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[17:00:08] WOLF BLITZER, CNN ANCHOR: Happening now, breaking news. Tweet of the deal. Donald Trump uses Twitter to announce what he says will be thousands more U.S. jobs. Then he introduces reporters to the Japanese businessman behind the deal. But are the jobs really new, or were they in the works already?
Air Force stun. The president-elect also shocks Boeing by calling for the cancelation of a deal for new jets to carry future presidents. Is he cutting waste or good-paying jobs?
Touting his legacy. President Obama visits the U.S. military Central Command and gives a speech defending his strategy on the -- in the war on terrorism, a strategy Donald Trump's pick for defense secretary has called a mess.
And un-checked. Kim Jong-un's hackers are accused of a cyber-attack on South Korea's military, and the worst may be to come. The former chairman of the House Intelligence Committee is worried about the threat North Korea's regime poses to the U.S.
I'm Wolf Blitzer. You're in THE SITUATION ROOM.
ANNOUNCER: This is CNN breaking news.
BLITZER: This hour's breaking news, Donald Trump touting a new deal he says will create 50,000 jobs here in the United States. In a rare appearance before cameras in Trump Tower, he praised a Japanese CEO for the deal.
Earlier on camera and also on Twitter, the president-elect took on Boeing, calling for the cancelation of a deal for new versions of Air Force One.
Also breaking, President Obama says we're breaking the back, his words, of ISIS. He just wrapped up a spirited and detailed defense of his anti-terrorism strategy. Despite the bloody chaos in the Middle East, the president proudly pointed to his decisions to bring home thousands of U.S. troops and rely on Special Forces and regional allies to fight terror.
We're also following alarming new developments on the Korean Peninsula. South Korea blames Kim Jong-un's regime for a cyber-attack on its military, and there are now new warnings about the North Korean threat to the United States. Congressman Jason Chaffetz, the chairman of the powerful Oversight and Government Reform Committee, he's standing by live to take our questions. And our correspondents and analysts and guests, they will have full coverage of the day's top stories.
Let's begin with the president-elect announcing new jobs and taking on what he calls coast -- cost overruns. CNN's Sunlen Serfaty is in North Carolina, where Donald Trump is holding a major rally tonight, part of his thank-you tour. His swipe at Boeing, Sunlen, was quite surprising earlier today.
SUNLEN SERFATY, CNN CORRESPONDENT: That's right. It was, Wolf. And we really saw the showman side of Donald Trump today on full display, not only in lashing out in public about the cost of building these new Air Force One planes, but also playing up big before cameras as he tells it that he was able to broker a deal with a Japanese tech firm to send more investment here in the U.S.
The message from the president-elect very clear. He wants to show that he's already working for American workers and American taxpayers and really tapping into that populist message, now as president-elect, that drove his campaign.
(BEGIN VIDEOTAPE)
SERFATY (voice-over): Donald Trump bringing his art of the deal approach to the White House. The president-elect touting a new investment in the U.S. from Japan's Softbank.
DONALD TRUMP (R), PRESIDENT-ELECT OF THE UNITED STATES: Ladies and gentlemen, this is Masa of Softbank from Japan, and he's just agreed to invest $50 billion in the United States and 50,000 jobs. And he's one of the great men of industry. So I just want to thank you very much.
UNIDENTIFIED MALE: Thank you. Thank you.
SERFATY: Just hours before that announcement, Trump pushed the airline manufacturer, Boeing, to give the country a better deal on the building of two new Air Force One planes, tweeting, quote, "Boeing is building a brand-new 747 Air Force One for future presidents. Costs are out of control. More than $4 billion. Cancel order."
TRUMP: Well, the plane is totally out of control. It's going to be over $4 billion. It's for Air Force One program. And I think it's ridiculous. I think Boeing is doing a little bit of a number. We want Boeing to make a lot of money, but not that much money.
SERFATY: Trump did not provide proof for his $4 billion claim. A Boeing official says they are not sure where the president-elect got the number and that the cost for the planes is not final.
This as Trump faces a brewing fight with some in his own party over his proposal for a 35 percent tariff on U.S. companies that move their businesses overseas.
TRUMP: I said we'd love to have your product. Thirty-five percent tax.
SERFATY: Congressional Republicans worrying it could spark a trade war.
UNIDENTIFIED MALE: But I do have concern with, you know, any time someone's talking about raising taxes.
SERFATY: House Speaker Paul Ryan signaling a broader rewrite of the tax code should be the focus.
[17:05:06] REP. PAUL RYAN (R-WI), SPEAKER OF THE HOUSE: We think the real solution here is comprehensive across-the-board tax reform, which is what we're going to be hitting the ground running on.
SERFATY: All this as Trump hits the road tonight for the second stop on his thank-you tour.
TRUMP: Mad Dog. He is great.
SERFATY: Holding a campaign-style rally in North Carolina near Fort Bragg to formally roll out on stage his pick for secretary of defense, General James Mattis.
BLITZER: They say he's the closest thing to General George Patton that we have, and it's about time.
SERFATY: Meantime, the revolving door at Trump Tower today continues.
TRUMP: We're going to talk about a lot of things to a lot of people. We have a lot of people coming up. Great group of people.
SERFATY: But the decision on secretary of state, the most high- profile job, still hangs in the balance. Trump expanding rather than narrowing his search.
GOV. MIKE PENCE (R-IN), VICE-PRESIDENT-ELECT: And he's taking his time. We have more names that may well be added to the list.
SERFATY: One of those new candidates, ExxonMobil CEO Rex Tillerson, interviewing with Trump today.
TRUMP: We've got some great people coming in today. You'll see them.
SERFATY: As Trump adds to his team, he's cutting one member of the transition, the son of retired General Michael Flynn, his pick for national security advisor.
PENCE: Mike Flynn Jr. is no longer associated with General Flynn's efforts or with the transition team, and we're focused eyes forward.
SERFATY: A source tells CNN Trump gave the direct order to remove the younger Flynn after he tweeted about a conspiracy theory involving a local Washington pizzeria that was the site of an armed attack over the weekend.
(END VIDEOTAPE) SERFATY: And after holding his rally here tonight in Fayetteville, Donald Trump has two more thank-you rallies scheduled this week. Thursday he'll be in Des Moines, Iowa. Friday he is traveling to Michigan, a state currently in the midst of a recount prompted by Green Party candidate Jill Stein -- Wolf.
BLITZER: All right. Sunlen Serfaty getting ready for the thank-you tour continuing in North Carolina tonight. Sunlen, thank you very much.
Let's get some insight from our political national security experts on all of this. And David Axelrod, let me start with you.
He made a rare appearance. He walked out before the pool of reporters in the lobby of Trump Tower to welcome this Japanese CEO and announce that he was going to be investing billions of dollars in the United States, creating 50,000 jobs. Wow! That's pretty impressive, isn't it?
DAVID AXELROD, CNN POLITICAL ANALYST: It is. I don't know the details or how many of these jobs were coming before this, but it is kind of -- he's -- it's almost like president as mayor, you know. He's -- one business at a time, one deal at a time. It's an interesting approach. I don't know if you can keep that up. But -- but it makes for a good story.
BLITZER: You think Democrats can learn something from his style? Because clearly what he's saying, he may be ahead of himself, but what he's saying will certainly resonate with the American public.
AXELROD: It will, and we saw this on the Carrier story, which was good politics. Whether it was good policy or not, it was -- or not, it was good politics. I think only time will tell what the aftermath of all of this will be.
DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: The other thing, Wolf, that, if you think about maybe three examples of what Donald Trump has been tweeting about or focusing on with regard to the economy or, you know, being tight with the purse strings. First of all, as you mentioned, Carrier, this Japanese deal today.
And what did he do this morning, both on Twitter and at the cameras? Talk about what he says is a $4 billion Boeing deal to do -- to make an Air Force One -- really it's to bring it up to date. But he says it's -- you know, it's too expensive. It's too much.
These are all really tangible things that his voters and now, you know, the American electorate, in whole, can look at and say, "You know what? I can wrap my head around this. I can wrap my mind around this. I understand. He's trying to save money. He doesn't want a big fancy plane. We'll see if that happens.
AXELROD: He's got one.
BASH: He's got his own. He -- he -- you know, he's doing deals with the Japanese. And he saved a thousand jobs in Indiana. I get that. BLITZER: You know, Mike Rogers, it was surprising to me that all of a sudden out of the blue, he's talking about canceling the deal -- a deal. Well, there's no deal yet, but eventually there will be a deal with Boeing to build new versions of Air Force One in 10, 20 years, or whatever, from now, long after he's president, even if he serves two terms.
Do you understand why, all of a sudden, he told Boeing no deal, cancel the deal, too much money?
MIKE ROGERS, CNN ANALYST: Well, he's clearly an unconventional candidate. He is now an unconventional president-elect. And I think he is doing these things to set himself up.
If you read his book and you look at the style of the way he does business, he likes to set the table for the negotiation. If he's going to be successful on all of his economic policies, he's going to need Congress. The pressure that he can build between now and election day only helps him go in because he's going to have a good majority of the public -- and I agree with Dana -- that you understand these things. I get it. He's pushing back on government waste, and he's saying, "I won't take the nicer plane, because I'm going to work on it." Even though he may not fly on it.
[17:10:16] And these 50,000 jobs, I don't care if it's a factor of a manufacturing plant, because there's always a multiple. It's really good politics, especially in the states that were traditionally Democrat-voting states and went for Donald Trump. He sent them a message that he's going to live up to his campaign promises. I think this is smart politics.
BLITZER: Hold on. Everybody stand by for a few moments. I want to bring in -- I want to talk about President Obama's final speech on national security, as well. We're going to talk about that.
But right now the chairman of the House Oversight And Government Reform Committee, the Utah Republican, Representative Jason Chaffetz is joining us.
Mr. Chairman, thanks very much for joining us.
REP. JASON CHAFFETZ (R), UTAH: Thank you.
BLITZER: Let me ask you. I know you've looked into this. Can the president-elect really take credit right now for this Japanese investment? This Japanese businessman, the CEO, goes over to Trump Tower. Trump brings him down into the lobby, says he's going to invest $50 billion in the United States -- excuse me -- billions of dollars in the United States and create 50,000 jobs. What do you think?
CHAFFETZ: I don't know. But between that and Carrier and Ford Motor Company, I mean, as long as this keeps happening every few days, it bodes well for the American worker. So I don't know who to give credit to. Just the reality is it's actually getting done. BLITZER: Is he getting ahead of himself, though? This Japanese company, Softbank, as it's called, it owns Sprint, who had an attempted merger with T-Mobile that was blocked by the Obama administration. There's already some discussion out there, if this Japanese businessman is simply seeking to curry some favor with the president-elect and hoping that maybe he would green-light this merger.
CHAFFETZ: I don't know. Wolf, I -- we'll have to see how this plays out. I'm sure everybody would love to have Donald Trump in the room to help close their deals. But you know, it's good for the economy. If there are American jobs that are going to be grown here that are going to stay here in the United States of America. But we'll have to keep watching it.
BLITZER: What's your reaction to his announcement today that he wants to kill the Boeing deal to build new versions of Air Force One? As you know, Boeing is the largest exporter in the United States. Hundreds of thousands of people have their jobs directly or indirectly related to Boeing. There's huge competition with European Airbus right now for sales, especially in countries like China. Is it smart for the president-elect to effectively criticize Boeing at a time like this?
CHAFFETZ: Well, he's asking the right questions, because you have a new Air Force One that's so over schedule. You look at the Marine One that President Obama put a kibosh on because of the cost overruns there. I'm glad. That seems to be a bipartisan concern. We've got to have the best, latest technology for the transportation of our -- of our commander in chief, but these people have got to come in on budget.
And Congress plays a role here. I know the Armed Services Committee in the House, Mac Thornberry is going to be looking at that, as well. But these are huge contracts, and they're way over budget. And that's just not right.
BLITZER: You chair this important Government Oversight Committee. A Trump spokesman, Jason Miller, told the "Washington Post" today that Trump sold all of his stocks back in June. Are you comfortable with that?
CHAFFETZ: Well, again, as a private citizen and what he's doing, I really think the clock starts for us when President Trump becomes President Trump. Until he's actually sworn in, he has time to make these transitions. Then, I think, once he's a federal employee, albeit the president of the United States, then obviously the Oversight Committee is going to be watching him with keen eyes.
Because the role, as the oversight chairman, is not to be the cheerleader for the president. It's to be there as a check and a balance on the president.
But what they're doing as a private citizen, as a candidate, as long as the financial disclosures were there, which by all accounts are there, at the FEC Website, then, you know, he gets to conduct his own business.
BLITZER: Do you believe the president-elect should release documents to prove that he no longer owns stock in these companies? Should he release it, even at this late stage, his income tax returns?
CHAFFETZ: Well, I said previously I thought that the best course of action, albeit not required by the law, would be open up his kimono and actually show his tax returns. I think that every candidate should do that. But that's not necessarily the law. And so his only obligation is to that of the law. And moving forward, come January 20, he plays by a different set of rules.
BLITZER: Because, as you know, there's been a lot of discussion of potential conflicts once he becomes president. It's extraordinary, because he does have such a huge business empire right now.
CHAFFETZ: Yes.
BLITZER: As far as the stocks are concerned, it's been estimated maybe he sold as much as $40 million in stocks. That's, from his perspective, if he's worth $10 billion, as he says he is, that's not a whole of lot of money. But you want to see details, I assume, as chairman of this Oversight Committee.
CHAFFETZ: Well, I think it would be different, take the Boeing situation, if he was shorting the stock and trying to profit off of that. But there's no evidence of that in any way, shape or form. He had in his portfolio some of the stock. He criticized, you know, Boeing and the cost overruns of this -- of this new airplane. But you know, it's a whole new world for Mr. Trump. Every word, the world markets and others, including the Oversight Committee, will be watching what he says.
But I think he still needs time during this transition to get settled in. He's got a new general counsel. He'll have an army of additional attorneys there. We look forward to making sure they're held accountable.
BLITZER: So bottom line, what type of oversight are you, the Republican majority in your committee -- I am sure the Democratic minority will want to work with you -- what type of oversight are you planning for Donald Trump's many businesses here in the United States and around the world?
CHAFFETZ: Well, again, he's got to comply with the law. And the law is actually different for a president than it is for other federal employees and members of Congress. They have more leniency. You can't ask -- I don't know exactly why that is, but that is the case. And so we'll have to compare the actions with the law and see where he's at.
But, you know, there's always somebody doing something stupid somewhere. So give it a little bit of time, and there will be plenty of things to go after, I'm sure.
BLITZER: I'm sure there will be. All right, Mr. Chairman, stand by. We'll take a quick break. Lots to discuss. We'll resume our conversation right after this.
(COMMERCIAL BREAK)
[17:21:07] BLITZER: We're back with Congressman Jason Chaffetz. He's the chairman of the Oversight and Government Reform Committee.
Mr. Chairman, your committee, you released a report concluding that the State Department has been prioritizing architectural design over -- over security at various embassies around the world. What are the problems you see.
CHAFFETZ: Well, when Colin Powell was doing it, we had standard embassy design. These things were coming in under budget, ahead of schedule. Beautiful buildings.
When Hillary Clinton took over, and the Obama administration, they prioritized and changed it to design excellence. The problem that I see is these buildings that were in the $35 million range are now coming in at $250 million. That happens in Mozambique, and in Zimbabwe. Look at what's going on in Port Moresby. And so in a post- Benghazi world, we've got to have safe and secure buildings, but after two years of investigation, we have places like London that is literally more than a billion dollars. And when component testing was done on the blast shield, you know, there were some real questions as to whether or not it could withstand a blast. And now we're concerned that the embassy in London won't open in February, as it was originally planned to do.
BLITZER: Eliot Engel, the Democratic Congressman, the ranking member of the House Foreign Affairs Committee, he says your -- your numbers lean on inaccurate information, making partisan claims rather than attempting to find real solutions to keep our brave men and women safe in an increasingly complex global environment. Your reaction to his accusation that what you're reporting now is partisan.
CHAFFETZ: Well, a hundred-plus pages of reports, footnoted every single step of the way, I think the report speaks for itself. Maybe he should have read the report before issuing a press release. He had no possible time, I am sure, to go through and actually do that. The reality is that, if we don't open the embassy in London on schedule in February, as they've assured us every step of the way, then the American taxpayers will pay $100,000 a day to keep the doors open, because we sold the other building, and if you can't move into the new embassy, you have to pay a lease payment back to the new owner. And that comes out to more than $100,000 a day. And it could go all the way -- at least from what we're hearing from Whistleblowers, till the end of 2017.
So a very costly mistake and a huge concern. But I am proud of the work that committee staff and that we have done literally over a two- year period to make sure we get this right.
BLITZER: Because Congressman Engel, among others, they say instead of investigating these embassies which are relatively small amounts of money, you should be investigating the reported $125 billion in administrative waste over at the Pentagon that was reported today in the "Washington Post."
What's your answer to him when he says investigate that waste. Don't waste your time on relatively modest sums of money?
CHAFFETZ: Well, modest sums of money in this case end up being billions of dollars. And shame on us if you think that a billion dollars here and there is just chump change and a modest amount of money. It comes up to a lot of waste, fraud and abuse.
The report that came out of the Pentagon that suggests there was $125 billion that was misspent or that certainly could have been reduced in dramatic ways, I mean, that money, we're trying to scrape to get to the fighting men and women out there, make sure they have the equipment. But they have this bureaucracy now, this overhead that I'm sure President Trump and certainly the Congress wants to get after. And very worthy of looking at in every single aspect.
BLITZER: So your committee will look at that, as well?
CHAFFETZ: Yes, absolutely. The Armed Services Committee will also be looking at it. It's something we're -- we just became aware of. And the fact that the Pentagon tried to bury this report, at least that's what I'm reading in the news accounts -- is very concerning.
BLITZER: That's real waste, $125 billion.
CHAFFETZ: Yes. Yes.
BLITZER: Mr. Chairman, thanks for joining us.
CHAFFETZ: Thank you, Wolf.
BLITZER: Later tonight, CNN's Van Jones talks with Michael Moore, Rick Santorum, Ana Navarro in a live town-hall event. Be sure to watch "THE MESSY TRUTH WITH VAN JONES," later tonight, 9 p.m. Eastern.
[17:25:07] Coming up here in THE SITUATION ROOM, President Obama strongly defends his record on fighting terrorism, insisting the U.S. and its allies are breaking the back of ISIS right now.
And later, alarming new details about a new cyber-attack blamed on North Korea. How much of a danger does Kim Jong-un pose to the United States?
(COMMERCIAL BREAK)
BLITZER: There is breaking news. President Obama defending his anti- terrorism strategy. Our White House correspondent, Michelle Kosinski is with the president in Tampa, Florida.
[18:30:00] Michelle, the president, without naming him directly, seemed to criticize Donald Trump at the end of his speech. Let me play a little bit of that for you.
(BEGIN VIDEO CLIP) BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The United States of America is not a country that imposes religious tests as a price for freedom. We're a country that was founded so that people could practice their faiths as they choose.
The United States of America is not a place where some citizens have to withstand greater scrutiny or carry a special I.D. card or prove that they're not an enemy from within. We're a country that has bled and struggled and sacrificed against that kind of discrimination and arbitrary rule here in our own country and around the world.
We're a nation that believes that freedom can never be taken for granted and that each of us has a responsibility to sustain it. The universal right to speak your mind and to protest against authority, to live in a society that's open and free; that can criticize a president without retribution.
(END VIDEO CLIP)
BLITZER: Pretty strong words, Michelle, from the president. Are you surprised he decided to go this route at the end of his final national security speech? These are clearly important values that he sees part of his own legacy.
MICHELLE KOSINSKI, CNN CORRESPONDENT: Yes. I don't think it's surprising at all. I mean, he -- I think he really felt the need to get something in there as a message to the next administration. It's something that we heard repeatedly from the president on the campaign trail. I mean, in some cases parts of this speech were almost word for word from how we've heard him criticize Donald Trump in the past.
I mean, when you think about it, this is really how this administration is continuing to communicate with the next administration. And the points that the president continues to hammer. He chose the Muslim issue, arguably, one of the most controversial parts and continues to be of Donald Trump's platform during the campaign.
But it's also the contrast that the president makes in his continued opposition to Gitmo, calling it a blot on our national honor; in his opposition to enhanced interrogation methods, or torture, saying during the speech today that adhering to the rule of law isn't a point of witness -- of weakness. In fact, he called it our nation's greatest strength.
So what he wants to do is set up a "Look at my record. Here's how I think it's worked. Yes, there is more work to do." But there's also a warning in this, Wolf, to the Trump administration, saying, "You have to be careful about how you handle these intricate complexities. Otherwise, you make the problems worse."
BLITZER: Michelle Kosinski, traveling with the president in Tampa, Florida. Thank you.
Let's get some insight from our political and national security experts. Phil Mudd, I'll start with you. What stood out to you in the president's approximately 45-minute speech?
PHIL MUDD, CNN COUNTERTERRORISM ANALYST: Wolf, quite simply tone and temperament. Step away from all the details and go back eight years.
We have a new president talking about change who says, "I'm going to shut down Guantanamo, and I'm going to pull out of places like Iraq." Reality is a brutal teacher. Guantanamo closure was opposed by Congress. It's still obviously not closed. And ISIS was the reality that taught the president you can't pull out that quickly.
We have a president-elect now who says, "I might institute water boarding, and I want to make a U-turn on Syria by potentially working with Russia." I think when he transitions from the campaign trail to the Oval Office and the situation room, he's going to face the same problems with the bureaucracy and with international reality that President Obama did.
The message from the president is simple. Say whatever you want on the trail. But when you face the realities of the office, tone and temperament are going to be different.
David Axelrod, you served as a top advisor to President Obama during his first term. What stood out in your mind?
AXELROD: Well, I thought the speech was interesting, because on the one hand he really was speaking to history. He was laying down his legacy as a president who came to office when 180,000 troops were in an active theater in Afghanistan and Iraq, when Osama bin Laden and al Qaeda were active and plotting. And he marked the progress we've made but also the challenges that lie ahead.