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The Situation Room

Interview With Presidential Adviser Dan Pfeiffer; Obama's Challenge; Excerpts from State of the Union Speech Revealed; President to Call for 'Use of Force' Resolution Against ISIS

Aired January 20, 2015 - 18:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

WOLF BLITZER, CNN ANCHOR: And the president's challenge. We're getting new details about his speech to the nation tonight, as he faces new terror threats, a resurging economy and a Congress with more power to stand in his way.

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Tonight, a critical U.S. ally in the war on terror is under siege and losing a grip on power. Officials inside Yemen say the president has no control there. The president of Yemen and his palace has now been taken over by rebel forces. Even as this crisis plays out, the United States has charged two suspects from Yemen with conspiring to murder Americans abroad and providing material support to al Qaeda.

And in Europe new arrests in the anti-terror crackdown all across the continent triggered by the attacks in Paris.

The president's senior adviser, Dan Pfeiffer, there you see him at the White House, he's standing by live, along with our correspondents, our analysts and they are all covering the breaking news.

First, let's go to our justice correspondent, Pamela Brown, in Paris. She's got new details on terror arrests and the exclusive new video that has surfaced -- Pamela.

PAMELA BROWN, CNN JUSTICE CORRESPONDENT: That's right, Wolf.

This exclusive surveillance video we obtained is providing important new clues in the investigation and apparently shows one of the Paris suspects and his wife surveying Jewish sites in the city in the months leading up to the attacks here.

(BEGIN VIDEOTAPE)

BROWN (voice-over): This exclusive surveillance video obtained by CNN shows Amedy Coulibaly and his partner, Hayat Boumeddiene, last summer outside a Jewish institution in Paris. Sources tell CNN the duo was trying to blend in and scope out potential Jewish targets months before Coulibaly eventually launched a siege on a kosher grocery store where he killed four people.

Today in France, authorities charged four in connection with the Paris attacks, the first since the "Charlie Hebdo" massacre shocked the city. One of the suspect's DNA was allegedly found on a car used to transport Coulibaly to the kosher grocery store, this as we learned Bulgaria will extradite this Frenchman who was friends with the Kouachi brothers.

The mayor of Paris tells Christiane Amanpour the city is still on heightened alert. "We have to be very vigilant," she said, "because for several months now, we have known that jihadist teams have been setting up in Europe and France."

Overnight in Germany, 200 police officers raided 13 properties of a group tied to Islamic extremists.

JEAN-CHARLES BRISARD, TERRORISM ANALYST: We're dealing with very complex networks. We need to be very cautious of what we're doing, especially in our analysis of what is going on.

BROWN: In Belgium, counterterrorism sources says ISIS directed a plot that may have included attempts to murder police officers. Several suspects are in custody, but a manhunt is still under way for one of the cell's suspected ringleaders, Belgian ISIS operative Abdelhamid Abaaoud.

Authorities believe he may have been in touch with ISIS leadership from Greece. And after the Police raid on alleged terrorist cell in Belgium where two suspects were killed, police in Holland raided the home of a suspect allegedly associated with that Belgian cell. They confiscated laptops and cell phones and police now say the man's passport was found last week in that Belgian raid.

(END VIDEOTAPE)

BROWN: And back here in France, the Paris prosecutor will be holding a press conference tomorrow. We expect the prosecutor to release new details about the investigation and the four suspects now under formal criminal investigation.

Also, the French government tomorrow is expected to release new details on anti-terrorism measures being taken, Wolf, as they try to figure out how to combat this growing problem of highly franchised terrorism here in Europe -- Wolf.

BLITZER: Pamela Brown in Paris, thank you.

Let's get to the bloody power struggle in al Qaeda's backyard right now, a power struggle that could give the terror network even more opportunity to plot attacks, including attacks against Americans.

Let's go to our senior international correspondent, Nick Paton Walsh, and he's the only Western TV journalist in Yemen right now.

Nick, this has been one of the tumultuous, historic days in Yemen, what, the presidential palace now under control of the Shiite Houthi rebels.

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Absolutely, but still no real sign of who is in charge.

The Houthi leader appearing on television, but still calling the president the president, the president in his residence but not really able to leave because of threats of gunfire on the streets outside. A really troubling day for a key ally to the United States in battling al Qaeda.

(BEGIN VIDEOTAPE)

WALSH (voice-over): America's vital ally against its biggest threat, al Qaeda in the Arabian Peninsula, penned in here by rebels who would later storm these walls and the presidential administration.

We drove cautiously around the streets, avoiding both government soldiers and Houthi rebels still squaring up for another fight.

(on camera): When we drive around here, it's pretty clear that all the gunmen on the streets surrounding it are Houthi militants. And that of course is vital, because this, the presidential administration, most Yemeni officials will tell you, if you control that, you effectively control the country.

(voice-over): Was it a coup? As uncertain as who is in control here, in a city battered by shelling. On this road, American diplomats also targeted that night, gunmen shooting up this, their armored SUV, nobody hurt, but the embassy said there intent to kill.

The U.S. presence always on heightened alert partially because of their drone campaign against AQAP leadership, which will surely suffer from the chaos and collapse of government. By the end of the day, the palace had been stormed, the president's home shot at, and it wasn't clear who in government would turn up for work tomorrow.

The rebels sounding like they were in charge, without actually declaring it, a nightmare in a key counterterrorism ally.

We reached the information minister by phone as she stood in the street.

(on camera): Do you believe that the president is still in control of the country and is his life safe?

UNIDENTIFIED FEMALE: I don't think the president is in control of anything.

WALSH: Do you think he should step down and flee the country, in a symbol of how the Houthis are trying to run his government?

UNIDENTIFIED FEMALE: He -- I'm not sure about staying in the country. It's time to shame and name it what it is.

WALSH: What is it?

UNIDENTIFIED FEMALE: It's a coup.

WALSH: A coup by the Houthis? UNIDENTIFIED FEMALE: Yes.

WALSH (voice-over): Unclear who is in control, if anyone, tonight or maybe still tomorrow.

(END VIDEOTAPE)

WALSH: A diplomat said to me, if it looks like a coup, walks like a coup, it probably is a coup.

But the issue tonight is, who really is in charge? We heard from the Houthi leader. He has some desire to change the new constitution and he certainly wants more levers on the hands of power, but he's not calling himself the president, even though his men are all over the presidential administration.

That's the key worry here for Washington, Wolf. We have a country so vital in hunting down al Qaeda that was already struggling. Now tonight nobody seems to be in charge and nobody seems to know what the timetable is for working out who is. And the U.S. Embassy not far from where I am standing on high alert, its vehicles shot up. That's going to make relationships here even harder as Yemen tries to piece together who really runs it -- Wolf.

BLITZER: Nick Paton Walsh, be careful over there. We will stay in very close touch with you.

The U.S. military already taking new action to be ready, if necessary, to evacuate the American Embassy in Yemen at a moment's notice.

Let's go to our Pentagon correspondent, Barbara Starr.

What are you learning, Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Wolf, here's where things stand.

It would be the State Department that has to make the decision to evacuate the embassy. The State Department always somewhat reluctant to do that. It's important for them to keep as many diplomatic posts open as possible, of course. But the situation is so fraught.

Now we know that two U.S. Navy warships overnight moved into the Red Sea just off Yemen. The USS Iwo Jima and the USS Fort McHenry, they have helicopters and V-22 aircraft on board. If the State Department orders was to come, they could fly into Sanaa. It would take several trips, but they could load up several hundred Americans at the embassy and get them out of there and get them to safety.

But that would be the most dire of circumstances because in an embassy evacuation, the hope is that people, personnel could just get in their cars and drive to the airport and board commercial flights out of the country, but with the events of today gunfire in the streets, a U.S. embassy vehicle shot up, it's not at all clear tonight the streets of Sanaa would be safe enough for that type of evacuation via a commercial airport.

So the military tonight says everything is in place and they are waiting for the order. If it comes, it will be ready to go -- Wolf.

BLITZER: Barbara Starr at the Pentagon, thanks very much.

Let's bring in Dan Pfeiffer right now. He's the senior adviser to President Obama. He's joining us from the White House.

Dan, thanks very much for joining us.

DAN PFEIFFER, SENIOR ADVISER TO PRESIDENT OBAMA: Thanks for having me, Wolf.

BLITZER: I know the president is getting ready. I think he's basically done with his speech for the State of the Union address tonight. Did he make revisions, as far as you know, in light of these late-breaking developments in Yemen?

PFEIFFER: No.

We haven't made specific revisions to reflect this, but the situations happening in the Middle East is part of the context for the foreign policy section of the speech.

BLITZER: How worried is the president about the Americans? And there are a lot of them apparently still in Yemen right now.

PFEIFFER: Well, look, there's no higher priority for the president than protecting our men and women serving in our embassies, serving in the military, people abroad, and so he's monitoring this very closely and he's being kept up to date regular on what is happening there.

And if a decision is made that we have to evacuate, we will be prepared to do that, as Barbara Starr mentioned.

BLITZER: Do you have a ballpark estimate how many Americans, military, diplomats, civilians may be in Yemen right now?

PFEIFFER: I don't have one for you here right now, Wolf, but we will be accounting for that and be prepared if we need to move those people.

BLITZER: Yemen is really critically important because al Qaeda in the Arabian Peninsula, AQAP, is based there in Yemen. They have got bomb-makers, they have got terrorists. That's the big al Qaeda threat to the U.S. right now, isn't it?

PFEIFFER: Well, al Qaeda in the Arabian Peninsula has been a threat.

It is something this president has been focused on for a very long time. We have taken a lot of action to degrade their capabilities and keep pressure on them. We're going to continue to do that. But we're obviously monitoring what is happening in Yemen right

now to make sure that we can still continue to take action and keep al Qaeda in the Arabian Peninsula at bay.

BLITZER: I assume in the president's address before the joint session of Congress tonight there will be an extensive section, not just on Yemen, but overall in terms of national security, the war on terrorism, what's going on in Syria, what's going on in Iraq, what's going on elsewhere in the region, right?

PFEIFFER: Absolutely.

It's an important part of the speech. We will be discussing the progress we have made abroad, the challenges that remain and how we use American values to successfully protect our national security around the world.

BLITZER: I assume he will also have some words about what happened in Paris in recent days and in Belgium for that matter as well.

PFEIFFER: Well, I'm not going to get too far ahead of the specifics in the speech, but I wouldn't be surprised if that was in there, Wolf.

BLITZER: And there will be some sort of gesture you think he might make to show's America solidarity with the people of France and the people of Belgium?

PFEIFFER: I think he will speak to the people of France and the people around the world who confront al Qaeda, ISIL, terrorist groups like that. He will certainly speak to that.

But, as I said to you before, Wolf, it's never a good idea to get too far in front of the president's remark. I will let him deliver those tonight.

BLITZER: Which is smart, if you want to keep having a job.

I assume you have actually read the speech by now, right?

PFEIFFER: More times than I can count, Wolf.

BLITZER: All right, stand by, Dan Pfeiffer. We have got a lot more to discuss.

The president of the United States, he is getting ready and he will be leaving the White House in a couple of hours or so to drive up to Capitol Hill, deliver his State of the Union address. By the way, we will have our extensive special live coverage beginning at 7:00 p.m. Eastern right after THE SITUATION ROOM.

We will be back with Dan Pfeiffer right after this.

(COMMERCIAL BREAK) BLITZER: We're back with President Obama's senior adviser, Dan

Pfeiffer. He's joining us from the White House. We're talking about the terror threats. We're talking about other challenges that the president faces. He's getting ready to address the nation before a joint session of Congress in his State of the Union address in a few hours.

You saw, Dan, that horrible video of this ISIS Jihadi John, as he's called, holding these two Japanese hostages, threatening to behead them if Japan doesn't pay $200 million in ransom. This is an awful situation. We have seen this before. And ISIS seems to be moving along in terms of their social media, in terms of their other capabilities without stop.

PFEIFFER: I think it's important to recognize the success of the efforts in Iraq and Syria today.

ISIS' momentum has been stopped. We have degraded a lot of their capabilities, their command and control and their ability to amass and move equipment. And in Iraq in particular, we have seen they have lost ground, like Mount Sinjar and some important towns.

But there's a lot more work to do. As the president said the night he announced we would begin taking action here, this is a long- term project. We have got keep working at it with our broad coalition.

BLITZER: Because they announced today the U.S. has now, what, spent about a billion dollars launching, what, 2,000 airstrikes against ISIS targets in Iraq and Syria. I think you're right as far as Iraq is concerned, and that situation seems to have stabilized a bit. But I haven't seen a lot of progress against ISIS in Syria, have you?

PFEIFFER: Well, we're making progress. There's more work to do. You have seen around Kobani and some other places where ISIL's momentum has been stopped. But there's a lot more work to do here.

We're not going to solve this problem overnight. It's going to take time and hard work and a continued coalition working together to defeat ISIL.

BLITZER: Let's talk about the president's speech tonight.

We're told -- and correct me if I'm wrong -- he's going to make the case for some additional tax increases for very wealthy people, for big financial institutions to provide some tax credits and some other benefits for the middle class. The Republicans, as you well know, they say the so-called Robin Hood tax plan, take from the rich, give to the middle class, is a nonstarter as far as they are concerned.

They have got the majority in the House and the Senate. Here's the question. Why is the president doing this if he knows it's not going to go anywhere?

PFEIFFER: Wolf, let me make a couple points here.

First, there's some elements of our plan that come directly from Republicans. Our tax credits for higher education are very similar to a bill that passed the House last year. The fee on large financial institutions you referred to is very similar to a provision in Republican Congressman Dave Camp's tax plan of last year.

There should be some elements of bipartisanship here. But we do have a big debate in this country between middle-class economics and trickle-down economics. The president believes the middle class needs a raise and we can help them. We just have to ask the wealthy and corporations to pay a little more.

The Republicans have a different view. Their view is that we should cut the programs that benefit the middle class, provide larger tax breaks to the wealthy and corporations and hope those benefits trickle down to everyone else. We have tried that in the past and it hasn't worked.

And when the president stands before you tonight, he will stand there with the American economy in one of the best places that it's been since the '90s. There's proof that middle-class economics works, that his economic theory is working. And we should not change it and go back to the philosophy that got us in this mess to begin with.

BLITZER: But the Republicans make the case, go ahead, have those tax breaks, those tax cuts, if you will, for the middle class, but don't pay for it by raising taxes on rich people or banks. They say find ways to cut government spending to pay for those benefits.

PFEIFFER: Look, we have made historic cuts in government spending, probably cut too far in some areas where we could use additional investment.

The question is, it's a simple values question. Do the Republicans think that there are loopholes in the tax code that benefit the corporations and the wealthy that should stay there? The president thinks we should close those and middle class should get the benefits, because for every loophole that benefits the super wealthy trust funds, that is money that cannot be spent on the middle class.

BLITZER: If the president can't get this proposal, this tax proposal through Congress and get votes in the House and the Senate, is he already taking a look and see what he can do unilaterally through so-called executive action?

PFEIFFER: Well, across not just the tax parts of the middle- class economic plan, across the entire breadth of our agenda, we have three avenues we try to get things done, legislative compromise -- and that's going to be hard in an era of divided government, but the president is going to work really hard on that, and he's going to double down on it tonight.

Executive action, we're always looking for that. Last week in Arizona, the president announced a plan that will save new borrowers, the average new borrower around $900. And then we're also going to use the bully pulpit, the phone, if you will, to go out and make the case to the American people and try to get states, communities, companies to embrace some of these initiatives.

We have seen that in the minimum wage. The president called for it in the State of the Union. Congress hasn't acted, but 17 states and the District of Columbia have raised their wages, putting more money in the pocket of millions of Americans across the country.

BLITZER: We know the president -- I assume the president knows he's not going to get the tax increases through. Where does he think he can realistically work with the Republican majority in the Congress over these next two years and get stuff done?

PFEIFFER: I think first, Wolf, the Republicans have said they are interested in tax reform.

The president also agrees we need to make our tax code fairer and simpler. His principle is that tax reform benefits the middle class. That's a tax reform plan he can sign. If tax reform plan makes life easier for the corporations and the wealthy, that doesn't make any sense to him.

If we're going to have a tax reform conversation, maybe we can get some stuff done there. Infrastructure is something that Republicans and Democrats alike have talked about getting done. We are very interested in that. We have talked about trade. There's a number of initiatives big and small that I think we have a chance to get done if people are willing, as the president is, to put aside the things we disagree on and focus on the things we agree on.

BLITZER: Why do you believe the president doesn't get more credit for helping to turn around the economy over these six years in so many areas?

Millions of new jobs have been created. Certainly, the Dow Jones industrials was 7000 when he took office. It's about 18000, approaching that, once again record highs. The deficit has been cut by two-thirds. These are very positive numbers, as you well know. But the president doesn't seem to get a whole lot of credit for that. Why is that?

PFEIFFER: I think he's getting more credit every day as the economy grows stronger.

But we're not focused on credit. We're focused on results, how we got out of this mess and then what are we going to do now that America is positioned better than anyone else in the world to take advantage of our progress over the last six years? What are we going to do to tackle the decades-long trends of wealth stagnation and declining economic mobility? The president has a plan for that that focuses on the middle class.

He's going to unveil that tonight.

BLITZER: The president's objective, the main objective he has tonight is what? PFEIFFER: The main objective is to tell a story to the country

about where this country has been and the progress we have made through the hard work of the American people and American businesses and American workers, and paint a vision for where we can go if we adopt a set of commonsense, historically bipartisan ideas that focus on the middle class.

BLITZER: One final question.

Since the midterm elections, the president has really been enthusiastic. He's going out, executive action and is making decisions on Cuba or China or immigration. Has he changed his attitude? Does he feel -- is he feeling a little emboldened now, liberated, since he doesn't have to worry about elections for himself or his Democrats, at least over the next two years, somebody else can worry about the presidential elections in 2016?

PFEIFFER: I don't know that liberated is the right word.

I think the president feels the urgency, what he often refers to from Martin Luther King quote, the fierce urgency of now, that we have two years left. We have, as he says to us, the greatest opportunity we will ever have in our lives to do the most good for the most people and he wants to take advantage of every minute of every day.

He's going to go out there and do what he thinks is right, make a case for the country about it. And if he can find areas of bipartisan compromise to move the ball further even more, he will certainly do that.

This is a very exciting time for the president.

BLITZER: All right, Dan Pfeiffer joining us.

As I said, since the midterm elections, he seems to be pretty enthusiastic on what he is doing right now, as opposed to in the months leading up to the midterm election. But that's just my analysis.

All right, Dan, thanks very much.

PFEIFFER: Thank you, Wolf.

BLITZER: Just ahead, much more on that exclusive video we have been showing you, showing one of the Paris terrorists and his girlfriend surveying potential targets.

And the State of the Union address just a few hours away, as President Obama makes final preparations. We're going to get details of what he's getting ready to tell the nation and the world.

(COMMERCIAL BREAK)

BLITZER: All right. We have got some breaking news.

We're just getting our first look at what President Obama will actually say tonight in his State of the Union address.

Let's bring in our senior White House correspondent, Jim Acosta. He's got a preview of what the president is getting ready to tell the nation, indeed the world.

Jim, tell us what you have got.

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Wolf, we know from talking to officials over here at the White House that the State of the Union speech that the president will deliver tonight to what will be a Republican Congress that will be in charge -- this is his second-to-last State of the Union speech -- this is going to be very much about the middle class.

Middle-class economics is the theme of this speech.

And the White House has been saying for the last couple of weeks that they are rolling out these proposals that the president -- something that he'll lay out tonight. But really, this is not going to be about a speech with lots of policy proposals. It's going to be thematic. It's really going to be talking about where Americans have been in this financial crisis that they're now coming out of and now this recovery that the White House feels is moving full steam ahead.

And so I want to share a couple of excerpts from the president's speech that have been released by the White House in advance of the address coming up in a few hours. On the economy, this is what the president will say about middle-class economics.

He says, "That is what middle-class economics is, the idea that this country does best when everyone gets their fair shot, everyone does their fair share, and everyone plays by the same rules."

You know, Wolf, the president is going to be taking about this proposal tonight to raise taxes on the wealthy when it comes to their capital gains but also cut taxes and extend credits to middle-class families and provide free community college to scores of Americans around the country.

Now, a big part of the speech will be devoted to ISIS and counterterrorism. You've been talking with Dan Pfeiffer about this earlier today. The president is going to devote even perhaps even a third of this speech to foreign policy, we're told.

And the president, I'm told by officials, will make a stout defense of his foreign policy doctrine, of his efforts to take on terrorists around the world. And so this is what he will say about the war on ISIS.

He will say tonight, "This effort" -- as we put it up onscreen -- "will take time. It will require focus. But we will succeed. And tonight, I call on this Congress to show the world that we are united in this mission by passing a resolution to authorize the use of force against ISIS" -- or ISIL, as the White House calls the terrorist group. Wolf, we've been hearing about this for weeks, and we now know

it's going to be in the speech tonight. The president is going to call on Congress to back him up in this war on ISIS and authorize a new use of force against this terrorist organization. It's going to be very different than the use of force that was authorized by Congress in the months after 9/11.

And finally tonight, Wolf, from talking to officials over here, I can tell you, this is not -- this is not a speech from a president who had his clock cleaned back in November. He may be a lame duck, but he's not quacking like one tonight.

BLITZER: Yes. He seems really enthusiastic about what he's doing, and willing to take actions, including controversial unilateral executive actions to get what he wants. And we've seen that recently with Cuba, for example. That's going to be a chunk of his speech, as well.

All right. Stand by, Jim. I want to get back to you shortly.

President Obama will call on Congress to pass, as Jim just said, a use of force resolution authorizing the U.S. military operations in Iraq and Syria against ISIS, even though he doesn't really believe it's necessary. He believes he already has that authority.

Let's discuss what's going on. Joining us, our CNN terrorism analyst, Paul Cruickshank; our counterterrorism analyst Phil Mudd -- he's a former CIA official; our law enforcement analyst, Tom Fuentes -- he's the former FBI assistant director; and our CNN military analyst, retired Lieutenant General Mark Hertling.

General Hertling, what do you want to hear from the president tonight as far as this war on terror is concerned, the war against ISIS? What does he need to say to the American people?

GEN. MARK HERTLING, CNN MILITARY ANALYST: Well, what Jim just mentioned is critically important. The authorization for the use of force is very important, and it gets everyone on his side. I think that will also drive appropriations.

Wolf, as you know, we're all over the world right now. It is more intense now for our military than it's been in two decades. So I think the importance of pulling the team together and saying we're continuing to fight this scourge of terrorism while, at the same time, upholding our promises around the world is extremely important, Wolf.

BLITZER: Phil Mudd, Pam Brown, our justice correspondent, she's out there. She reported that Amedy Coulibaly and his partner, Hayat Boumeddiene, they scoped out, they surveilled -- they were engaging in some surveillance of potential Jewish targets in the months before Coulibaly held a kosher grocery store hostage. Two of those four Jewish men in that kosher grocery store. This sounds to me like there was some sort of intelligence failure there. What do you sense?

PHIL MUDD, CNN COUNTERTERRORISM ANALYST: Look, you've got to look at this from two perspectives, and we've only been focused on one. We've been looking at the potential hundreds of people in western Europe who might have gone to places like Iraq or Syria and gotten training and then hoping, once they returned, the security services are good enough to pick every one of them up and have enough resources to follow them.

There's a different way to look at this, Wolf, that we haven't talked about. Think of this ISIS training as the spider in the midst of a spider web. If we can't identify, for example, from the interrogations of these suspects this week, who the leadership is in Iraq and Syria that's training people to go out and eliminate that leadership. It's sort of like Awlaki, that trainer in Yemen, was eliminated by drone strikes a few years ago. We're going to be at this forever. There might have been intelligence failures here, but you're just not going to follow hundreds of people around if you can't get to the center of the spider web and take out the leadership that inspires and trains them.

BLITZER: Phil, what do you want to hear from the president tonight?

MUDD: First, a couple things, Wolf. This ought to be somber. Let's bookend this. 2011, we had the Arab Spring and a great sense of hope. Let's look today, four years later. Libya, Syria, Yemen, complete disasters.

And look at what's happening. I agree that ISIS has been blunted in Iraq, not an Arab Spring state but a state where we had an American-led revolution more than a decade ago. ISIS is holding its ground.

I think we have to have a conversation about how long the Americans are going to be at this.

One final thing, Wolf. I heard the word "success" when Jim Acosta was talking about this. This is not something people want to hear. We will not, America, succeed against this adversary. This is for the Iraqis, the Yemenis, and so far they have not come to the plate.

BLITZER: He'll say this in his speech, according to the advance excerpts that they released. He'll say, "In Iraq and Syria, American leadership, including armed military power, is stopping ISIL's advance. Instead of getting dragged into another ground war in the Middle East, we are leading a broad coalition, including Arab nations, to degrade and ultimately destroy this terrorist group. Do you buy that, Phil?

MUDD: I don't. Look, you have the Iraqis already complaining about the extent of our engagement. This is a civil war. We are not ourselves defining our engagement in terms of leading a civil war in Iraq. We're in a support role. We are supporting. We are not the supported Army that's leading the fight against ISIS.

We need the Iraqi Army to step up. They've done so episodically. There should not be comments about why America isn't stepping up to the plate more if the folks on the ground can't carry the fight. We're not going to invade again.

BLITZER: Paul Cruickshank, we're also getting some new video that the suspected ringleader of that failed Belgian plot, Abdelhamid Abaaoud, news you broke yesterday here in THE SITUATION ROOM, how important is this guy, is this guy? How important is it that he be found and captured?

PAUL CRUICKSHANK, CNN TERRORISM ANALYST: Well, I think it really speaks to Phil's that it's key to capture these kinds of operatives, these linked people back to ISIS. So you can understand the people in the senior leadership of ISIS, who are now directing these plots and who are encouraging these young men to return to Europe to launch attacks.

So they'll be absolutely desperate to try and find him. He's obviously a dangerous operative, a very determined operative. But he may also have critical information about the scope of this plot, the scope of the plot in Belgium but also the scope of plots in Europe that ISIS may be putting into action now. Real concern by the European intelligence services that ISIS has pivoted towards launching attacks in Europe.

And I think, you know, the president is going to talk about how it's going to take time in Syria and Iraq against ISIS or how much time does Europe and the United States have until one of these major plots get through? I mean, in Belgium, that was a major imminent plot that they were about to launch there, according to the Belgians. It was ISIS-directed. How much time does the west have. Even under the best case of scenarios, we're talking now about a terrorist safe haven in Syria and Iraq.

So one, two, three, perhaps four years. It's not just ISIS. It's the Khorasan Group, as well, which is trying to plot attacks against western aviation, also against Europe. This is a huge problem. I mean, a lot of people want to see more urgency from the White House.

BLITZER: Tom Fuentes, on top of everything else, ISIS now releases a new video of so-called Jihadi John holding a knife, threatening to behead two Japanese hostages unless Japan hands over $200 million to them within 72 hours.

FUENTES: Right. And we don't know that Japan won't pay. Other European countries have been paying all along, helping ISIS get the funding to carry out this global attack that we are seeing now. And they've done it with oil that's on the black market. They've done it by taking over the Bank of Mosul and looting it, and now they've had this continuous hostage taking, where other countries are paying; and Japan may pay. We don't know that yet.

BLITZER: Well, let's see if they do or they don't, but it's very chilling video.

General Hertling, you were once in command of the U.S. Army in Europe. You tracked fighters leaving Syria elsewhere in the Middle East, planning to return to the United States. There are dozens of Americans who have trained in Syria. How do you stop these individuals? They obviously are U.S. citizens. They have American passports. They can come back. What do you do about that?

LT. GEN. MARK HERTLING (RET.), CNN MILITARY ANALYST: I'd echo what both Paul and Phil have just said, Wolf. You can't attack the cells. You can't attack individuals. You can track them, but then you fight for intelligence. That's one of the biggest things we learned in the military, is you have to fight for intelligence to defeat a network. You can't defeat cells, because there's just too many of these guys.

So I think some of the other ones that are popping up now -- the individual in Greece, the individual in Bulgaria -- those individuals may not be the ringleaders, as Paul earlier reported, but they're certainly critical to the network, and they're alive.

So we have to interrogate. We have to find more intelligence that will allow us to go after the network, not the individual people.

BLITZER: Good point.

All right, guys, stand by. We have much more coming up on the growing terror threat sweeping out of the Middle East and across Europe. Are Americans now at greater risk?

And we're going live to Capitol Hill, where lawmakers, they are now beginning to gather for the president's State of the Union address.

(COMMERCIAL BREAK)

BLITZER: We're following the breaking news in tonight's State of the Union Address. President Obama will focus on what he's calling middle-class economics but also ask lawmakers to pass a new resolution, a use of force resolution to fight ISIS in Iraq and Syria.

Let's bring in our chief congressional correspondent Dana Bash. She's up on Capitol Hill.

Dana, this request for this new legislation, how is it going to play with Congress?

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Pretty well.

This has bipartisan support. In fact, we've heard a lot of Republicans and Democrats calling on the president to ask Congress to authorize -- formally authorize the force. It's already going on against ISIS months ago. It didn't happen for political reasons. I know that's really shocking before the election in November. But now, the president is asking for in a bipartisan way. It is probably going to happen and we understand that the actual text of this is going to be sent from the White House to Congress in the next couple of weeks, Wolf.

BLITZER: Set the scene for us because the president addresses a different chamber tonight, a majority not only in the House of Representatives of Republicans but a majority in the Senate as well.

BASH: Very different kind of vibe. There's no question about it, because for the first six years of his presidency, he had Democrats in control of at least one chamber. Now, as you said, it's complete Republican control here on Capitol Hill. And, you know, what I'm hearing from Republicans in the hallways here is frustration that the president, from their perspective, doesn't get that. That he is still going to push forward on raising taxes, that he is even today, hours before he comes and faces Congress, is saying that he's going to veto some of the things that Republicans have already promised to do to roll back some regulations that he's put in and immigration executive order and things like that.

So, he's coming here with his party in the minority, but obviously he's got the economy doing better, which helps him, it gives him power, gives any president power, and he also has the sense of better poll numbers, which also gives any president power. And those are two things that he clearly is using and Republicans are saying, you know what, we won pretty handedly in November and we're not giving that up easily. So, you're going to see a lot of rhetoric on both sides and the big question is going to be whether, behind the scenes, Republicans feel such pressure to govern that they're going to actually find compromise in some of these issues that the president will talk about tonight.

BLITZER: Stand by, Dana.

I want to bring in our senior political analyst Ron Brownstein. He's the editorial director of "The National Journal", and our chief political analyst, Gloria Borger.

He does have better poll numbers in part because Americans think that the economy is improving.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Yes. They think the economy is improving. And, of course, he'll get the credit for that. There's less pessimism in the country. When there's less pessimism in the country, the president benefits. People go to the gas pump, they see that the prices are lower, they see wages are starting to tick up a little bit.

So, this, as Dana was saying, becomes a pivotal moment for this president, not because he's facing a Republican Congress, but he feels like he's got two years left, probably one year in which he can actually try and get things done. He can set the agenda, not only for his legacy to a great degree, this middle class economics is about his legacy, but it's also about the Democratic agenda heading into the 2016 election. As they say, they want to turn the page. The recession is not hanging over their head anymore. They want to turn the page, go on offense and do what they wanted to do years ago.

RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: Interesting added point on the economy, I put out some numbers today from the last poll Pew Research Center poll last week. And overall, clearly, people are more optimistic about the economy. But there is a separation, it's very clear, if you look at who is the most optimistic about the economy, white collar whites, college-educated white voters, benefiting from the improving housing market, benefiting from the stock market.

Non-collar -- blue collar whites and older whites who are the groups at the absolute center of the Republican gains in 2014 are much more pessimistic about where they are today. Big majorities of them still believe they are losing ground in the economy. And I think you have a situation developing over the next two years, where economic perception may reinforce the ideological drift that already exist between the groups that lean towards the Democratic coalition and those that are really the cornerstone of the moderate Republican coalition. So, it kind of all pushing toward more separation.

BLITZER: The president clearly believes that you take a little more money from the rich, from the banks, you give that money to the middle class, that's going to resonate.

BORGER: You know, that's very popular, obviously. You talk about --

BLITZER: Not with a lot of Republicans --

BORGER: Well, it's very popular with the American public. You talk about inheritance taxes, for example, you know, you talk about raising the capital gains taxes which affects the very wealthy.

People in this country aren't against wealth. They are for fairness. And I think this is the argument that the president is going to continue to make over and over again.

Now, the Republicans will say, this is not fairness, OK? That the wealthy paid most of the taxes in this country and why are you doing that to the wealthy.

So, I think it's a fight the president is itching to have right now.

BLITZER: Hold on for a moment. We have more to assess as we get ready to hear the president of the United States in his State of the Union Address. Much more coming up right after this.

(COMMERCIAL BREAK)

BLITZER: We're back with the breaking news.

Gloria and Ron are still here with us.

Let's go back to our senior White House correspondent Jim Acosta for more on that what the president will say.

You've got more information, right, Jim?

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: That's right, Wolf.

And, as you know, the White House has been briefing Democratic operatives for the last couple of weeks about this speech. According to one source the president is going to, essentially, acknowledge this is the first State of the Union speech he's been able to deliver without a major financial crisis hanging over the heads of Americans across the country. And so, in fact, the president is going to be taking some credit for this economic recovery that we're seeing right now.

But the president understands, Wolf, that wages are not moving fast enough. They're not moving fast enough. So, that is a key reason why the president is going to be talking about this theme of middle class economics tonight. This whole notion of trading, raising taxes on the wealthy in exchange for lowering taxes and providing credits to the middle class.

And when I asked a senior White House spokesman, Eric Schultz, about this earlier today, hey, this stuff is dead on arrival according to the Republicans up on Capitol Hill. He said, you know what, we'll have that debate. If Republicans want to argue in favor of tax breaks for the wealthy, instead of helping out the middle class, the White House welcomes that debate.

So, for all this talk of bipartisanship, there's still plenty of partisanship to go around, Wolf.

BLITZER: The president, Gloria, he can do a little victory lap, take some credit, more jobs were created last year than any time since 1999 when Bill Clinton was president. But there's a risk if you do too much of a victory.

BORGER: And, you know, President Obama is not somebody who likes to gloat and do victory laps, but clearly, what they want to say is we've turned the page. That we don't have a financial crisis sort of hanging over our heads and now, we can take advantage and focus on the systemic challenges that we have in this country, because we can take advantage of the fact we're not really suffering in a recession anymore.

I think what we're going to have to figure out is whether everyone can walk and chew gum at the same time. There's going to be division on the question of the tax increases and everybody knows that going on. That's fine. The question is whether the Republicans will believe it's in their own self interest to actually get something done with this president on trade, on infrastructure, on corporate tax reform, even though they will oppose him on the other tax issue.

BLITZER: Let me ask you a question I asked Dan Pfeiffer, the White House senior adviser. Compare it to six years ago, the economy is so much better right now. All of the indicators, all the numbers are so much better. And only recently he began getting a little credit for that. Why has it taken so long for the president to start getting some credit from the American public?

BROWNSTEIN: First of all, historically, there is a lag. I mean, this is not unique to this president. And the reality is that despite the overall improvement, the big except in that is median income is still lower than it was in 2000. It's almost unprecedented in American history to go 14, 15 years without the living standard of average families increasing.

And that is the big challenge I think that is out there. You hear more Republicans talking about it, Jeb Bush and Mitt Romney. I think the Democratic presidential nominee in 2016 we're talking about -- I think the president will be talking about it quite a bit tonight.

I mean, this kind of speech is kind of a reverse. We've gotten a lot of the policy details, the laundry list that we've heard from other -- remember, Bill Clinton, famous with the kind of laundry list sometimes State of the Union.

Now, I think they're going to try to encompass it in a broader theme and talking about the importance of raising middle class living standards as the key to overall economic --

BORGER: Right. And I think what they're going to do is sort of throw it out there and say, OK, this is what we've got. Let's see what you've got. OK, we want to -- we want to raise wages in this country. We know that's a huge problem.

Here is what we want to do to raise wages. Here's what we want to do for community colleges. Tell me, what do you have? Who do you got? And then, they're going to try to force Republicans to say this is our approach.

Some of the things that are suggested is Republican support. So, they're doing a kind of a mix there. But they want to kind of force the Republicans out of the corners here.

BROWNSTEIN: You even compare to the Clinton era, the Clinton and the Newt Gingrich congress, the assumption about what they might agree on is so much lower than it was 15 years ago. If you look at the things the Republicans passed in their initial burst, or the president is going to talk about tonight, neither one of them are fundamentally oriented with finding common ground with the other. It really is much more about framing the debate going forward and trying to win unified control and simply implement your own agenda in 2017.

BORGER: But if you have a public that believes we're starting to get more on the right track. If you have a public that is less pessimistic, I would argue it's in your own self-interest as a member of Congress, because don't forget, you have 2016 around the corner. It's in your own self-interest to get a few things done or the public will be much more possess mess pessimistic about you as you head into the election.

BLITZER: Fascinating night for all of us political news junkies. I know you guys are going to be with us. Don't go too far away.

Remember, you can always follow us on Twitter. Tweet me @wolfblitzer. You can tweet the show @CNNSitroom. Be sure to join us tomorrow right here in THE SITUATION ROOM. Watch us live or DVR the show you won't miss a moment.

Thanks very much for watching. I'm Wolf Blitzer in THE SITUATION ROOM. CNN special coverage of President Obama's State of the Union

Address with "ERIN BURNETT OUTFRONT" that starts right now.