network on how will it work. how will it work, stuart? >> seniors will get a fixed dollar amount they can spend on any private insurance plan they chose including medicare. in other words medicare would remain intact as is right now but will be one of a series of competing private health insurance plans. if you want better than that, seniors would have to pay a little more. this is a way of getting competition into the system to try to control costs which are currently out of control. bill: it also seems to be a way to get away from a government option? and it also seems for a way for republicans to put an option on the table that could compete with obamacare. now any reform plan though creates serious opposition, does it not? >> oh, yes. this thing will be demagogued if not demagogued to death. remember the first ryan plan to deal with medicare. i wonder if you can run the commercial aired by activists right after the first ryan plan came out. you're going to see literally a man who resembles paul ryan throwing granny off a cliff. that, they said, would be the result of the first ryan plan, literally granny off a cliff. that is demagoguery. you can expect exactly the same thing to happen again because anytime you touch any entitlement program there is enormous and emotional opposition to it. bill: despite that music as the under bed there. paul ryan really went out on a limb with his position. is he changing his position somewhat now? >> the first ryan plan was out and out privatization. this new plan is a softening of that to some degree in that medicare remains intact. it remains an option. just one of several other options and must now compete with, would compete with private health care insurance. remember, anybody 55 and over would not be affect at all by this plan. bill: that is one thing he tried to hammer home since the very beginning. thank you, stuart varney. see you at nine 20 on fox business. martha: this is a big news. this is a very interesting development at all this. look closer at the medicare program, shall we. in 201047 1/2 million people were covered by medicare. medicare cost 15% of the federal budget. doctors were facing a 27% cut in fees for treating medicare patients if the congress doesn't act by january 1st. that is the doc fix. bill: just now into "america's newsroom", there are stunning new poll numbers from scott rasmussen on the republican race specifically in iowa. looks like yet again this could be a game changer. anything you have been told or thought up to this point think again. scott's here to tell us who is leading the republican pack. only about 19 days away from the iowa caucus and a few hours away from that debate. martha: because they are very surprising is all i can tell you right now. ahead of tonight's debate in iowa, several of the republic can presidential hopefuls took part in a pro-life forum hosted by our own mike huckabee. look at a little bit what happened last night. watch. >> under my administration, planned parenthood will be 100% fully defunded. $300 million gone. [applause] >> one of the very first executive orders will reinstate ronald reagan's mexico city policy of no u.s. money going to pay for abortion anywhere in the world. [applause] >> every life is precious. every life is a precious gift from god. >> we can not be a strong country economically or anything else, we can not have limited government, unless we have moral and decent people living out moral and decent lives, respecting life, and embracing and supporting the american family. martha: let me tell you something. based on the poll numbers we're seeing, tonight's debate is must-see television, folks. go to the fox news channel tonight. the gop debate in sioux city, iowa. it starts at 9:00 eastern. i will have my popcorn ready for this one. i have absolutely cleared the schedule to watch this from fox news election headquarters. foxnews.com/debate also get in on the action. bill: brand new job numbers. the labor department reporting 40 minutes ago, the unemployment benefits claims fell to 366,000. economists had expected the number to go higher. jobless claims need to be below 375,000, which it is at this moment on a steady basis week after week, month after month for the economy to be considered healthy but that appears to be a pretty good number so far. martha: that is indeed a good number today. while all of this is going on there is a little issue of funding the government which ones again we're up against. if congress does not reach an agreement by midnight tomorrow we'll face a partial government shutdown. do you feel like this is like that movie, groundhog day? john boehner says it is up to the senate democratic majority leader to get a deal done on this. here is what he said. watch. >> we intend to act to make sure we don't allow there to be a shutdown of government. harry reid hasn't done anything. the onus is on him. we ought to wok together to bring this thing to a proper conclusion. martha: that is what eric cantor had to say about this. peter doocy joins is from washington. peter, when will they start debating this bill? >> reporter: not until tomorrow, martha, friday the same day the government runs out of money at midnight. the republican controlled house is waiting tomorrow to force the democratic controlled senate to pass their version of the bills to fund the government by end of the september giving them very little time to do anything else. speaker boehner says democrats and republicans in the house and senate have agreed to a bipartisan bill and now the ball is in senate majority leader harry reid's court. >> i'm tired of hearing what the senate can't do. i think it is time for us to wait and see what the senate can do. so i'm hopeful that the president and the senator reid will allow the appropriators to sign the conference report and allow that bill to come to a vote. >> reporter: as of right now there is no temporary bill. there is no continuing resolution, martha. this is it. martha: so the onus is on the democrats in the senate according to john boehner. are they okay with that as it stands? >> reporter: not really. they want more time to hash out the extensions of the payroll tax holiday and unemployment insurance benefits. the white house actually had their communications director dan pfeiffer come out late last night and say, quote, congress should pass a short-term continuing resolution as it has seven times already so all parties have appropriate time to consider and complete all the budget and economic issues necessary to finish our responsibilities for the year. democrats are done pushing for the controversial surtax on millionaires. boehner's brinkmanship will keep their backs against the wall. less than 40 hours until the government could shut down. martha: that incredible statement of itself. seven crs as we try to move towards some kind of budget out of congress which is their number one task when sent there to prepare a budget. peter, you will be busy watching all of that. bill: we wonder what it will take to get the deal done to avoid the possible government shut down. john cornyn will wonder whether or not the democrats are giving on the millionaire's tax and keystone pipeline. martha: so there is new reaction as the united states formally ends the war in iraq. defense secretary leon panetta in baghdad telling soldiers that the war was worth the american sacrifice. >> you did not know whether you would return to your loved ones. you will leave with great pride, lasting pride, secure in knowinging that your sacrifice has helped the iraqi people begin a new chapter in history. free from tyranny and full of hope for prosperity and peace. martha: controversy over this exit and the way that it was handled. i'm going to be joined in a little while by arizona senator john mccain who is blasting president obama over his iraq war policy and what the president he claims did not do to make sure that those sacrifices were not in vain. he was a strong supporter of the 2007 troop surge. he said that led to any successes we had in iraq which he says the military certainly has but he is concerned about what the future may hold for that country. he will join us in a few minutes to talk about that. bill: just on hold of nine years of sacrifice to the small percentage of the u.s. population connected to that part of the u.s. military thank you, thank you for what you have done. our fighting force is better than anything this planet has ever seen. martha: no matter what the outcome for iraq in the end everybody is thankful these soldiers and marines are coming home to their families this christmas but what needs to be discussed future of iraq and whale we'll talk about that with senator mccain in few minutes. >>. there are brand new polling numbers specific to iowa. scott rasmussen has that information. this could be a game changer yet again. stay tuned for that. he is on set today. martha: mitt romney is on the attack. his shift in strategy to deal with the gingrich surge. we saw a little bit of that yesterday with mitt romney. bill: can you say saney? 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christopher hahn, former aide to senator charles schumer. fox news contributor. how are you doing. >> i'm doing well? bill:. angela mcglowan good morning. we had to put you on separate cameras to be sure you stay away from each other. angela, what is romney's strategy? does he go have gingrich tonight or does he lay back a bit. what would you do. >> if i were in his shoes i would latest ad with newt gingrich tying him with nancy pelosi. with friends like newt who do we need on the left? the bottom line is this, bill, what he needs to do is talk about the issues, talk about solutions. talk about the fact that he lives in capitalism. he is former entrepreneur. that he helped create jobs. that is what the american people. bill: you're saying don't make it personal. talk about your policies? >> exactly. bill: chris, what do you think about that? is that a saney idea or is that okay? >> i think that would be good except for the one factor that the anchors who will be hosting this debate are going to ask him about the recent attacks and he can't back down from them period. i think has been a problem for other candidates. we saw it take people out when they backed down from attacks. he has been very strong the last couple of days against newt. i think he needs to keep it up tonight. now he can't be mean about it but he has to be tough about it. this is all about newt lately and newt mitt has to make it about newt in a negative way. >> as a strategist, anybody can ask any type of question but how you answer that question. >> that's right. >> we can talk about the attack but he should put more emphasis on solutions, results and policy. >> i think it always comes back to that. but i think that, you know, we're in a very critical juncture in iowa. he can stop newt here if he's strong against him. maybe not win iowa but he could definitely stop this surge newt has been having. bill: on that point, wait 30 minutes forras muse send to come on and wait until you see what he has to share with us. chris, you make an interesting point about going after gingrich but doing it in the romney way. romney seems to attack with a smile on his face. >> yeah. bill: you notice that? >> i do. i think one of the things i like about him. listen, i have said all along there are really only two people on the stage who could challenge the president next year, romney and huntsman. i don't think huntsman is on the stage tonight. those two people will appeal across the partisan divide and attract independents especially with romney they can assign anything he want to he takes both sides of every issue. >> is this the debate against president teleprompter and newt gingrich, newt gingrich would win every time. obama needs the teleprompter. newt gingrich is brill amount man, if i were you democrats i would --. bill: how good is your prompter. >> let me refute my good friend angela on one point. newt goes into debate with obama with extremely high expectations. we know what happens when you have high expectations just ask rick perry. you make one flub and you're done. newt gingrich will make those flubs. he has a history making the flubs. >> he has a history creating policy that created a better america. what does obama have? that's what the american people are after. >> right. >> newt gingrich has a track record, part not so great but when you talk about the contract with america and president clinton that was some of our most prosperous times. that's what i would stick with. bill: three quick points. gingrich has refrained or restrained himself for the most part, not entirely going after romney or anybody else. hunt man will be on the stage tonight. what romney's team tell you they gamed out this system all the way to california on june 5th and that's the lesson they learned from 08 between obama and hillary clinton. angela, thank you. chris, thank you. i know where you guys will be tonight. >> thanks for having us. bill: see you real soon. okay, martha. martha: after nearly nine years, the iraq war is over and everybody is coming home. but senator john mccain says president obama dropped the ball in the end and he will explain that. having run against president obama back in '08 who does he think can beat the president now? bill: looking forward to that. also a standoff on the hill over a payroll tax cut deal that could affect every american. will it pass? are we looking at another government shut down? what does that mean for you? >> our proposal, a surtax on the wealthiest americans, not on the first million dollars in income each year but on their second million dollars in income. a surtax. bill: got some breaking news on the economy just crossing right now. u.s. factory output declines for the first time in seven months. they blame it on auto production. also hearing word of electronic production for your home devices, business equipment and apparel also falling. first time in seven months, an indication that the global economy might be hitting another rough patch especially after you watch what is going on in europe. just crossing right now. 22 minutes after the hour. martha: there is new reaction as the stars and stripes are lowered over the american military headquarters in baghdad. this ceremony formally ending the war in iraq. now some in washington are pointing out that president obama tried to block the strategy, widely credited with bringing about today's conclusion and we want to talk about where we go from here in iraq. here is arizona republican senator john mccain, ranking member on the armed services committee. senator mccain, good morning. good to see you as always. >> good morning, martha. martha: the president said yesterday at fort bragg he believed all of the soldiers and marines who fought in iraq and coming home can leave with their heads held high. the question is, as all of this plays out, can the administration hold their heads high in terms of our relationship with iraq? >> well, i don't think so. i think several things. i think it is well to point out that the president has never acknowledged that the surge succeeded. he opposed it. he said it would fail even when it was succeeding. he made a campaign promise in 2008 and perhaps one of the reasons why he won the nomination was a pledge to remove all troops from iraq. and that political goal has been achieved. unfortunately in the words of general keane, one of the architects of the surge, he said we won the war and now we are risking losing the peace because we always felt we need ad residual force to leave behind. as condoleezza rice has stated that we always envisioned that. despite what the administration's spin is that the bush administration made an agreement to get all troops out. we always envisioned leaving a residual force. there are big problems in iraq. we haven't goat time to go through all of them. a residual force of 20,000 would have ensured we continued the progress that needs to be made. and finally we're proud of the young men and women who have served but now we're putting at risk all of that loss of blood and treasure because i believe for political reasons. martha: jennifer driven fin was on the -- griffin was on the ground this morning and she was very surprised there were only a handful of iraqis at the ceremony. alluding to the fact that the relationship was really not nurtured between our administration and the iraqi administration and that would be the key to make sure that iraq felt stable and secure going forward and they weren't vulnerable to encroachment by iran, right? >> you're exactly right. there is already increasing influence of the iranians. there are tensions between the kurdish area and the other parts of iraq. they have no air control, control of their airspace. they need the technical, technological skills that we could have provided for counterinsurgency. and of course there maliki has been less than inclusive in his government and has taken some steps that are very disturbing as far as the sunnies are concerned. so our forces remaining there could have done a lot of things and a lot of things right. and unfortunately we are now, as i said, placing all of this at risk and i would remind you that senator, i mean then senator, now vice president biden wanted to break up the country into three different countrys. martha: that's right. >> unfortunately he may see that aspiration realized. >> that is exactly true. two very quick things if i could. >> sure. martha: vladmir putin and you have a tweet relationship going on apparently. let's put up what he said, what you said rather. the arab spring is coming to a neighborhood near you tweeted to vladmi