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THE SITUATION ROOM
What Awaits Obama
Aired November 5, 2008 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, CNN ANCHOR: Thanks very much, Campbell.
And happening now: America catches its breath.
After a stunning and historic election victory touches off spontaneous celebrations across the country, president-election Barack Obama begins planning the transition to his new administration, Senator Obama, now president-elect Obama, facing an equally stunning list of challenges, a wrenching financial crisis, two wars, and a continuing terror threat.
He is already scheduled for top-secret intelligence briefings, as he weighs his first moves on the economy and national security and more.
And a seismic shift in Washington's balance of power, as Republicans also suffer crushing defeats in both the Senate and the House.
I'm Wolf Blitzer at the CNN Election Center. You are in THE SITUATION ROOM.
In the span of hours, Barack Obama goes from an open-air victory party with tens of thousands to private meetings with senior advisers planning the transition to his presidency, the president-elect saying change has come to America.
But he makes it clear that this will be a process in the face of serious challenges.
Let's go live to Chicago, where our CNN senior political correspondent, Candy Crowley, is standing by. Candy, he has got an enormous challenge ahead of him and it has to start right now.
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Absolutely, and in fact it started before the election as they looked ahead to what they believed would be a victory. Transition was already, at least the skeleton of it, up and moving.
They have a big building, office building, office space actually in Washington, D.C., where much of the legwork and the nuts and bolts of transition will take place.
Barack Obama, himself, today, we know he had breakfast with his children. He did work out. He's going to thank his staff. And then he is going to have meetings with his senior staff to talk about going forward. We believe his first decision has already been made, and that is chief of staff. A source tell manages that Rahm Emanuel has in fact been asked to be Barack Obama's chief of staff, he being a congressman from Illinois, a tough partisan, but he understands as one source said to me the legislative puzzle palace, that Rahm Emanuel knows how to get things done.
And they also want a hard-nosed person running -- White House chief of staff running that White House in an efficient way, so that Barack Obama can begin to work on what has been a very ambitious agenda.
So, Joe Biden is still in town. He's also at meetings. We are assuming they are meeting together, but, right now, this is all being kept pretty private. They want today to be a time for them to take a breath, but also to move forward -- Wolf.
BLITZER: And, Rahm Emanuel, as you remember, and, of course, I remember, he worked in the first four years of the Clinton White House, so he understands not only Congress, where he is a member right now, but also how a White House is supposed to operate.
Let's talk about expectations for this president-elect. How high, Candy, are they?
CROWLEY: Really high. I think, honestly, Wolf, you could see that in the faces of the crowd anywhere you went with Barack Obama.
Remember what his main theme was. It was hope, and it was change. And in the end, it was all about believing that change could happen. And when you look at what is on his plate, some of which you outlined when you opened the show, it is enormous.
And, yet, here are people that really are expecting their lives to change. I think it is why, last night, you heard him say, echoing Martin Luther King's language in some way, the mountain is high; we are not going to get this done right away; we might not get some of it done by my first term.
So, I think that there is some definite attempt by Barack Obama to say, basically, give me some time here.
BLITZER: Candy Crowley reporting for us from Chicago. That is where Barack Obama is on this day.
The overwhelming victory by Barack Obama and the Democrats mirrored by the enormity of the Republican defeat, loss of the White House, big setbacks in both the Senate and the House, and an apparent redrawing of America's political map.
Let's go to Brian Todd. He is looking at all of this. Brian, how does the GOP pick up this collapse, if you will, this serious setback?
BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, this is where they are going to start to begin to do that. They may not even be sure how they're going to do it just yet. This is a real pummeling that the Republicans have suffered. And as you know it is not just for the 2008 election.
This began with the 2006 midterm, so it a two-cycle series of losses for the Republican Party. Just how much is this party reeling right now? Let's listen to the RNC chairman Mike Duncan a short time ago.
(BEGIN VIDEO CLIP)
MIKE DUNCAN, CHAIRMAN, REPUBLICAN NATIONAL COMMITTEE: I woke up this morning feeling like Lincoln's young boy who stubbed his toe. Some of you know the story. It hurts too bad to laugh, and I'm too big to cry.
I think some of you felt that way before. But those facts do refute absolutely the preposterous idea that this election represents a mandate for another New Deal or the death rattle of Republican conservatism.
(END VIDEO CLIP)
TODD: So, now what happens? Well, we are told by the Republican insiders and others that this is kind of the time for the Republicans, as it would be for the Democrats if they were in this situation, for the finger-pointing to begin.
One Republican strategist says, this is going to be a real bloodbath. It's going to be a particularly ugly time for the Republicans in the next couple of weeks and months as they kind of look at what went wrong, they start to finger-point. And again, this happens in both parties when a loss is this total, that they're going to be doing this.
And then they are going to have to kind of reassess what their message is, what their platform is going to be. Do they move more to the right to try to get the grassroots going? Do they move more to the center? All of that is going to be talked about.
Then, Wolf, they have got to pick up the leadership position. So, a lot happens with the Republican Party in the next weeks and months. It is going to be crucial.
BLITZER: And based on what you are hearing, Brian, how much they are blaming President Bush and Vice President Cheney for the predicament they are in right now?
TODD: Well, it starts there, and they have been doing that now for a couple of years. Clearly, the Bush/Cheney presidency has been very, very unpopular, maybe matched only by the approval ratings in Congress, ironically, but that is where it started.
John McCain had to inherit a lot of that, but now they are going to have to just look for other people to kind of reshuffle. We are talking about people in the House leadership positions. John Boehner, the House majority -- minority leader -- excuse me -- wants his position back. Will he get it back? Will he be challenged? Those are questions that they're going to be taking on. But leadership positions are going to be talked about. And then they have got to find the top of the ticket. Who is going to lead this party in the next general election? A lot of names are being bandied about, Sarah Palin, Mitt Romney, but it's way too early for that.
Remember, Barack Obama was barely known four years ago.
BLITZER: Never too early for some of those political pundits to start doing that.
BLITZER: Brian, thanks very much -- Brian Todd on that story.
Let's check in with Jack Cafferty. He's got "The Cafferty File" -- Jack.
JACK CAFFERTY, CNN ANCHOR: Finger-pointing, that's my department.
So, what happened to John McCain? That likable maverick who beat some pretty strong competition get his party's nomination had morphed into something quite different by yesterday. After promising to run an honorable campaign, McCain quickly became another symbol of the divisive politics of past Republican presidential campaigns. Name- calling, insults, pettiness, empty gestures replaced the once likable McCain that we all looked to, to challenge the status quo.
His campaign got nasty, and his lack of judgment was on display for all to see a couple of times late in the race, Sarah Palin, an act of desperation. With little vetting, McCain named an unknown from Alaska to energize the Republican base. But she came with too much baggage and quickly went from an asset to a big liability. Openly ignorant of the issues in press interviews, Palin began to offend women and anger McCain's own campaign managers, who sniped that she was a rogue who frequently went off the reservation in pursuit of her own interests, instead of John McCain's.
When the financial crisis exploded, McCain made a huge empty gesture. He suspended his campaign, threatened to cancel the first presidential debate. He was the one that wanted all those town meetings, remember? Rushed back to Washington, where he accomplished absolutely nothing.
And in the end, he simply looked silly. He might not have been able to overcome to damage to the Republican brand anyway, but he quickly became his own worst enemy, who gave away any chance he might have had to win.
Here is the question: What was John McCain's biggest mistake? Go to CNN.com/caffertyfile. Post a comment on my blog -- Wolf.
BLITZER: Jack, thank you.
Jack Cafferty will be back. It is a warning that stirred controversy, and now president-elect Obama is getting top-secret briefings on greatest threats facing the United States. We will have details of one of the most delicate parts of this new transition.
Also, President Bush speaks out on Barack Obama's win. What do his final 76, 77 days or so in office hold in store? Plus, big Democratic gains in the Senate, what it means for balance of power.
Stay with us. You're in THE SITUATION ROOM.
BLITZER: The transition to power has begun. President Bush is inviting the next first family to visit the White House as soon as possible. He talked about the election this morning in the White House Rose Garden.
Let's go to Kathleen Koch. She's over at the White House right now. What else did the president have to say, Kathleen?
KATHLEEN KOCH, CNN CORRESPONDENT: Well, Wolf, President Bush in the Rose Garden this morning came out and spoke really quite optimistically about this period of change that Washington is beginning to embark on.
But, truly, many wonder if the results of this election yesterday mean that the lame-duck president will be the lamest of lame ducks in his final months.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: All Americans can be proud of the history that was made yesterday.
KOCH (voice-over): President Bush reappeared, speaking publicly for the first time in six days. He said he called and congratulated Barack Obama on his historic victory Tuesday night and pledged his complete cooperation during the transition.
BUSH: There is important work to do in the months ahead, and I will continue to conduct the people's business as long as this office remains in my trust. During this time of transition, I will keep the president-elect fully informed on important decisions.
KOCH: And there will be many for this unpopular lame-duck president, implementing the massive financial rescue plan and other measures to stabilize the economy, including agreements with Iraq on the status of U.S. forces there, working with Congress on a possible stimulus package.
Progress on that, says the House speaker, is up to the president.
REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: Well, it depends on what the White House is willing to do. KOCH: Those who see the election results as a referendum on the Bush presidency predict he will accomplish little in his final 77 days.
STUART ROTHENBERG, EDITOR AND PUBLISHER, "THE ROTHENBERG POLITICAL REPORT": The voters have turned thumbs down on him. And so while he is technically still the president -- and he is -- and he has certain powers that he can exercise -- he really doesn't have a lot of influence either with the country as a whole or on Capitol Hill.
KOCH: Others say, yes, he can, with the president-elect.
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: And I think you are going to see an unusual degree of good spirit between George W. Bush and president-elect Obama. I think they are going to -- they both recognize that we are in a financial crisis. This is getting worse. This is very serious stuff. And when Americans come together better, and I think you will see Bush and Obama working well together in the next few weeks.
KOCH: And there is as of yet no announced date for a meeting between the two men. Important to point out, though, that president- elect Barack Obama, Vice President Joe Biden, will get their top- secret intelligence briefings tomorrow from the CIA -- Wolf.
BLITZER: Kathleen Koch is over at the White House.
Up on the Capitol Hill, the House speaker, Nancy Pelosi, said Americans spoke out loudly and clearly for change. And Democrats scored big for gains in both the House and the Senate.
Let's turn to our chief national correspondent, John King. So, the balance of power, John, how is it going to look?
JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Well, the new president, Wolf, has a pretty big Electoral College mandate. And the question now is, what can he do with the bigger Democratic majorities in both the House and the Senate?
Let's bring up our virtual Capitol here to get a better sense of the balance of power in the Senate as it comes up. The Capitol comes up, you see it there. Now, I'm going to bring you up the Senate. And this is the Senate going in -- this is the Senate right here, these numbers going into last night, a 51-49 Democratic advantage, and here is what the Democrats are celebrating today, a 56-40 lineup right now.
If you look closely in the middle, you will see some white tiles there. These are the four races we have yet to call at CNN, because they are close. We will go west to east. Alaska is one of them. Ted Stevens, the longest serving Republican, convicted just last week of corruption charges, this race too close for us to call right now.
Another very close one in Georgia headed to a runoff. Saxby Chambliss, the Republican incumbent against Jim Martin. That one will go to a runoff because Saxby Chambliss didn't get 50 percent plus one, as is required by state law.
Another very close race out in Oregon. Gordon Smith is the Republican incumbent trying to hold on to that seat, a tough seat. And Minnesota, this was a race that drew a lot of national attention because a lot of people know Al Franken, the former comedian, the liberal talk radio host, running against the Republican incumbent, Norm Coleman. That one looks like it is heading for a recount.
So, Wolf, you put it all the way, the Democrats will at least have 56. If they split these, they will have 58. Most think they will get -- won't get to that magic number of 60. But we will watch this one play out as we go.
And now I want to bring you up over here on my side, the House side. These were the numbers going, 236 to 199. You just heard Nancy Pelosi, the speaker, talking about it. We now project she will get at least 252. Excuse the crude handwriting there. At least up to 252, and the Republicans will drop to 172.
Now, if you are doing the math at home, that leaves 11 seats we have not yet accounted for, 11 more House races to call for, Wolf, but without a doubt, the Democrats will have a bigger majority here. And we talked about this a bit earlier, roughly on parity with what Bill Clinton had, the last Democratic president who came to power in Washington. He had 57 seats in the Senate. I believe it was 256 in the House.
So Obama will have room to move, if you will, room to maneuver with the Democratic majority, but with that room, with that power comes a lot of pressure, as you well know.
BLITZER: And we're going to continue talking about all of this, a lot of lessons learned from that Clinton transition that the Obama transition people are trying to avoid some of those major mistakes at the end of '92 and early '93.
BLITZER: With America facing two wars and an ever-present terror threat, Barack Obama is already scheduled to receive top-secret information.
Let's go to our justice correspondent, Kelli Arena. Kelli, when will Senator Obama, now president-elect Obama, get his intelligence briefings?
KELLI ARENA, CNN JUSTICE CORRESPONDENT: Well, Wolf, we expect the president-elect to be briefed tomorrow by the director of intelligence himself. And he better celebrate today, Wolf, because, tomorrow, he is due for a harsh reality check.
BUSH: All Americans can be proud of the history that was made yesterday. KOCH (voice-over): President Bush reappeared, speaking publicly for the first time in six days. He said he had called and congratulated Barack Obama on his historic victory Tuesday night and pledged his complete cooperation during the transition.
BLITZER: All right. Unfortunately, that is the wrong tape. We are going to get the right tape.
Kelli, as we await the right tape, let's a little bit talk about what is going on.
Actually, I think we have queued up the right tape this time. So, let's go with your report.
ARENA (voice-over): It is called the presidential daily briefing, or PDB. It contains the most classified information about covert activities, U.S. military operations, and threats facing the United States.
FRANCES FRAGOS TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: He will begin to see not only the threat, but also the response. And he will have to begin to make decisions about what will his policy be.
ARENA: It will be a sobering experience for the president-elect. He will be able to see top-secret satellite photos, hear what the nation's spies are reporting. And he will get the latest intelligence from the world's hot spots.
What is happening with the insurgency in Iraq? How sick is North Korea's leader, Kim Jong Il? And what is the status of the hunt for terrorists in Pakistan? The sooner he hears it, the better.
MIKE MCCONNELL, DIRECTOR OF NATIONAL INTELLIGENCE: Those who wish us harm realize this is a period for us when we are still adjusting to making decisions and understanding.
ARENA: McConnell points out the first and second attacks of the World Trade Center happened during the first years of the Clinton and Bush administration, a fact that has not escaped the president-elect or his number two.
SEN. JOSEPH BIDEN (D-DE), VICE PRESIDENT-ELECT: Mark my words. It will not be six months before the world tests Barack Obama, like they did John Kennedy.
ARENA: Officials stress there is no intelligence to suggest that any attack is imminent, but they remain on guard.
UNIDENTIFIED MALE: We are concerned everyday. That is what the taxpayers pay us to do, is to make sure that we are doing everything humanly possible to prevent the next terrorist attack.
ARENA: A smooth transition also calls for the fast placement of a new national security team.
ARENA: The president-elect may choose to name both a new CIA director and director of national intelligence. The attorney general and homeland security secretary posts are Cabinet positions, so they will definitely change. Only the FBI director stays put -- Wolf.
BLITZER: All right, Kelli, lots of major decisions he's got to make. We will watch every step of the way.
BLITZER: Out of sight for months, amid rumors of serious health problems, there are now new photos emerging of North Korea's mysterious leader, Kim Jong Il. You're going to see them right here.
And millions of Americans struggling in the country's worst economic crisis in a century, what can they expect from the Obama presidency?
Lots of news happening on this historic day right here in THE SITUATION ROOM.
BLITZER: Home foreclosures at a record high right now. So, what will Barack Obama's economic plan do for tens of thousands of Americans losing their homes?
Plus, millions of dollars poured into some of the country's most controversial ballot measures, including gay marriage, abortion and more, we are going to show you where they stand.
Stay with us, lots of news happening today, right here in THE SITUATION ROOM.
BLITZER: Happening now: bitter disappointment. So what does John McCain do now that what has been described as his lifetime ambition to become president has been dashed? We are going to tell you what some of his closest friends and confidants are urging him to do. Stand by.
Also, Colin Powell weighs in on this important day. A man who many thought could be the first African-American president reflects on this campaign, last night's historic results, and the challenges facing president-elect Barack Obama. CNN's interview with Colin Powell, that is coming up.
And let the speculation begin. Rumors are already flying about who Barack Obama will appoint to his Cabinet and to key staff positions. We are going to tell you what we are hearing. I'm Wolf Blitzer. You are in THE SITUATION ROOM.
The gloves were off during the campaign, but Senator John McCain was gracious and generous in defeat. The Arizona Republican vowed to do everything in his power to help Barack Obama lead the nation through these difficult times.
And Senator McCain said, the failure of his campaign rests solely on his shoulders.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), ARIZONA: I don't know -- I don't know what more we could have done the try to win this election. I will leave that to others to determine.
Every candidate makes mistakes. And I am sure I made my share of them, but I won't spend a moment of the future regretting what might have been.
(END VIDEO CLIP)
BLITZER: Running mate the Alaska governor, Sarah Palin, was a lightning rod for criticism, but mobilized the Republican base.
CNN's Dana Bash asked Governor Palin today about the next presidential election.
GOV. SARAH PALIN (R), ALASKA: Don't know what the heck is going to happen in 2012. Again, just very anxious to get back to work there in Anchorage and in Juneau, making sure that the people of Alaska are well-served.
DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: You're notably not ruling out 2012.
PALIN: Well, you know, right now, I cannot even imagine running for national office in 2012. And I say that, though, of course, coming on the heels of an outcome that I -- I certainly didn't anticipate and had not hoped for.
But this being a chapter now that is closed and realizing that it is a time to unite, and all Americans need to get together and help with this new administration being ushered in.
(END VIDEO CLIP)
BLITZER: Let's go to Dana Bash. She is joining us now live from Phoenix. Lots of controversy, as we all know, involving Governor Palin, but it looks like she is getting ready to move on.
BASH: That is right. She is actually literally getting ready to move on, to go back to the state of Alaska, she said, to go back to what had been her day job. That, of course, is governing -- governing the state of Alaska.
But, with regard to controversy, certainly, that has happened on a number of levels. But I think the most important when it comes to the vote that took place yesterday, was the controversial aspect of her performance with regard to Independent and suburban voters, Wolf.
Our exit polls showed that more than six in 10 Independent voters said Sarah Palin simply was not qualified to be president. Almost that number said that same thing in terms of suburban voters.
So I asked Sarah Palin about that, about the fact that she may have hurt John McCain with the very voters she was supposed to help with.
(BEGIN VIDEO CLIP)
PALIN: I don't think anybody should give Sarah Palin that much credit that -- that I would trump an economic woeful time that in this nation that occurred about two months ago -- that my presence on the ticket would trump the economic crisis that America found itself in a couple of months ago and attribute John McCain's loss to me.
But now having said that, if I cost John McCain even one vote, you know, I am sorry about that, because, John McCain, I believe, is the American hero. I had believed that it was his time.
(END VIDEO CLIP)
BASH: There you heard her saying that she believed it was John McCain's time. As for Sarah Palin's time, again, she would not rule in or out any run in 2012. But as you well know, Wolf, there are a lot of Republicans already talking about, thinking about perhaps even working on a potential Sarah Palin run the next time around -- Wolf.
BLITZER: So when you saw her, Dana, today, and you spent a little time with her, interviewing her. What kind of sense did you get? Was she confident? Was she nervous, sort of relieved? Give us a little description of her attitude on this day.
BASH: Not nervous at all. Maybe relieved is, perhaps, a good word to describe her. But actually what surprised me is that our producer, Emily Schultz, and some of our crew saw that she was down in the lobby. She was basically just hanging out in the lobby of this Arizona Biltmore, where this McCain event took place last night, where she slept last night. And she was, you know, talking to some supporters. She'd already talked to a couple of other people.
And I caught her eye and I tried to get her to come over. And I thought it was going to be very difficult. I thought she would, frankly, blow me off. But she walked right over, Wolf. She was very eager to talk and, in fact, it seemed as though her husband was pretty eager to pull her away. And that's what ended our quick interview -- Wolf.
BLITZER: All right. Well, at least there's a lot of those handlers that used to sort of protect her are gone. She can do what she wants to do now.
BASH: They're all gone.
BLITZER: All right, Dana. Good work. Thanks very much.
BASH: Thank you.
BLITZER: Issue number one for President-Elect Obama is picking a Treasury secretary. CNN's Christine Romans takes a closer look at one of the most scrutinized short lists ever.
CHRISTINE ROMANS, CNN CORRESPONDENT: Wolf, the Treasury Department says a suite of offices has been readied for the Obama economic team to work side by side with Treasury Secretary Henry Paulson. The parlor game of picking the next Treasury secretary has already begun.
Here's the short list. Larry Summers was Treasury secretary under Bill Clinton. Summers is a tested hand on the rudder. He also has a reputation for being in politics. As president of Harvard University, he sparked controversy for remarks about women's science and math aptitude.
New York Federal Reserve President Timothy Geithner has experience in this crisis as the Fed's go-to for the rescue of Bear Stearns and AIG. But he's been criticized for the failed rescue talks that resulted in the bankruptcy of Lehman Brothers.
"The New Jersey Star-Ledger" cites state Democratic sources who report New Jersey Governor Jon Corzine is being vetted for the Treasury job. He once ran Goldman Sachs and later was a United States senator.
Sheila Bair has earned praise as head of the FDIC and she's also criticized this administration for not doing enough to help homeowners.
And a dark horse is JPMorgan Chase CEO Jamie Dimon. He worked with Treasury to rescue Bear Stearns and is also a Wall Street favorite.
Obama's business brain trust includes Paul Volcker, the Fed chairman who broke the stagflation crisis of the 1980s, and legendary investor Warren Buffett. Buffett has said he'd like to see Paulson stay on as Treasury secretary. Paulson has consistently said he will not.
Economists and political insiders say it is critical the next Treasury secretary be named soon. The White House hosts an emergency global economic summit in just 10 days -- Wolf.
BLITZER: Christine Romans, thanks very much.
And we're watching the Dow Jones Industrial Average right now. It's down more than 400 points. We'll continue to maintain -- we'll continue watch what's going on -- down 424 right now, apparently amid fears of a deep and perhaps long lasting recession.
There were a number of hot button social issues on state ballots across the country, ranging from same-sex marriage to abortion and more.
Let's go to CNN's Chris Lawrence.
He's tracking all of them for us -- all right, Chris, what happened?
What were the top issues?
CHRIS LAWRENCE, CNN CORRESPONDENT: Well, Wolf, by far, it was gay marriage, which people in Florida and Arizona rejected by wide margins. Now the closest call and toughest fight on that issue is right here in California.
LAWRENCE (voice-over): We begin out West, with the most expensive battle ever over one issue -- the one that's still too close to call. Californians spent $60 to $70 million campaigning for and against Prop 8, a ban on gay marriage.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I think Prop 8 is shameful. I think that the voters of California have already given the right to gay marriage and I believe that it should stay intact.
UNIDENTIFIED FEMALE: I believe in the family and that children need a mom and a dad.
(END VIDEO CLIP)
LAWRENCE: Out of 10 million votes, just 400,000 more people voted yes to amend the constitution and limit marriage to men and women. With millions of absentee ballots still being counted, it's too close to call.
In Arkansas, people overwhelmingly voted to ban unmarried partners from adopting children. That measure applies equally to opposite sex and same-sex couples.
Also, by a big margin, voters in Washington approved a death with dignity measure that allows terminally ill adults to get lethal medication from their doctors and commit suicide.
(BEGIN VIDEO CLIP)
BOOTH GARDNER (D), FORMER WASHINGTON GOVERNOR: And they've got the right to consult a physician on end of life issues and do it without feeling guilty.
LAWRENCE: In Colorado, voters rejected a landmark measure that would have defined a person as existing with full legal rights from the moment of conception. Even some abortion opponents said it went beyond banning abortion and raised the possibility of mothers being charged with negligence during their pregnancy.
LAWRENCE: And for the second election in a row, South Dakota they rejected an attempt to ban abortion in their state.
Californians rejected a measure that would have required doctors to wait two days and inform a girl's parents before performing an abortion on a minor -- Wolf.
BLITZER: Chris Lawrence working that story. Thank you. Important information for our viewers.
More than any other candidate in history, Barack Obama harnessed the power in the Internet to win the White House. You're going to find out the secret of one of his online success stories.
Also, the transition to power -- will President-Elect Obama put any Republicans in high level positions in his administration? Lots of names are already circulating.
Plus, two of the most pressing issues facing President-Elect Obama as he awaits the presidency -- the war in Iraq and al Qaeda. I asked him about both in our recent one-on-one interview, that interview last Friday. You're going to hear what he told me. It takes on new significance today.
BLITZER: We've seen President-Elect Obama's online community of supporters grow over the past two years. And they certainly helped him pave the way to the presidency.
Let's go our Internet reporter, Abbi Tatton -- Abbi, how did all this start?
ABBI TATTON, CNN INTERNET REPORTER: Wolf, think back to the beginning of 2007. It all began on the Internet with an online video announcing Barack Obama's candidacy. And since then he reached out through Facebook to create rallies; on YouTube, uploading almost 2,000 videos over the course of his campaign, to speak directly with his supporters -- supporters who then went online and created their own Web sites, their online videos to support their candidate, and, of course, donated in droves over the Internet.
But what stood out about this campaign is -- we've been following all the campaigns over the last couple of years using the Web -- is how much online organizing came into this.
This is Barack Obama's own social network that he created -- the campaign created on the Web site -- a place where supporters, since the beginning of 2007, could meet other supporters locally, organize their own events, their own canvassing, their own fundraising. And we saw them in action yesterday phone banking, placing over a million calls to battleground states over the course of election day.
Now Barack Obama and his team thanking all those online supporters, saying this is all because of you. That's a few million online supporters, through text messages, e-mails, that were allowed to participate in his campaign who are now wondering about how they're going to be able to participate in the Barack Obama presidency -- Wolf.
BLITZER: Abbi, thank you.
In our "Political Ticker," we're looking ahead to President-Elect Obama's cabinet and Republican he may potentially ask to join that cabinet.
Let's talk about that and more with Lisa Caputo. She's a Democratic strategist, former press secretary to Hillary Clinton when Hillary Clinton was the First Lady in the White House. And our CNN political contributor, the Republican strategist, Leslie Sanchez.
Do you think he'll name some Republicans to his cabinet?
LISA CAPUTO, DEMOCRATIC STRATEGIST: I think it's certainly within the realm of possibility. I think he's moving very quickly. He should get great kudos today for naming a transition team organization. That will be co-chaired by John Podesta, Valerie Jarrett and Pete Rouse. And I think he's moving quite swiftly to think through who he wants to name as Treasury secretary. I think secretary of State and Defense would closely follow because of the current situation globally, with two wars and an economic situation that's not a positive one.
So I think it's certainly within the realm of possibility, because he's a uniter. And he is not like this president, let's say, who talks about it and doesn't do anything. Barack Obama is true to his word.
LESLIE SANCHEZ, CNN CONTRIBUTOR, REPUBLICAN STRATEGIST: Well --
BLITZER: And we know he likes Chuck Hagel. He's an outgoing Republican senator. And Dick Lugar, the senator from Indiana. He often speaks about those two Republicans, people he likes to consult with.
SANCHEZ: Sure. Sure. And I want to just (INAUDIBLE) to the point. I mean, George W. Bush did put Mineta as Transportation secretary. There was bipartisanship in that cabinet.
But moving forward, I think it should be applauded in terms of the swiftness that Barack Obama is appealing. There are many Republicans, I think, that look to -- to bolster their power in this new administration and see what they can do, in the Senate particularly.
BLITZER: What advice, Lisa -- and you have, you know, unique knowledge of this because you were involved in the transition back at the end of '92 and '93, when you were with Hillary Clinton, when she went from Arkansas to the White House. What advice -- best advice would you give Michelle Obama right now, looking ahead to her days as a First Lady?
CAPUTO: To be true to yourself and true to your family is the first thing I would tell her. And secondly, I would tell her to look at the role of the first lady and define it as you want. And to realize that every first lady defines that role for herself. Every first lady brings unique traits to that role and there's no stereotypical first lady. It's defined by each person in their own right.
BLITZER: What advice would you give her, Leslie?
SANCHEZ: I think she very much should follow the model of what Laura Bush was able to do. She took on issues like about early childhood cognitive development. She talked about reading first and issues that were important to her through her entire career and as a librarian and an educator and brought that to a national platform.
There's tremendous opportunity in education and any issues as a mom, as a leader.
But I will tell you, as a woman of color, it is going to be imperative this new image that we see. I think I'm excited about that and what it means for women, I think, around the -- around the world, actually.
BLITZER: I think a lot of people are excited. You know, and, Lisa, she's got to be aware of -- remember the headaches that Hillary Clinton and Bill Clinton had with Chelsea -- would she go to public school, would she go to private school. You've got to protect these two little girls that President-Elect Obama and Michelle Obama have right now.
CAPUTO: Absolute. And I think that they will draw a hard line -- and they should -- around those girls' privacy, because they're young girls. They're going to grow up in the White House. And their privacy should be protected. And I hope everybody in the media is respectful of that wish.
Certainly, the media was respectful of the Clintons' wish for Chelsea's zone of privacy. And I think the Obama family has every right to draw an even harder line around these two young girls.
SANCHEZ: And --
BLITZER: I think we were pretty respectful of the Bush twins, as well.
SANCHEZ: Exactly. Until they reached a certain age and went off to college.
SANCHEZ: And then all -- you know, all bets were off. But, overall, I think the press has stood down when it comes to protecting the family and the children.
BLITZER: All right, take a look at this. The Dow Jones Industrials down 428 points on this day, the first day of President- Elect Barack Obama. We're watching what this means. We're told there's deep concern right now that the recession could be longer and deeper than some of the economic experts had assessed.
He says he wept at Barack Obama's victory. Now, Colin Powell is speaking out about this historic win.
(BEGIN VIDEO CLIP)
COLIN POWELL, FORMER U.S. SECRETARY OF STATE: President-Elect Obama did not put himself forward as an African-American president. He put himself forward as an American who happened to be black.
(END VIDEO CLIP)
BLITZER: Powell himself was once seen as a potential presidential contender. Does he have any regrets? Colin Powell speaks to CNN one-on-one in an exclusive interview. You'll see it here.
And global reaction to the Obama victory -- we take you around the world. You'll hear what people are saying in Baghdad, Moscow and elsewhere.
Stay with us. You're in THE SITUATION ROOM.
BLITZER: It's no exaggeration to say the entire world is watching President-Elect Barack Obama's historic win. Here with the view from Russia and Iraq and Afghanistan.
BARBARA STARR, CNN PENTAGON CORRESPONDENT: I'm Barbara Starr in Bagram, Afghanistan.
The election of Barack Obama as the next president of the United States being received very emotionally by some of the younger troops here, who say that basically they believe the torch has again been passed, now to their generation.
They have been watching Obama's message of change not just about the war, but about the economy and the financial situation back home. And they say they will be watching to see Obama deliver on that message.
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: I'm Matthew Chance in Moscow.
And just hours after Barack Obama's election victory, the Russian president has launched a scathing attack on U.S. policy, blaming Washington for the global financial crisis and the recent war in the former Soviet Republic of Georgia.
Ties between the United States and Russia, of course, have been strained in recent years over issues like NATO expansion and missile defense in Eastern Europe. Russian officials now say they expect to see a fresh start in relations under President Obama.
PHIL BLACK, CNN CORRESPONDENT: I'm Phil Black in Baghdad, where many Iraqis have been glowing in their praise of President-Elect Obama. On the streets, he has been described to us as intelligent, of good character and a vast improvement on the current president. Iraqis feel that he will change American policy in this country, although only subtly.
Among Iraqi politicians, great surprise at an Obama victory. Many had predicted a McCain triumph until the end, despite recent opinion polls. But they all say they can work with a President Obama. They support his policy of pulling out of Iraq, but not before this country is ready.
BLITZER: I spoke with Barack Obama about the war in Iraq, as well as the hunt for bin Laden, in our one-on-one interview last Friday. Listen to what the now president-elect told me.
BLITZER: What about the war in Iraq? You're going to want to stop that war, as well, right?
OBAMA: The war in Iraq -- we can achieve some significant savings. It's not going to come immediately. I've said I want a responsible drawdown. We're still going to have to refit our military. We're still going to have to deal with rising veterans costs. Post- Traumatic Stress Disorder, for example, I think it has been under- diagnosed. We've got to make sure treatment is (INAUDIBLE).
BLITZER: So the $12 billion the United States is spending a month right now on Iraq, that's going to go on, at least, for what, a year, a year-and-a-half?
OBAMA: My hope is, is that we draw down that money -- over time, it is drastically reduced. But it's -- the point is, is that we're not going to be able to take that $12 billion and suddenly automatically apply it all to domestic stuff. We've got to take care of our troops. And we're still going to have expenditures in Afghanistan, because we need to hunt down bin Laden and al Qaeda and put them finally out of business.
BLITZER: Do you know how to capture bin Laden?
OBAMA: I will focus on what Secretary Gates and others have indicated is our number one security threat. And that is bin Laden and Al Qaeda. We will go after him. We will kill him or we will capture him, try him, apply the death penalty to him, where it is necessary.
But that is the threat that we should have stayed focused on. That's the threat that I will focus on when I'm president.
BLITZER: His words last Friday in an interview with me. They take on more significance right now, now that he's been elected president.
She's from the opposing party, but Condoleezza Rice says President-Elect Obama's win makes her proud.
(BEGIN VIDEO CLIP)
CONDOLEEZZA RICE, U.S. SECRETARY OF STATE: One of the great things about representing this country is that it continues to surprise. It continues to renew itself. It continues to beat all odds and expectations.
(END VIDEO CLIP)
BLITZER: The secretary of State talks personally about an African-American winning the White House and what it means to her. You'll hear more of what she had to say.
Also, an historic moment especially meaningful to African- Americans. We'll get their reaction to Barack Obama's victory.
Plus, the Dow Jones -- take a look -- it's sinking right now. What's going on? We're live on Wall Street.
Stay with us. You're in THE SITUATION ROOM.
BLITZER: Let's check in with Jack Cafferty once again. He's got "The Cafferty File" -- Jack.
CAFFERTY: The question this hour is: What was John McCain's biggest mistake?
Joan writes: "McCain's biggest mistake was running his campaign on an entitlement mentality. He truly felt he was owed this election and when he saw it wasn't going to be handed to him, he ran a very negative campaign, and in the process, turned off many Americans."
Becky in Austin, Texas: "Let's see, there was his choice of running mate, lack of understanding of our economic crisis, lack of coherence throughout the campaign and, of course, who could forget "Joe the Plumber?" I wonder what he's going to do now?"
Sarah writes: "He made a lot of mistakes, but I think his biggest was picking Sarah Palin, not just because it was a drag on the ticket -- which was part of the reason he lost -- but because of the divisions that she caused within the Republican Party."
Melissa in Canada: "The biggest mistake -- to change who he was as the candidate back in 2000 and become more in line with the status quo that nobody really supports anymore. He needed a clear message of how he was not George W. Bush and he never really delivered on that, either."
Kirsten in San Diego: "Simple. He elected a superficial" -- or "he selected" -- I'm sorry -- "he selected a superficial political tactic for a vice president instead of a qualified successor."
And Mark in Mississippi says: "The popular opinion will be Sarah Palin. I do believe John McCain's worst mistake was running as a Republican in an election year following George W. Bush. I don't think, in this election cycle, any Republican could have won the presidency."
If you didn't see your e-mail here, you can go to my blog at CNN.com/caffertyfile and look for yours there among hundreds of others.
I have one other question. Why are we doing four hours of this today?
BLITZER: Because it's a huge, historic day.
CAFFERTY: That was the reason I figured you'd tell me.
BLITZER: OK. And the viewers love you.
CAFFERTY: Got you.
BLITZER: Jack, stand by.
Let's go over to Susan Lisovicz. She's over at the New York Stock Exchange, where the numbers are going down -- I'm hearing, Susan, a lot of investors fearing this recession that apparently we're in right now could be deeper and longer than even some of the economists were thinking. What's going on?
SUSAN LISOVICZ, CNN FINANCIAL CORRESPONDENT: Well, you know, Wolf, we have a new president. We have the same old problems. That's really it in a nutshell.
You know, we get continuing data that shows just how fragile this economy is. And so while yesterday we had the best election day rally in 24 years, because there was a certainty that Senator Obama would become President Obama, that it would remove at least one uncertainty that weighed on investors' minds, the fact is he's going to inherit a very, very tough economy.
And he acknowledged that last night in his victory address. This is the toughest financial situation since the Great Depression.
Case in point, we've got a couple of jobs reports today -- not the all encompassing monthly jobs report, but one on announced job cuts, which showed a rise from September to October. And then one on just the service sector, which is the broadest part of the U.S. economy. And it showed a loss of more than 150,000 jobs.
We also had a very big pharmaceutical company today, GlaxoSmithKline, continuing this daily parade of companies -- blue chip companies announcing that they're downsizing their staff. Glaxo said they're going to cut a thousand jobs. We also had -- we had mortgage applications which hit -- weekly mortgage applications at an eight year low.
You know, the solution to the economy, many bright people believe, is the housing market. That's where it started. That's where it will end. So when you see that mortgages are still too expensive and that people aren't buying homes, that is something that really weighs on the market. And you see with the sell-off that accelerated in the final hour of trading, the Dow will end -- close lower by 500 points -- Wolf.
BLITZER: All right. A miserable day on Wall Street. Susan, thank you.
To our viewers, you're in THE SITUATION ROOM.