[Wolf Blitzer, Cnn Anchor:] Happening now, a dangerous new foreign policy challenge for President Obama, as word comes that Iranian fighter jets have fired fired on an unarmed U.S. drone over the Persian Gulf. You know all about the rallies and the political ads, but you'd be surprised to learn how much the Obama campaign knew about you. How data mining and number crunching helped reelect the president. And it may sound strange, but there's already some buzz out there about the next presidential election. We're going to hear about potential candidates for 2016. We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM. President Obama scored a pretty solid reelection victory. Congress remains divided, on the other hand. The president has four more years now to pursue his agenda. But what can he actually accomplish? Our chief national correspondent, John King, is joining us right now. He's got some major challenges. And on his mind right now, is obviously what's good for the country, but also what's good for his historic legacy.
[John King, Cnn Correspondent:] You talk about the L word, legacy, whenever someone is reelected. But remember the reality. It's a divided government and a closely divided Congress, a Republican House that disagrees with him on many issues. And, Wolf, no money to spend because of the fiscal cliff. So what can the president do with a second term? Number one, as we've seen in recent years, priority number one is to consolidate the gains of the first term, largely the health care bill. The health care bill will be fully implemented. There will, for sure, be problems and he'll have to deal with that. Can he somehow keep a relationship with the Republican House if they have to go back and fix a couple of things? At least we know Obama Care won't be repealed. And that's his top priority keep it that way. Let it be implemented, secure that as his Democratic and a legacy for the country. Otherwise, you look around and you say what can he do? Education reform is something. Some people in the White House talk about. Some Republicans point to John Boehner, the House speaker. He used to be a key education negotiator in the Hill. A lot of Republicans think the president backed away from sopro some proposals they actually liked in the first term as he closer to the election because he didn't want to anger the teachers union. So I would look at that. And you just mentioned a story in the news now that will complicate and perhaps even dominate the early foreign policy agenda of the second term. And that is the nuclear standoff with Iran and now, apparently, an Iran that, at least at the moment, wants to be more aggressive.
[Blitzer:] Yes, they're trying to make a statement, obviously.
[King:] Yes.
[Blitzer:] We're going to have more on this part of the story coming up. A second term president you and my you and I have covered second term presidents. He has more flexibility. He doesn't have to worry about getting reelected. And the president acknowledged himself, remember, in that off the record comment to Dmitry Medvedev.
[King:] Right.
[Blitzer:] He'll have more flexibility. He's going to have to compromise, because he's got a Republican leadership in the House of Representatives.
[King:] Right. So he won the election, which gives him a bit of leverage going into these fiscal cliff negotiations and then beyond, when he gives his State of the Union, when he presents a new budget. He has a bit of leverage because he has the valid you know, the validation of the American people, if you will. But he just won, with 50 percent. The Electoral College victory quite impressive. But his own victory shrunk from the last time. So he has to be careful. The question is, can he get the Republicans? Speaker Boehner laid out yesterday, I'll give you more revenues, Mr. President, but only if you do it through tax reform, not higher tax rates. The president would have to back away from a campaign promise to do that. So the question now, and one of the criticisms in the first term, early first term, especially, was that the president was not a masterful negotiator, a masterful CEO, if you will, cut a deal, implement a deal. His relationship with John Boehner, the speaker of the House, is probably the greatest priority early priority of the second term, because with not a lot of money to spend, he's going to have to give to get.
[Blitzer:] Because I heard from so many members of Congress the Senate, and the House not just Republicans, but Democrats this is a president who never called them, never invited them to come over. He never really bonded with them. He never reached out. He's going to have to do a lot more of that.
[King:] He is. And when you traveled the country in the campaign, a lot of state Democratic president chairmen had no love lost for the Obama operation. They would say these guys don't consult me. They ignore my advice. They won. The best thing you can have in politics behind you, especially in the short-term, is fresh memories of a victory. Now, the question is, how do they use that? They don't have a huge electoral mandate, but they do have a lower case M mandate. They won the election in very tough times. He made history, the first president reelected since Franklin Roosevelt with unemployment above 7 percent. That gives you stature politically. The question is, how do you use it? And when you mention the relationship with Democrats, that's why it gets so hard, because to get the deal he wants for his legacy and for the good of the country on these fiscal issues, he's going to have to cut Medicare. He may have to make some changes in Social Security. He may have to do some other things in entitlement and Democratic favored programs that some of these never mind the older Democrats in place, Nancy Pelosi for example some of these new Democrats, the new senator from Massachusetts, Elizabeth Warren, a friend of the president's. Her ad said, "I will never touch Medicare." You can't get a deal on the fiscal cliff the president can't get he wants from the Republicans unless he agrees to deep cuts in Medicare. So he's going to have to be the negotiator-in-chief in the early term.
[Blitzer:] Yes, I suspect the soc...
[King:] It's going to be hard.
[Blitzer:] the social secretary at the White House is going to be a little bit more active in the second term, bringing some of those members...
[King:] Without a doubt.
[Blitzer:] Democrats and Republicans, over to the White House for a meal or a cup of coffee or something.
[King:] Domestic diplomacy.
[Blitzer:] Yes, very important stuff. John, thanks very much. President Obama already faces a serious new foreign policy challenge. There is word today from the Pentagon that in the closing days of the election campaign, Iranian jets fired on a U.S. drone. Let's get the details from our Pentagon correspondent, Barbara Starr. What are you learning Barbara.
[Barbara Starr, Cnn Correspondent:] Well, Wolf, it was last Thursday, just one week ago, we now know that two Iranian Russian made jets, aging aircraft, but nonetheless, very workable, flew out into the Persian Gulf, into international air space, according to the Pentagon, and fired at a Predator drone, a U.S. Air Force Predator drone that the Pentagon says was on a routine surveillance mission, although that mission was classified. Here's what the Pentagon had to say about it all.
[George Little, Pentagon Press Secretary:] We believe this is the first time that an unmanned aircraft has been shot at over international waters in the Arabian Gulf.
[Unidentified Male:] Is that an act of war?
[Little:] I'm not going to get into legal labels. The reality is that we have a wide range of options, as I said before, to protect our assets and our forces in the region and we'll do so when necessary. We have communicated to the Iranians that we will continue to conduct surveillance flights over international waters, over the Arabian Gulf, consistent with longstanding practice.
[Starr:] . And look, Wolf, even though this was an unmanned drone, no pilot on board, this raises tensions military tensions with Iran. The aircraft were operated by Iran's Revolutionary Guard Corps, the Pentagon says. That's the most aggressive branch of the Iranian security forces. How important was this? Well, the president and Defense Secretary Panetta were very quickly informed last Thursday morning when this happened.
[Blitzer:] Well, if they try it again, presumably, Barbara, U.S. military jets could scramble and they could get into some sort of dog fight, if you will, with those Iranian jets. How realistic is a scenario like that?
[Starr:] . Well, look, the Pentagon is not looking for a shooting war with the Iranians. Top officials are very clear about this. But what were the Iranians up to? Are they trying to send a signal of more aggressiveness over those critical oil shipping lanes? The Pentagon, the Obama administration can only let the Iranians go so far. If they try this again, that's really the key question. It might have been a it might have been an unmanned drone, but how far do you really let the Iranians go in such a critical economic area Wolf.
[Blitzer:] Yes. All right, Barbara. You're I know you'll stay on top of this. Thank you. Let's get back to politic right now. President Obama certainly owes his reelection to an extremely well organized campaign. You know all about the rallies, you know about the political ads, the army armies of volunteers. But you may not necessarily know very much about the campaign and how much it knew about you you. Our Brian Todd has been digging into the data crunching that helped the campaign tailor its winning strategy data mining, as it's called.
[Brian Todd, Cnn Correspondent:] Data mining, right.
[Blitzer:] And it's a fascinating detail. Explain to our viewers what you've learned.
[Todd:] Wolf, this is, experts say this is the way campaigns are going to go after voters from now on. Gone are the days when campaigns target whole regions just on a hunch. Now they are so- called micro targeting individual voters, using sophisticated ways to figure out who they can persuade. We pointed cameras at them, showed you the conventional way they ran their campaigns.
[Barack Obama, President Of The United States:] And we will reaffirm...
[Todd:] But far from the rallies and debates, in office back rooms and cubicles, there was another campaign a silent humming machine targeting your vote. Did you get an invitation to try to win a dinner with actress Sara Jessica Parker? Did you get an e-mail from Michelle Obama calling you "friend?" Did you get a banner ad for a campaign when you were surfing the net? It turns out you were targeted for these things by a sophisticated campaign technique called data mining, an effort to find out who individual voters are and how they'll respond to campaign messages.
[Sasha Issenberg, Author, "the Victory Lab":] The goal is to come up with an individual level, a statistical prediction of your likelihood of supporting their candidate or of casting a ballot at all.
[Todd:] Then they target you for ads. The Obama campaign is widely believed to have had the most sophisticated data mining operation. Central to his election victory this year getting people out to vote who might not have otherwise. "Time Magazine" profiled it with a picture of the data crunchers working in a room called "the cave." Analysts say campaigns do this by going to commercial data warehouses, which compile information on your buying habits, like what magazines you subscribe to, maybe information on where and how you like to travel. Campaigns cross-reference that with demographic information like voter registration records. Jordan Lieberman, who data mined for Republican campaigns, but not Mitt Romney's, says a Republican ticket might use that information to win persuadable voters in an area like Northern Virginia.
[Jordan Lieberman, Campaigngrid:] So if you're a Republican running in in a Democratic area, perhaps in Arlington or Alexandria, these are people you might need to talk to. And you would talk to them with a very specific message about why you should not vote for the Democrat this time.
[Todd:] The biggest problem for privacy advocates?
[Justin Brookman, Center For Democracy And Technology:] The the lack of transparency. The fact that, you know, we I don't know what Obama knows about me. I don't know what Romney knows about me. I don't know what what the 2016 candidates are going to know about me. But I do know they're going to know more about me than Obama did.
[Todd:] The Obama campaign responded to that by telling us that it is committed to protecting individual privacy, going above and beyond what the law requires in that field. And they say they've got a they've got strong safeguards in place to make sure that your personal information is not provided to outside entities Wolf. They say they guard that very closely.
[Blitzer:] Why does it seem that the Obama campaign was better at this this data mining, as you call it, than the Romney campaign?
[Todd:] Analysts say the Romney campaign had a lot less time to put it together this year. They had to fight through the primaries first and then they really couldn't get it together quite as fast as they probably needed to to make it effective. They also say the the Romney team had a little less talent to do that, but also less experience in putting it together once they could. You know, the Obama team did it very well in 2008. They did it even better in 2012. They just have people who know how to put together these numbers crunchers and how to do it so well, so fast and so effectively. It's really...
[Blitzer:] That's amazing.
[Todd:] it really made a huge difference this time.
[Blitzer:] Yes. And he is really lucky, the president, he didn't face a Democratic primary challenger.
[Todd:] Right. Right.
[Blitzer:] He could devote all of his energy to a full-time campaign.
[Todd:] While...
[Blitzer:] Romney didn't have that advantage.
[Todd:] Right. While the Republicans were fighting it out, that's what they were doing.
[Blitzer:] Yes.
[Todd:] They were putting these number crunchers together and targeting these demographics.
[Blitzer:] Brian, a good report. Thank you. Many thought passions had cooled since 2008. But minority voters turned out in very big numbers to reelect the president of the United States. We're going to find out why and what it means for both parties.