The Golden Report

5 DAYS UNTIL THE SOUTH CAROLINA PRIMARY (25 delegates)
8 DAYS UNTIL THE STATE OF THE UNION ADDRESS
15 DAYS UNTIL THE FLORIDA PRIMARY (50 delegates)

POST-DEBATE EDITION

TONIGHT…from Myrtle Beach, South Carolina…the 16th Republican Presidential Candidates Debate.

And it was fight night in Myrtle Beach.

Four of the five remaining candidates recognized that they have four hours over two of the next four nights to knock off the front-runner before he makes it 3 for 3 in the early primary states.

From POLITICO’s Alexander Burns, “South Carolina GOP debate: Mitt Romney pressed on Bain, tax returns”

“While Romney stayed focused on a tightly controlled and almost entirely familiar message, there were a few rare moments when the former Massachusetts governor appeared to stammer and grasp for balance.

And after weeks of declining to promise to release his tax returns, Romney relented — mostly — under persistent questioning from moderators.

“In history, people have released them around April of the coming year and that’s probably what I’ll do,” Romney conceded.

Among Romney’s opponents, Newt Gingrich was first to start the pile-on, accusing Romney and his former private equity firm, Bain Capital, of having acquired companies, “leaving them with enormous debt and then within a year or two or three, having them go broke.”

THE DEBATE WAS FIERCE

Romney responding to Gingrich’s attacks on his Super PACs “If we’re talking about super PAC ads that are inaccurate, Mr. Speaker, you have a super PAC ad that attacks me. It’s probably the biggest hoax since Bigfoot. The people who’ve looked at it said it was entirely false…somehow for you …to suggest I have different standards here is not quite right.”

Romney answering a question about the last time he went hunting “I’m not going to describe all of my great exploits,” Romney began, “but I went moose-hunting —- went elk-hunting with friends in Montana.”

Newt Gingrich responding to Ron Paul’s comparison of Al-Qaeda terrorists (including Osama bin Laden) to Chinese dissidents: “He’s not a Chinese dissident. The analogy that Congressman Paul used was utterly irrational. A Chinese dissident who comes here seeking freedom is not the same as a terrorist who comes to Pakistan seeking asylum.”

Ron Paul invoking MLK: “Martin Luther King would be in agreement with me on the wars as well, I’m the only Republican who favors total withdrawal from Iraq and Afghanistan He was a strong opponent of the Vietnam War.”

Ron Paul on building the US Embassy in Iraq “You consider that defense spending - I consider that waste.”

SANTORUM’S BIG MOMENT IN THE DEBATE- from POLITICO’s Maggie Haberman

“Rick Santorum seized control of the Fox News/Wall Street Journal debate about 20 minutes in Monday night, interrogating Mitt Romney with a series of questions about his position on voting rights for felons – and attack ads a pro-Romney super PAC is airing against Santorum.

Santorum noted that Restore Our Future, the pro-Romney group, ran ads implying the Pennsylvanian wanted to let felons vote from prison.

In fact, Santorum said, he wanted to give voting rights to people who had already paid their debt to society.

“I would ask Gov. Romney,” Santorum said, “do you believe people who are felons who have served their time, who have exhausted their parole and probation, should they be given the right to vote?”

When Romney began with a few words about the rules governing super PACs and non-coordination, Santorum cut in to demand an answer to his question.

“That’s how you got the time. It’s actually my time,” Santorum said, adding of the voting rights issue: “This is Martin Luther King Day, this is a huge deal in the African-American community.”

Romney responded in a level tone: “I don’t think people who committed violent crimes should be allowed to vote again.”

And that’s when it became clear that Santorum had set a trap.

“In the state of Massachusetts, when you were governor, the law was not only can violent felons vote,” Santorum said, but they can vote when on parole or probation – a “more liberal position” than Santorum ever supported.

“If in fact you felt so passionately about this,” Santorum asked, “then why didn’t you try to change that when you were governor of Massachusetts?”

Romney shot back that he had to contend with an 85 percent Democratic legislature and that, by the way, he didn’t order a super PAC hit on Santorum because that would be illegal.”

FIRST THOUGHTS:

This was not a good debate for Romney who was off his game tonight. He should be considering these debates as practice for the general election cycle and he missed an opportunity to respond with crisp convincing answers to a whole host of questions tonight

Newt Gingrich did very well tonight in his role as attack dog and conservative cheerleader. The question now is if its enough to carry him to a close 2nd place or an upset victory in Saturday’s primary. And with polls released this weekend showing Romney running away with the lead in the state, that is not looking likely.

Ron Paul had his worst debate and seemed to be stumbling over his answers when he finally had an opportunity to answer the moderator’s questions.

The audience for tonight’s debate was wild. The Myrtle Beach Convention Center hall was packed and they were animated..frequently booing candidates up and down the stage..and moderators too.

It’s too early to say if tonight’s debate changed the dynamics of the South Carolina race. It may be too little too late for the anybody but Romney candidates. Or the Republican primary, which seemed late last week to be all but over, could be taking one more, final, crazy turn.

The next debate is Thursday night at the Citadel.

10 DAYS UNTIL SOUTH CAROLINA (25 delegates)
13 DAYS UNTIL THE STATE OF THE UNION ADDRESS
20 DAYS UNTIL FLORIDA (50 delegates)

TOP STORY: US TO RESUME PEACE TALKS WITH TALIBAN- previous talks had collapsed in December- from The Washington Post’s Karen DeYoung

“A tentative U.S.-Taliban deal, including the transfer of five Afghan detainees from the Guantanamo Bay prison to Qatar and an insurgent renunciation of international terrorism, collapsed in December when Karzai refused to go along with it.

There have been no meetings with the insurgents since then. Although all parties have publicly said that they agree to one element of the deal — the opening of a Taliban office in Qatar — “we need now to make it real,” one official said.

Prime Minister Hamad bin Jasim al-Thani, for the first time acknowledging Qatar’s support for the arrangement, said Wednesday that his government welcomed “any opportunity” to defuse tension in the region. Thani spoke after a meeting with Secretary of State Hillary Rodham Clinton.

The administration, which has said that negotiations must be “Afghan-led,” insists that its talks with the Taliban are only a preliminary effort to build confidence before actual negotiations over Afghanistan’s future can begin between the insurgents and the Karzai government.

One hurdle is that the Taliban prefers to talk to the United States and is “not willing to sit down with the Afghan government’,” one official said. “Our job is to see if we can break through that door.” Karzai has been under pressure from domestic opponents of negotiations to stand firm against the talks.

IN MISSISSIPPI TONIGHT-  a judge has ordered the halt to the release of any further prisoners pardoned by Governor Haley Barbour, in his final days in office. Barbour has pardoned 200 prisoners, including 14 convicted murderers. Today, the Mississippi Attorney General said that the Governor’s actions threatened public safety. From CNN-

“He’s tried to rule the state like Boss Hogg and he didn’t think the law applied to him,” Hood told CNN’s Anderson Cooper on Wednesday night, referring to a character in the 1980s TV series “The Dukes of Hazzard.”

“These families are afraid out here,” Hood said of relatives of crime victims.

Hinds County Circuit Court Judge Tomie Green issued the injunction, saying it appeared some pardons, including those for the four murderers, did not meet the 30-day requirement. Any inmates released in the future must meet the standard, Green ruled.

On his way out the door, the Republican governor approved full pardons for nearly 200 people, including 14 convicted murderers, according to documents the Mississippi secretary of state’s office released Tuesday.

The four murderers who received full pardons last week — David Gatlin, Joseph Ozment, Charles Hooker and Anthony McCray — were cited in Green’s order.

They were all serving life sentences and worked as inmate trusties at the governor’s mansion, said Suzanne Singletary, spokeswoman for the Mississippi Department of Corrections. Trusties are inmates who can receive additional rights through good behavior.

ROMNEY RAISED $24 MILLION IN THE FOURTH QUARTER- from Reuters-

“The campaign has raised more than $56 million so far in the primary election season and has $19 million in cash on hand.

The strong fundraising means Romney has a substantial warchest as he strives for a third consecutive victory in the state-by-state race for the Republican nomination to oppose President Barack Obama, a Democrat, in the general election in November.”

RON PAUL’S CAMPAIGN IS CALLING ON THE REST OF THE FIELD- EXCEPT MITT- TO DROP OUT- from a statement released by the campaign after the results from New Hampshire last night:

“Ron Paul and Mitt Romney have been shown in national polls to be the only two candidates who can defeat Barack Obama.

“And Ron Paul and Mitt Romney are the only two candidates who can run a full, national campaign, competing in state after state over the coming weeks and months. Ron Paul’s fundraising numbers — over $13 million this quarter — also prove he will be able to compete with Mitt Romney. No other candidate can do all of these things.

“Ron Paul is clearly the conservative alternative to Mitt Romney as the campaign goes forward.

“We urge Ron Paul’s opponents who have been unsuccessfully trying to be the conservative alternative to Mitt Romney to unite by getting out of the race and uniting behind Paul’s candidacy.

“Ron Paul is in this race for the long haul. And he is ready to fight.”

“See you on the campaign trail.”

TODD PALIN GOES ROGUE- endorses Gingrich without consulting wife, Sarah- Here’s the former Alaska Governor on FOX News last night

“First dude went rogue. I respect him for doing that, Todd is all about hardhats and steel-toed boots and getting people to work, that’s what he represented and worked verry hard for as First Gentleman in our state.”

VIDEO 

SUPER PACS BLANKETING SOUTH CAROLINA- from National Journal’s Reid Wilson

“After decades at the head of the primary calendar, South Carolina voters won’t be surprised when they turn on their televisions this morning and see wall-to-wall campaign advertisements. And while a super PAC backing Newt Gingrich has said it will spend $3.4 million on negative ads blasting front-runner Mitt Romney, it’s actually Romney and his allies who are spending the most on television time this week and next.

Restore Our Future, a super PAC backing Romney’s campaign, has purchased more television advertisements than every other entity playing on South Carolina television, our sources in the ad buying community tell us. Restore Our Future has purchased more than $1.7 million in advertising over the next 10 days in South Carolina alone.

The pro-Romney group is spending nearly twice what any other candidate or PAC has purchased in the Greenville/Spartanburg, Columbia, Charleston and Myrtle Beach/Florence markets. And Restore Our Future is going head-to-head with the Gingrich-friendly super PAC, Winning Our Future, in the Charlotte, Augusta and Savannah markets, too.

Romney’s campaign dropped an additional $300,000 into South Carolina television time on Tuesday, reserving a total of $418,000 this week and $187,000 next week in total statewide spending.

Romney’s campaign will outspend his rivals this week, according to our sources. Rep. Ron Paul is spending $237,000 on television advertisements, with Texas Gov. Rick Perry spending $339,000 this week. Former Sen. Rick Santorum, who raised more than $2 million after nearly winning the Iowa caucuses, is starting to spend, too, reserving $337,000 in advertisements this week and another $52,000 next week. Former House Speaker Newt Gingrich is up with $149,000 spread across broadcast and cable.”

ROMNEY READIES HIS COUNTER ATTACK- POLITICO’S REID EPSTEIN

“Campaign advisers are polishing new messaging, tailored to rebut Republican and Democratic attacks separately. They’re cueing up new commercials.

And they’re rolling out a more aggressive approach from the candidate himself, even as the candidates who’d been waging the Bain battle appeared to be retreating from the rhetoric on Wednesday.

The change comes following three days of stumbling responses from Romney and campaign aides, who admit they were caught unprepared for the explosion of Bain as the dominant topic of the Republican race – “out of nowhere,” one adviser said. And it comes as Romney is aiming to turn his polling lead into a primary win — an early-state hat trick they hope will quickly establish him as the presumptive GOP nominee.

They’ll start with advertisements featuring employees of companies started and rescued by Bain to tell their stories — a direct response to the documentary released by the pro-Newt Gingrich super PAC that features employees of four companies closed by Bain that brutally slams Romney as a job killer. That documentary is set to be parceled out into shorter commercials which will air in South Carolina with a $3.4 million ad buy.

Romney adviser Kevin Madden says they’re confident they’ll quash those attacks with their new rebuttal.

REALITY FROM GINGRICH: THE PATH TO THE REPUBLICAN NOMINATION COULD END IN SOUTH CAROLINA
from an interview on MSNBC this morning

“If Romney can win South Carolina, he’s probably going to be the nominee. This is his big test,” Gingrich said of his rival for the Republican presidential nomination. “He has so much money that if he also has the advantage of momentum, it’s going to be very hard to stop him,” Gingrich said of Romney.

WHAT TO WATCH FOR: There is growing chorus of Republicans who are urging- privately & publicly- for candidates to stop the attacks on Mitt Romney’s record at Bain Capital, believing that it ultimately will hurt the party and the man they see as the inevitable front runner. Watch, especially, for Newt Gingrich’s reaction.

WALL STREET TODAY- from CNBC-: Stocks ended near session highs Wednesday, but still closed narrowly mixed, as worries over the euro zone and declines in the energy sector limited gains.

• DOW down 13
• NASDAQ up 8
• S&P 500 up 0.4

FINALLY: Brad Pitt and Angelina Jolie visited President Obama today at The White House, to update the President on Jolie’s recent work on preventing mass atrocities and combating sexual violence to women, according to an Administration official. Pitt was using a cane, the result of a recent skiing accident.

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11 DAYS UNTIL SOUTH CAROLINA (25 delegates)
14 DAYS UNTIL THE STATE OF THE UNION ADDRESS
21 DAYS UNTIL FLORIDA (50 delegates)

PRIMARY EDITION

THE LATEST RESULTS:
77.7% OF THE VOTE IN

ROMNEY 38.3%
PAUL 23.2%
HUNTSMAN 16.9%
GINGRICH 9.7%
SANTORUM 9.6%

ROMNEY’S VICTORY-

The Union-Leader’s Headline: “NH Speaks: It’s Romney”
Boston Globe- “Romney a solid first, Paul second in N.H…Fmr Mass. Governor Gets Decisive GOP Win”

THE GLOBE-

“In his victory speech to the cheering crowd, Romney turned his fire mainly on Democratic President Barack Obama, saying, “This president has run out of ideas; now he’s running out of excuses.”

He said Obama wants to “put free enterprise on trial. … I stand ready to lead us down a different path, where we’re lifted up by our desire to succeed, not dragged down by resentment of success.”

“He apologizes for America, and I will never apologize for the greatest nation in the history of the earth,” Romney said.

FIRST THOUGHTS ON THE ROMNEY WIN:

With some vote still left to come in, Romney is running ahead of John McCain’s winning percentage from 2008, but still below expectations in the last week that he would top 40% of the popular vote. It look as if Romney will finish at 37, 38 or 39 percent.

Ron Paul finishes with a strong second place standing. It’s difficult to see where his campaign goes next- although they will compete strongly in the caucuses through the winter and spring. Does tonight’s second-place finish by Paul make him more likely to mount a third party candidacy in November?

Jon Huntsman’s third place finish is a disappointing result for the former Utah Governor, but the candidate does say that he will be going on to South Carolina. The bigger question is how Huntsman’s campaign regroups and develops a strategy.

Rick Santorum and Newt Gingrich are nearly tied for fourth place, but this is not particularly surprising. Santorum did not spend a lot of money in New Hampshire over the last week and Gingrich’s standing with New Hampshire voters was well known. Both are expected to vie with Rick Perry in South Carolina on the 21st.

No candidate is expected to drop out of the race over the next week before the South Carolina debates beginning next Monday and the primary a week from Saturday.

ALL FIVE CANDIDATES DELIVERED STATEMENTS TO SUPPORTERS IN NEW HAMPSHIRE TONIGHT

RICK PERRY, IN SOUTH CAROLINA, RELEASED THIS STATEMENT

“Tonight’s results in New Hampshire show the race for ‘conservative alternative’ to Mitt Romney remains wide open. I skipped New Hampshire and aimed my campaign right at conservative South Carolina, where we’ve been campaigning hard and receiving an enthusiastic welcome. I believe being the only nonestablishment outsider in the race, the proven fiscal and social conservative and proven job creator will win the day in South Carolina.

“South Carolina is the next stop. I have a head start here, and it’s friendly territory for a Texas governor and veteran with solid outsider credentials; the nation’s best record of job creation; and solid fiscal, social and tea party conservatism.”

ROMNEY’S VICTORY WAS DECISIVE- from POLITICO’s EMILY SCHULTHEIS- who took a look at tonight’s exit polls

“He was the first pick of a full 30 percent of voters who described themselves as “very conservative,” followed by Rick Santorum at 29 percent. He had a strong lead among those who described themselves as “somewhat conservative,” with 45 percent choosing him; he also led among self-described “moderates” and “liberals” with 35 percent.

Still, exit polls found that a full third of New Hampshire voters said they wanted another candidate in the race — only 65 percent said they were “satisfied” with the current GOP field, while 32 percent said they would like to see another candidate join the race.

Also worth noting was the high number of independents voting in tonight’s primary — a group that will be fiercely contested by both parties next fall. A full 45 percent of those coming to the polls said they were registered independents, and 47 percent of total voters tonight described themselves as independents. Both Romney and Ron Paul did well among independents — with registered independents, Romney led at 32 percent, followed by Paul at 30 percent and Jon Huntsman at 23 percent.

The former Massachusetts governor even led among New Hampshire evangelical voters, with 27 percent of that group picking Romney. Santorum took second place with the evangelical vote at 26 percent, followed by Paul at 10 percent.

One group Romney did not win, however, is the youth vote — a group that went strongly for Paul, as it did in Iowa. Paul got the support of 46 percent of voters aged 18 to 29, with Romney coming in a distant second at 21 percent. Romney, however, had a strong advantage with older voters: He won 45- to 64-year-olds with 39 percent and the 65 and older vote with 39 percent.

THE DEMOCRATS:

Vice President Joe Biden spoke via video-conference to about 2,000 Democratic supporters in New Hampshire tonight.

President Obama is traveling to Chicago tomorrow, to attend a re-election fundraiser and, likely, stop by his re-election headquarters

THE HEADLINES TONIGHT

Mitt Romney wins New Hampshire. Officially, he is now 2 for 2 in the contests so far this primary season.

No candidates are dropping out after tonight’s results.

It’s on to South Carolina, where Gingrich, Santorum and Perry are going to attack Romney over Bain Capital. 

1 DAY UNTIL NEW HAMPSHIRE (12 delegates)
12 DAYS UNTIL SOUTH CAROLINA (25 delegates)
15 DAYS UNTIL THE STATE OF THE UNION ADDRESS
22 DAYS UNTIL FLORIDA (50 delegates)

ALL POLITICS EDITION

“I LIKE BEING ABLE TO FIRE PEOPLE who provide services to me,” MITT ROMNEY, speaking today in Nashua, NH.

First- some context- and in the Romney’s campaign defense, the candidate was answering a question about services such as health care, and referencing insurance companies.

However- this quote came just one day after Romney said the following last evening in Rochester, NH:

“I’ve learned what it’s like to sign the front of a paycheck, not just the back of a paycheck, and to know how frightening it is to see if you can make the payroll at the end of the week. These are experiences that many of you know.”

“I know what it’s like to worry whether you’re going to get fired. There were a couple of times I wondered whether I was going to get a pink slip.”

Both quotes were immediately seized upon by Romney’s rivals in tomorrow’s primary. They also came on a day when the Wall Street Journal ran an A1 investigation into Romney’s record at Bain Capital, echoing an attack that Newt Gingrich brought up in this weekend’s debates, and which Gingrich’s Super PAC has bought an extraordinary amount of air time in South Carolina to make an issue in that state’s primary.

Tonight, Romney, the man who is expected to handedly win tomorrow’s primary, is under attack. They’re the same attacks that will be used by President Obama and the re-election campaign during the general election. Further, Romney’s misstatements today bare a striking resemblance to a fatal mistake made my Massachusetts Senator John Kerry during the 2004 election, with his comment that the “actually voted for it before he voted against it”- a line that came to symbolize his indecisiveness.

CAMPAIGN RESET- ROMNEY COMES UNDER FIRE AS PRIMARY LOOMS- THE WASHINGTON POST-PHILIP RUCKER IN HUDSON, NH

“An assault on Mitt Romney’s business career intensified Monday after the front-runner for the Republican presidential nomination made an ­off-the-cuff comment that his opponents say shows that he was a corporate predator who sought profits at the expense of workers.”

“Governor Romney enjoys firing people; I enjoy creating jobs,” former Utah governor Jon Huntsman Jr., who polls suggest is enjoying a late surge here, told reporters in Concord. “It may be that he’s slightly out of touch with the economic reality playing out in America right now, and that’s a dangerous place to be.”

Former House speaker Newt Gingrich (Ga.) went further, criticizing the type of business Romney engaged in. “Look, I’m for capitalism,” Gingrich said on NBC’s “Today” show. “But if somebody comes in, takes all the money out of your company and then leaves you bankrupt while they go off with millions, that’s not traditional capitalism.”

Instead of sprinting to the finish before Tuesday’s primary, which he is heavily favored to win, the candidate spent his final day on the New Hampshire campaign trail explaining and defending his role as co-founder and chief executive of Bain Capital. The venture capital firm invested in start-ups such as Staples, an office supplies superstore, but also oversaw large-scale job losses through leveraged buyouts and restructuring.

“Free enterprise will be on trial,” Romney told reporters in Hudson. “I thought it was going to come from the president, from the Democrats on the left, but instead it’s coming from Speaker Gingrich and apparently others. And that’s just part of the process. I’m not worried about that. I’ve got broad shoulders.”

WMUR AND THE UNIVERSITY OF NEW HAMPSHIRE PREDICT A ROMNEY BLOWOUT TOMORROW NIGHT, HAVE HIM UP 24 POINTS IN A POLL RELEASED TODAY

Romney 41%, Paul 17%, Huntsman 11%, Santorum 11%, Gingrich 8%, Perry 1%

SUFFOLK UNIVERSITY/NEWS 7 HAS IT A BIT CLOSER, ROMNEY UP 13

Romney 33%, Paul 20%, Huntsman 13%, Santorum 10%, Santorum 10%, Perry 1%

AND PPP TRACKING PUTS ROMNEY UP BY 17- probably the most accurate assessment of where the race stands

Romney 35%, Paul 18%, Huntsman 16%, Gingrich 12%, Santorum 11%, Perry 1%

IT’S ALL ABOUT EXPECTATIONS...

Will Romney crack 40% tomorrow?
Will anything significantly less be seen as a sign of weakness?
Will Ron Paul pull a strong second or will his support be transfered to another candidate?
Was there a Huntsman surge at the end of the race? Does he come in third, fourth or fifth?
Which candidates hold their New Hampshire primary parties from South Carolina (Rick Perry)?

DRIVING SOUTH CAROLINA- “A BIG CHECK AND GINGRICH GETS A BIG LIFT”- By NICHOLAS CONFESSORE and ERIC LIPTON- THE NEW YORK TIMES-

“MANCHESTER, N.H. — For weeks this winter, as Newt Gingrich’s presidential hopes faltered under the weight of millions of dollars in attack ads paid for by backers of Mitt Romney, a small group of Gingrich supporters quietly lobbied for help from one of the richest men in America: Sheldon Adelson, a billionaire casino owner and Mr. Gingrich’s longtime friend and patron

By the time Mr. Gingrich limped into New Hampshire, some of his top backers had given up on Mr. Adelson and begun prospecting elsewhere, including among erstwhile supporters of Gov. Rick Perry of Texas, to finance the counterattack they believed could salvage Mr. Gingrich’s campaign.

But on Friday, the cavalry arrived: a $5 million check from Mr. Adelson to Winning Our Future, a “super PAC” that supports Mr. Gingrich. By Monday morning, the group had reserved more than $3.4 million in advertising time in South Carolina, a huge sum of money in a state where the airwaves come cheap and the Republican presidential primary is just 11 days away. The group is planning to air portions of a movie critical of Mr. Romney’s time at Bain Capital, the private equity firm he helped found.

The last-minute injection underscores how last year’s landmark Supreme Court ruling on campaign finance has made it possible for a wealthy individual to influence an election. Mr. Adelson’s contribution to the super PAC is 1,000 times the $5,000 he could legally give directly to Mr. Gingrich’s campaign this year.

Several people with knowledge of Mr. Adelson’s decision to donate to Winning Our Future said that it was born out of a two-decade friendship with Mr. Gingrich, his advocacy on behalf of Israel and his turbulent months as a presidential candidate.

“His friend needed his help,” said a close associate of both men, who spoke on the condition of anonymity to avoid drawing Mr. Adelson’s ire. “It’s more than anything else a loyalty thing. And he believes strongly in his platform and in Newt’s candidacy.”

THE DAY’S TOP POLITICAL STORY- WHITE HOUSE CHIEF OF STAFF BILL DALEY IS STEPPING DOWN-
from National Journal’s George Condon, Jr. at The White House-

“President Obama promised on Monday that the White House will “not miss a beat” even though he was taken by surprise by the resignation of Chief of Staff William Daley and has had to turn to his third person in the post at the beginning of a critical election year.

To replace Daley, the president turned to another Washington veteran, Jack Lew. Lew is the current director of the White House Office of Management and Budget and previously served as a top deputy to Secretary of State Hillary Rodham Clinton. He also served as an adviser to President Bill Clinton.

“Obviously, this was not easy news to hear,” the president said in the State Dining Room, flanked on each side by Daley and Lew. “And I didn’t accept Bill’s decision right away. In fact, I asked him to take a couple of days to make sure that he was sure about this. But in the end, the pull of the hometown we both love, a city that’s been synonymous with the Daley family for generations, was too great.”

Daley will become a co-chair of the President’s re-election campaign.

WALL STREET TODAY- from CNBC- “Stocks Eek Out a Gain Ahead of Earnings”

• DOW up 33
• NASDAQ up 3
• S&P 500 up 3

EVERYTHING YOU NEED TO KNOW FOR TOMORROW

VOTING HOURS: Polls open at 7am ET and close in most places, including Manchester, at 7pm. The last polls in the state close at 8pm. That’s the earliest time the networks will make a projection. [and exit polls could provide enough information to make a projection at poll closing time tomorrow].

DIXVILLE NOTCH, NEW HAMPSHIRE HOLDS THE FIRST VOTES OF THE ELECTION, just past midnight ET tonight.

TURNOUT EXPECTATION: 250,000 for the Republican Primary and 75,000 for the Democratic Primary (President Obama is on the ballot uncontested), per the Secretary of State

INDEPENDENTS CAN VOTE: Because New Hampshire is an “open primary”. 40% of New Hampshire’s electorate is independent.

HOW ARE THE DELEGATES AWARDED: Tomorrow’s primary is the first time delegates will be awarded towards the Republican Nomination. Iowa’s caucuses last week were non-binding. They will hold a binding contest later this year to formally apportion delegates. 12 delegates are at stake tomorrow. Ordinarily, NH would have 23 delegates but the state is being penalized by the Republican Party for holding its primary in January, earlier than the official rules allow. Delegates will be awarded proportionally to any candidate attracting at least 10% of the vote.

WHAT’S NEXT? Two debates in South Carolina next week (Monday and Thursday), ahead of the South Carolina Primary on Saturday January 21st. Then comes the Florida Primary on Tuesday January 31st. That Saturday, February 4th, Nevada holds its caucuses and Maine begins their multi-day caucus. Super Tuesday is on March 6th. The earliest a candidate is likely to have a statistical “hold” on the nomination is on March 20th, after the Illinois Primary.

THREE FAST FACTS ABOUT NEW HAMPSHIRE:

In the last 25 years, only one candidate not named Bush or McCain has won the New Hampshire Republican primary: Pat Buchanan (1996).

And since 1952, no Republican presidential candidate has gone on to win his party’s nomination without finishing either first or second in New Hampshire.

New Hampshire holds more regular statewide and local elections more frequently than any other state in the United States.

2008 NEW HAMPSHIRE PRIMARY RESULTS

John McCain 37.0%
Mitt Romney 31.6%
Mike Huckabee 11.2%
Rudy Giuliani 8.5%
Ron Paul 7.7%
Fred Thompson 1.2%
Turnout: 239,793

THE EVENING REPORT will publish a special post-primary edition tomorow night after the winner is known. Last Tuesday, our post-caucus edition was sent at 12:04am ET. 

4 DAYS UNTIL NEW HAMPSHIRE (12 delegates)
15 DAYS UNTIL SOUTH CAROLINA (25 delegates)
18 DAYS UNTIL THE STATE OF THE UNION ADDRESS
25 DAYS UNTIL FLORIDA (50 delegates)

FRIDAY’S EARLY EDITION

TOP STORY: The Labor Department reported this morning that the US economy gained 200,000 jobs last month, which dropped the unemployment rate to 8.5%.

It is the lowest level of unemployment since February 2009, the month that President Obama took office. It is also the sixth consecutive month of private sector job growth.

Still, 5.6 million Americans have been out of work for six months or longer, chronically unemployed and the unemployment rate does not reflect the millions of Americans who are no longer counted as part of the labor pool because they have dropped out and stopped looking for work.

PRESIDENT OBAMA, for whom the economy holds the key to re-election, trumpeted today’s news as he took a political victory lap of sorts at the Consumer Financial Protection Bureau in Washington, where he visited the newly appointed Commissioner, Richard Cordray. 

“This morning we learned that American businesses added another 212,000 jobs last month. All together more private-sector jobs were created in 2011 than any year since 2005,” he said.

“There are a lot of people that are still hurting out there, after losing more than 8 million jobs in the recession. Obviously, we have a lot more work to do. But it is important for the American people to recognize we added 3.2 million new private-sector jobs in the last 22 months, nearly 2 million new jobs last year alone….

“One of reasons is the tax cut we put in place last year.When Congress returns, they should extend the payroll tax cut all year. There should not be delay, there should not be a lot of drama.”

COMING ATTRACTION: The debate over extending the payroll tax cut through the end of the year will resume when Congress returns to town at the end of the month. Some believe that it is the only significant piece of legislation that Congress may move this year.

WALL STREET: for all the seemingly good economic news this week, the Dow managed to end the day slightly lower.

• DOW down 56
• NASDAQ down 3
• S&P 500 up 4

CAMPAIGN 2012

Just four days to go before New Hampshire votes and the politics of debate-prep and expectations setting drove the day today

ANOTHER SERIAL HYPOCRITE- and the latest in a theme of Ron Paul’s attack ads against fellow Republicans in the race. Today, the Paul campaign announced a $250,000 ad buy in South Carolina- home to Saturday January 21st primary- attacking Rick Santorum and calling his a “record of betrayal”  

WASHINGTON POST HEADLINE TONIGHT AND THE SUNDAY SHOWS THIS WEEKEND- Romney Looking To Wrap Things Up By End of Month- from Philip Rucker in Tilton, NH

“Buoyed by a narrow win in the Iowa caucuses and his commanding lead in the New Hampshire polls, Romney has turned his attention to South Carolina, where he is dispatching a slew of high-profile surrogates and relocating his staff ahead of the Jan. 21 primary. Looking further ahead, Romney has begun a massive advertising blitz in Florida and launched an aggressive outreach program to early voters in the state.

Romney campaign advisers insist they are taking the race one state at a time and not taking any contest for granted. Yet Republican observers see Romney executing an ambitious strategy that would quickly maximize his momentum and try to quash any further surges by his rivals.

“If Romney wins the first four states, he’ll be the de facto nominee of the party,” said Steve Schmidt, a senior strategist on Sen. John McCain’s 2008 campaign who is unaffiliated in the current race. Ed Rogers, another unaffiliated Republican strategist, said the notion that Romney may wrap up the nomination by Jan. 31 is “perfectly plausible.”

NEW POLLS OUT TODAY PROVIDE A SNAPSHOT OF THE RACE

ROMNEY UP BY 24 IN WMUR NH PRIMARY POLL: Romney 44%, Paul 20%, Santorum 8%, Gingrich 8%, HUNTSMAN 7%, Perry 1%

AND BY THE SAME MARGIN IN RASMUSSEN’S NH SURVEY: Romney 42%, Paul 18%, Santorum 13%, Huntsman 12%, Gingrich 8%, Perry 1%

IN SOUTH CAROLINA, CNN HAS HIM LEADING SANTORUM BY 18: Romney 37%, Santorum 19%, Gingrich 18%, Paul 12%, Perry 5%, Huntsman 1%

BUT RASMUSSEN SAYS ITS CLOSER, WITH ROMNEY ONLY LEADING BY 3: Romney 27%,Santorum 24%, Gingrich 18% , Paul 11%, Perry 5%, Huntsman 2%

DRIVING THE POLITICAL WORLD- The New York Times’ Jodi Kantor is out with a new book- which paints an unflattering view of the Obama Administration, with sources deep inside The West Wing. President and Mrs. Obama were not interviewed for the book.

WHAT WE’RE LEARNING- Former Chief of Staff Rahm Emanuel offered his resignation to the President in the winter of 2010 at the end of the divisive health care debate. Kantor also exposes a rife between Emanual and First Lady Michelle Obama. From the Huffington Post’s White House Correspondent Sam Stein, reporting on the book:

“Once the administration began, the frictions only escalated. Emanuel rejected Michelle Obama’s efforts to be part of his 7:30 a.m. staff meeting. The administration did not outfit her with a speechwriter for some time. And the first lady’s office grew so isolated from the rest of the presidential orbit that aides there began, as Kantor writes, “referring to the East Wing as ‘Guam’ — pleasant but powerless.”

“Michelle and Rahm Emanuel had almost no bond; their relationship was distant and awkward from the beginning. She had been skeptical of him when he was selected, and now he returned the favor; he was uneasy about first ladies in general, several aides close to him said, based on clashes with Hillary Clinton in the 1990s that became so severe that she had tried to fire him from her husband’s administration,” writes Kantor. “Now Emanuel was chief of staff, a position that almost never included an easy relationship with the first lady. They were the president’s two spouses, in a sense, one public and official and one private and informal.”

AND MORE ABOUT THE FIRST LADY “Michelle Obama, who came to politics skeptically but saw her husband as someone capable of lofty achievements, lashed out against her isolation. She sent emails to [Obama Counselor Valarie] Jarrett when she had complaints about news coverage, which Jarrett would forward to others after removing the first lady’s name from them. When she couldn’t wedge herself into her husband’s schedule, she would send her missives to Alyssa Mastromonaco, the president’s director of scheduling. The emails, Kantor writes, “were so stern that Mastromonaco showed them around to colleagues, unsure of how to respond to her boss’s wife’s displeasure.”

THIS BOOK has the power to drive the White House off its new, revived, 2012 message, if the Administration allows it to do so. Watch to see over the next week how the White House officially responds, and what unofficial message they send as they play damage control.

AND FINALLY…The Bieb’s Got The Ink. NBC Entertainment reports:

“If you ever questioned the Biebs’ religious beliefs, this oughta clear it up for you.

In addition to his dove and Hebrew script of Jesus’ name on his rib cage ( matching with pops…awww), Justin Bieber showed off his new ink on the back of his calf while going to Shakey’s Pizza with his dad and some friends today.

The 17-year-old got a portrait of Jesus Christ’s face. Is it shocking?

To some it may seem that way, but Bieber has never been shy when it comes to religion. His movie, “Never Say Never,” even has some Christian reflection.

“People will walk away (from the movie) knowing faith is very important to him,” Scooter Braun, Bieber’s manager and one of the film’s producers told USA Today. “As a Christian, he’s someone to look up to…When [fans] are getting the real person is when they can connect to that person.”

“I believe that Jesus died on a cross for my sins,” Bieber told Billboard last November. “He’s the reason that I’m here.”

1 DAY UNTIL IOWA (28 delegates)
8 DAYS UNTIL NEW HAMPSHIRE (12 delegates)
19 DAYS UNTIL SOUTH CAROLINA (25 delegates)
22 DAYS UNTIL THE STATE OF THE UNION ADDRESS

QUOTE OF THE DAY (SHOT) “I don’t think I’m going to win,” Newt Gingrich, to ABC News about his chances in tomorrow’s Iowa Caucus

AND/BUT (CHASER) ”We may pull off one of the greatest upsets in the history of the Iowa caucuses,” Newt Gingrich in a tele-town hall later tonight

QUOTE OF THE DAY RUNNER UP: “You got a name? You got a name? You got a name?” Rick Perry to POLITICO’s Mike Allen after being challenged to answer questions about the loyalty of his campaign advisors.

AND FINALLY...RICK SANTORUM SAID THE FOLLOWING TODAY ”I don’t want to make black people’s lives better by giving them somebody else’s money; I want to give them the opportunity to go out and earn the money.”

TODAY ON THE TRAIL- All over the state. From the Washington Post’s team of political reporters group-filing tomorrow’s A1 lead piece:

“Former Massachusetts governor Mitt Romney’s agenda included four cities, spread over 269 miles. Former senator Rick Santorum (Pa.) drove a 171-mile circuit around Iowa’s navel. And Rep. Ron Paul (Tex.), the third candidate in the lead pack, began a long trek across northeastern part of the state, making five stops over 391 miles.”

“Over the past few months, Iowa has embraced and then rejected four charismatic front-runners: Rep. Michele Bachmann, Perry, Gingrich and pizza executive Herman Cain.”

KEY PASSAGE: “Now, the state seems set to split its vote among three candidates chosen, instead, for the ideas they represent.

For Romney, those are steadiness and electability.

For Paul, they are small government and personal liberty.

And Santorum’s appeal is based on his socially conservative views on issues such as abortion and same-sex marriage.”

WHAT WE MISSED: Newt Gingrich is recovering from the flu, which his campaign says was particularly bad on Friday and Saturday last week

THE LATEST FROM SANTORUM- He’s facing very tough questions about his endorsement of Mitt Romney in 2008 and about his position on abortion- and conflicting statements he gave on both during a Meet the Press interview yesterday. As Santorum is surging in the polls, he is now undergoing intensive media scrutiny.

THE LATEST FROM ROMNEY- He won the day. According to POLITICO’s Alexander Burns.

“…There were three good omens for Romney Monday that suggest no matter who wins in Iowa, he’ll be in good shape for the long haul.

The first was a harsh attack on Rick Santorum, mounted by Rick Perry on cable TV and on the campaign trail. The Texan blasted Santorum for having “raised the debt limit more than Obama” and supporting “the bridge to nowhere in Arizona” (he meant Alaska.) Both Perry and his wife, Anita, vowed to press on after Iowa, taking their campaign to South Carolina and also New Hampshire, where Perry isn’t scheduled to appear this week.

Perry wasn’t the only other Republican attacking Santorum. In a second Romney-friendly development, Ron Paul’s campaign got in on the action, with national chairman Jesse Benton accusing Santorum of having a “horrible record on the Second Amendment,” and telling POLITICO Santorum’s record on “so many other issues is so poor he can’t stand up to real criticism.”

And in a third, counterintuitively pro-Romney turn of events, Newt Gingrich vowed to stay in the race past Iowa and train his guns more intently on the GOP front-runner, whose supporters Gingrich blames for tearing down his own campaign.”

AND THEN ROMNEY PREDICTED VICTORY, TELLLING SUPPORTERS TONIGHT

“We’re going to win this thing with all our passion and strength and do everything we can to get this campaign on the right track to go across the nation and to pick up the states and to get the ballots I need and the votes I need to become our nominee. That’s what we’re going to get, with your help.

THE LATEST FROM PAUL- National Journal- “Paul Battles Assumptions He Can’t Win Outside Iowa”

“Paul has sought to defy the conventional wisdom that his campaign will end in Iowa by beginning to air television ads in New Hampshire, which votes Jan. 10, and in South Carolina, which holds its primary on Jan. 21”

Indeed, Paul is on the air in New Hampshire with what his campaign his calling his “closing argument”

INSIDER ADVANTAGE POLL TODAY GIVES ADVANTAGE ROMNEY, but the top three are well within the margin of error

Romney 23%
Paul 22%
Santorum 18%
Gingrich 16%
Perry 10%
Bachmann 6%
Huntsman 2%

PPP POLL TODAY GIVES ADVANTAGE PAUL, but still, we have a three-way race on our hands. 

Paul 20%
Romney 19%
Santorum 18%
Gingrich 14%
Perry 10%
Bachmann 8%
Huntsman 4%

EVERYTHING YOU NEED TO KNOW FOR TOMORROW AND TOMORROW NIGHT

• Caucus officially starts at 8pm.
• The first results should start coming in at about 8:30pm.
• Four years ago, Sen. Obama’s victory in Iowa was declared at 9:25pm ET.

• In 2008, Republicans saw a record caucus turnout of 118,000+ and many party officials also expect a record or near-record turnout this year.
• There are more than 1,700 precincts in Iowa that will be holding caucuses tomorrow night.

• In the modern primary system, only one Republican has won Iowa and gone on to be elected President (George W. Bush in 2000)
• In 2008, John McCain became the only Republican to finish outside of the Iowa top 3 and still go on to become the nominee
• Herbert Hoover is the only Iowan to be elected President

2008 REPUBLICAN IOWA CAUCUS RESULTS

Mike Huckabee 34.4%
Mitt Romney 25.2%
Fred Thompson 13.4%
John McCain 13%
Ron Paul 9.9%
Rudy Giuliani 3.4%
Turnout: 118,411

2008 Iowa Presidential Vote: Barack Obama 828,940 (54%) John McCain 682,379 (44%)

THE EVENING REPORT’S CONVENTIONAL WISDOM:

Mitt Romney will become the Republican nominee. He may face a challenge from the Republican right over the next six weeks but it will not be long, drawn out or fatal. A Santorum or Paul win in Iowa ultimately helps Romney. Santorum doesn’t have the organization to compete nationally and he will be crushed in New Hampshire next week. Paul is too crazy to ever win the Republican nomination or the presidency. It will be clear that Romney is the nominee by the State of the Union in three weeks. He may lose some states during the primary season and because of the way the party is awarding delegates, it may not be until March when he officially becomes the nominee, but everyone will know in a matter of days or weeks that 2012 will be Obama v. Romney.

COMING ATTRACTION: GOP BATTLE PLAN AGAINST OBAMA: USE HIS OWN WORDS AGAINST HIM- The Washington Post Monday top story-

“GOP officials in Washington are quietly and methodically finishing what operatives are calling “the book” — 500 pages of Obama quotes and video links that will form the backbone of the party’s attack strategy against the president leading up to Election Day 2012.

The document, portions of which were reviewed by The Washington Post, lays out how GOP officials plan to use Obama’s words and voice as they build an argument for his defeat: that he made specific promises and entered office with lofty expectations and has failed to deliver on both.

Republican officials say they will leverage the party’s newly catalogued video library containing every publicly available utterance from Obama since his 2008 campaign. Television and Internet ads will juxtapose specific Obama promises of job gains, homeowner assistance, help for people in poverty, lower health insurance premiums and stricter White House ethics standards against government data and news clippings that paint a different reality.

The decision by GOP officials to finalize a strategy at this stage underscores the view, in both parties, that the general-election campaign has begun — even if an official Republican nominee has not been selected.

The new GOP playbook is designed to take one of Obama’s great assets — the power of his oratory — and turn it into a liability. It details hundreds of potential targets, partially a result of a president who Republican strategists say is unusually prone to making detailed promises.”

FINALLY- Take a few minutes to think about how far we’ve come over the last six months leading up to tomorrow’s caucus- which itself is only the start of the Republican primary season. Through 13 debates, we’ve watched candidate after candidate rise and fall in public opinion polling. The title frontrunner has been awarded to Michele Bachmann, Rick Perry, Herman Cain, Newt Gingrich and Mitt Romney and, in the past week, we’ve seen the Santorum Surge. Tomorrow, Iowans caucus. And then, it’s on to New Hampshire…and South Carolina…and Florida…and Nevada…and…

WATCH- Political analyst & satirist James Kotecki today released a new video: The Iowa Surge Song (Old MacDonald Parody).

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4 DAYS UNTIL IOWA (28 delegates)
11 DAYS UNTIL NEW HAMPSHIRE (12 delegates)
22 DAYS UNTIL SOUTH CAROLINA (25 delegates)

ALL POLITICS EDITION

QUOTE OF THE DAY: “Politics has become a really nasty, vicious, negative business and I think it’s disgusting and I think it’s dishonest”- Newt Gingrich to ABC’s Jonathan Karl

HIGHLIGHTS FROM TODAY ON THE CAMPAIGN TRAIL:

GINGRICH TEARS UP- from The Washington Post-

“Gingrich was asked to speak about a time his mother affected him at the event sponsored by CafeMom, a social networking website for mothers.

“You’ll get me all teary-eyed — Callista will tell you, I get teary-eyed every time we sing Christmas carols. My mother sang in the choir and loved singing in the choir,” Gingrich said, referring to his wife, as he fought back tears.

“But I identify my mother with being happy, loving life, having a sense of joy in her friends, but what she introduced me to, is late in her life she ended up in a long-term-care facility. She had bipolar disease, and depression, and she gradually acquired some physical ailments, and that introduced me to the issue of long-term care, which I did with [Former Nebraska Sen.] Bob Kerrey for three years, and that introduced me to the issue of Alzheimer’s, which I did with Bob Kerrey for three more years, and my whole emphasis on brain science comes indirectly from dealing with the real problems of real people in my family,” the former House Speaker continued, at moments stopping to cry.
The audience sympathetically cheered for Gingrich as he spoke about his mother.

“I do policy much easier than I do personal,” Gingrich joked.

WATCH VIDEO

FLASHBACK: Hillary Clinton January 2008, one day before the New Hampshire Primary that she went on to win- “This is very personal for me, it’s not just political, it’s not just public”

CHASER: Mitt Romney this evening at an event, via POLITICO’s Maggie Haberman:

“Here in Merrimack, Romney started talking about his parents and what they meant to him, and how they taught him to love America — and said, “No, no, I won’t cry.

ROMNEY SON MAKES A BIRTHER JOKE IN NEW HAMPSHIRE- via the Washington Post-

“He’s certainly not afraid of anything. He’s not hiding anything,” Matt Romney said in response to an query from an audience member on whether the former Massachusetts governor would release his tax returns. “You know, I heard someone suggest the other day that as soon as President Obama releases his grades and birth certificate and sort of a long list of things, then maybe he’d do it.”

Perhaps sensing trouble, the eldest Romney brother, Tagg, quickly jumped in.

“That was not my dad saying that,” he told the crowd.

“No, no, no, that was just a suggestion from someone else,” Matt Romney added.

AND THE OBAMA CAMPAIGN SEIZES ON IT- via ABC’s Jake Tapper-

“In a fundraising email, Obama 2012 campaign manager Jim Messina pounced like a jungle caton a remark made by Mitt Romney’s son Matt, 40, seeking to paint his father as appealing to extreme elements.

“Friend,” wrote Messina in a mass email to supporters, “You’ve got to hear this. Asked at a Romney campaign event whether his father would follow decades of precedent and release his tax returns, Mitt Romney’s adult son Matt quoted the most recent Tea Party line, saying: ‘… As soon as President Obama releases his grades, and birth certificate, and sort of a long list of things, then maybe he will.’”

Asserted Messina, “This is how the Romney campaign thinks it’s going to win the Republican primary: by pandering to the dead-ender fringe of extremists who still question where the President was born. We can’t make them rewrite their talking points. But we can drive up the cost of this kind of politics.”

WELCOME TO THE GENERAL ELECTION

2012’s BIG STORY- RON PAUL TO AL HUNT ON POTENTIAL FOR A THIRD PARTY RUN ”I’ve never been an absolutist and say absolutely might or absolutely will, but I have no intention of doing. I can’t imagine it happening…we’re doing pretty well in the polls. So I’d better concentrate on the polls rather than on something like that.”

ROMNEY LEADING PAUL IN NBC/MARIST POLL IN IOWA

Romney 23%
Paul 21%
Santorum 15%
Perry 14%
Gingrich 13%
Bachmann 6%
Huntsman 2%

AND CONTINUES TO LEAD IN GALLUP DAILY TRACKING (NATIONAL)

Romney 26%
Gingrich 14%
Paul 11%
Perry 7%
Bachmann 5%
Santorum 5%
Huntsman 2%

TOMORROW at 7pm, the final Des Moines Register poll before the Caucus is released. We’ll have the results in a special Saturday edition of THE EVENING REPORT.

YOU’LL SEE THIS STORY AGAIN- Huffington Post’s Sam Stein- “Obama Campaign In Iowa Hopes To Flex Organizing Muscle”

“The Obama reelection campaign is paying significant attention to the Jan. 3 caucus, not just as a means of assessing future competition but also as a dry run for the 2012 general election. The president will technically be on the ballot. And his team would love nothing more than for him to scoop up more votes than some of the top names in the GOP primary. But the prevailing concern is to reengage the network of Hawkeye State supporters who initially pushed Barack Obama to the White House and to bring new ones into the fold.

In reporting on the Obama reelection team’s efforts in Iowa earlier this week, Politico referred to their work as a “shadow campaign.” In actuality, reelection aides are hoping that it ends up being a fairly open illustration of the very different styles of the president and his opponents.

“We have built this campaign from the ground up just like in ‘07 and ‘08,” said one Obama campaign official. “And in ‘07 and ‘08, it left a legacy in states in which we had a really strong field program and were able to engage volunteers. And what is clear is that Romney and the other candidates, rather than investing in organization and supporters on the ground, have instead competed on the air and on a national stage, and they haven’t left a legacy of a strong organization in states across the country. And they are not going to be able to just flip a switch. It takes time.”

WHAT TO WATCH FOR THIS WEEKEND: Endorsements matter in the hours before the Caucus. Also watch the DMR poll tomorrow night. This year’s caucus is unusual in that it falls the day after a long holiday weekend. Caucus-goers will be at home, likely watching local media, so small stories could make a big difference if they get significant media attention.

MUST-READ: NBC’s “Decision 2012: Iowa Caucus & New Hampshire Primary Guide” (.pdf) This is the briefing book NBC political reporters and anchors are reading this weekend to prepare for the next two weeks of political coverage.

WALL STREET- the final trading day of the year- from CNBC

• DOW down 69
• NASDAQ down 9
• S&P 500 down 5

DOW closed at 12217.56, finishing 1.4% higher for the month of December and 5.5% higher for the year.
NASDAQ closed at 2605.15, down 1.8% this year.
S&P 500 closed at 1257.60, essentially unchanged for 2011.

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5 DAYS UNTIL IOWA (28 delegates)
12 DAYS UNTIL NEW HAMPSHIRE (12 delegates)
23 DAYS UNTIL SOUTH CAROLINA (25 delegates)

ALL POLITICS EDITION

CAMPAIGN RESET- from The Washington Post’s Dan Balz in Ames- “Romney prepares aggressive Iowa finish”

“Romney is far from a clear favorite in Iowa: Rep. Ron Paul of Texas continues to show strength in the polls and is banking on a well-regarded organization, and former Pennsylvania senator Rick Santorum is on the rise. But no campaign can match Romney’s for the breadth and depth of its infrastructure, and for the first time the weapons he can deploy are all on display.

For months, Romney’s campaign in Iowa appeared to be moving in slow motion, but it has suddenly taken on a new intensity and some Republican ­strategists say the former Massachusetts governor is building his Iowa momentum at just the right moment.

The volatile political landscape in Iowa underwent its latest jolts in the past 36 hours, scrambling the fortunes of several candidates — most notably Santorum, Newt Gingrich and Paul — and left Romney in his most favorable position in Iowa so far.

But increasingly, the focus of the race is Romney and his potential to win Tuesday. He is drawing energy from boisterous crowds, some of whose participants said in interviews that they had only recently come around to Romney because he seems like the party’s best bet to beat President Obama.

Romney asked Iowa voters Thursday to weigh their choices carefully. “I hope as you look at the people running you can measure their capacity to lead effectively and you can also determine whether they can become our nominee and defeat President Obama,” Romney told 400 supporters in Mason City. “I think I can.”

LEADING DESMOINESREGISTER.COM TONIGHT: ”Almost Bowl Time for ISU, UI”

THEIR OTHER TOP STORY- “Des Moines police arrest 12 protesters at Democratic headquarters”- as #OccupyTheCaucuses come to Iowa

“Twelve protesters have been arrested at the Iowa Democratic headquarters this afternoon, as they protested that Guantanamo remained open and corporate donations to campaigns.

As arrests were going on, other protesters with the Occupy the Caucuses movement chanted, “Hey, hey, ho, ho, Obama close Guantanamo.”

Among those arrested was Frankie Hughes, 14, who earlier today told a Register reporter that she gets good grades.

More than two dozen protesters were at the Democratic headquarters, the fourth Des Moines-area site in two days that protesters have demonstrated at.”

NEXT WEEK’S BIG STORY TONIGHT- “Michele Bachmann’s hard fall”- by POLITICO’s Maggie Haberman

“But as the race wraps up, the woman who was on a trajectory to become the first-ever female winner of the Iowa caucuses is fighting to avoid finishing dead last in the state where she was raised.

To underscore her troubles, Bachmann has spent the last 24 hours trying to spin the fallout from her Iowa state campaign chairman’s defection to the Ron Paul camp — insisting repeatedly that the man in question took a payoff to make the switch. Another longtime staffer, who went public to defend the departed chairman, was gone from the campaign by late Thursday.

All that seems certain, amid a fractured evangelical base and the latest polling data, is that the low-on-cash Bachmann rates as an extreme long shot to win the Iowa caucuses. There’s no comfort back home either: she faces uncertain re-election prospects in her own House seat at the end of the presidential primary season.”

QUOTE OF THE DAY- Mitt Romney “When the president’s characterization of our economy was, ‘It could be worse,’ it reminded me of Marie Antoinette: ‘Let them eat cake,’” Romney said, referring to the infamously dismissive remark toward the poor attributed to the queen.”

ALEX BURNS’ WHO WON THE DAY- RON PAUL

“But it was today when the full impact of state Sen. Kent Sorenson’s defection sank in, triggering a daylong firefight between Bachmann and her onetime supporter, whom she accused of taking a payoff to abandon her. When another Bachmann adviser, Iowa operative Wes Enos, came to Sorenson’s defense, he was booted off the campaign. If Bachmann had any chance of delivering a strong closing message to regain traction in the race, she just lost a day squabbling with a defector.

It wasn’t only Bachmann whose campaign shifted gears Thursday in reaction to Paul’s strength: Jon Huntsman put out a web video attacking him for the first time and Rick Santorum, the Iowa momentum candidate of the moment, went after Paul at multiple campaign stops. Add to that a Union Leader editorial blasting Paul as a “dangerous man” and it’s clear which candidate was at the center of the 2012 universe.”

ATTACK OF THE DAY: Huntsman v. Paul in this web ad in which he asks “Can New Hampshire voters really trust Ron Paul?” 

ROMNEY’S CLOSING ARGUMENT: Believe in America Again. 60-second ad airing in Iowa. 

POLL OF THE DAY: INSIDER ADVANTAGE FINDS A 3-WAY TIE IN IOWA

Romney 17%
Paul 17%
Gingrich 17%
Santorum 13%
Bachmann 12%
Perry 11%
Huntsman 3%

RASMUSSEN FINDS ROMNEY UP BY ONE IN IOWA

Romney 23%
Paul 22%
Santorum 16%
Gingrich 13%
Perry 13%
Bachmann 5%
Huntsman 3%

AND GALLUP TRACKING HAS ROMNEY UP BY FOUR NATIONALLY

Romney 27%
Gingrich 23%
Paul 11%
Perry 8%
Bachmann 5%
Santorum 4%
Huntsman 2%

DAVID YEPSEN IN THE WASHINGTON POST- FIVE MYTHS ABOUT THE IOWA CAUCUSES

1/ Iowa voters don’t represent the United States.
2/ Retail politics is king in Iowa.
3/ To win, you need to appeal to right-wing activists.
4/ The weather will influence the outcome.
5/ Iowa caucus-goers take voting more seriously than people in other states.

READ THE DEAN OF THE HAWKEYE STATE’s full analysis 

WALL STREET- from CNBC- “Stocks End Near Highs, S&P Positive for 2011”

• DOW up 136
• NASDAQ up 24
• S&P 500 up 14

6 DAYS UNTIL IOWA (28 delegates)
13 DAYS UNTIL NEW HAMPSHIRE (12 delegates)
24 DAYS UNTIL SOUTH CAROLINA (25 delegates)

ALL POLITICS EDITION

TOP STORY- “Romney, Santorum Rising in Iowa”- The Washington Post’s Amy Gardner on the ground in Des Moines-

“There was evidence of growing intensity on both sides of the argument [today] as the candidates crisscrossed the state on a frenzied day of campaigning.

Against the backdrop of persistent questions about his conservative credentials, Romney drew enthusiastic crowds as he rumbled across eastern Iowa in a bus making the case that he is the most electable Republican in the field.

The support lost by Gingrich, whose front-runner status made him the subject of a barrage of negative TV ads, flowed to other candidates, notably Santorum

In one bit of good news for Gingrich on Wednesday, his campaign announced that it had raised $9 million in the past quarter. That is enough money to allow him to respond to some of the negative attacks and continue his campaign into later contests.

After months of being near the bottom of the standings, San­torum has surged, becoming the latest symbol of the Republican electorate’s continuing search for a satisfactory candidate. His new statewide radio ad, “Unite,” promotes his record on abortion and dubs him the “one consistent conservative” in the race.”

GAME CHANGE: With six days to go before voting begins, ROMNEY and SANTORUM are rising,GINGRICH is falling, PAUL is in a fight for second and PERRY and BACHMANN are fighting to stay relevant.

WHAT DROVE THE DAY: A new poll from CNN that found MITT ROMNEY leading the field in Iowa, with RON PAUL second and RICK SANTORUM third. 

Romney 25%

Paul 22%

Santorum 16%

Gingrich 14%

Perry 11%

Bachmann 9%

Huntsman 1%

ALSO FROM IOWA, A PPP Poll that finds RON PAUL with a four point lead over ROMNEY

Paul 24%

Romney 20%

Gingrich 13%

Bachmann 11%

Perry 10%

Santorum 10%

Huntsman 4%

GALLUP NATIONAL TRACKING- Gingrich and Romney are tied

Gingrich 25%

Romney 25%

Paul 11%

Perry 8%

Bachmann 5%

Santorum 4%

Huntsman 1%

Meanwhile, a CNN survey from New Hampshire also released this afternoon shows MITT ROMNEYwith a rock solid 27-point lead OVER RON PAUL in the first primary state.

THE WASHINGTON MACHINE- In what must be a nominee for best campaign ad of the 2012 cycle to date, today the PAUL campaign released a new 30-second attack ad aiming at both Gingrich and Romney. 

LEADING POLITICO TONIGHT, “Mitt Looks to Lock Down Iowa”

“Buoyed by internal polling and a CNN survey released Wednesday afternoon that showed Newt Gingrich falling to fourth place in Iowa, with Ron Paul in second and Rick Santorum climbing to third, Romney told reporters in a deli here that he couldn’t think of a reason why he won’t win the state.

“I can’t imagine, except that there are other good people running, and they’ve got good campaigns,” he said. “I like the fact that my support is building and the momentum is positive, but I can’t tell you where it’s going to end up.”

Romney will spend the next three days in the state intensifying his focus in Iowa at a moment when the state, and possibly an early wrap-up of the nomination, are now tantalizingly in reach.

He’s nearly 30 points ahead in his New Hampshire stronghold, which will vote the week after Iowa.Wins in both will make it increasingly hard for his rivals to continue their campaigns.”

AS NATIONAL JOURNAL’S ETHAN KLAPPER ASKED TODAY...if Romney wins Iowa and New Hampshire, how long before the GOP nomination is completely locked up? Developments so far this week seem far removed from discussion, as recently as this past weekend, of a prolonged primary season and even a contested convention.

BREAKING TONIGHT FROM THE BATTLE FOR THIRD IN IOWA…Michele Bachmann’s Iowa campaign manager, Kent Sorenson, has resigned and is now working for RON PAUL.

The latest from POLITICO’s Alexander Burns

“Sorenson made the announcement at a Paul rally with veterans here in Des Moines, telling the crowd: “I believe we’re at a turning point in this campaign.”

Calling the decision to abandon Bachmann a painful one, Sorenson said he felt obligated to join Paul as the “Republican establishment” tries to undermine his campaign.

“I thought it was my duty to come to his aid, just like he came to my aid during my Senate race, which was a very nasty race,” Sorenson said, pledging to go all-out for Paul over the next few days.

To cheers from the crowd, he continued: “We’re going to take Ron Paul all the way to the White House.”

SO WHO WON THE DAY? Alex says it’s Rick Santorum.

“At the start of the month, Rick Santorum needed the following things to happen in order for him to be competitive in Iowa: Newt Gingrich needed to fade. Evangelicals needed to move toward his campaign. Then voters needed to see some tangible sign of momentum, in order to speed up the tortoise-like pace of his Iowa campaign.

The former Pennsylvania senator has now gotten at least a dose of all three ingredients. Gingrich’s campaign has lost ground in every recent Iowa poll. Santorum won the endorsement of a number of high-profile Christian conservatives, including the head of The Family Leader. And today, Santorum placed third in an Iowa poll for the first time, running fairly close behind Mitt Romney and Ron Paul in a CNN/Time magazine survey.”

DEPARTMENT OF MAKING THINGS WORSE- Newt Gingrich today attempted to explain his March cruise in Greece by saying it gave him a better understanding of the financial crisis that began in Greece and now threatens the European economy

“Ironically, being in Greece during the Greek crisis was very helpful and gave me a much deeper perspective of how hard this was going to be,” he said.

TOP BELTWAY TALKER IN THE MORNING- Helene Cooper in the New York Times- White House Memo: “Bipartisan Agreement: Obama Isn’t Schmoozing”

“Mr. Obama, in general, does not go out of his way to play the glad-handing, ego-stroking presidential role. While he does sometimes offer a ride on Air Force One to a senator or member of Congress, more often than not, he keeps Congress and official Washington at arm’s length, spending his down time with a small — and shrinking — inner circle of aides and old friends.

He typically golfs with a trio of mid- to low-level staff members little known outside the West Wing. He does not spend much time at Camp David, the retreat other presidents have used to woo Washington. His social life runs toward evenings playing Taboo with old friends and their families, Wii video games with his wife and daughters or basketball with Robert Wolf, a banker and the rare new best friend Mr. Obama has acquired since entering politics. He vacations with friends from Chicago on Martha’s Vineyard in August and in Hawaii at Christmas.

This week, for example, Mr. Obama is ensconced in the protective bubble of the Secret Service. With him are his closest outside-the-Beltway-friends, including Eric Whitaker, a Chicago doctor, and two of Mr. Obama’s Hawaii friends from Punahou School: Mike Ramos, a businessman,and Robert Titcomb, a commercial fisherman whom Mr. Obama has stuck by despite his arrest in April on suspicion of soliciting a prostitute. Mr. Obama bolted from Washington last Friday barely an hour after he had signed legislation extending the payroll tax cut after a grinding fight with House Republicans whose result is widely viewed as a big win for him. His relationship with Washington insiders is described by members of both parties as “remote,” “distant” and “perfunctory.”

KEY QUOTE: “This is not a Lincoln bedroom guy,” said James Carville, the Democratic strategist, referring to the guest bedroom at the White House where President Bill Clinton put up supporters and donors. “In fact, he’s the anti-Lincoln bedroom guy. He doesn’t seem to relish, or even like, having politicians around.”

WALL STREET- from CNBC- ”Stocks End Near Lows, S&P Negative for 2011”

• DOW down 140
• NASDAQ down 35
• S&P 500 down 16

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12 DAYS UNTIL IOWA
19 DAYS UNTIL NEW HAMPSHIRE

BREAKING: A magnitude 5.9 earthquake has struck near Christchurch, New Zealand, the US Geological Survey reports

TOP STORY: A deal.

Late this afternoon, Speaker of the House John Boehner, looking weary and defeated after a week of intense negotiations, came to the microphones to announce that he had reached a deal with Senate Majority Leader Harry Reid to have the House pass the Senate bill extending the payroll tax cut for two months, adding a provision that seeks to accommodate the burden that some businesses may face from having to adjust their payroll filings as a result of the legislation.

He expected that the House and Senate would both act before Christmas- meaning tomorrow- to pass the bill by unanimous consent. That is, unless one member objects which, while entirely possible, is considered unlikely.

THE LATEST- from The Hill- “House Republican Leaders Cave- Agree To Pass Two-Month Bill”

“Speaker John Boehner (R-Ohio) announced the agreement with Senate Majority Leader Harry Reid (D-Nev.) Thursday evening after briefing rank-and-file House Republicans on a conference call. The House has agreed to pass a version of the Senate’s two-month payroll tax cut legislation, with a fix demanded by Republicans to make implementation easier.

According to a lawmaker who participated in the House GOP conference call, Boehner told the rank-and-file members that a deal was struck and the deed had been done. Unlike an extended phone call on Saturday, where members voiced extreme opposition to a Senate compromise, the Thursday conference call was one-way, and members were only allowed to listen in.

The agreement capped a disastrous week for Boehner, who was first forced into a fight with Senate Republicans by his own angry members and then was abandoned by senior Republicans, including Sen. John McCain (R-Ariz.), the 2008 presidential nominee, and Karl Rove, the chief strategist for the last Republican president.

“I don’t think this is any time for celebration,” Boehner said as he announced the agreement in the basement of a nearly empty Capitol.

Asked if he caved on the issue, the Speaker replied: “You know, sometimes it’s hard to do the right thing, and sometimes it’s politically difficult to do the right thing.”

STATEMENT FROM SPEAKER BOEHNER announcing the deal:

“Senator Reid and I have reached an agreement that will ensure taxes do not increase for working families on January 1 while ensuring that a complex new reporting burden is not unintentionally imposed on small business job creators.  Under the terms of our agreement, a new bill will be approved by the House that reflects the bipartisan agreement in the Senate along with new language that allows job creators to process and withhold payroll taxation under the same accounting structure that is currently in place.  The Senate will join the House in immediately appointing conferees, with instructions to reach agreement in the weeks ahead on a full-year payroll tax extension.  We will ask the House and Senate to approve this agreement by unanimous consent before Christmas.  I thank our Members – particularly those who have remained here in the Capitol with the holidays approaching – for their efforts to enact a full-year extension of the payroll tax cut for working families.”

STATEMENT FROM MAJORITY LEADER REID affirming the deal-

“I am grateful that the voices of reason have prevailed and Speaker Boehner has agreed to pass the Senate’s bipartisan compromise. Year-long extensions of the payroll tax cut, unemployment insurance and Medicare payments for physicians has always been our goal, and Democrats will not rest until we have passed them. But there remain important differences between the parties on how to implement these policies, and it is critical that we protect middle-class families from a tax increase while we work them out.

“I look forward to appointing members of my caucus to continue negotiations towards a year-long agreement. Two months is not a long time, and I expect the negotiators to work expeditiously to forge year-long extensions of these critical policies.”

STATEMENT FROM PRESIDENT OBAMA trumpeting what has been a very good week for his presidency-

“For the past several weeks, I’ve stated consistently that it was critical that Congress not go home without preventing a tax increase on 160 million working Americans. Today, I congratulate members of Congress for ending the partisan stalemate by reaching an agreement that meets that test.

Because of this agreement, every working American will keep his or her tax cut – about $1,000 for the average family. That’s about $40 in every paycheck. Vital unemployment insurance will continue for millions of Americans who are looking for work.  And when Congress returns, I urge them to keep working to reach an agreement that will extend this tax cut and unemployment insurance for all of 2012 without drama or delay.

This is good news, just in time for the holidays. This is the right thing to do to strengthen our families, grow our economy, and create new jobs.  This is real money that will make a real difference in people’s lives. And I want to thank every American who raised your voice to remind folks in this town what this debate was all about. It was about you. And today, your voices made all the difference.”

TONIGHT, THE PRESIDENT TWEETED FROM @WHITEHOUSE:

Thanks to all who shared #40dollars stories. Today’s victory is yours. Keep making your voices heard – it makes all the difference. –bo

PAYROLL TAKEAWAYS:

1/ This debate was a big deal. The question is how big a deal it remains weeks and months from now. Will it be seen as a defining moment in the relationship between President Obama and Congress, between Democrats and Republicans, between Republicans and the Tea Party- or will this debate, similar to the others we have seen this year over federal funding and the debt ceiling, be eclipsed by the next big battle?

2/ The White House found its voice. After a year of trying, and often coming up short, in its negotiations with Congress and after continued difficulty messaging and communicating with the public, the White House’s operation has seemingly come together over the last week. The #40Dollars campaign was really the first time the formal White House has successfully leveraged the social media tools they mastered in the 2008 election to help them win both a policy and a political debate, in a way that related to the average American.

3/ The Speaker is severely weakened. What we don’t know is if he is damaged beyond repair or, quite possibly and alternatively, if the Tea Party Republicans who forced a change in control in the House in 2010 have finally been shunned by enough of the traditional Republican establishment. Many believe that this group of freshman representatives revolted in the summer and prevented Speaker Boehner from agreeing to a grand bargain with President Obama. This time, the Speaker was at first ready to give in to their demands but then essentially said “not this time.”

WALL STREET- from CNBC-

“Stocks pushed into the close to finish around their highest levels for the second day in a row, as banks surged and Wall Street shrugged off fears of a global economic slowdown.

Financials, energy and technology — the market’s principal weak spot recently — led gainers, while commodities, particularly mining-related stocks, showed weakness. Consumer staples was the worst of the 10 Standard & Poor’s 500 sectors during a day in which the market traded in a tight range throughout the session.”

• DOW up 62
• NASDAQ up 21
• S&P 500 up 10

CAMPAIGN 2012:

Former President George H. W. Bush endorsed Gov. Mitt Romney today.

(Earlier this year, Romney was the only one of the current presidential candidates to attend a tribute event for Pres. Bush at the Kennedy Center in Washington organized by the Points of Light Institute. THE EVENING REPORT was there that night and met President Bush and Governor Romney)

RON PAUL is surging in Iowa, although his campaign is coming under new questions about documents that have surfaced (similar- maybe even identical- to ones that surfaced with allegations of racism in 2008). Yesterday, Paul even walked out of an interview with CNN’s Glorida Borger.

And as NBC’s Domenico Montanaro reports, there may be more skeletons in the closet set to come out in these final days before the Caucus:

• No federal regulations for car safety, medicines, even air traffic control
• Don’t regulate raw milk:
• Heroin, marijuana, cocaine, prostitution OK if states allow them
• - No air conditioning for troops (as a way to bring them home)
• Against the Americans with Disabilities Act
• No FEMA
• Believes Social Security, Medicare and Medicaid are unconstitutional

The question is how many of these past statements and positions, many which are quintessentially Ron Paul, will have staying power.

GINGRICH HAS A NEW NICKNAME FOR ROMNEY- via National Journal-

“When a Massachusetts moderate says I’m not conservative, it makes me want to laugh when he goes down that road,” Gingrich told radio host Tony Powers, responding to the former Bay State governor’s frequent charge. “When a Massachusetts moderate says Newt Gingrich is not conservative enough, other than break up laughing I don’t know what the correct response would be.”

Gingrich also criticized another rival, Rep. Ron Paul, R-Texas, who also has run ads critical of the former House speaker. “Paul’s case is different because he believes in legalizing drugs … thinks it’s OK for Iran to have a nuclear weapon and believes Americans are responsible for 9/11, which makes no sense.”

GALLUP TRACKING POLL: Gingrich 27, Romney 21, Paul 12, Perry 7, Bachmann 6, Santorum 4, Huntsman 1, Cain

GINGRICH averages a 3.8% lead in an average of national polls for the Republican nomination

RON PAUL leads an average of recent polls in IOWA, topping Romney by 3.5%

In NEW HAMPSHIRE, MITT ROMNEY has a 13 point average lead over Newt Gingrich

The near-reverse is the case in SOUTH CAROLINA, where GINGRICH has a 16 point lead over Romney

And in FLORIDA, the last of the early primary states (at the end of January), GINGRICH retains a 18 point lead over Mitt Romney.

FINALLY…Matt Damon still has some beef with President Obama. Actually, a lot of beef. And he told Elle Magazine that the President should think about leaving after one term. From the Huffington Post-

“I’ve talked to a lot of people who worked for Obama at the grassroots level. One of them said to me, ‘Never again. I will never be fooled again by a politician,’” Damon tells the magazine. “You know, a one-term president with some balls who actually got stuff done would have been, in the long run of the country, much better.”

Referring to the Occupy Wall Street movement, Damon continued: “If the Democrats think that they didn’t have a mandate — people are literally without any focus or leadership, just wandering out into the streets to yell right now because they are so pissed off … Imagine if they had a leader.”

The slam follows in the same vein as a number of other criticisms Damon has made of the President and the Democrats, including in March, when he criticized Obama’s education policy.

“I really think he misinterpreted his mandate. A friend of mine said to me the other day, I thought it was a great line, ‘I no longer hope for audacity,’” Damon told CNN host Piers Morgan. “He’s doubled down on a lot of things, going back to education… the idea that we’re testing kids and we’re tying teachers salaries to how kids are performing on tests, that kind of mechanized thinking has nothing to do with higher order. We’re training them, not teaching them.”

HAPPY HANUKKAH!

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