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Obama Vows Swift Action on Economy; Dems Confront Lieberman; Interview With Michigan Governor Jennifer Granholm

Aired November 7, 2008 - 16:00   ET


SOLEDAD O'BRIEN, CNN ANCHOR: Happening now, the president-elect promises immediate action to jump-start the economy. Barack Obama faces reporters for the first time in his new position of power. This hour, his top priorities and his performance, too.
Plus, the scramble to be in Obama's cabinet. We'll take you behind the scenes, tell you who has the inside track on that.

And Michelle Obama as first lady and first mom. She's giving the nation a heads-up about what she hopes to accomplish in the White House.

Wolf Blitzer is off today. I'm Soledad O'Brien. And you're in THE SITUATION ROOM.

It lasted only 12 minutes. A surprisingly short debut news conference for a president-elect who's known for eloquence. But during that time, Barack Obama left little, if any, doubt that the economy is going to be his most urgent priority on day one in the White House.



SEN. BARACK OBAMA (D), PRESIDENT-ELECT: This morning we woke up to more sobering news about the state of our economy. The 240,000 jobs lost in October marks the 10th consecutive month that our economy has shed jobs. In total, we've lost nearly 1.2 million jobs this year, and more than 10 million Americans are now unemployed.

Tens of millions of families are struggling to figure out how to pay the bills and stay in their homes. Their stories are an urgent reminder that we are facing the greatest economic challenge of our lifetime, and we're going to have to act swiftly to resolve it.

Now, the United States has only one government and one president at a time. And until January 20th of next year, that government is the current administration.

I've spoken to President Bush. I appreciate his commitment to ensuring that that his economic policy team keeps us fully informed as developments unfold. And I'm also thankful for his invitation to the White House.

Immediately after I become president, I'm going to confront this economic crisis head-on by taking all necessary steps to ease the credit crisis, help hard-working families, and restore growth and prosperity.

This morning, I met with members of my transition economic advisory board who are standing behind me, alongside my vice president-elect, Joe Biden. They will help to guide the work of my transition team, working with Rahm Emanuel, my chief of staff, in developing a strong set of policies to respond to this crisis. We discussed in the earlier meetings several of the most immediate challenges facing our economy and key priorities on which to focus on in the days and weeks ahead.


O'BRIEN: Let's bing bring in CNN's Jessica Yellin. She's covering the Obama transition in Chicago.

Jessica, what did you take away from this press conference?

JESSICA YELLIN, CNN CORRESPONDENT: Well, Soledad, what I heard Obama doing was reassuring skittish Americans that as president, he will have a laser-like focus on repairing the nation's economy. And he brought out with him that team of seasoned experts who speak just by the picture to Americans' fears that this man by be new. They aren't; they know how to get things done. And his message is he will take action from the very get-go.

As one of his first moves, he's putting his political capital behind urging Congress to enact an immediate economic stimulus plan, and he said if they don't, he'll make that his priority next year.


OBAMA: We need a rescue plan for the middle class that invests in immediate efforts to create jobs and provide relief to families that are watching their paychecks shrink and their life savings disappear. A particularly urgent priority is a further extension of unemployment insurance benefits for workers who cannot find work in the increasingly weak economy.

A fiscal stimulus plan that will jump-start economic growth is long overdue. I've talked about it throughout this -- the last few months of the campaign. We should get it done.


YELLIN: Soledad, in addition to supporting extended unemployment benefits, he also wants to see that stimulus offer help to families facing foreclosure, assistance to small businesses, local governments and, importantly, the auto industry.

And one final point on this, he did once again repeat, as did he in the first sound you played at the beginning of the show, he emphasized he is not yet the president, there is only so much he can do right now -- Soledad.

O'BRIEN: Jessica Yellin reporting from Chicago for us.

Jessica, thanks.

Now, choosing a cabinet is one of President-elect Obama's most urgent priorities. You heard him say it at that press conference. It's also a hush-hush process.

But our Senior Political Analyst Gloria Borger is working her sources, writing down some names.

Before we talk about those names though, first let's talk about what you thought of the press conference. Short.

GLORIA BORGER, CNN SR. POLITICAL ANALYST: Well, it was short. And I think he did it on purpose that way.

He kept saying, as Jessica said, there's one president at a time. He wanted to say look, I've got a plan. If they don't do something in Congress on the stimulus package, I will. I'm not president yet.

And one other important.message, Soledad, was set partisanship aside. That's a message the American public really wants to hear right now.

O'BRIEN: OK. Well, then take that to our next question, the look of the cabinet. Will he set partisanship aside?

BORGER: Well, we don't really know yet. It's clear that he's reaching out, certainly.

Let's start with secretary of state. Secretary of state, high on the list as someone who ran for the Democratic -- had the Democratic nomination for president, John Kerry, very high on the list. Senator Chris Dodd of Connecticut, a very good Obama friend. Also on the list.

Familiar names, New Mexico Governor Bill Richardson came out for Obama. Lots of folks in the Hillary Clinton camp didn't like that. And former U.N. Ambassador Dick Holbrooke.

O'BRIEN: How about secretary of defense?

BORGER: Well, secretary of defense, there's where the bipartisanship thing comes in, because they're really trying to get the current secretary of defense, Robert Gates, to stay. One of my sources today who's very involved in the cabinet gathering said that they have some indications that that may happen for just a certain period of time. That would certainly help them, particularly if they want to close Guantanamo, and with their plan for troop withdrawal in Iraq.

O'BRIEN: It wouldn't make sense to name a timeline for him, obviously.


Attorney general, who are the names that are being floated right now?

BORGER: Well, one name I keep hearing more and more is Arizona Governor Janet Napolitano. She was also an early Obama supporter, a former attorney general, U.S. attorney in that state, and really has a lot of experience with immigration cases. Someone told me she's tried about 1,000 of them. That's going to be very important for the next attorney general.

O'BRIEN: Secretary of commerce?

BORGER: Well, there's a long list. Lots of people want that job.

O'BRIEN: Give me the top names.

BORGER: Leon Panetta, former White House chief of staff; Chicago businesswoman Penny Pritzker, ver big fund-raiser for Barack Obama, former Clinton adviser Laura Tyson.

We're not sure, because one thing, Soledad, they want this cabinet to look like America. They care about diversity, and so they're sort of looking at all the pieces and trying to juggle things a little bit.

O'BRIEN: One of the things they try to fit in there.

Gloria Borger, thank you very much.


O'BRIEN: Appreciate that.

As of today, President-elect Obama can claim that he turned another red state blue. CNN can now project Obama narrowly winning North Carolina and its 15 electoral votes. That leaves only one state without a projected winner. That's Missouri.

The latest returns show McCain leading Obama by just a percentage point in that state, which has 11 electoral votes. And, of course, Obama had more than enough electoral votes to win the White House without either of those states.

Over on Capitol Hill, we're learning more about a confrontation with Democrat-turned-Independent Senator Joe Lieberman. At issue is Lieberman's support of John McCain and his very public criticism of Barack Obama. Now at stake, Lieberman's committee chairmanship and whether he's going to continue to caucus with the Democrats.

Let's get right to our Congressional Correspondent Dana Bash.

Dana, you've been reporting on what's been going on behind the scenes. What are you hearing?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, Soledad, you know, we have learned that in that private meeting yesterday, Senate Majority Leader Harry Reid told Joe Lieberman that, because of that harsh criticism specifically of Barack Obama at the Republican convention, that Reid wants to strip Lieberman of his chairmanship of the Homeland Security Committee and instead make him the chairman of a lower profile committee. And I'm actually told that one option that Reid gave Lieberman was the Veterans Affairs chairmanship. Now, that is possible, but it also seems at this point that other low-profile committees are more likely.

Now, the Lieberman aide I spoke to said that Lieberman told Reid that that was "not acceptable," and that Lieberman thinks he should remain chairman of the Homeland Security Committee because he actually helped write the legislation that created the Homeland Security Department. And get this, Soledad. Things have gotten so tense, that sources tell us Lieberman, the former Democratic vice presidential nominee, is in discussions with the Republican Senate leader about caucusing with them.

And actually, just moments ago our John King sat down with the Senate majority leader, Harry Reid, and asked him about the pressure on him to punish Lieberman and his own feelings about this.


SEN. HARRY REID (D-NV), MAJORITY LEADER: Joe Lieberman has done something that I think was improper, wrong, and I'd like -- if we weren't on television, I'd use a stronger word of describing what he did. But Joe Lieberman votes with me a lot more than a lot of my senators. He didn't support us on military stuff and he didn't support us on Iraq stuff. But you look at his record, it's pretty good.


BASH: You can see the pressure and how torn Harry Reid is there about what to do about Lieberman. But he also did say, Soledad, that the decision on whether to really punish Lieberman and how far to grow is up to the Democratic Caucus, and they're going to meet next week.

O'BRIEN: We learned today that the Senate majority leader, Reid, talked to John McCain as well. Those are two people who I think it's fair to say hate each other.

BASH: I think that's pretty fair to say. They did speak. In fact, Reid told our John King in this interview which is going to air on "LATE EDITION" on Sunday that he called McCain today, and the two did agree to work together in the Senate.

And as you said, this really is a big deal. Because to say they don't like each other is definitely an understatement.

You know, they came to the House together in 1983, so they've known each other for 25 years. And remember, Reid was incredibly vocal during the campaign about how he did not think that McCain had the temperament to be president -- Soledad.

O'BRIEN: All right. Dana Bash for us this afternoon.

Thanks, Dana. Appreciate it.

Time now to get to "The Cafferty File." Jack Cafferty joins us.

Good afternoon, Jack.


A lot of change coming to Washington in January. And it won't all be at the White House.

Democrats are expected to have a strong upper hand now in both houses of Congress, even though there are three Senate races still up in the air: Minnesota, Alaska and Georgia, where there's going to be a runoff which has been scheduled now for early December. And there are a handful of house races undecided as well. Not quite filibuster-proof, but the game should allow Barack Obama to push through much of his agenda in the first 100 days of his presidency.

One thing though that's going to look the same on Capitol Hill is some of the faces at the top. The aforementioned Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi, they'll both be back.

Remember how they vowed to change and have bipartisanship after they were elected to those jobs a couple of years ago? They have presided over one of the worst congresses in recent memory, and a lot of people, a lot of people simply don't like either one of them for a whole variety of reasons.

So the question is this: Are Nancy Pelosi and Harry Reid the right leaders for the new Congress?

You can go to and post a comment on my blog -- Soledad.

O'BRIEN: All right, Jack. Thank you very much.

Well, jobs are varnishing. The auto industry is in peril. And the president-elect has to juggle a lot of economic priorities.


OBAMA: Tens of millions of families are struggling to figure out how to pay the bills and stay in their homes. Their stories are an urgent reminder that we are facing the greatest economic challenge of our lifetime. And we're going to have to act swiftly to resolve it.


O'BRIEN: Does Obama have any bold moves in the works? I'll ask a top economic adviser, the Michigan governor, Jennifer Granholm, straight ahead.

When the Obamas visit the Bushes at the White House on Monday, some awkward moments may be inevitable.

And Michelle Obama's most important job, how she hopes to put her children and the country first.


O'BRIEN: Some grim new economic reports drive home the challenges that Barack Obama is going to face as president. As the president- elect noted in his news conference today, employers slashed 240,000 jobs in October. That pushed the unemployment rate to a 14-year high of 6.5 percent.

The auto industry is especially hard hit. General Motors reporting a whopping $4.2 billion operating loss in the third quarter, warned it could run out of cash next year. GM says it's going to cut another 10 percent of its salaried workforce on top of the 20 percent that's already been planned.

And Ford announce it will cut about 2,200 more white collar jobs in North America after a $3 billion operating loss in the third quarter.

So joining us now, Michigan Governor Jennifer Granholm. She's a member of President-elect Obama's economic transition team.

Nice to see you, Governor. Thanks for your time. We appreciate it.

The press conference, we saw President-elect Obama laying out his priorities, growing the economy, creating more jobs. You had a meeting just before that press conference.

Is there some kind of a bold plan, like an FDR-like big thing to unveil that we will see from President-elect Obama and President Obama?

GOV. JENNIFER GRANHOLM (D), MICHIGAN: Well, I think he's going to execute on the plans that he articulated during his campaign. He refocused in the meeting on making sure that the middle class tax cuts were doable, making sure that there is immediate help for those who are unemployed by perhaps the extension of unemployment insurance, the need for states to have a stimulus package so that we don't end up seeing people cut off of health care, the opportunity for infrastructure and building to put people to work right now. And we did talk about the immediate challenges that many industries are facing as a result of the collapse in the financial markets, industries like you're seeing this morning like the auto industry, and how we can make sure they survive also.

O'BRIEN: Those were all things that you pushed for, specifically in a letter I know you wrote to Nancy Pelosi and Harry Reid. And you also talked about the 80,000 people who are facing foreclosure in your state alone.

Can we afford all of that as a priority when you look at a $10.5 trillion deficit and you also look at this $700 billion bailout plan?

GRANHOLM: The question is, can you afford not to? The issue is, are people hurting on the ground? You bet they are. Can we stabilize this market, and starting with foreclosures, because that's where much of the problem began?

He had great people around the table today who are experts in dealing with these matters. He's assembled and will continue to assemble a tremendous team. He's just -- he's so incredibly smart and probing and wants to make sure that the right decisions are made. Recognizing that, of course, he's not president yet. He's not president until January 20th. And so between now and January 20th, are there steps that can be taken, or can Congress take some steps to provide relief on the ground?

That's really -- we had a talk about triaging. What's the most pressing need? How do you get that done recognizing that he's not going to be president, at least having the office, until the 20th? And how do you make sure that the plans that he announced on the campaign trail can be fulfilled?

O'BRIEN: Is there a timeline for that triage? Because as you know well, the economy was the issue, to a large degree, that brought him into office. How much patience will the American people have when we see really dire economic times?

GRANHOLM: Well, I think that people have to recognize that this didn't happen overnight, even though there was sort of a cataclysmic week there where the markets really imploded. But certainly the buildup to it, the causes, did not happen overnight, and it's not going to be overnight to be able to get out of this.

However, one of the great strengths of President-elect Obama is that he is capable of seeing that long-term strategy with some short-term steps. And he's assembling a tremendous team to do that. And he expressed in the meeting and at the press conference great confidence in the long-term confidence in the ability to stabilize this economy and come out stronger on the other side.

O'BRIEN: I'm sure you're well aware that your name is on many, many lists to be part of Obama's cabinet. I've seen Supreme Court justice, I've seen secretary of commerce, both of those lists with your name on them.

Which of those jobs do you want?

GRANHOLM: I am excited to be a partner on the ground as governor of a state that desperately has needed a partner in the White House. You know, Soledad. You've been to Michigan. We have been through eight years of slamming the manufacturing industry, and with very little support from Washington, D.C.

Well, Senator Obama's plans, especially in creating an energy sector that will replace those lost manufacturing jobs while he tries to provide aid to the traditional industries like manufacturing, that is music to our ears. So I'm going to be a partner on the ground.

O'BRIEN: Will you be a partner as governor or has he asked you to be part of his cabinet?

GRANHOLM: No, I'm excited to be governor while there is an administration that supports the issues that we care about in Michigan.

O'BRIEN: Governor Jennifer Granholm joining us this afternoon. Thanks for your time. We certainly appreciate it. GRANHOLM: You bet. Thanks so much, Soledad.

O'BRIEN: My pleasure.

If you voted, you may have stood in a really long line. But did those long lines translate into record voter turnout?

And in one state, the weather outside is frightful. Hundreds of cars stranded, schools are closed, and residents snowed in under up to four feet of snow. We'll tell you where straight ahead.




Happening now, it is the first family of the Democratic Party. Some members were out front in endorsing Barack Obama. We'll take a look at which of the Kennedys might get jobs in the new administration.

The president-elect wants to make it easier for Cuban-Americans to visit the island and send money home. We'll hear what they have to stay about that.

And despite the bowling alley, despite the movie theater, the White House may not be where you want to raise your children. We'll see what lies in store for little Sasha and Malia Obama.

Wolf Blitzer is off today. I'm Soledad O'Brien. You're in THE SITUATION ROOM.

It's certainly going to be an interesting meeting. During the campaign, President Bush surely preferred Barack Obama to lose, while Obama openly campaigned against the president's policies. But now the campaign's over and the two men will come together on Monday. That's on Monday.

Today, the president-elect was asked about that meeting and if he'll challenge President Bush over any economic disagreements. Listen.


OBAMA: I'm sure that in addition to taking a tour of the White House, there's going to be a substantive conversation between myself and the president. I'm not going to anticipate problems. I'm going to go in there with a spirit of bipartisanship and a sense that both the president and various leaders in Congress all recognize the severity of the situation right now and want to get stuff done.


O'BRIEN: CNN White House correspondent Elaine Quijano joins me now.

Hey, Elaine.


Well, you know, after the partisan rancor on the campaign trail, Monday's meeting will likely be decidedly nonpartisan, and certainly historic.


QUIJANO (voice-over): Democrat Barack Obama and Republican George Bush will come together Monday for the start of a time-honored tradition of American democracy, the transfer of presidential power.

This year, it is steeped in history, the first transition post 9/11, the first African-American president-elect.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It will be a stirring sight to watch President Obama, his wife, Michelle, and their beautiful girls step through the doors of the White House. I know millions of Americans will be overcome with pride at this inspiring moment that so many have waited so long.

QUIJANO: Just as George Bush did with Bill Clinton in December of 2000.


BUSH: I am humbled and honored. And I can't thank the president enough for his hospitality. He didn't need to do this.


QUIJANO: The incoming president will have a chance to seek advice from his predecessor.


BILL CLINTON, PRESIDENT OF THE UNITED STATES: Get a good team and do what he thinks is right.


QUIJANO: This time, as President Bush sits down with president-elect Obama in the Oval Office, the two will have a full agenda.

BUSH: We face economic challenges that will not pause to let a new president settle in. This will also be America's first wartime presidential transition in four decades. We're in a struggle against violent extremists determined to attack us, and they would like nothing more than to exploit this period of change to harm the American people.

QUIJANO: The two leaders will also have the delicate task of balancing decision-making and consultation in the coming weeks, as president-elect Obama's views come into sharper focus.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: And it's more complicated this time than ever before, because we have an economic crisis on our hands. And he may it be called upon to make decisions about priorities and about policies during the transition.


QUIJANO: Monday's meeting will also be a time for the current and future first ladies to meet. As their spouses confer in the Oval Office, Michelle Obama and Laura Bush will tour the private residence, a chance for Mrs. Obama to take a look at the place that will become home for the Obama family -- Soledad.

O'BRIEN: Elaine Quijano at the White House for us -- Elaine, thank you.

Getting some new images to share with you. They're from election night behind the scenes of the Obama family watching the returns.

Internet reporter Abbi Tatton is with us -- Abbi.

ABBI TATTON, CNN INTERNET REPORTER: Soledad, a little peek at what election night might have been like for the Obamas behind the scenes, a lot of photos just been uploaded onto, onto the photo- sharing account from the Barack Obama campaign.

Take a look at this. You can only imagine what must be going through Barack Obama's head right now, as he's sitting in a hotel room watching these returns come in. The family is all there, daughters Malia and Sasha. Michelle Obama's mother, Marian Robinson, is there as well, putting a helping hand on to Barack Obama's shoulder as the night goes on.

A picture of the Bidens arriving, Jill Biden there hugging Michelle Obama. And, then, as the evening goes on, some of the behind-the- scenes either before or after this speech, the couple there, the Obamas as he was giving the speech on election night.

There is a lot of material up here, been uploaded by the Obama campaign that's been sharing a lot with their online supporters. Dozens more photos at -- Soledad.

O'BRIEN: Great. Abbi, thank you.

There were a few unexpected moments in president-elect's Obama debut news conference today.


B. OBAMA: I didn't want to get into a Nancy Reagan thing about, you know, doing any seances.


B. OBAMA: On the other hand, our preference would be to get a shelter dog, but, obviously, a lot of shelter dogs are mutts, like me.


B. OBAMA: Will the man known as a rousing speaker throw us some verbal curveballs in the days and years ahead?

Stand by for our "Strategy Session."

And people flocked to polling places in droves, or at least they seemed to. Did voter turnout live up to great expectations?

And, if you missed Barack Obama's first news conference as president- elect, you will want to stay right here. You can listen to the whole thing straight ahead.


O'BRIEN: On Election Day, we all saw the long lines at polling places and heard the stories of people who were waiting hours and hours to vote. It seemed like it would be an election for the record books.

Our senior political analyst, Bill Schneider, is here with a reality check.

Well, was it? Was it a record turnout, Bill?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, of Democrats, yes. Of all voters, not so much.


SCHNEIDER (voice-over): We expected to see high voter turnout in this election.

B. OBAMA: It may be raining. The lines may be long. We're going to have record turnout.

SCHNEIDER: Was there? Just over 208 million Americans were eligible to vote this year. Edison Media Research estimates that a total of just over 130 million actually voted. That's over 62 percent, two points higher than four years ago -- 2008 continues a steady trend of higher voter turnout since 1996, but it's not exactly a quantum leap.

According to the Center for the Study of the American Electorate, a downturn in the number and percentage of Republican voters going to the polls seemed to be the primary explanation for the lower-than- predicted turnout. The long lines at the polls were mostly populated by Democrats.

Democrats went from 37 percent of voters in 2004 to 40 percent this year. Independents also went up. Republicans declined from 37 to 32. Something else failed to happen, the so-called Bradley effect, where voters tell pollsters they intend to vote for an African-American candidate, and then don't.

MICHELLE OBAMA, WIFE OF SENATOR BARACK OBAMA: If there was going to be a Bradley effect, or if it was going to be in play, Barack wouldn't be the nominee.

SCHNEIDER: There is no evidence that people were lying to pollsters. The CNN poll taken by the Opinion Research Corporation just before the election showed Barack Obama getting 53 percent of the vote and John McCain 46 percent. That is exactly what they got.

CNN and "TIME"'s pre-election poll showed Obama winning Florida, the biggest battleground state, by four points. Obama won Florida by three. The pre-election poll predicted Obama would carry Ohio by four. He did.


SCHNEIDER: The story of this election was not so much a huge surge of new voters, as it was a huge surge of Democratic enthusiasm and Republican defeatism -- Soledad.

O'BRIEN: Explains it all.

All right, Bill Schneider for us -- thank you, Bill.


O'BRIEN: Barack Obama made one point clear in his first news conference as president-elect. He said he's not the president yet. But do those words contradict his mannerisms and his message? "Strategy Session" is up next.

Plus, it's November 7, but the election isn't over yet for some key races. We will have the latest on that straight ahead.


O'BRIEN: President-elect Barack Obama holds his first press conference. It's short. It's heavy on the economy, and it's got a couple of awkward moments. We will take a look -- straight ahead.



B. OBAMA: The United States has only one government and one president at a time. And, until January 20 of next year, that government is the current administration.


O'BRIEN: That's the president-elect acknowledging he's not in power yet, but is there anything he can do to jump-start his agenda now?

Here for today's "Strategy Session," CNN political contributor Donna Brazile, a Democratic strategist, and conservative commentator Terry Jeffrey, the editor in chief of the Cybercast News Service.

Nice to see both of you.

What did you think of this number-one press conference for the president-elect?

DONNA BRAZILE, CNN POLITICAL ANALYST: I thought it was very presidential. He was, of course, very straightforward about the challenges ahead, addressing the high unemployment crisis today, talking about the auto industry. So, I thought he was very presidential in tone. He had his economic advisers behind him.

BRAZILE: Is it a problem being presidential, when, as he admitted in the press conference, he's not the president yet?


BRAZILE: And there's only one president...


TERRY JEFFREY, EDITOR IN CHIEF, CYBERCAST NEWS SERVICE: Well, what he is saying there, Soledad, was a constitutional truism. I mean, there's just no doubt about it.

I will tell you, I thought the most interesting thing in this press conference was the last question. He was asked is he still going to go ahead and tax the rich? And he said, well, he still thinks his tax plan is the right one, but a principal focus of his tax plan is going to be economic growth.

I think there's a contradiction between increasing the marginal tax rates and economic growth. And I think that president-elect Obama was implicitly conceding that today. We might be seeing right now the first flip-flop of President Obama, that he actually isn't going to tax the rich, because that would only deepen the recession we're heading into.

O'BRIEN: Well, he actually didn't have a lot of details, I mean, outside of listing all the things he was going to focus on, all the priorities. And there were sort of a dozen priorities, if that's not contradictory in and of itself. He didn't really say specifics.


And Terry's talking about the rich. Obama is talking about the middle class. He's talking about those right now who are worried about keeping their jobs and their homes. He was trying to reassure the American people that he will have a transition in place, so the moment he takes the Oval Office, takes the oath of office, he will hit the ground running.

O'BRIEN: There were a couple minutes in this -- or moments in this press conference that were kind of the awkward moments, because here's a guy who's been very steady through the whole campaign.

A couple of things. First, he talked a little bit about Nancy Reagan and the seance. Let's listen to a clip first.



B. OBAMA: In terms of speaking to former presidents, I have spoken to all of them that are living, obviously, President Clinton -- I didn't want to get into a Nancy Reagan thing about, you know, doing any seances.

I have re-read some of Lincoln's writings, who's always an extraordinary inspiration.



O'BRIEN: Cheap shot? Funny? Cute? Off-the-cuff?

BRAZILE: It was off-the-cuff. And, look, that was a moment of, you know, just letting his hair down.

I think what was important is that he has reached out. He is talking to former presidents. And it's important that he continues to talk to, you know, both the former president, as well as the current president, because he's inheriting a mess.

O'BRIEN: Agree or disagree?


JEFFREY: Nancy Reagan is a great and a gracious lady. And she would never take a swipe at...


O'BRIEN: Frail, elderly.

JEFFREY: She is also very, very gracious. She would not take a swipe at president-elect Obama.

I think that was a gaffe. He shouldn't have said it. I'm going to give the guy a break. Look, I think we ought to focus about what he is planning to do in terms of public policy. That ought to be debated. There are going to be very series debates, I know, between conservatives and President Obama over where he's going to take the country. But we ought to focus on that, rather than on style. I think he's got a great style. But he shouldn't have...


O'BRIEN: But style is interesting to see. I mean, it is one of the things you take a look at, one of the -- you get a chance to see in a first press conference.

He talked about the family dog that they're trying to think about. I didn't realize that it's Malia who is allergic.


O'BRIEN: So, they're trying to figure out, what kind of dog can you get for a kid who is allergic to a dog?

Here's what he said at the end of that comment. Listen.


B. OBAMA: Malia is allergic, so it has to be hypoallergenic. There are a number of breeds that are hypoallergenic.

On the other hand, our preference would be to get a shelter dog, but, obviously, a lot of shelter dogs are mutts, like me.



O'BRIEN: What was your reaction to that, "mutts like me," and me, I guess I should say, too? But is that an awkward presidential -- is that a gaffe, too, do you think, Terry?

JEFFREY: Well, he's talking about -- he has the right to say thinking he wants about himself.

By the way, he ought to read Mark Levin's book "Rescuing Sprite," a great book about getting a dog from a shelter. I think he was being a little bit politically correct there. But there's something he has in common with Mark Levin.

O'BRIEN: A little politically incorrect, you mean?




JEFFREY: No, no, politically correct. He's going to get a dog from a shelter.

O'BRIEN: Oh, politically correct on that.


O'BRIEN: No, I guess my question was, you know, there were some people in the room when we were watching that who said, ooh. And I wondered -- I personal, as someone who is biracial, not offended at all. But I wonder, is that going to read badly?

BRAZILE: No. No, I -- look, I -- again, I thought, when I heard himself say it, call himself a mutt, I cracked up. I'm like, he doesn't look like a mutt, you know, a lot smarter, but...

O'BRIEN: Charming, self-deprecating?

BRAZILE: Yes, but mutts -- mutts are very smart dogs. I know a lot of mutts myself.

I actually have a Pomeranian. I would loan my dog to him, but I want my dog to stay home.

JEFFREY: You know, your previous report on the polls showing that race really wasn't a factor in this election. This is an election that, you know, if you're a conservative...


O'BRIEN: It wasn't a barrier.


O'BRIEN: I would say not a barrier.


O'BRIEN: People -- there were people who voted on race, but it wasn't a barrier to...


JEFFREY: I think we can agree on this.

I disagree with on -- with Senator Obama on a whole lot of very serious issues. But his election does show that America really is moving toward being a colorblind society. We're not going to parse people by their race and ethnicity. We're going to look at them on their merits.

That is a good thing. And he can joke about that if he's talking about himself. Good for him.

O'BRIEN: All right. Thank you very much. I appreciate it, Donna Brazile, Terry Jeffrey.

Three days after Election Day, there are still candidates who don't know if they have won or if they have lost. The key races that are still up in the air, we will take a look.

And many members of the Kennedy family backed Barack Obama. Now there is word that several might be part of the new administration. We will show you how straight ahead.

Then later, a new president-elect means a new attitude in Iraq -- how Obama's election is impacting negotiations -- straight ahead.


O'BRIEN: She's an Ivy League-trained lawyer, an accomplished professional in her own right, but what kind of first lady will Michelle Obama be?

CNN's Susan Roesgen has been looking into that. She joins us from Chicago.

There's one role she says she's going to especially cherish, isn't there, Susan?


And a bit of advice to Barack Obama, if I could be so bold, which is, whenever a woman says to you to do something, just say "Yes, dear" and do it. We understand that there's going to be a lot of estrogen in the Obama White House, that not only his two daughters, his wife, but also his mother-in-law from here in Chicago is moving to Washington.

But, as you said, Soledad, Michelle Obama says her goal as first lady is to be first mom.


ROESGEN (voice-over): There's something reassuringly normal in seeing the future first lady in a ball cap and sweat suit with the future president leading a parent-teacher meeting at their kids' school.

But the truth is, Mrs. Obama is every bit as high-powered as her husband. Michelle Obama is a Princeton graduate and a Harvard Law School graduate, just like her husband. In fact, they met at the same corporate law firm. So, why is it, then, that her goal for the next four years seems so much more modest than his?

MICHELLE OBAMA, WIFE OF SENATOR BARACK OBAMA: I come here as a mom, as a mom whose girls are the heart of my heart and the center of my world.

ROESGEN: Is Michelle Obama's number-one ambition as first lady to be first mom? That's what she writes in this op-ed piece reprinted this week from an earlier "U.S. News & World Report."

If that's true, she will be a first lady more akin to Laura Bush than Hillary Clinton.


HILLARY RODHAM CLINTON, WIFE OF BILL CLINTON: You know, I suppose I could have stayed home and baked cookies and had tea.


ROESGEN: Michelle Obama's press office declined to say how she would pursue her role as first mom. And her press office points out that she has said she will try to help working mothers and military families. How exactly she will do that, informally or in some official capacity, hasn't been revealed yet. But her daughters are number one.

M. OBAMA: One day, they and your sons and daughters will tell their own children about what we did together in this election.



ROESGEN: And, you know, Soledad, president-elect Obama has said that he listens to his wife. He takes her counsel. He's acknowledged how important her opinions are to him. And, again, you know, he may be the president-elect, ultimately, the president, but she's the boss at home. (LAUGHTER)

O'BRIEN: Kind of how it works, isn't it, Susie?

All right, Susan Roesgen this afternoon -- thanks, Susan.

On our "Political Ticker" now: The longest serving U.S. senator in history is giving up a powerful post. West Virginia Democrat Robert Byrd is stepping down as head of the Appropriations Committee. The 90-year-old Byrd has become increasingly frail in his recent years. And his decision did not come as a surprise.

Joe the plumber apparently wants more than his 15 minutes of political fame. Samuel Wurzelbacher purportedly is launching a government watchdog group to keep president-elect Obama and other politicians accountable, he says. "The Boston Globe" reports that Wurzelbacher is filling out his next move, even as he throws cold water on the speculation that he's going to run for Congress.

And, remember, for the latest political news anytime, you can go to It's also where you can download our political screen saver and can check out my blog.

After a stinging -- after a stinging electoral defeat, conservatives online are circling the wagons, with hopes of building a bigger and better Internet presence.

Our Internet reporter, Abbi Tatton, is taking a look into that new plan.

A lot of catching up to do, isn't that true, Abbi?

TATTON: Soledad they have got a ways to go. And anyone you talk to, pretty much, on the left or right is going to agree with that.

Take any example from the election. Obama supporters could sign up for text message alerts, where the McCain campaign supporters couldn't do that. On Facebook, on YouTube, Obama supporters outweighed McCain supporters by margins of four or five to one.

And the Obama campaign had its own social network from the very beginning, where supporters could meet other supporters online and plan events.

Well, now a group of online activists and prominent bloggers are saying, "We need to catch up," launching today a Web site called Rebuild the Party, calling on whoever leads the Republican National Committee next to make the Internet and technology the number-one priority, in order to reach young voters and the new grassroots online.

Now, they're setting a lofty goal here, trying to get five million new Republican online activists to get ready for 2012. If you talk to the Republican National Committee, they say -- an official there saying they're in mutual agreement that technology needs to be foremost in their efforts. They're saying they do have new things in the works, and they promise that we will hear about them soon, just, I guess, not ready for 2008 -- Soledad.

O'BRIEN: It's a lofty goal, but certainly a critical one.

Abbi Tatton for us -- thanks, Abbi. Appreciate it.

Jack joins us once again with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: The question this hour: Are Nancy Pelosi and Harry Reid the right leaders for the new Congress?

Paul in Columbia, South Carolina, says: "Reid and Pelosi represent the pettiness of partisan politics and led the most unproductive Congress ever. These are two of the people who abetted in the collapses that threaten us now. They ought to go."

Rose in Arizona: "Absolutely not. They have done nothing for the past two years, except place blame for everything on someone else. Pelosi has a big mouth. Reid is just plain incompetent. They both need to go, and quickly. They take no responsibility for their decisions."

Markel in Houston, Texas: "Reid and Pelosi are both very capable legislators, but they just might be in for a trip to the woodshed. The choice of Rahm Emanuel was not made lightly. Mr. Obama is sending a very loud, very clear message to congressional leadership. He brought in the bad cop, and this bad cop isn't inclined to play footsie."

Larry in Georgetown, Texas: "If -- I take it you're talking about Dopey and Grumpy. No, they are not what we need in our leadership today. Dopey, Pelosi, showed her clout in her speech on the bailout. And Grumpy, Reid, filled the bill with enough pork to feed the hungry of the world."

Eileen writes: "I think so, but I do see president-elect Obama reeling them in. He needs to keep his promise to America, build a bipartisan Congress. Pelosi and Reid will kick and scream, but Obama needs to tell them it's time to grow up"

And Rex in Portland, Oregon: "Haven't Reid and Pelosi already proved to us and to the world that they are hopelessly inept? Why the 9 percent approval rating? And who are those people anyhow, the 9 percent who approve?"

If you didn't see your e-mail here, you can go to my blog at Look for yours there, among hundreds of others -- Soledad.

O'BRIEN: All right, Jack, thank you.


Happening now: president-elect Barack Obama meeting with experts, and assuring Americans the financial crisis gripping the country is issue number one as he transitions into power -- his first news conference since winning the election. Also, high-profile positions for members of the Kennedy family in the Obama administration, it's a very real possibility. We will have some details of who might be in line for what.

And they are the country's new first daughters, but life in the White House comes at a price for presidential kids -- what Sasha and Malia Obama might in for.

Wolf Blitzer has got the day off. I'm Soledad O'Brien. You're in THE SITUATION ROOM.