"Face the Nation" transcript: December 25, 2011

BOB SCHIEFFER: And David Martin, another big story, the last U.S. military troops left Iraq. There is still a large American presence there--

DAVID MARTIN (National Security Correspondent): Yeah.

BOB SCHIEFFER: --but the last military troops are out. Where are we on that?

DAVID MARTIN: Well, the day after combat troops left, the Prime Minister Maliki issued an arrest warrant for his vice president on grounds that the vice president was actually running death squads. Now, we have political crises in this country. We call it Democrats versus Republicans. There, it's Shiites versus Sunni. We don't settle our political disputes by guns. In Iraq, they do. And so the question is whether this crisis will dissolve into sectarian fighting that the Iraqi army and police can't control, in which case all the sacrifices of the past nine years are put at risk.

BOB SCHIEFFER: What you're saying is that this whole thing might fall in?

DAVID MARTIN: It could. The-- the presence of the U.S. military was a big tamping device on top of all that seething sectarian discontent and hatred.

BOB SCHIEFFER: In this country, of course, Nancy and John Dickerson, it was all about the Congress and what the Congress didn't do. I laughed one day and said, you know, it's a good thing Congress hasn't done anything this year because if they had, we wouldn't have any place to put it with all-- with all the news that we had otherwise. But it was quite a year up there on the Hill. Wasn't it?

NANCY CORDES (Congressional Correspondent): It was. And I think what we learned this year is that divided government which in the past has produced some really remarkable pieces of legislation, doesn't produce the same kind of results when you have two parties that are so far apart the way that these two are right now. And you know, the modus operandi on the Hill for so many years has been to leave legislation to the last minute, funding the government, this payroll tax cut, it's worked in the past but it doesn't work anymore because you have a new crop of Tea Party House Republicans who have no interest in political expediency. That's not what they ran on. They're not just going to get along. When they don't like a piece of legislation, they don't mind if it makes them look bad in the short term, they're going to stand their ground.

BOB SCHIEFFER: And Anthony Mason in New York, perhaps the-- the news that many of us found the-- kind of the most discouraging, I-- I don't know what word to put on it but for the first time in a long time, U.S. securities were not the safest place to put your money. Our-- our financial securities were downgraded. This whole thing about the economy kept on-- unemployment stayed high. What was the biggest thing that happened this year, do you think?

ANTHONY MASON (Senior Business Correspondent): Well, I-- I think I would call it an embarrassment, Bob. That's what it was. I mean our-- our debt rating was downgraded. And it looked like, you know, that would cost us money because our interest rates would go up. But as it turns out, the rest of the world was in worse shape than we were. So in fact, people were still investing money in the United States and still bla-- buying our debt. That didn't solve the jobs problem, though, that continues to be the-- the biggest lingering problem out of the financial crisis and the recession. We-- we just aren't producing enough jobs. And even though the economy is kind of stumbling along, it doesn't look like it's getting a whole lot better.

BOB SCHIEFFER: Norah O'Donnell over at the White House, the President seemed to catch it from all sides. The-- the Republicans obviously don't like him. But a lot of people on the left were very disappointed in the President and said he didn't fight hard enough for the things that they thought he ought to be fighting for. His approval ratings are certainly nothing to brag about. What-- what's he going to do in the next year?

NORAH O'DONNELL (Chief White House Correspondent): Well, no doubt it has been a very tough year for President Obama domestically. As you pointed out, his approval ratings have been below fifty percent for almost the entire year with the exception of the killing of Osama bin Laden where the President saw a spike in his approval ratings. Jobs are still the number one issue for the President. And as you see, he tried to put forward, changed the debate of that disastrous summer in the debt ceiling debacle to talk about the American Jobs Act. And guess what, only one small piece of that bill has been passed, and that was, of course, to help veterans. So this has been a difficult year for the President domestically but on foreign policy, they believe it was a successful year. Not only the killing of Osama bin Laden, they claimed some credit, of course, for successfully ending the war in Iraq, while there are still some sectarian tensions that exist. And they think that they've taken the fight to al Qaeda in a way that President George W. Bush has done. And that will be a strength in the new election. But I think this is going to be-- next year is going to be a year when the President tries to priv-- pivot and try and rack up successes on the economy or else he won't be re-elected.

BOB SCHIEFFER: John Dickerson, you have the hardest job of all as our political director. Just trying to make some sense of the politics of all of this and what's going on. I have to say this is one of the most unusual-- for want of a better word-- campaigns that I've seen going into Iowa here now. I mean up and down. The last-- I mean somebody said Bob Orr was now leading out in Iowa.

JOHN DICKERSON (Political Director): That's right. He's got a very good ground game. The-- you know, that picture Norah paints of the President in peril. Republicans see this golden opportunity right before them and they are so desperate to grab it. And yet what has happened in this primary season both nationally in the polls and in Iowa, you've seen the sort of king for a day. You had Michelle Bachmann doing well then Rick Perry doing well. Herman Cain had his moment. Newt Gingrich had his moment in Iowa. And going into the caucus he is undergoing a blistering amount of attacks and he doesn't have the organization or the money to fight back in part because his campaign was declared dead in June. So what's happening now going into the Iowa caucuses it's all up for grabs again in-- in-- in a race where it's been up for grabs? Well, it goes in that way and Mitt Romney who has kind of stayed steady and at about twenty percent in the polls, well that's where he is who--


JOHN DICKERSON: --where he is too. And at just finally Ron Paul has supporters who love him. They-- his supporters are not undecided like the rest of the Republican voters. And he is the one who is now having his little moment in the sun.

BOB SCHIEFFER: Let me ask you this. Let's suppose that somebody does eventually get the Republican nomination as somebody will. That puts us against-- that puts that person against Barack Obama. How does that campaign, how does the general election start out? About even will Obama be favored? Where-- where do you see it right now?

JOHN DICKERSON: Key thing to look at his those twelve swing states. We forget the rest of the country just focus on the twelve where it stands there is in most of those it's about even. Some polls you can show either the President or one of the Republican frontrunners is-- is ahead. But what we suddenly get very quickly into is a debate over a referendum on the President's behavior, the economy. Almost exclusively unless we have some foreign event that interrupts. And then the President will try and stop that conversation and say, no, this is a conversation about the attributes, qualities, and vision of whoever it may be, Mitt Romney or Newt Gingrich. And it is not going to be a pretty election at all. No more hope and change and glowing speeches. It's going to be a pretty ugly campaign.