'This Week' Transcript: 2011 Year in Review

WASHINGTON, Dec. 25, 2011— -- AMANPOUR: THIS WEEK, a year to remember, as gridlock consumes Washington.

REP. JOHN A. BOEHNER, R-OHIO, HOUSE SPEAKER: Put something on the table.

SEN. HARRY REID, D-NEV.: The Republicans should stop playing chicken.

PRESIDENT BARACK OBAMA: This is not class warfare. It's math.

AMANPOUR: A roller-coaster Republican race heads into the final stretch.

FORMER REP. NEWT GINGRICH, R-GA., PRESIDENTIAL CANDIDATE: I'm going to be the nominee.

FORMER GOV. MITT ROMNEY, R-MASS., PRESIDENTIAL CANDIDATE: Ten thousand dollar bet?

HERMAN CAIN, PRESIDENTIAL CANDIDATE: 9-9-9.

GOV. RICK PERRY, R-TEXAS, PRESIDENTIAL CANDIDATE: Oops.

REP. MICHELE BACHMANN, R-MINN., PRESIDENTIAL CANDIDATE: President Obama is a one-term president.

AMANPOUR: While the country waited anxiously for economic recovery.

SEN. MITCH MCCONNELL, R-KY.: The biggest the American people have is jobs.

REP. NANCY PELOSI, D-CALIF.: Jobs, jobs, jobs, jobs, jobs.

AMANPOUR: Anger occupies American streets.

CROWD: We are sold out.

AMANPOUR: People-powered revolution roils across the Arab world.

MOAMMAR GADHAFI, FORMER LEADER, LIBYAN ARAB REPUBLIC: They love me, all my people with me. They love me all.

AMANPOUR: And public enemy number one finally meets his end.

OBAMA: The United States has conducted an operation that killed Osama bin Laden.

AMANPOUR: While American troops begin to head home.

UNIDENTIFIED MALE: Welcome back. I'm glad to see you.

AMANPOUR: We reflect on the remarkable year that was and the election year to come in a special edition of THIS WEEK.

ANNOUNCER: From the Newseum in Washington, THIS WEEK WITH CHRISTIANE AMANPOUR STARTS NOW.

AMANPOUR: Good morning. Merry Christmas and a very happy holidays to you all. It's hard to believe, but 2012 is nearly upon us. And in just over a week, Iowa becomes ground zero in the race for the White House. And rarely has a Republican presidential nomination been so up for grabs. But the campaign battle is just one of the dramatic political stories that shaped this unpredictable year. And our man, Jon Karl, counts down the top 11 of 2011.

(BEGIN VIDEOTAPE)

JONATHAN KARL, ABC SR. POLITICAL CORRESPONDENT: It was a year of gridlock, protests, hopeful comebacks, agonizing defeats and racy tweets. So we begin the list with number 11 of 2011, the Tea Party invasion of Congress.

It was a freshman class of outsiders. Nearly half of them had never held elected office. There was pizza shop owner Bobby Schilling, dentist Paul Gosar, Army Colonel Allen West, nurse Renee Ellmers, Eagles lineman Jon Runyan. John Boehner couldn't have been speaker of the House without them.

(on camera): There's the Tea Party's got Speaker Boehner painted into a box, things -- he has -- he has no control over his caucus. The freshman class is running roughshod over him.

(CROSSTALK)

UNIDENTIFIED FEMALE: No, no, that is not happening.

KARL: Trust me: Speaker Boehner couldn't do anything without them.

Number 10. Occupy. It started as a few tents on Wall Street but grew into a national, even global movement.

UNIDENTIFIED MALE: This is what democracy looks like.

KARL: Their agenda was murky. But by year's end, they seemed to eclipse the Tea Party movement, the 99 percent against the richest 1 percent. Republicans denounced it all as class warfare.

CAIN: Don't blame Wall Street. Don't blame the big banks. If you don't have a job and you are not rich, blame yourself.

UNIDENTIFIED MALE: You don't think the...

KARL: Number nine, the rise and fall of Herman Cain, of course.

CAIN: You see all these cameramen following me around?

KARL: He started out as the pizza guy with a big smile, giving a thumbs up to our favorite pizza on Capitol Hill.

CAIN: The crust has got just the right amount of chewiness.

KARL: He had a catchy economic plan...

CAIN: 9-9-9. 9-9-9. 9-9-9.

KARL: A smoking campaign manager and was unlike any candidate we'd ever seen.

CAIN: Aw, shucky-ducky, I feel pretty good today.

CAIN: -- Ubecki -- becki -- becki -- becki -- stan -- stan.

CAIN: No, that's an apple.

FORMER GOV. MITT ROMNEY, R-MASS., PRESIDENTIAL CANDIDATE: OK.

CAIN: We are replacing a bunch of oranges.

ROMNEY: OK. So then Governor Perry was right.

CAIN: No, he wasn't. He was mixing apples and oranges.

KARL: But after multiple allegations of sexual harassment and infidelity...

UNIDENTIFIED FEMALE: And he put his hand on my leg, under my skirt.

CAIN: Excuse me. Excuse me.

KARL: ... Cain's campaign crashed and burned.

CAIN: I am suspending my presidential campaign.

KARL: Number eight: the scandals.

UNIDENTIFIED MALE: (Inaudible) criminal sexual acts.

KARL: There was a ripped Republican congressman, Chris Lee, married and hooking up with women on Craigslist. Arnold Schwarzenegger, admitting he fathered a child 10 years ago with his family's long-time housekeeper. But no scandal captured our attention quite like New York Democrat Anthony Weiner's tweet.

FORMER REP. ANTHONY WEINER, D-N.Y.: I did not send that tweet. It -- my system was hacked. I was pranked. It was a fairly common one. People make fun of my name all the time.

UNIDENTIFIED MALE: Tell me definitively, is that a photograph of you?

WEINER: We're trying to find out the -- where the -- where that photograph came from and whether it was manipulated.

KARL: Oh, yeah, that was him.

WEINER: I'm deeply sorry for the pain this has caused my wife, Huma, and our family.

KARL: Number seven, congressional gridlock. In April, we came to the brink of a government shutdown.

BOEHNER: We're not going to allow the Senate nor the White House to put us in a box.

REID: We have bent over backwards to try to be fair and reasonable.

KARL: The agreement came within minutes of lights going out on the federal government. But the higher stakes came in August with the debt ceiling showdown. The country came within hours of its first- ever default.

BOEHNER: I stuck my neck out a mile to try to get an agreement with the president. It is time for the administration and time for our colleagues across the aisle -- put something on the table. Tell us where you are.

KARL: The final deal was hated by everybody, and was followed by another first -- a credit downgrade of the United States of America.

Number six. The end of the Iraq war. For President Obama, it was a promise kept. He had once called it a "dumb" war, but in the end, he acknowledged the mission started by George W. Bush had actually accomplished something.

OBAMA: We're leaving behind a sovereign, stable and self-reliant Iraq, with a representative government that was elected by its people.

KARL: Number five. The long overdue capture and killing of enemy number one.

OBAMA: The United States has conducted an operation that killed Osama bin Laden.

KARL: The heroics of the Navy SEALs who swept into his compound deep inside Pakistan instantly became the stuff of legend, and also a way for President Obama to push back against Republicans who call him soft on terrorism.

OBAMA: Ask Osama bin Laden and the 22 out of 30 top Al Qaida leaders who've been taken off the field whether I engage in appeasement.

KARL: Number four. They could have been contenders. Trump, Palin, Daniels, Barbour, Ryan -- they all flirted with running. But it was New Jersey Governor Chris Christie who Republicans practically begged to run. Who could forget this moment at the Reagan Library?

UNIDENTIFIED FEMALE: We need you. Your country needs you to run for president.

(APPLAUSE)

GOV. CHRIS CHRISTIE, R-N.J.: I thank you for what you're saying, and I take it in and I'm listening to every word of it and feeling it.

KARL: Poor Mitt Romney must have been thinking, "What about me?" But Christie opted out.

CHRISTIE: New Jersey, whether you like it or not, you're stuck with me.

KARL: Number three.

MARK KELLY, HUSBAND OF GABRIELLE GIFFORDS: She's now starting to open her eyes spontaneously.

KARL: The miraculous return of Gabby Giffords. She not only survived a gunshot wound to the head, but shocked the nation with a surprise visit to the House floor to cast an historic vote to raise the debt ceiling.

Months later, she and her husband talked about their ordeal with Diane Sawyer.

DIANE SAWYER, ANCHOR, "WORLD NEWS WITH DIANE SAWYER": Is there a word for Mark?

REP. GABRIELLE GIFFORDS, D-ARIZ: Brave.

KELLY: That's what I think of when I think of you, too.

KARL: Number two. Jobs, or lack thereof. That could be the determining factor if Obama keeps his job. Job fairs around the country were inundated. In L.A., over 10,000 showed up for a single job fair, and thousands more lined up in the summer heat in Atlanta, even camping out overnight in their best business attire.

UNIDENTIFIED MALE: You got a child (ph), you got kids, got bills. You got to stay somewhere. You don't want to be homeless.

KARL: The year started out with an unemployment rate of 9.4 percent. It improved ever so slightly, but by year's end, it was still too high, and over 14 million Americans were still searching for work.

Number one. The boom and bust Republican primary. In August, Michele Bachmann looked like a frontrunner.

BACHMANN: Thank you, everyone. We did this together.

KARL: She won the Iowa straw poll and them promptly flamed out. Next up, Rick Perry shot to the top, but not for long.

PERRY: The -- Commerce, and let's see, I can't. Oops.

KARL: Herman Cain had his turn, but he, too, was at a loss for words.

CAIN: OK, Libya. No, that's a different one.

KARL: Throughout it all, Mitt Romney stayed steady, about 25 percent in virtually every poll as the others rose and fell. One Romney aide called it Whac-A-Mole. Bang, bang, bang -- every time one candidate went down, another popped up. The last one standing: Newt Gingrich, and maybe even Ron Paul.

GINGRICH: I'm going to be the nominee.

KARL: Who would have thought? Gingrich was dead and buried over the summer. The Greek cruise, the $500,000 line of credit at Tiffany's, the mass resignation of his campaign staff. But Newt would rise again. Just ask Mitt Romney.

DAVID LETTERMAN, TALK SHOW HOST: Top 10 things Mitt now would like to get off his chest.

ROMNEY: Newt Gingrich? Really?

LETTERMAN: Yes, yes. That's right.

KARL: With this year in politics 2011, I'm Jonathan Karl -- Christiane?

AMANPOUR: As ever, thank you, Jon Karl.

And in a little more than a week, the deciders finally start deciding in the Iowa caucuses. So let's bring in our roundtable, George Will, Cokie Roberts, former Republican National Committee Chairman Ed Gillespie and ABC News senior political correspondent Jon Karl.

Let me start with you, George. Republicans often rally around a top candidate early on, but this time it seemed like at least every month there's a new top candidate. What's been going on?

WILL: What's been going on is an astonishingly broad-based and persistent resistance to Mitt Romney. Now at the end of the day, they may settle on Mitt Romney, but they're going to shop around for a while yet.

AMANPOUR: Let me ask you, Ed, that broad-based resistance has brought us now to Newt Gingrich being at the top of the pack. Is that something that gives you confidence that, should he be the nominee, your party will be able to regain the White House?

GILLESPIE: Oh, I think whoever emerges as the Republican nominee is going to be the odds-on favorite to win the White House in 2012.

When you look at President Obama's numbers, his reelect, his approval rating, the right direction-wrong track, whomever emerges as our nominee from a very tough competitive primary process, I think, is likely to be the next president.

(CROSSTALK)

KARL: But you know, Ed, now that there are Republicans up there nervous that if Gingrich wins, they're going to lose everything. I mean, I talked to some good friends of yours that tell me that, look, if Newt Gingrich is our nominee, we are in serious danger of losing the House.

GILLESPIE: Well, you know, Jon, I think we're going to have a very lengthy nominating process as I've been predicting for some time. And the fact is if Gingrich demonstrates the discipline necessary to win in that lengthy, contentious process, I suspect that would settle the nerves of a lot of those folks.

ROBERTS: Well, but the point you're making, that all things being equal, a Republican should win.

GILLESPIE: Yes.

ROBERTS: And the -- what's happening is all things are not equal because of the field of candidates. And that has really turned this thing into a real election, and it does have Republicans extremely nervous. I just keep thinking they're bound to settle on Romney at some point.

AMANPOUR: And nervous because -- spell it out, why nervous if Gingrich is the nominee?

ROBERTS: Well, because people, particularly on Capitol Hill, know him quite well and he is someone who just throws bombs and we've all seen him do that. And they're worried that some bomb is going to come, and it' s going to make it totally impossible for the majority of people to say I feel comfortable with him, with his hand on the button.

WILL: Newt Gingrich has made a central part of his campaign a frontal assault on the rule of law in the United States, an attack on the courts. He, in doing so, he has aligned himself with two saints of the Democratic Party, Andrew Jackson, in his defiance of John Marshall; and Franklin Roosevelt in packing the courts.

AMANPOUR: So not the conservative that he says he is and that primary voters want. Isn't this all...

(CROSSTALK)

ROBERTS: Not sure primary voters are spending a lot of time thinking about Andrew Jackson.

AMANPOUR: No, but about conservative credentials.

ROBERTS: Yes, they do care about conservative credentials, and obviously those are being attacked. But they just can't get themselves around to Mitt Romney. I mean, he just doesn't get over 23 percent. I mean, 77 percent keep saying no.

AMANPOUR: And you mentioned in your report that the Tea Party, that resurgence, it -- or surge of the Tea Party over the last year and a half, is this part of the problem, this sort of battle between the establishment Republican Party and the insurgent Tea Party?

KARL: Well, George will tell us there is no Republican establishment. But I will tell you this...

ROBERTS: Call them office holders.

KARL: ... that the -- that the Tea Party, you know, takeover of Congress has utterly transformed the Republican Party, and it's fascinating. This is a movement that helped fueled the election win in 2010 for Republicans. It was basically a reaction against Obama and Pelosi.

But the effect it has had is to transform the Republican Party and tie -- if you want to call them the establishment or not, to tie the leadership of this party in Congress in knots.

AMANPOUR: So, Ed, has their power peaked? Do you think they're on the wane? Where do you see this insurgent force that we've seen play out?

GILLESPIE: Well, I think they're still very strong, and I'm happy about it. You know, the notion in Washington, D.C., among some of the elite that the Tea Party are a problem for the Republican Party has been pretty laughable. The fact is that -- and, look, I'm someone who's been in the Republican Party trenches for years, and my mentality is...

(CROSSTALK)

GILLESPIE: -- but I've also -- my view of the Tea Party folks is where you been? We're thrilled to have you here. This is the fight we've been fighting. Let's go.

(CROSSTALK)

AMANPOUR: You also see some backlash in various stage elections and other such things.

ROBERTS: But you can't see a real backlash because of the way congressional lines are drawn, the district lines are drawn. If they were running against Democrats, they would have a problem, perhaps. But they're not. They're running, you know, in very, very safe districts. And so the only problem they would ever have is if a Republican challenged them from the Right, and that's not going to happen.

GILLESPIE: That's true. Democrats, too, (inaudible)...

ROBERTS: Oh, I agree completely.

GILLESPIE: ... their biggest fear is being challenged from the left.

ROBERTS: Absolutely.

AMANPOUR: So let's talk about that. President Obama obviously seeing quite a lot of his core supporters disappointed with him. There is this bad economy. What happens? How does he turn that around, do you think, in the 12 months or so -- not quite -- until the next election?

ROBERTS: He scares them to death about the other guy, and that's what he's in the process of doing right now.

AMANPOUR: Is that a winning strategy?

ROBERTS: Well, it can be. I mean, look, the way people vote for president is they sit there and say, who do I trust more to do what I think is right in the next four years, whatever issue comes up? And do I at least trust this guy more than the other guy? And if he says you can't trust the other guy enough, the people believe it, that could help.

AMANPOUR: And, George, it's not just presidential election, obviously. A lot of Congress people are also up for election. Is there any chance that anything will get done any time this coming year? Or are we going to see what we've seen over the last 12 or so months more, which is gridlock?

WILL: Sure, because the country is divided and this representative institution represents the country's division of its mind (ph). Let's remember one thing: we always talk about people running for office.

Probably the most important man in 2012 is Justice Anthony Kennedy, the traditional swing vote, because sometime, probably by the end of June, the Supreme Court is going to rule on several aspects of the constitutionality of the president's signature achievement, ObamaCare. No matter how they rule, it will bring it back to the forefront of the argument, and that cannot help the president.

ROBERTS: Well, except that what's beginning to happen is some aspects of it that are quite popular, when you look at the polling on specifics in the bill, are taking effect. And if enough of them start to take effect and people start to like it, that could change the dynamic.

(CROSSTALK)

KARL: I mean, look, we -- this is a health care bill that was passed without a single Republican vote. I mean, this is...

ROBERTS: Even though it's very similar to one...

(CROSSTALK)

KARL: ... purely partisan vote (inaudible). And we're going to have a Supreme Court decision on this, and what's the betting it's going to be a 5-4 decision?

WILL: Pretty good.

AMANPOUR: So apart from that, what are some of the looming battles that you see ahead?

KARL: Well, we've got to -- they're -- all the battles are all stacked in the lame duck session. So whoever wins control of the presidency, whichever party gains control of the -- of the Congress is going to have to wait until they're sworn in, and watch this lame duck Congress and potentially lame duck president deal with things, like the expiration of the Bush tax cuts, the looming defense cuts under the super committee's agreement; and, of course, the fact that the debt ceiling -- remember, that has to be raised again by the end of the year.

AMANPOUR: Yes. So let's go around the table, do a little bit of end-of-year and future prognostication here.

What was, George, for you, the biggest political disappointment of this year?

WILL: About 11 o'clock at night on Saturday, May 21st, I got a call from my friend, the governor of Indiana, saying that the next morning he was going to announce he -- Mitch Daniels was not going to run for president. The man best suited by experience, temperament and philosophy opted out.

AMANPOUR: Cokie?

ROBERTS: Well, for me, political disappointment is not, you know, partisan. It's -- as a reporter, if somebody fun doesn't run, and I have no disappointments along those lines. This has been great.

AMANPOUR: So what was the biggest surprise for you?

ROBERTS: Well, the biggest surprise has been the Republican field's up-and-down nature as we saw in Jon's piece.

AMANPOUR: Because it's not usually that way.

ROBERTS: No, it's not usually that way at all, and the -- and the fact that they still haven't settled is really quite interesting.

AMANPOUR: So what is there for you, Ed Gillespie, taking what Cokie said about the Republican Party, the biggest sort of failure of the year, would you say?

GILLESPIE: Well, I'm not sure about failure. But I would agree with George in terms of disappointment that Mitch didn't run. I'd add to that John Thune and Haley Barbour as well. I think that had those three been in the field, it would be a, you know, more fulsome field right now.

And so I think that there's -- there is a sense of disappointment amongst many Republicans, that those three in particular opted out rather than in.

AMANPOUR: So you said those who've opted out, do you think Mitt Romney, the sort of target of this -- Anyone but Mitt! -- is actually going to be the nominee?

GILLESPIE: Well, I don't know. It's been very fluid. And the fact is, that's the question right now, is that a, you know, is it a ceiling that he is facing? Or is it, at the end of the day, people are going to gravitate toward him?

You know, we saw this a little bit with John McCain in the last cycle, you know, he was down and then -- and, you know, people resisted going to him. And at the end of the day, they did. I don't know that that's going to be the case this time...

ROBERTS: But that didn't turn out so well for the Republicans in the end.

AMANPOUR: Do you think...

GILLESPIE: Well, it was a tough -- you know, I agree with that, obviously, very tough environment. I don't think -- I think it's a very tough environment for the president this go-around.

AMANPOUR: Do you think, Jon, that even at this late date, all of this anxiety could result in a third-party candidate?

KARL: Well, look, the conditions are practically perfect for a third-party candidate, especially if Newt Gingrich is the Republican nominee. You have -- you have two candidates for the parties that have absolutely -- I mean, almost no support among independents at this point, I mean, completely alienating independents. And there is the environment. But I just -- who?

ROBERTS: Yes.

KARL: I mean, you know, who's out there?

ROBERTS: Ron Paul.

WILL: Traditionally, successful third-party candidates have three things: a regional base -- George Wallace -- a burning issue -- George Wallace or Ross Perot, who got 19 percent of the vote -- and a vivid personality, and Lord knows Wallace and Perot had both. I don't see anyone with any of the three.

AMANPOUR: So quick, lightning round, then, who do you think was the most influential politician of 2012? Real name, not the president?

WILL: John Boehner...

AMANPOUR: John Boehner?

WILL: ... who consistently managed an unruly caucus and bested the president time after time.

ROBERTS: I'm not -- I can't say the president, because...

AMANPOUR: No.

ROBERTS: ... oh, OK. Well, I'm afraid I'd have to agree with George, then, John Boehner.

AMANPOUR: Otherwise, why the president?

ROBERTS: Because the president's still the president, and he -- and he can set an agenda in a way that, you know, that others can't.

GILLESPIE: Paul Ryan, who put forward a very concrete plan to reform entitlement spending, withstood an onslaught by the left in defense of it, and I think has shaped the debate and made clear to Republicans and conservatives that this is an argument we can make, and make with confidence.

AMANPOUR: Yes.

KARL: Yes, and I'll say Paul Ryan, slightly different take. I mean, he put forth the idea that you could actually tackle entitlements and survive politically. And he got every single Republican in the House to sign onto his plan. Now we'll see if it works.

It's going to be a major factor in the election going forward. They will demonize Paul Ryan. He gave the Democrats something to really portray as the enemy. But I think Paul Ryan.

AMANPOUR: Do you think -- and, of course, we actually saw our own George Will and Paul Ryan debating these very important issues last week on "The Great American Debate." Do you -- can I get you all to predict who will be, this time next year, preparing his inaugural address?

George?

WILL: All the numbers say the president won't be. But if the president carries the John Kerry states, he has 245 electoral votes. He needs 25 more. Don't count the president out.

ROBERTS: I think probably at this time next year it, would be Barack Obama.

GILLESPIE: Well, I obviously disagree with that. I'm not sure I'm neutral in the Republican Party primary, but like I say, whomever emerges as the nominee is the one who will be doing that.

KARL: Oh, come on.

GILLESPIE: I'm not going to -- I really -- I -- it's too fluid to--

AMANPOUR: Can you tell me who will win Iowa, do you think?

GILLESPIE: ... make a prediction right now.

AMANPOUR: The caucuses?

GILLESPIE: I really can't. I mean, I think, you know, Iowan voters are famously late in deciding, and we're seeing up-and-down, you know, still today, you know, and...

ROBERTS: And for (ph) the influence at the caucus themselves...

GILLESPIE: Right.

ROBERTS: ... and there's a tremendous amount of "Betty Sue, come to my corner." AMANPOUR: All right. Jon?

KARL: All right. I have no idea who's going to be the next president. But I -- but I will say this, I will say that we also, none of us, will have any idea on midnight election night. It's going to be such a close race, this country is so evenly divided. George mentioned -- the Kerry map. This is going to be a close election, and we are going to be awaiting until the following day to find out...

(CROSSTALK)

GILLESPIE: ... well, I would disagree with that.

ROBERTS: If that's the case that we don't call it, then.

GILLESPIE: I actually -- I actually think it's going to be the other way. I think it's going to be a decisive win, one way or the other.

AMANPOUR: All right. And, of course, this conversation will...

KARL: I'll bet you $10,000.

AMANPOUR: ... continues...

(LAUGHTER)

AMANPOUR: ... this conversation will continue in "THE GREEN ROOM." And up next, revolt and revolution, what this year's upheaval in the Muslim and Arab world will mean for the United States in 2012 and beyond.

(COMMERCIAL BREAK)

AMANPOUR: It's been a huge eventful year, both here and around the world. "Time" magazine couldn't find a single individual to name "Person of the Year," instead calling it the "Year of the Protester."

And indeed it was, from the Occupy Wall Street movement here to European demonstrators protesting budget cuts and crowds of Russians calling for election reforms, and most momentous of all, the Arab Spring protests that transformed that part of the world, which is now bursting with new political life. So let's take a look at the big events in the world that happened this year.

(BEGIN VIDEO CLIP)

AMANPOUR (voice-over): It began just as year ago, when a young Tunisian street vendor named Mohamed Bouazizi set himself on fire to protest an unresponsive dictatorship. Suddenly, whole region was ablaze with young people yearning for change.

The majority of the Arab population is under 25.

After the Tunisian ruler Zine El Abidine Ben Ali fled the country, Egypt, leader of the Arab world, was next to erupt. The people took to Tahrir or Liberation Square by the thousands, and we were in the middle of it.

UNIDENTIFIED FEMALE: You, Mubarak, we wait for -- to your -- to a crashing defeat, whatever you do. You will be put to a crushing defeat.

AMANPOUR (voice-over): And suddenly this almost medieval site, men riding horses and camels, galloping in at breakneck speeds, charging the crowd and cracking their whips.

Soon this square was a battleground. We went back to the square and quickly found ourselves surrounded by an angry mob of pro-Mubarak supporters.

UNIDENTIFIED MALE: We hate America, we hate any country more. OK? Go to any place more.

AMANPOUR: You want us to go?

UNIDENTIFIED MALE: Yes, I want you go to from here.

AMANPOUR (voice-over): They kicked in the car doors and broke our windshields as we drove off.

AMANPOUR: They hit the car with their fists over and over again, and threw a rock through the front window. The glass has shattered all over our driver.

AMANPOUR (voice-over): Violence flared that night as firing started into the crowd. Morning brought with it some calm.

AMANPOUR: Inside the barricades, again the protesters are lining up their own civil defense here, prepared for what might happen this afternoon.

AMANPOUR (voice-over): All over the square, we saw the weary and the wounded...

UNIDENTIFIED MALE: (Speaking foreign language)

AMANPOUR (voice-over): ... their foreheads, noses, faces bandaged and bloodied. Reinforcements were pouring in. People came with new supplies.

In a remarkable 18 days, they forced out one of the region's enduring leaders, a great ally of the United States and Israel, Hosni Mubarak. I was the only journalist to see and talk to Mubarak during those last days in office, and I'll never forget him telling me that he was tired, fed up and would step down.

AMANPOUR: "If I resign now," he said, "there will be chaos, and I'm afraid the Muslim Brotherhood will take over."

AMANPOUR (voice-over): Libya's Moammar Gadhafi was next in line for the wrath of his people. Unlike Mubarak, who knew the game was up, Gadhafi was in total denial.

AMANPOUR: How are you? It's good to meet you. I'm Christiane Amanpour, ABC.

AMANPOUR (voice-over): I spoke to him in an exclusive interview in February.

GADHAFI: They love me, all my people with me. They love me all.

AMANPOUR: But if they do love you...

GADHAFI: They will die to protect me and my people.

AMANPOUR (voice-over): Instead, they lynched him the moment they got their hands on him after NATO helped the insurgency with air support.

Across North Africa and to the heart of the Middle East, dominoes fell all the way to Syria, where the foreign press is banned, and more than 5,000 Syrians have been killed, according to the United Nations. The president, Bashar Assad, had the gall to claim that he was not to blame for the bloodshed, that he wasn't in control. He said that in an exclusive interview with ABC's Barbara Walters.

BARBARA WALTERS, ANCHOR, ABC NEWS: Do you think that your forces cracked down too hard?

SYRIAN PRESIDENT BASHAR AL-ASSAD: They are not my forces. They are -- really, they're forces, belong to the government.

WALTERS: OK, but...

(CROSSTALK)

AL-ASSAD: I don't own them. I'm president. I don't own the country. So they are not my forces.

WALTERS: No, but you have to...

AMANPOUR (voice-over): Dictators dissembling for all the world to see. His neighbor, King Abdullah of Jordan told me in May there was no doubt who was running the show in Syria.

ABDULLAH II OF JORDAN: ... here he is in charge, yes, and he is calling the shots. I think Bashar needs to reach out to the people and get people around the table.

AMANPOUR (voice-over): Assad ignored that advice, and the violence in his country has escalated to the brink of civil war.

What does all this upheaval mean for the region and for the United States? The big fear has always been that well-organized Islamist , like Egypt's Muslim Brotherhood, would emerge as the strongest and turn the Arab world towards Islamic fundamentalism. With the first elections now taking place, grassroots experience is paying off.

In Tunisia, a moderate Islamist party won the most votes in the elections in October, and they're at pains to insist that their Islam is not at odds with democracy.

In Egypt, the Muslim Brotherhood did win the biggest block in this month's parliamentary elections, and lately has been seen as more moderate and politically flexible, although a more radical Islamist party came in a strong second. The real tension in Egypt now is over the role of the military, how long will it stay in power?

The headlines said it all. Osama bin Laden, the most notorious terrorist in history, shot and killed by American forces. The discovery that he'd been hiding in plain sight in a military garrison town in Pakistan was an important milestone in the fight against terrorism. But the Arab Spring had shown that the Al Qaida ideology was already a spent force in the Muslim world, relegated to remote corners like Yemen and Somalia.

It's the worst drought the region has seen in 60 years, and it's left more than 10 million people in desperate and dire straits. Where this summer we were the first American network to report on the looming disaster there. A dying child, a mother grieving, a father helpless -- they are the victims of what aid officials are calling the worst humanitarian crisis on earth.

Drought combined with a deadly insurgency by Al-Shabaab, an Al Qaida-linked rebel group, led to the first famine of the 21st century, tens of thousands perished, and there are predictions that another quarter million Somalians still might die.

As my team and I crossed Japan to find almost biblical scenes of destruction, fears of a nuclear meltdown.

In March, we were in Japan covering a different kind of disaster, a devastating earthquake that triggered a terrible tsunami. It killed more than 15,000 people and unleashed a nuclear calamity. Huge swaths of land along the coast remain underwater.

We fly past this massive plume of black smoke, billowing 3,000 feet into the air. The petrochemical plant below has been burning since the earthquake structure, and oil is spilling into the water. And as the disaster in Japan shook the global economy, financial tremors were rumbling throughout the world.

Greece teeters perilously on the edge of default. Europeans took to the streets, protesting austerity measures to combat their debt- ridden countries. The international financial system was imperiled throughout the year by the euro debt crisis.

UNIDENTIFIED MALE: Greece started as an infection in the toe, and was allowed to spread. And now Europe has three distinct problems. It has a debt problem, it has a banking crisis and it has a growth problem.

UNIDENTIFIED FEMALE: To return to your initial question, Christiane, of what impact does this have on the U.S., I think potentially devastating.

UNIDENTIFIED MALE: We walked into a Taliban ambush. Bullets are coming at us from three sides.

AMANPOUR: And in Afghanistan in October, the U.S. marked 10 years of war as the Obama administration announced it would start drawing down its forces.

In Iraq this week, the last American troops withdrew, ending nearly nine years of combat there with 4,500 Americans and more than 100,000 Iraqis dead, and at a cost of $800 billion. ABC's Martha Raddatz has been there throughout.

MARTHA RADDATZ, ABC REPORTER: All U.S. troops may be out of Iraq right now, but this does not really end the war for the Iraqis. And there is a very big threat of sectarian violence in Iraq and certainly the threat of Al Qaida. But the biggest question is what kind of influence Iran will have here.

AMANPOUR: And this week, the year ended with another dictator down. North Korean ruler Kim Jong Il's death added more uncertainty to the volatile Korean Peninsula.

And when we return we'll discuss these events that shaped our world with our roundtable. So stay with us.

(COMMERCIAL BREAK)

AMANPOUR: Welcome back. It's been just over a year since the dawn of the Arab Spring, and the ripple effects are still churning the region and the world. Gone are many of the autocratic regimes of the Muslim world. Mubarak has been deposed, Gadhafi is dead. And what's sprouting is democracy, but also considerable uncertainty for the United States.

And that's where we begin our discussion today. Joining me at the table are Richard Haass, president of the Council on Foreign Relations and Robin Wright, senior fellow of the U.S. Institute of Peace and author of the new book, "Rock the Casbah: Rage and Rebellion Across the Islamic World."

Thank you for being here. So let's go right into what's really excited everyone, and that is the Arab Spring. There are elections going on right now. Political Islam is rising to the fore. Is that necessarily something really scary, Richard?

RICHARD HAASS, COUNCIL ON FOREIGN RELATIONS PRESIDENT: Potentially. And so I disagree with two things you said, if I might. First is I wouldn't use the phrase "Arab Spring." Springs last for three months; this is going to last for three decades. Springs are good. This may not be.

Second of all, I don't think it's fair to say democracy is sprouting. What we've seen is the overthrow of some authoritarian regimes. We don't have the basics of democracy. We don't have civil society. We don't have constitutionalism, we don't have checks and balances. We'll only know if we have democracy again, years if not decades forward.

AMANPOUR: So that's the pessimistic viewpoint.

HAASS: Realistic, maybe.

AMANPOUR: You're absolutely right. All the institutions have yet to be enshrined. But political Islam was bound to be the first iteration, wasn't it?

ROBIN WRIGHT, AUTHOR AND U.S. INSTITUTE OF PEACE FELLOW: Well, I think, first of all, that the Arab uprisings are probably the most important story of the early 21st century in terms of changing the last block of countries, the world's most volatile corner, in a way that we saw elsewhere in the late 20th century.

And I think the two trends of the next decade will often, for those of us in the West, look like contradictions. One will be this burst of demand for political participation and justice and the end of corruption, but also the use of Islam.

And it's -- I'm not sure it's always scary. I think that we have seen the emergence of a whole new political spectrum which, among Islamist parties, that you have groups -- the Salafis, who are the ones to worry about...

AMANPOUR: The hardline ones?

WRIGHT: The hardline ones, who follow the ideology of Saudi Arabia, and all lot of -- a whole lot of others, who are various places on the spectrum, have renounced violence, understand that they have to not only learn how to pick up the garbage but create jobs, and that they're -- this will be the...

AMANPOUR: Which is why the Muslim Brotherhood is doing well, because they had been picking up the garbage and delivering social services. So again, Richard, what does this mean for the United States, given that presumably America wants the voice of the people to be heard?

HAASS: Way too soon, because we're still going to be working it out right then. I think we're going to have disagreements about democracy, again, the same fundamental issues.

We have disagreements about approaches to Israel, because as the public voice becomes much more pronounced in this part of the world, likely to be quite anti-Israeli, we'll probably have some disagreements about working against terrorism. The old guard was a real partner. These guys aren't.

Also, we're going to want to give help to them, but only on certain conditions. We will give you economic help if only you do certain things. We will give you political help and democratic assistance, but only if you do certain things. And I think working that out is going to be a real source of friction.

WRIGHT: When it comes to Israel, I -- the interesting thing is that the majority of Arabs don't want another war, but they do want, in the case of the Muslim Brotherhood, changes to the current Camp David treaty. The Salafis don't want the treaty at all, so that's where the danger lies.

But a lot of the dynamics, I think, are going to be changed in terms of their dealings with the outside world. And we're going to have a hard time, of course, because these are societies that don't want to be tainted by us or new governments that are not going to take aid on our terms.

And we're going to be wanting, not -- I think many people in Congress particularly are not going to be wanting to give aid to what look like to them Islamic governments.

AMANPOUR: Let's shift to Iran -- because that is still going to be -- I presume -- do you agree, Richard, a big issue for the U.S. administration?

HAASS: Absolutely. Iran has the potential to be the dominant foreign policy issue of 2012.

AMANPOUR: But we've heard President Obama throughout his administration -- once it was clear diplomacy was not going to go the way he intended, talk about an unacceptable situation of a nuclear Iran.

And that language has somewhat abated, using all means and all powers of the U.S. to prevent a nuclear Iran has shifted to now we're going to try to prevent, we're going to isolate. Is there a tacit policy shift that's happening?

HAASS: I don't think so. I think there is, though, a concern about bringing this to a head in a way that would spook the international oil markets, that oil prices two or three times where they are, which could be the external shock that would cause the double dip.

But I do think the administration policy is still to try to use sanctions, use clandestine methods to try to slow down the Iranian nuclear program. They want to avoid the choice, Christiane. They want to avoid that choice between either accepting or acquiescing an Iranian nuclear weapons program, or launching a preventative military strike against it.

AMANPOUR: And actually, they're actually trying to, I think, condition against a military strike, because every time you hear somebody talking about it, you hear, oh, my goodness, but look at the unintended consequences. It would be so bad. But sanctions haven't worked. They're still doing it. What are the options now, if you really want to prevent a nuclear Iran?

WRIGHT: Look, there are a couple of things that haven't been done in terms of sanctions. One is dealing with a central bank.

AMANPOUR: But they still don't want to do that.

WRIGHT: No. Well, the Congress has just voted, you know, recently, 100 to nothing, to impose sanctions on countries, companies, et cetera, that do business through the central bank. But there's also the issue of oil, and this is one where, whether it's the European Union taking the lead, or the United States, that's one that's down the road.

I don't think that even though Iran is likely to be the dominant or the new big issue of 2012, that we're likely to see any kind of military strike by the United States or Israel during that period. I think no one believes that we're at that point, that action really needs to be taken. And that's true, even among Israeli intelligence analysts.

AMANPOUR: But so what does it mean? Does one go back to a containment of Iran? Does one try to live with a nuclear Iran? What does this all mean?

WRIGHT: Well, and the problem is also you can't bomb knowledge, and the Iranians have reached a certain point that what do you bomb and what can you damage, and how much would you set back the program, and how much do you actually rally Iranians around the idea of at -- we need a nuclear weapon now because we are being attacked by the outside world.

So it changes the political dynamics and -- on that issue as well...

(CROSSTALK)

AMANPOUR: But how troubling is Iran going to be for the United States in the next 12 months?

HAASS: Well, it's going to be extraordinarily troubling. Iran was the great beneficiary of the Iraq war. It's dramatically improved Iran's strategic position. High oil prices improved Iran's strategic position. Some of the events in the Arab world, with one important exception -- Syria -- have in many ways helped Iran. So Iran has emerged as a major regional actor.

You mentioned Turkey before, along with Turkey, obviously, with Israel, we'll see what Egypt becomes. So this is now part of the mix. And what this also means is U.S. influence is probably down.

We're at a situation right now where our interests in this troubled part of the world, our interests are far greater than our influence. It's never a comfortable point for a policymaker. But I think that's the truth, that in some ways we're as much bystander to events as we are influencer.

AMANPOUR: Well, and you've written about this, reorientating America towards this new challenge, and it looks to me -- I don't know whether you agree -- that the U.S. is sort of maybe moving away from the Middle East and Iran to an extent, and moving towards Asia, the Pacific as the president has said.

HAASS: Well, makes great strategic sense, in the sense -- look, if you look at the world, where's the great concentration of wealth? Asia. Ultimately, this wealth is going to be translated into other forms of power, China, India, Korea, Japan, what have you. This is -- this is where history in the 21st century is largely going to be written. How Asia plays out will determine more than anything the character of the coming decades. But the Middle East still has the potential to wreck things, whether it's through terrorism, instability, oil, you -- or nuclear proliferation.

So the Middle East is still the fly in the ointment. We can't -- we can't ignore it. We can't move away from it, but we can avoid future Iraqs. American forces have just been home. We can't avoid future Afghanistans. That's sort of large-scale American land force investment in the Middle East. Bob Gates was right. Those days are over.

AMANPOUR: What about the other major headwind for the United States, which is this global economic crisis? We see it playing out most perilously in Europe right now.

WRIGHT: Well, one of the reasons I think the United States is engaging in what's called strategic rebalance toward Asia is because the barometer of power increasingly is defined by economics and less and less by military might, reflected in the fact that we can't actually achieve our goals in Iraq and Afghanistan militarily.

It takes a lot of political muscle. But the fact that we've ignored what's been happening in Asia with the reemerge -- or the emergence of China and South Korea as these strong economies, but the challenges is looking at Europe and can it survive.

And one of the things that's so interesting about the world in the 21st century is how we're moving to a global world through regional blocks. And a lot of what happens in Europe will influence what happens in other regions of the world. Can it unite around whether it's a financial unit or a constitutional or common political goals?

AMANPOUR: In our last 45 seconds, how perilous is what's happening in Europe right now, given it's the largest market for the U.S.?

HAASS: It is perilous, and the politics have lagged behind the economics and the finance, and that's not going to change. You're not going to see a integrated Europe in the fiscal sense that will match the monetary sense.

I've just come back from China. What was interesting in all my meetings with senior Chinese officials, the first question they had was Europe. They are worried that if Europe goes badly, China's ability to export will go down. That raises fundamental questions about China's economic model and hence political stability.

So Europe right now was the dominant issue in 2011, along with the Middle East. Probably those two issues, they're going to stay dominant in 2012.

AMANPOUR: Robin Wright, Richard Haass, thank you so much indeed for joining us. And Happy Christmas, happy holidays. And when we return, your road map for the start of election 2012, what to expect in the week ahead. That's coming up.

(COMMERCIAL BREAK)

AMANPOUR: While the Republican candidates are all taking the weekend off for Christmas, they won't be able to rest for long. Here's Jonathan Karl with a look ahead at the next week in politics.

(BEGIN VIDEOTAPE)

KARL: Next week, all eyes are on Iowa as the GOP candidates make their final push before the January 3rd caucuses. On Tuesday, Newt Gingrich and Michele Bachmann both hit the road with bus tours across the Hawkeye State.

Mitt Romney brings his new campaign bus to Iowa on Wednesday, making his final appeal to caucus goers. Ron Paul targets central and western Iowa, holding a salute to veterans rally in Des Moines Wednesday night.

And as Rick Perry criss-crosses Iowa all week, flat tax godfather Steve Forbes stumps for him in New Hampshire. Meanwhile, with the payroll tax deal wrapped up, President Obama spends the holiday week relaxing with the first family in Hawaii.

(END VIDEOTAPE)

AMANPOUR: And stay around. The "Sunday Funnies" are next.

(COMMERCIAL BREAK)

AMANPOUR: And now the "Sunday Funnies."

UNIDENTIFIED MALE: This one is entitled, "Things that We Will Miss about Kim Jong-Il."

(LAUGHTER)

UNIDENTIFIED MALE: Nothing.

UNIDENTIFIED MALE: Republicans and Democratic senators set aside their differences and exchanged gifts in the first-ever Senate "Secret Santa."

(MUSIC PLAYING)

UNIDENTIFIED MALE: Merry Christmas, Bob.

UNIDENTIFIED MALE: Thank you, George. (Inaudible).

REP. PETER KING, R-N.Y.: He's too erratic. I think he does not have the discipline, does not have the capacity to control himself, and he can't stay focused.

JON STEWART, COMEDIAN: That's who you're going to nominate for president? Can't control himself, can't stay focused, too erratic? Those last descriptions are usually followed by the phrase, "and he's disruptive at naptime and a bit of a biter."

(END VIDEO CLIP)

AMANPOUR: We'll be right back.

(COMMERCIAL BREAK)

AMANPOUR: Now, "In Memoriam."

(MUSIC PLAYING)

CHRISTOPHER HITCHENS, AUTHOR: Religion is manmade. Gods -- all gods so far have been manmade. It does not say at all that there may not be a prime mover or a higher intelligence. But I say that no one has yet earned any claim to act in that entity's name.

(MUSIC PLAYING)

TOMMY GILCHRIST, ACTOR: He won't eat it. He hates everything. He likes it! Hey, Mikey!

(MUSIC PLAYING)

AMANPOUR: We remember all of those who died in war these last two weeks. The Pentagon released the names of these service members killed in Afghanistan.

We'll be right back.

(COMMERCIAL BREAK)

AMANPOUR: That's our program today. And I want to thank you all for inviting me into your homes every Sunday for the past year and a half. It's been an enormous privilege to anchor this prestigious program as we've traveled around the country and parts of the world together.

As I noted earlier, this has been the year of the people -- you. And people like you from every corner of the globe have made your voices heard. And it's exhilarating to be able to cover and experience democracy in action, whether old or newborn.

In the new year, you can find me off on new adventures, covering global affairs and challenges here at home in this struggling economy. I'll be doing specials in prime time and on all the other ABC news programs.

And finally, I would like to thank the dedicated staff of "This week," which works tireless to get this program on the air every week, and they'll be in good hands with my colleague, George Stephanopoulos, who takes over this broadcast on Sunday, January the 8th. For all of us here, thank you for watching. I wish you all a joyful holiday and a very happy new year.

END