By AMY WALTER ( @amyewalter ), Elizabeth Hartfield (@LizHartfield) and Chris Good (@c_good)

• ABC NEWS EXCLUSIVE: PRESIDENT OBAMA SAYS POT USERS NOT 'TOP PRIORITY' IN DRUG WAR. President Obama and First Lady Michelle Obama sat down with ABC News anchor Barbara Walters in their first joint interview since the President's re-election. In the interview, which has become an annual holiday tradition, President Obama said that recreational users of marijuana in the states that have legalized the substance should not be a "top priority" of federal law enforcement officials prosecuting the war on drugs. "We've got bigger fish to fry," Obama said of pot users in Colorado and Washington during an exclusive interview with ABC News' Barbara Walters. "It would not make sense for us to see a top priority as going after recreational users in states that have determined that it's legal," he said, invoking the same approach taken toward users of medicinal marijuana in 18 states where it's legal.The full interview will air tonight on a special "20/20? from 10:00-11:00pm ET. http://abcn.ws/W4pWeq
• NOTED: THE OBAMAS REFLECT ON PARENTING IN THE WHITE HOUSE. The President and First Lady also spoke about their parenting strategy. Their eldest daughter Malia, now a freshman in high school, recently got her first cell phone. "You never know when I'm going to walk in your room and I'm going to definitely ask you, 'oh, are you, who are you talking to, and are you talking about school work?" Mrs. Obama told Barbara Walters. "And, and they're not very good at lying," President Obama interjected with a grin. Both said fostering independence and responsible behavior, grounded in mutual trust, is a hallmark of their parenting. http://abcn.ws/Wb3X1A
• SUSAN RICE WITHDRAWS HER NAME FROM CONSIDERATION FOR SECRETARY OF STATE. White House officials say they're angry about the unfair way Rice was treated on the Hill, ABC's Jake Tapper reported on Good Morning America, but that said, President Obama was heading in a different direction with his pick for the position anyway. With signals from Republicans that hers would be a bruising confirmation battle, and signals from the White House that the president thought John Kerry might be a better choice, overnight the U.N. Ambassador rolled out her withdrawal campaign. In an interview on NBC and in a Washington Post op-ed, Rice said a partisan battle was the last thing the country needs. Rice had become the designated Obama administration target for Republicans seeking answers and/or political advantage on the Sept. 11 th attack on the U.S. compound in Benghazi, Libya.
• GET YOUR PARACHUTE, WE'RE GOING OVER THE CLIFF. The President and John Boehner met last night, but it was less than an hour, and there is still no sign of progress, ABC's Jonathan Karl reported on GMA. Both sides emerged from that meeting describing it as "frank." Karl talked to a prominent House Democrat who told him "get your parachute ready, we are going over the cliff." With both sides of the Capitol going home for the weekend, Congress is like a desert right now. One fallback plan Republicans are talking about, is they would extend whatever tax cuts they can, that means the middle class tax cuts the president wants to extend, but do nothing else, which means a big battle coming over the debt ceiling coming in the early part of next year.
• THIS WEEK ON 'THIS WEEK': SEN. JOHN McCAIN. Following Susan Rice's surprise withdrawal from consideration for secretary of state, George Stephanopoulos speaks exclusively to Rice's top critic, Sen. John McCain, R-Ariz., only on "This Week." Plus, an expanded powerhouse roundtable tackles the latest challenges at home and abroad, from the fiscal cliff stalemate to the Rice withdrawal to hotspots in Syria and North Korea, with Rep. Steve Israel, D-N.Y.; Rep. Jason Chaffetz, R-Utah; Council on Foreign Relations President Richard Haass; Ret. General Wesley Clark; and ABC News' George Will, Donna Brazile, and Christiane Amanpour (h/t ABC's Imtiyaz Delawala.) Tune in Sunday: http://abcnews.go.com/thisweek

THE NOTE

With just 11 days left until Christmas, a number of politicians have already gotten a sneak peek at the presents awaiting them under the tree.

But, while they are wrapped in pretty bows today, these gifts may not look quite as shiny once the glow of the season is over.

Nikki Haley: Once consider a rising star for the GOP, the young and telegenic SC Governor's political future no longer looks all that bright. A computer hacking scandal of the state's tax files is the latest stumble in a shaky first term. Jim DeMint's resignation gives Haley a chance to try and regain that glow. Choose Rep. Tim Scott as the replacement and she wins approval not only of GOPers, but she also gets enshrined in history for putting the first southern African-American Republican in the Senate since reconstruction. Pick Jenny Sanford and she puts a well-respected Republican female - and an "outsider" into the Senate club. The risk in an unconventional pick like Sanford: Haley looks even weaker if her hand-picked successor loses a primary challenge in 2014.

Lindsey Graham: The SC senator is doing all he can to discourage a serious primary challenge in '14. But, will his role in the take down of Susan Rice be enough to appease his detractors? Remember, there are plenty of other pitfalls ahead for Graham - especially on immigration reform legislation that could re-ignite conservative anger.

Scott Brown: A John Kerry appointment to Sec of State gives the ex-GOP Senator a chance to get his seat back. Despite his 7 point loss to Elizabeth Warren, Brown remains well-liked in the Bay State. In fact, exit polls showed that Brown had a higher favorable rating and lower unfavorable rating than Warren (60/38 to 56/43) on Election Day.

That said, winning a senate race in Massachusetts as a Republican is still one of the most difficult things to do in politics. And Democrats are committed to not making the same mistake twice.

ABC's Jon Karl reports that Dem Gov Deval Patrick has already reached out to Vicki Kennedy, who has not said yes - but hasn't said no either.

EYE ON 2016? BOBBY JINDAL PENS OP-ED, CALLING FOR "THE END OF BIRTH CONTROL POLITICS." "The American College of Obstetricians and Gynecologists announced its support last month for selling oral contraceptives over the counter without a prescription in the United States," Jindal writes in an op-ed in the Wall Street Journal. "I agree with this opinion, which if embraced by the federal government would take contraception out of the political arena." http://bit.ly/UFJYqX

NOTE IT!

ABC'S JONATHAN KARL: The President has not made a choice on his next nominee for Secretary of State yet, but Governor Deval Patrick is already making plans to fill presumptive SecState nominee John Kerry's Senate seat. Knowledgeable sources tell me Governor Patrick has already had a discussion with one potential replacement for Senator Kerry: Vicki Kennedy. The sources say the governor talked to Kennedy, the widow of Senator Ted Kennedy, about the possibility of replacing Kerry in the Senate and that she did not rule it out. But don't count on seeing another Senator Kennedy from Massachusetts any time soon: a source close to Vicki Kennedy says she would be unlikely to accept the appointment. But again, she has not ruled it out. If Kerry is nominated and confirmed as Secretary of State, Governor Patrick would appoint somebody to replace Kerry and, under Massachusetts law, a special election would be held no later than 160 days (and no earlier than 145 days) after Kerry leaves the Senate.

ABC'S RICK KLEIN: After the soul-searching will come the policy-finding. Gov. Bobby Jindal's play is that the Republican Party is ready for both, and fast. His latest proposal, a make-you-think op-ed where he argues in favor of over-the-counter birth control, reads like a challenge to the social-conservative base, until you realize it actually isn't. He's charting not a centrist course but a mature course for Republicans, to shift to fit the nation's changes rather than wish them away.

THE BUZZ:

SUSAN RICE: WHY I WITHDREW. "On Thursday I asked that President Obama no longer consider me for the job of secretary of state. I made this decision because it is the right step for this country I love. I have never shied away from a fight for a cause I believe in. But, as it became clear that my potential nomination would spark an enduring partisan battle, I concluded that it would be wrong to allow this debate to continue distracting from urgent national priorities - creating jobs, growing our economy, addressing our deficit, reforming our immigration system and protecting our national security. These are the issues that deserve our focus, not a controversy about me." http://wapo.st/QXDTb2

NOTED: WHY RICE MADE A CONTROVERSIAL CANDIDATE. Rice, who withdrew her name Thursday, has faced months of criticism over how she characterized the Sept. 11 attack on a U.S. consulate in Benghazi, Libya, reports ABC's Dana Hughes and Sarah Parnass. She also has come under fire for her approach to dealing with African strongmen. Over the last few weeks, criticism of Rice had grown beyond her response to Benghazi to include a closer scrutiny of her work in Africa, where she had influence over U.S. policy during the Clinton administration. Critics of her Africa dealings were not partisan - but included human rights workers, journalists and some Africans themselves. http://abcn.ws/Wb3HQc

GEORGE'S BOTTOM LINE: SUPREME COURT SAYS 'I DO' TO GAY MARRIAGE CASE. The Supreme Court's decision last week to weigh in on the gay marriage debate presents the justices with several options. And ABC's George Stephanopoulos got a lot of questions about it this week, which he addressed in his ABC/Yahoo! Power Players series "George's Bottom Line." Daniel Van Winkle asked via Twitter: "If the court rules in favor of gay marriage, what does that mean for states that have amended constitutions banning it?" And Larry Lozan wrote us via Facebook to ask: "Assuming DOMA [Defense of Marriage Act] is struck down can a married couple legally wed in one state be entitled to all federal benefits and rights afforded to any couple regardless of the state they legally reside in?" Checkout George's answers: http://yhoo.it/TY7dPr

TOP LINE: SENS. STEPHEN COLBERT AND ASHLEY JUDD? The speculation for the 2014 elections has already begun, and some of the Senate names being discussed you would expect to see on the silver screen rather than a ballot. Can you imagine a Sen. Ashley Judd? How about Sen. Stephen Colbert? That's the question tackled by ABC's Amy Walter and Rick Klein in this week's episode of the ABC/Yahoo! Power Players series "Top Line." http://yhoo.it/W4EIln

OBAMACARE EXCHANGE DEADLINE LOOMS. ABC's Shush Walshe reports, all of the Affordable Care Act, also known as "Obamacare," doesn't go into effect until 2014, but states are required to set up their own health care exchanges or leave it to the federal government to step in by next year. The deadline for the governors' decisions is Friday. The health insurance exchanges are one of the key stipulations of the new health care law. They will offer consumers an Internet-based marketplace for purchasing private health insurance plans. But the president's signature health care plan has become so fraught with politics that whether governors agreed to set up the exchanges has fallen mostly along party lines. http://abcn.ws/12bYVWY

SENDING SANDY MONEY TO…SPACE? ABC's Jonathan Karl reports, The Obama administration's $60-billion emergency aid package for victims of superstorm Sandy is now caught in the crossfire over the "fiscal cliff," with some critics questioning why millions of dollars are directed to areas far from the epicenter of the storm. The request, which still needs the approval of Congress, includes billions in urgently needed aide. But it also features some surprising items: $23 million for tree plantings to "help reduce flood effects, protect water sources, decrease soil erosion and improve wildlife habitat" in forested areas touched by Sandy; $2 million to repair roof damage at Smithsonian buildings in Washington that pre-dates the storm; $4 million to repair sand berms and dunes at the Kennedy Space Center in Florida; and $41 million for clean-up and repairs at eight military bases along the storm's path, including Guantanamo Bay, Cuba. http://abcn.ws/VDkYiJ

KERRY NOMINATION COULD CREATE MUSICAL CHAIRS IN THE SENATE. News that Amb. Susan Rice withdrew her name from consideration for Secretary of State may have brightened the days of both senators from Massachusetts. ABC's Elizabeth Hartfield reports, prior to Rice's withdrawal, she was considered one of the top two contenders for the job- the other is Sen. John Kerry, and with Rice out of the running, Kerry is "all but certain" to get the nomination, according to ABC's Jake Tapper. That means a vacant seat and a special election, which could benefit out-going Sen. Scott Brown, who lost his bid for reelection to Elizabeth Warren in November. Brown is widely expected to seek out his old job and he would be viewed as a strong contender, particularly in a special election to fill Kerry's vacancy. http://abcn.ws/TXlueg

AS STATE BUDGETS REBOUND, FEDERAL CUTS COULD POSE DANGER. The New York Times' Michael Cooper reports, "after years of budget cuts and sluggish recovery, states expect to see their revenues climb back to prerecession levels this year for the first time since the financial crisis hit. But even as some states hope to restore some of the deep spending cuts they have made, they face a new threat. Washington's efforts to tame the federal deficit, state officials fear, could end up further whittling away the federal aid that states depend upon and weakening the economy as it slowly mends." http://nyti.ms/UqdGPs

THE CONGRESSIONAL THREATS THAT DIDN'T STEAL CHRISTMAS. With 18 days left to go until we reach the so-called fiscal cliff, House Speaker John Boehner told Republican members of Congress Wednesday not to make plans for the holidays. But conflating Boehner with the Grinch might be premature. The prospect of canceling Christmas has actually become commonplace in Washington over the past several years. In fact, Obama and/or leaders in Congress have uttered these threats during the month of December for the past three years in a row. And all three years, deals have been struck before Christmas. http://abcn.ws/Xi1fX6

WHAT HAPPENS IF THE BUSH TAX CUTS EXPIRE? ABC's Arlette Saenz reports, determining whether the nation heads over the "fiscal cliff" in the New Year could come down to an agreement on how to deal with the Bush era tax cuts, which are set to expire at the end of the month. But what happens if Democrats and Republicans can't reach an agreement by the end of the year and the Bush-era tax cuts expire for all Americans? A report by the Tax Policy Center says taxes would rise by over $500 billion in 2013 if the nation heads over the "fiscal cliff." This averages out to a $3,500 increase for the average American household due to the expiration of the Bush tax cuts and the payroll tax holiday. http://abcn.ws/VDVNwA

CLIFF CRASH MAY CLEAR WAY FOR A DEAL IN JANUARY. The AP's Charles Babington reports, "to get to 'yes' on a 'fiscal cliff' accord, Congress and the White House first might have to get to 'no.' Such a breach would immediately change the political dynamics, making it easier for many lawmakers - especially Republicans - to agree to a second-chance compromise in the new year." http://apne.ws/Z51WJV

ANALYSIS: 2012 A UNIQUE YEAR FOR THE HOUSE. According to a new Cook Political Report analysis, 2012 marks only the second time in the last 70 years that one party has won a minority of the total two-party vote for House but a majority of seats. Thanks to an unprecedented concentration of Democratic votes in urban areas and unprecedented GOP control of redistricting in 2010, Republicans won a 4.29 percent greater share of seats than votes - the largest GOP over-performance since the House Clerk's office began providing complete data in 1942. The data paint a troubling portrait for House Democrats, although they will led ably by DCCC Chair Rep. Steve Israel for another cycle. Thanks to their own urban concentration of votes and GOP-drawn maps in large states such as Florida, Michigan, North Carolina, Ohio, Pennsylvania, Virginia, and Texas, Democrats might need to win nearly 55 percent of all House votes cast in order to win a majority at any point in the coming decade. In 13 of the last 15 cycles, neither party has hit 55 percent of the vote. http://bit.ly/Ueh5Sb (subscribers only)

WHO'S TWEETING?

@HotlineReid: Stephen Colbert's super PAC giving $250k to charities, another ~$525k to Center for Responsive Politics & Campaign Legal Center ?#HotlineSort

@mattklewis: What the GOP can learn from A.A. ?http://bit.ly/SnDq3G

@MarkLandler: The hardest thing for Susan Rice: telling her children she was withdrawing her name for SecState: ?http://bit.ly/UKJRIi

@AlexPappasDC: DeMint on prospect of Jenny Sanford replacing him: 'She's great' ?http://bit.ly/W3Dfvs

@BenSherwoodABC: "Robin, we love you" - First Lady Michelle Obama on ?@gma this morning talking about ?@RobinRoberts. ?#unanimous