michele bachmann, bachmann's iowa chair defects to ron paul. >> we're going to take ron paul all way to the white house 2012. >> in the direct conversation that i had with him, he told me that he was offered money. he was offered a lot of money by the ron paul campaign to go and associate with the ron paul campaign. no one else knows about that conversation other than kent sorenson and myself and i know what he said to me about that. >> have you spoken to michele bachmann, she said you personally told her you were offered money. >> that's not true. >> not true at all? >> no. >> were you offered any sum of money? >> absolutely not. >> iran on the strait of hormuz as the u.s. announces a sale to long fighter jets so saudi arabia. no more mystery about mitt's hopes in iowa, he is all in. announcing he'll stay in des moines on caucus night and do the morning day after interviews in the hawkeye state not new hampshire. romney is launching a new ad today. >> generations of immigrants looked up and saw the statue of liberty for first time. one thing they knew beyond any doubt, they were coming to a place where anything was possible and in the campaign to come, the american ideals of economic freedom and opportunity need a clear andç unapologetic defense and i intend to make it because i have lived it. >> but while the campaign's television ads are all soft and fuzzy, the pro-romney super pack continues its deadly assault on newt gingrich. >> ever notice how some people make a lot of mistakes. >> mistake. >> i made a mistake. >> made mistakes at times. >> haven't we had enough mistakes. >> chris cillizza managing editor of post politics.com and chris, first to you, thank you. thank you, marathon man. >> thank you. >> for giving us a couple of days off. >> what are you seeing in the poll? >> the thing that's most striking is rick santorum up 11 points -- >> how real is that? >> because newt gingrich is down 19 points and rick santorum is picking up the lion's share of that support. you know, the social conservative vote in iowa has gone from michele bachmann to herman cain to newt gingrich and at least right now it appears that a portion of it is now moving to rick santorum. question is can enough move to him so he could be a modern day mike huckabee? he beat mitt romney. i think it's unlikely because perry bachmann and gingrich, they are still all in that field and taking some of that vote, splintering enough that frankly mitt romney may wind up winning with 26% which is remarkable. >> that is the point susan page, you're in des moines, we'll join you there tomorrow. the whole point is that mitt romney is benefitting from this division of theç conservative libertarian evangelical wings of the party. >> he sure is. i interviewed mitt romney yesterday on his campaign bus. i have to say he is about as optimistic as i have seen him. i remember four years watching his campaign collapse at this point with the surge of huckabee, there's none of that sense now. i think the romney people are in this to win. we've never had someone who won the iowa caucuses and then the new hampshire primary and then failed to get the nomination. >> susan, also usa today and gallop have a poll an political ideology, this is your poll on a scale of 1 to 5 with 1 being very liberal and 5 being conservative, respondents rated themself as 3.3 slightly to the right. they rate mitt romney as closest to their idealogical views and president obama 2.3 and michelle bachmann at 4.0. mitt romney is sort of in a sweet spot. >> he is if you can get to the general election. mitt romney's problem is to get through iowa and then in south carolina, which is a conservative state, a history of picking the winner. i interviewed newt gingrich for a package we'reni of course ups his fall in the polls. he says all he needs to do is survive until south carolina because that's where the electorate will be friendly to him and not mitt romney. >> the question is did he have the money? they have pushed back the fact that they are running out of money, that the fourth quarter willç show they are in the red. they say they are in the black. but they need the money for new hampshire. >> and beyond. >> to get to south carolina. then florida, an expensive state. >> what we know andrea that is always true, money follows momentum. if you win, you will get money. if you look like a winner, you will get money. the converse of that, if newt gingrich finishes a distant third in iowa, maybe he comes in fourth in iowa, raising money starts to become a lot more difficult. one thing to add, newt gingrich's campaign said they raised $9 million in the last three months of 2011. they have -- they have $500,000 on tv vastly outspent. what does that tell you? if she had more it will be on television right now. >> any don't have it. >> susan page, let's talk about ken sorenson, this somewhat amusing change of pace. it's a he said, she said as to whether money for a campaign organization or ground troops was on the table. but the bottom line is he's following the momentum. >> yeah, this could have been a little bit of a boost for ron paul but now it's kind of one of those political muddles and so i think it makes it a little bit of a side show. michele bachmann although campaigning hard here and won the aims straw poll does not seem to be in the mix for the top tier. >> to susan's point, michele bachmann, $162,000 spent on television advertising this year in iowa. and has not run a single television ad since august. i understand she's back up now but that just speaks to can't raise money,ç can't run tv and get your message out. the story of the campaign may wind up being mitt romney is is the candidate best able to raise money and put together both television and organizations in iowa and new hampshire and south carolina and florida. given the competition, no one else is going to be able to match him unless they come up fast. no one has emerged yet. >> chris, see you later. susan, thanks so much. with new polls showing him leading in iowa and new hampshire, mitt romney's campaign is buying television time in south carolina, the third state in the primary election calendar. eric finnstrom sitting somewhat pretty today, eric. your polls are holding and i think i would say you guys aren't unhappy to see ron paul coming to the floor. >> well, andrea, we're pleased with the state of the race but we're not naive enough to believe the republican primary comes down to a single contest. it's a series and we will win some of those and do less well in others. but at the end of the day, we hope to have the requisite number of delegates that would allow us to win the nomination. >> what about these attacks, the romney and gingrich campaigns going at each other. this was newt gingrich following up on mitt romney's attack over the lucy and desi chocolate fakry analogy. >> i just want to say, here i am in the chocolate factory. [ applause ] and now that i have the courage to come to the chocolate factory, i hopeç governor romn will have the courage to debate me. >> why from governor romney's perspective, why is newt gingrich not the most qualified former speaker of the house, the best qualified to lead the republican party this year? >> well, because mitt romney believes he's the best qualified to be the republican nominee. this election is going to be a referendum on barack obama's handling of the economy. i think republicans do best when they put up a nominee who has strong experience in the private sector and has the skills and capabilities to lead this nation out of its doll drums, that person is mitt romney. newt gingrich is a fine person. but there are some questions about his reliability as a conservative. as you know when republicans in 2008 were fighting cap and trade, newt gingrich was on the coach with nancy pelosi talking about global warming. when paul ryan put forward a strong entitlement reform plan for medicare, virtually every republican in the congress took a tough vote in favor of that plan and then they had the rug pulled out from underneath by newt gingrich who called it right wing social engineering. it's -- that record -- that reevaluation of newt gingrich's record that i think more than anything else explains his drop in the polls across the board. >> across mitt romney has his own explanations for his changes of opinion, abortion being the most prominent one that's been playing very widely in iowa. >> well, as you know andrea, several years ago the governor announced that he was firmlyç pro-life. he's not going to apologize for that. there have been many politicians before him who have traveled that same path, ronald reagan and henry hyde and george herbert walking bush. when folks go the other way and switch from being pro-life to becoming in favor of abortion rights, that's celebrated. and but as i said, mitt romney has nothing to apologize for as president. he will govern as a pro-life president. >> eric, the candidate has also been very tough on ron paul on foreign policy, wanted to play a little bit of that. >> one of people running for president thinks it's okay for iran for a nuclear weapon. i don't trust the eye ayatollas or ahmadinejad or those who back hamas or hezbollah. >> do you and mitt romney think he's outside the mainstream of both democratic and republican foreign policy positions? >> well, you're right he has a very committed and passionate group of supporters but his views on foreign policy are completed hypothetical cal to the republican party. willing to tolerate a nuclear armed iran and unfriendly to israel and wants to cut off foreigv%mi?ik aid to that coun. and recently, he was raising questions about the presence of u.s. troops on the korean peninsula. imagine if we would suddenly withdraw and what that would mean to our ally in south korea with a very blij rant neighbor to the north that is bent on forcedç reunification. i think those issues as they relate to ron paul and foreign policy are at the end of the day going to prevent a lot of republicans from joining his or getting behind his candidacy. >> one quick question, the decision to stay in iowa and do the morning after interviews rather than going back to new hampshire, does that display a great deal of confidence that you think you're going to win? >> we'll be campaigning in new hampshire the day after the iowa caucus but we want a well rested candidate. four years ago we made a midnight flight from iowa to new hampshire and it was draining for not only the candidate but the press. and everybody else that was traveling with the governor. so we'll leave at a more sensible hour in the morning and we'll be campaigning that afternoon in new hampshire. >> okay, eric, thank you very much, we're looking forward to catching up with the governor tomorrow in des moines. we'll have that tomorrow at 1:00. thank you for being with us. we'll be in iowa on the campaign trail interviewing mitt romney tomorrow morning. up next, escalating tensions with iran. is the threat serious or just bluster? this is "andrea mitchell reports" only on msnbc. north korea had 13 days of morning for kim jong-il. tens of thousands of people governed in pyongyang's main square for a memorial service. at the event the president of north korea's parliament officially declared kim's third son, kim jong-un the supreme head of the nation. iran is rejecting a warning from the navy. the warning that it will respond if iran blocks the strait of hormuz, that critical choke point. a top official said the u.s. was not inç a position to tell tehn what to do. they have been staging ten days of exercises near the strait. the passage way for one-sixth of the world's oil supply. michael is now managing director of the washington institute. thanks for joining us. we've seen this sort of dance before a lot of bluster from iran. this time some u.s. officials particularly at the pentagon are taking it more seriously because iran is responding to the toughest economic sanctions ever. europe is poised to go after the central bank. greece and italy and spain have new governments less friendly to iran and the u.s. is now in this situation where the president is about to sign a bill with an amendment he did not want, which is a real crackdown on iran's oil trade and central bank financial industry. zpl that's right. as we get closer to really targeting iran's oil exports and oil makes up 70% of iran's budget and 50% is gdp. they are trying to communicate this is a red line for us and we're not going to simply sit back while we're targeted in this way. it begs a question could they actually do this, close the straits of hormuz, the answer is no, not really. it's questionable as to whether they would try to do that. it could spark a bigger confrontation which would end in their own demise. could she do other things to lay mines and those things, absolutely yes. >> they've done it before. >> and they've done it before and in the lay '80s there was a conflict in the gulf between the u.s. and iran and the iranians have taken lessons and applied them today. the u.s. navy has done the same thing. >> i remember we were at a that uncertainty gets priced in the markets now and in the future. >> there was a vote of 100-0 in the united states senate, that never happens. this after the deputy secretary of state, wendy sherman and people from secretary warned that this is the wrong way to go. these are not the right kind of sapgss, we should have rach eted sanctions. the president has to sign this bill because it's the defense authorization bill. it's an amendment he cannot get rid of. he can waive the sanctions but the republicans would be all over him, you're soft on iran. he's in a no-win situation here. >> iran may have a weapon of 6 to 12 months and theç thought the administration's policy is not getting the job done. let's force their hand. >> a lot of pressure on all sides. thanks so much. >> republican candidates going after ron paul's foreign policy. the politico briefing is up next. but first, the countdown is onto the new year in times square. today organizers conducted the official confetti air worthiness test in preparation for the release of one ton of confetti on new year's eve and new yorkers are saying good-bye to bad memories of 2011 from break-ups to bad vacations. people turned out wednesday for good riddance day in times square and wrote down the worst memories of the year and tossed them into the shredder. a woman used a sledge hammer to get rid of her ex's motorcycle helmet. what is it about taking a first step that we find so compelling? is it because taking a step represents hope? or triumph? at genworth, we believe in taking small steps every day to keep your promises, protect what matters, and prepare for a secure financial future. no matter where you want to go, one step at a time is the only way to get there. go to genworth.com/promises. fantastic! 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[ female announcer ] live the regular life. phillips'. msnbc is the place for politics. right now the candidates are fanning out across iowa. mitt romney's bus has taken him to mason city. he's about to speak about the economy there. you can see people are gathered. rick santorum is holding a town hall near davenport and newt gingrich is about to speak in storm lake at the local restaurant. and ron paul's republican rivals are going after him on his foreign policy positions, describing them as dangerous and naive. charles is a national politics editor with politico and joins us from des moines. hey, charles. first of all, iran, that's front and center, israel, i mean basically is ron paul too isolationist in his fundamental positions to end up as the republican uñnominee? >> well, shaping up as a real problem. in many ways the party has grown closer to ron paul and ron paul has run more mainstream marked by campaign atd ads and robust ground ç5uá the one sticking point when you talk to voters in iowa is the discomfort or unease over the foreign policy positions, whether talking about iran or iraq or 9/11 or various sorts of national security positions and that right now is a big stumbling block for him in iowa. and certainly it's going to be a bigger stumbling block going forward out of iowa. >> and in fact, if he gets through iowa and then has traction perhaps his libertarian policies or his budget policies in new hampshire, he hits south carolina, a strong military state. a lot of veterans and military installations, that's going to be a problem for him. >> that's a great point, iowa and sk sg are different in many ways. one important difference is that iowa is a historically dubbish state and south carolina is a hawkish state. he's another big difference he will run into in south carolina, the field will be much more narrower than he's facing in iowa where the ee vvangelical a social conservative support out there which is very wired into the israel issue, that is going to be much more component of the vote in south carolina and there are going to be less candidates for that vote to splinter across. that's another hurdle he's going to face going forward. >> we shouldn't underestimate at least in iowa that ron paul organization and the enthusiasm of his supporters. he's been at this a long time. thanks, charlie, thanks for being with us. >> thanks. up next, president obama or mitt romney? we'll look at the polling. and have aç question you wt me to answer, join me for a live web chat from iowa between 2:15 and 2:45 right after our show. 2:15 and 2:45 eastern online at andrea.msnbc.com. nick, what are you doing? oh, there's still a few more days of chevy's giving more. got to stay loose. how do you do it? i have my little helpers. boop. oh. [ chuckles ] [ male announcer ] hurry in to chevy's giving more. these savings are almost over. now very well qualified lessees can sign and drive the chevy cruze ls for around $199 a month. or get 2.9% apr financing plus no monthly payments until spring. ♪ topping the headlines, the number of americans seeking unemployment benefits rose last week. the labor department saysç weey unemployment applications increased by 15,000 but the overall trend for the last month was positive. obama administration announced a $30 million sale today of f-15 fighter jets to saudi arabia. the agreement which will give saudi arabia 84 new jets with advanced raid after equipment is part of a larger strategy to build up the military strength of the allies to better counter threats from iran. turkish officials say many of the 35 people killed in an air strike across the border in iraq were civilians. the strike led by turkish war planes was supposed to be aimed at kurdish rebels, they are investigating the possible intelligence failures that led to the attack. prosecutors are preparing the first felony charges against bp employees after the explosion which left 11 people dead and created the worst oil spill in u.s. history. the wall street journal reports prosecutors are focusing on engineers who may have provided false information about the risks of drilling. democrats are trying to derail mitt romney's progress by tripping him up in the iowa caucuses. archie is vice chair of the democratic national committee and surrogate for the democrats in iowa. see you in java joe's, wonder what's happening in minneapolis that you were able to get away for the iowa caucuses. >> lots going on. i'm down here to talk for democrats and i think right now we see it a