry also released ten years of returns, so this might not be the end of it, wolf. >> i suspect not, especially if he gets the nomination. lisa, good report. romney certainly has been hammering at his chief rival newt gingrich just how far gingrich went for clients. there are also other claims that gingrich used his influence to lobby in favor of a medicare expansion plan, something the former house speaker denies. brian todd is taking a closer look. the debate is over the word "lobbying." >> gingrich in this campaign has said, no he never lobbied. but we found two congressmen who say when gingrich talked to them, it sure felt like lobbying to them. >> he remembers the occasion well. he was one of the few republican holdouts that doesn't want to -- others did, and they brought in a closer, former speaker newt gingrich, he said, was forceful. >> he told us confide millennium rackly, if you can't pass this, you don't deserve to govern as congressmen. so i felt lobbied. >> knowing that he had health care clients that had this legislation would have an impact on him, i feel in retrospect what he was doing that day with myself and other members of congress clearly was advocacy that most people would think was lobbying. >> blake and bradley are most mitt romney supporters. gingrich and his campaign have fired back, saying he never load yesterday for anyone, he supported it as a public citizen. >> not correct having public advocacy as lobbying. every citizen has the right to do that. >> reporter: he's right and technically he wasn't lobbying, but listen to what michael beckel of the watch dog group says about that bill, which became known as medicare part d, a program that provides drugs for seniors. >> at the time, he had clients that would have benefited from that legislation passing. he had pharmaceutical companies paying him to be able to get his services. >> reporter: like drug maker note onorth is. they have listed the center for as a group helping the company with public policy activities, a spokesman is quoted as saying he only offered guidance and strategic advice. that's the same thing gingrich did for freddie mac. >> strategic advice looks a lot like lobbying. you can tell people your subordinates, your clients, who to call and what to say. you can coach people what they need to do to be persuasive, then can tell you who to meet, what to saw, but you yourself aren't registering as a lobbyist whether that happens. >> reporter: and this 2006 contract for freddie mac released by the gingrich campaign says gingrich was paid as a consultant, but reported directly to the director of public policy, who is a registered lobbyi. gingrich said he didn't lobby for freddie mac, but watch dog group says often that line is blurred. >> in the debate last night he said he and his firm brought in that expert to tell them where the fine but bright line between lobbying and not lobbying. he said that expert is prepared to, quote, testified that he trained them on this issue. >> maybe that's why romney is not accusing him of influence peddling, as opposed to lobbies. >> and influence peddling is everywhere. >> a lot things you can do as an influence peddler. i'll be moderating the next presidential debate, this thursday evening, 8:00 p.m. eastern, only a few days before the pivotal florida primary. you'ric looking at a live picture from clay, alabama. check it out. they're cleaning up after the powerful tornado. for one family the loss goes far beyond a demolish home. we'll have their story and the latest when we come back. snufr [ male announcer ] the cadillac cts sport sedan was designed with near-perfect weight balance from front to back... and back to front. ♪ giving you exceptional control from left to right... and right to left. ♪ the cadillac cts. ♪ we don't just make luxury cars. we make cadillacs. i'm giving you the silent treatment. so you're calling to tell me you're giving me the silent treatment? ummm, yeah. jen, this is like the eighth time 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[ male announcer ] buy unlimited messaging and get free unlimited calling to any mobile phone on any network. at&t. bum p.m. has a lot riding on the state of the union address tonight. it's a major speech he can't afford to get wrong. he's no doubt been working on it for a long time. they released a video today of some of the help. >> we're one week away, finished the first complete draft last night. now we'll meet with the president. he read the draft last night, made a lot of ed its. i saw his draft when i went up there this morning. now we're going to talk to him about it. >> the thing about president obama, which i guess is this is simply not an editing exercise. he writes a lot of the speech himself. >> republicans meanwhile, have a different view of the current state of the union revealed in this new ad. >> if i don't have it done in three years, then there's a one-term opposition. >> here we are four years later and they could find a job. >> with 4 million people out of the work for more than a year. >> undue influence by obama campaign supporters. >> things are not going in the right direction. they're going in the wrong direction. >> tough words in that republican ad. let's go the to the without. jay carney is joining us. thanks for coming in. how much of the president's speech tonight is substantive, policy-oriented, how much is political? >> contrary to, i guess, some of the expectations that have been laid out there that this would be a political speech, this is a traditional state of the union address. the president will assess for the american public and his listeners in congress where the country is, the state of the nation, if you will, and where he believes we need to take it, working together to grow the economy, to have it create even more jobs. after 22 straight months creating private sector jobs, we have more work to do. he's going to talk about -- he's going to lay out a blueprint for an american economy that's built to last. not built on housing bubbles or financial sector bubbles or internet bubbles, but on american manufacturing, on american energy, on skills for american workers, and on renewal of american values. so this will be a substantive, policy-oriented speech that will also be encapsulated in a vision for where this country needs to be moving so that it can dom nate economically the 21st century the way it did the 20th. >> how will the president describe the state of the union? >> the president will say that the state of the union is getting better. the fact of the matter is that you and i, wolf, even though we've been around for a while, the economic recession that we saw happened would be the worst of our lifetimes for moth americans, that would be the case. when president obama was sworn into office in january 2009, the economy was shedding nearly 800,000 jobs per month. we know in the fourth quarter of 2008, the last conveyor of the previous administration, the economy shrank by nearly 9%. we haven't seen numbers like that since the great depression. this was a deep, deep hole. the facts are, contrary to the ad you just played, since president obama's tough policy decisions have been allowed to take effect, the economy has reversed itself, begun growing and -- than any year since 2005. we're headed in the right direction. we have more work to do. >> how do you explain this three-day trip to several battleground states, states he needs if he's going to be reelected. what's the theory behind that? >> the president will travel all over the country to talk about the policy initiatives that he'll begin to lay out tonight in the state of the union address. in many ways the speech tonight will be a bookend laying out themes how he views america's economic future that he kay in osawatomie, kansas. i don't think you can argue that kansas is a battleground state. he'll travel all over to blue states, red states and purple states, arguing for the kinds of policy initiatives that he's going to put forward tonight. >> when he hears that newt gingrich, the republican presidential candidate, the former speaker of the house called him the best food stamp president ever, what does he think about that? >> i think he understands there's a lot of bluster and empty rery rick in the political process. this president has the support in his party that means he doesn't have a challenge, he doesn't have a contest in his primary, that allows him to focus more intensely on the job he was electioned to do. to build an economy here that's durable and will last. so he's focused on his job, you know, the politics that's going on in the republican primary process will take care of itself, will sort itself out eventually there will be a nominee. president obama will be ready to engage in debate when he emerges. mitt romney released his income tax returns for the last two years. he wound up paying about 14% in taxes. 14% obviously is a lot less than 35%, but all legal, because it was different, interest, long-term capital gains. under your vision what would he have paid for those types of investments? >> the president has spoken in the past about the buffett rule. he'll speak about it against tonight. this is the principle laid forward by warren buffett, who feels very strong le he should not be paying taxes at a lower rate than his secretary. americans who are fortunate enough to have benefited from this country to be millionaires and billionaires should not be paying less in taxes at a lower rate. the president will speak about that principle that will guide tax reform for him, again in more detail this evening. you may have heard already that warren buffett's secretary, the embodiment of the rule that buffett describes will be joining the first lady in her box tonight to witness the president give the state of the union address. this is a very important principle. we need an economy where nch gets a fair shot, everyone does his fair share. that means wall street and main street playing by the same set of rules. the president believes very strongly that the vast majority of americans share and believe should guide us as we devise a policy. >> so will the president propose increasing the tax rates for capital gains, dividends, interest? >> he won't get into specific proposals or lay out a specific plan. the principle he say tonight will guy the tax return that he believes needs to be done on the individual tax side. and put a little more detail. in the something should not be paying a lower tax rate to be able to save our financial defense and make sure we build the right infrastructure, invest in education and energy. these are high priorities for our country. we need to make sure that everyone is doing their fair share so this country can grow in a way that everyone gets -- or most people possible gets a real fair shake and real opportunity. >> i want to be precise. on the dividends and the interest, capital gains, you want that to be taxed like earned income, 35%? you'd like that to go up to 39% -- >> no, no, we're not proposing that. we're not proposing specifics for tax reform, because each individual because of the complications in our tax code, who might be a billionaire or millionaire and pay a tax rate of 15% or 17% or lower, as warren buffeted stated, you know, may get to that rate for different reasons. the overlay principles will be that millionaires and billions nair should not pay a lower effective tax rate. the president will be more specific about that, but he will not lay out the specific rates for capital gains or dividends. he'll lay out the principle. >> we'll be listening very closely. jay carney, thanks for coming in. >> wolf, always good to be with you. >> the president's speech later tonight. meanwhile, other important news we're following, including a scene of utter devastation near berming ham. taking a look at live pictures of what looks like a war zone. one loss makes the physical dang pale in comparison. a giant similar storm reaching earth. why it's forcing a major airline to make big changes. a little bird told me about a band... ♪ an old man shared some fish stories... ♪ oooh, my turn. ♪ she was in paris, but we talked for hours... everyone else buzzed about the band. there's a wireless mind inside all of us. so, where to next? 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we're told excerpts already released at the top of the hour. for our north american viewers, you can watch john king, and you'll get some excerpts. the republican response will be from mitch daniels. there you see, the governor of indiana, he'll be delivers the republican response. communities in and around birmingham, alabama are shell-shocked. five schools remain closed, one almost destroyed after yesterday's deadly tornado. hundreds of homes are destroying or damaged. worst is two people are known dead. cnn meteorologist reynolds wolf is joining us from the town of clay, alabama. reynolds, what did you learn about what happened to this young girl? >> it was amazing. the thing we came away with. despite the action you see behind us, people trying to pick up the debris, a lot of this can definitely be fixed. it was very obvious that some things are beyond repair. >> she had just such spirit, such life. she -- i mean, she was smart, and such ambition. >> this is the worst day of dare and carol's lives. the song of their heart, 16-year-old christina was killed when the twister barreled out of the sky and roll through their home. >> you remember i day we would send her to school. i always told her, just we love you, and yogts to do that for her anymore. >> their home nestled in a small valley, they never heard the warning sirens. dare and his 12-year-old son josh landed in the pool. carol was trapped briefly under debris. christy was found in the backyard on a mattress. he never woke up. >> christina, she was the kind of kid you wanted to have -- if we told her to be home by 10:00, she was home. she would always text me when she arrived at school. >> christy was destined for greatness for sure. she was brilliant. i could see her going on to do really anything she wanted to do, but i know she wanted to go to veterinary school. she would be wonderful with animals. >> her dad says christina, a junior honestors student planned to go to auburn on a full scholarship. >> all her plans were coming into place and now they're gone. i don't know what to do. >> reporter: wolf, we stopped by her school and spoke with some of her instructors, many of which were wearing blue in honor of their classmate, her favorite color. >> what a heartbreaking story and please convey our deepest condolences. but people are going through the rubble, i guess looking for some possessions that may have survived? sup what's going on? you can't rebuild those homes. >> reporter: from what you have here, they're just going to have to start over from scratch. but it's been amazing, actually quite heartwarming to see not just the families themselves, but a trust testament, neighbor helping neighbor. you haven't heard many complains from people in this neighborhood. they've been rolling up their sleeves, getting to work and trying to sift through the rubbish. family photographs, small heir looms. everything else, as you know, can be replaced, with the exception of family members, as we know very well, wolf. >> thank you very much, reynolds. what nasa is calling the strongest solar storm is playing hack voc. delta air lines rerouting some transpolar flights as a precaution. a delta spokesman saying it affected several flights today. four from asia, four from the united states. he says the company is waiting to see how tomorrow's travel might be impacted. nasa described it as an eruption on the sun directed as earth with a burst of highly energetic fast-moving protons. they can affect satellite and radio operations, but are not harmful to humans. an historical treasure trove released today, the final months of the kennedy presidency all captured on secret tapes. we'll hear them. that's coming up. just a reminder, the white house will be releasing excerpts of the president's state of the union address in about 15 minutes or so. for our north american viewers, watch john king usa at 6:00 p.m. eastern at the top of the hour, 15 minutes or so from now. you're about to hear an eerily foreboding moment from john% kennedy itself. the library has declassified the final 45 hours of secret white house audio tapes recorded during president kennedy's time in office. mary snow is joining us from new york. what new insights are we getting? >> reporter: for historians this is a gold mine. the recordings were made during the last three months of president kennedy's life. they provide a window so his thinking on vietnam as well as political challenges. they contain a portion that might best be described as eerie. it's a moment inseed the white house that could see mundane, him talking to his staff about a tight schedule and an upcoming meeting with indonesia's prime minister. the day november 19th, 1963. that month ended up being the day president kennedy's funeral was held. it was president kennedy's idea to secretly record conversation. with a flick of a switch, he could activate a tape machine. as the situation became tense in vietnam, kennedy's frustration was evident, as two advisers gave conflicting records of the situation on the ground. >> reporter: beyond policy, some rare personal moments inside the office. the president's children, caroline and john can be heard in the background as the president met with the russian foreign minister. >> she was the dog given to them by khrushchev. the library says president kennedy didn't like the way the military portrayed his decisions during the bay of pigs crisis. it was his way of backing up his side of events. >> he was a very confident man. he wanted posterity to understand the decisions he made. he wanted the history that he was a part of to be recorded for all time. >> reporter: just weeks before he was assassinated. he resume nated on the campaign strategy, one that resonates nearly 50 years later. wolf, president kennedy also had a novel suggestions for the 1964 democratic convention. he recommended films at the convention should be shown in color, and break from the black and white american households were used to. he thought it would have a big effect. >> fascinating stuff for historians and other folks as well. thank you. jack cafferty is asking how would obama's second term look different? you're e-mail is next. as president obama gets prepared, our own tom foreman is looking at whether he kept his promises from last year's address. over eight years after invading iraq, thousands of u.s. lives lost and enormous sacrifice on the part of the military and their families. president obama told the american people that our troops were coming home. >> this year or civilians with forge a lasting partnership with the iraqi people, while we finish the job of bringing the troops out of the iraq. >> by the end of the year the president kept his work. it is l.a. troops crosseded border in december. so in this case, promise kept. back to jack for the cafferty file. >> the question this hour is how would president obama's second term look different from his first? assuming of course he gets a second term. james in illinois second term will be more socialistic, more radical, and the country will continue to go downhill. even more so than the last four years. all great powers come to an end. we're over the top and on the way down. pat in michigan writes "i should be much better. new congress, old guard tossed out their butts. common sense representatives not cow towing at the radical rich. greg in arkansas writes "with no worry about re-election instead of offering congress an olive branch for bipartisan cooperation obama can threaten them or obstructing everything and promise them a public trip to the wood shed for a good old-fashioned thrashing for not doing their jobs." tim writes "all depends on the congress. if the republicans have any edge it will be just as divisive and mean as his first term. if the democrats have super majorities in both houses he'll get all he wants." the only new tomb we could see if there are small democratic majorities so bipartisanship in congress would have to happen. but the president would still have some prerogative." russ writes "worse than the first as oebds would be sure to continue robbing us of our money and our rights. more government, more intrusion, less freedom." catherine in zarkz "he'll finally tell john boehner to go to hell." to see more go to our web site, cnn.com, or our facebook page. unbelievable security video. a dog stuck on the wrong side of the elevator door. we're going to show you what happened. people with a machine. what ? customers didn't like it. so why do banks do it ? hello ? hello ?! if your bank doesn't let you talk to a real person 24/7, you need an ally. hello ? ally bank. no nonsense. just people sense. will be giving away passafree copies of the alcoholism & addiction cure. to get yours, go to ssagesmalibubook.com. stop what you're doing. check out this upcoming video. cnn's jeanne moos has a story on a dog stuck on the wrong side of the elevator doors. >> reporter: no wonder some dogs drag their feet and everything else when faced with an elevator. watch what happened to filo earlier this month in chicago. the bulldog mix came home from her walk, and her owner stepped into the elevator. but filo paused, distracted by a woman in the lobby. the owner, who wished to remain unidentified, told cnn he was on auto pilot, so used to the dog just stepping in. and then the doors closed leaving man inside, dog outside, attached by a leash. the owner frantically started pushing buttons as the elevator went up. he was yanked down by the leash, hitting his head. he says the leash fractured his wrist and broke a bone in his hand. he held head and hand as the elevator kept going up. >> the dog owner said he was expecting the worst. he almost didn't want to see the door open. didn't want to see what happened. >> here's what he missed as the owner was yanked down, the dog was snapped up, but the leash broke and filo fell down. the woman ran to help, the dog was shaken but uninjured. >> the exact same thing that happened to stella. >> stella the shitshu got into a new york elevator withdrew anderson's wife and their great white great pyranees. the doors closed on stella's leash. >> thrown up to the top of the elevator car, and her harness snapped in half around her chest. luckily. and she fell right into my wife's arms. >> it was over in seconds and stella was fine. but drew learned this about the sensors that usually keep elevator doors from closing on something. >> apparently an inch or two gap at the bottom where the sensor doesn't capture anything. >> seems to vary from elevator to elevator. we sure didn't stop the doors on this one. millithe bulldog never had the fear of getting stuck because she had bat hips her owners built what they call a milli-vator sort of like a doggy dumb waiter. filo was wait down in the lobby when the doors opened and her owner learned she had
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