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Obama's First News Conference; Economic Crisis Impacts Transition; Will Kennedys Be in Obama Cabinet?; Obama's Iraq Challenge

Aired November 7, 2008 - 17:00   ET


SOLEDAD O'BRIEN, CNN ANCHOR: 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'll 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.

A dismal new jobs report underscores the severity of the crisis that is facing this country and the daunting task ahead for President- Elect Barack Obama. Just hours before his news conference -- his first one since winning the election -- the government reported 240,000 job cuts in October, which pushed unemployment to 6.5 percent -- the highest number in 14 years. That news gave extra urgency to Mr. Obama's meeting with financial experts and then the meeting with the news media that followed.

CNN political -- senior political correspondent, Candy Crowley, was there -- Candy, good afternoon. What did you hear?

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Well, really interesting. You really didn't have to hear at some points, you only had to look -- at least to figure out what Barack Obama's priority is.


CROWLEY (voice-over): Flanked by his economic advisers, the president-elect made clear his priority in pictures and words.

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: Thank you. 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 hardworking families and restore growth and prosperity.

CROWLEY: He wants a stimulus package now or after his inauguration, an extension of unemployment benefits and favors help for the auto industry. Still, immediately is 74 days from now. Barack Obama is in no position to act -- a point he was quick to make.

OBAMA: 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.

CROWLEY: The incoming president says he expects no conflict with President Bush and will meet with him Monday in the spirit of bipartisanship.

In this period of limbo, as Americans watch an economy continue to fail, the president-in-waiting is intent on projecting confidence -- the show of brain power, old hands from the Clinton era, elected officials and industry hot shots behind him. And a quick selection of the chief stewards of his economic policies.

OBAMA: I want to move with all deliberate haste, but I want to emphasize deliberate as well as haste.

CROWLEY: Though he has spent some time returning phone calls to world leaders, the president-elect, who has vowed to open dialogue with hostile countries, still contemplates how to respond to a congratulatory letter from Iranian President Mahmoud Ahmadinejad. It was an all business and cautious debut, with a few light moments sprinkled in.

On his discussions with former presidents...

OBAMA: I have spoken to all of them that are living -- obviously, President Clinton.


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

CROWLEY: And about that puppy he promised his daughters if he won -- two issues to be reconciled.

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.

CROWLEY: At so many levels, so many decisions.


CROWLEY: Right after his news conference, Soledad, Obama went over to get his daily top intelligence briefing in a secure building here. Just to give you an idea of what he is facing, just in terms of getting this together, not only does he have to put a cabinet out there and make his selections, which obviously have to be approved by Congress. There are over 1,100 presidentially appointed positions in the government that have to be approved by Congress. So it's a lot of work to be done. O'BRIEN: A lot of work just on that front. And, of course, you have the economy and all those other issues he's got to deal with, too.


O'BRIEN: Candy Crowley for us this afternoon. Thanks, Candy.

The financial crisis that's gripping the country is complicating matters -- in fact, forcing everyone to rethink the way presidential transitions are usually done.

CNN's Kelli Arena is working that part of the story for us -- Kelli, what is the impact?

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Well, Soledad, the president-elect today said, as you heard in Candy's report, that he'd act with deliberate haste in naming his economic team. But Wall Street is very inpatient. It's looking for some assurance that policies that are put in place now will not be reversed in just a few months.


ARENA (voice-over): Offices are set aside, phones hooked up. Treasury officials stand ready to work with the president-elect's economic transition team.

TONY FRATTO, DEPUTY WHITE HOUSE PRESS SECRETARY: Secretary Paulson, I know, is very interested in how the next administration will deal with the economic plans that he's putting in place, for very important reasons.

ARENA: Instead of bailing out early, which is usually the case, Treasury Secretary Henry Paulson's top deputies have agreed to remain in their jobs through January 20th to assist in the presidential transition. That includes Neel Kashkari, the man who is overseeing the $700 billion economic bailout plan.

NEEL KASHKARI, ASSISTANT TREASURY SECRETARY: Transitions are always complicated. But we are going to do everything we can to make sure this one is absolutely seamless.

ARENA: Kashkari and his team are not only dealing with the transition, they're busy implementing their plan to invest $250 billion of new capital into the banking and financial sectors. But officials are also crafting other parts of the During the campaign, , including a proposal to provide relief to as many as three million homeowners about to foreclose.

Wall Street experts say it's important that Paulson make decisions with some input from the new team.

JOHN MONTGOMERY, INVESTMENT ADVISOR: I think Mark's extremely concerned that things might change. They want some sort of stability as to what's going on?

ARENA: But it's a fine line to walk.

OBAMA: I am not the president and I won't be until January 20th.

ARENA: If the new team is too involved, it could be blamed for any missteps. If it keeps its distance, it may get stuck with policies it hates.


ARENA: Still, Wall Street experts say that it's crucial for the president-elect's team to be put together early. Now, for now, Obama has not said who his pick for Treasury secretary is. And those standby offices at Treasury remain empty -- Soledad.

O'BRIEN: But there's lots of speculation. Kelli Arena for us this afternoon. Thanks, Kelly.

ARENA: Thank you.

O'BRIEN: Appreciate it. Jack Cafferty. And back to him in New York with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: After getting the wind knocked out of them in both 2006 and 2008, the Republicans are a party in disarray. From putting a woman on the presidential ticket who reportedly cannot name the members of the North American Free Trade Agreement -- there are only three and there's a hint in the title, North America -- and thinks that Africa is a country rather than a continent, to a presidential candidate who declared "the fundamentals of our economy are strong" at the very moment the worst financial" crisis in almost a century was descending on us, they appear to have lost their touch.

And if the Republicans are pinning their presidential hopes on Sarah Palin for 2012, well, good luck with that. Bush damaged the brand, but John McCain and Sarah Palin didn't do much to restore it. Republicans also enter the new year with declining minorities in both houses of Congress.

So the question is this: What does the Republican Party have to do to get back in the game? Go to and you can post a comment on my blog -- Soledad.

O'BRIEN: OK Jack, thanks. Well, he campaigned for ending the war in Iraq. Now he's been elected president. Can Barack Obama make good on his promise to bring home U.S. troops soon? We've got a reality check for you from the Pentagon.

Also, possible plum jobs in the Obama administration for members of the Kennedy family -- we'll have details of which ones and why.

And the youngest children to live in the White House since Amy Carter -- we'll take a look what lies ahead for Barack Obama's daughters.

(COMMERCIAL BREAK) O'BRIEN: They were some of the striking moments of the Obama campaign -- Senator Ted Kennedy and his niece, Caroline Kennedy Schlossberg, both endorsing the now president-elect. So could the Kennedy family be rewarded with plum cabinet posts?

CNN's Brian Todd is following some developments. Is a Kennedy -- or maybe a better way to ask it -- are more than one Kennedy headed for the Obama administration, do you think?

BRIAN TODD, CNN CORRESPONDENT: It could be one or more of them headed that way, Soledad. The Kennedys could be on the rise again, thanks to a dramatic and politically bold move that two of them made in January.


TODD (voice-over): When it could have gone either way, they gave him a critical boost.

SEN. TED KENNEDY (D), MASSACHUSETTS: It's time again for a new generation of leadership. It is time now for Barack Obama.

TODD: Now is it payback time for key members of the Kennedy clan for that endorsement back in January? We are told that among the possibilities for high profile appointments in the Obama administration, the late president's daughter, Caroline Kennedy Schlossberg, for U.S. ambassador to the U.N. or Great Britain. After endorsing Obama, she served on his vice presidential search team.

Ted Kennedy, battling cancer and entrenched as a senior senator, is likely not on tap for a cabinet post. But he, too, may wield enormous influence in the Obama White House as the likely point man in Congress for health care reform.

ROBERT DALLEK, PRESIDENTIAL HISTORIAN: You are never going to get back to what existed in 1961 to 1963, when John Kennedy was president, or even in 1968, when Robert Kennedy was running for the White House. But there is a continuing tie to the Kennedy family. It's as if they've become our royal family.

TODD: Add to the mix Robert Kennedy, Jr. , seen as a possible nominee for EPA administrator. He told The Huffington Post, "I would be of service in any way the administration asked me to be." Not exactly his sentiment on the very day his cousin and uncle endorse Obama.


ROBERT F. KENNEDY, JR. ENVIRONMENTAL ATTORNEY: It's my opinion that Hillary will make the best candidate and the most effective president.


TODD: Observers say Robert Kennedy could be a polarizing choice. An environmental lawyer and activist, he's been involved in some high profile lawsuits against big business and could become a target of conservative partisans. And there are questions about his experience.

PROF. MARC LANDY, BOSTON COLLEGE: The person who has that job has to be exquisitely well versed not just with the full panoply of policy choices, but with how the bureaucracy runs and how one performs the job of a public manager. And he simply is ill-suited to it.


TODD: Now Robert Kennedy was traveling and could not be reached for comment. One of his aides also would not comment on that remark. Also, no response from Caroline Kennedy or any member of the Obama transition team on these possibilities.

A top aide to Ted Kennedy told us the senator has consulted very often with Barack Obama, both before and since election day. The aide tried to downplay Ted Kennedy's role in the Obama health plan. But no doubt, Soledad, Ted Kennedy is going to be front and center of that effort.

O'BRIEN: And there must be some thinking of the symbolism behind Caroline Kennedy.

TODD: Right.

O'BRIEN: Any of those two posts that you were talking about for her.

TODD: She's thought of maybe to be the best bet for something like that post. And if you think about it, she's got the substance to fill the U.N. post. And look at the family history. Her grandfather served as U.S. ambassador to Great Britain right before World War II. Even if she slides right into that post, it could be a nice fit.

Now, her grandfather left under some fairly disgraceful circumstances. He was basically booted out. But that was two generations ago. Caroline Kennedy is seen as maybe a good fit for either of those jobs.

O'BRIEN: Brian Todd, thank you very much.

TODD: Thank you.

O'BRIEN: We appreciate the update.

Also, some huge buzz about who the president-elect will tap to fill one of the administration's most critical roles -- secretary of State. CNN's State Department correspondent, Zain Verjee, is working that part of the story for us -- Zain.

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Soledad, Condoleezza Rice has already talked to President-Elect Obama and promises a smooth transition at the State Department. But the guessing game is on over her successor.

(BEGIN VIDEOTAPE) VERJEE (voice-over): Condoleezza Rice gave her successor a tough new assignment while in the Middle East, admitting a peace deal has slipped from her grasp.

CONDOLEEZZA RICE, SECRETARY OF STATE: I hope that the tremendous commitment of these parties -- the Palestinians and Israelis -- is fully understood by all who will -- who will come later.

VERJEE: As the transition rushes forward, the next secretary of State will inherit a full in-box.

RICE: As to advice to the next administration, I'll give that privately.

VERJEE: The president-elect already is speaking to world leaders. He could choose someone who served with him on the Senate Foreign Relations Committee to be his top diplomat. Senator John Kerry, who lost a bid for president in 2004, endorsed Obama early on and has expertise in foreign affairs. Vice-President Elect Joe Biden's current co-chair, Republican Senator Richard Lugar, spearheaded a program that destroyed more than 7,000 Soviet nuclear warheads.

New Mexico Governor Bill Richardson was an energy secretary and U.S. ambassador to the United Nations under President Clinton and was his trouble-shooter to Sudan, North Korea and Iraq. There could be a dark horse, like former NATO Supreme Commander General Jim Jones or former Senator Sam Nunn. Whoever is chosen will work closely with Vice-President Elect Biden, a foreign policy heavyweight who will likely want a major role on national security. The State Department is ready for the new team, with transition offices and a set of briefing books.

ROBERT WOOD, STATE DEPARTMENT SPOKESMAN: We await those contacts and we have a team of 24 Department of State employees who are ready to help assist the transition team.


VERJEE: The next secretary of State faces daunting challenges -- two wars, a nuclear hungry Iran, a hostile Russia, an unpredictable North Korea and a financial crisis that could slow diplomacy down -- Soledad.

O'BRIEN: Zain Verjee, thank you. Well, U.S. commanders warn that President-Elect Barack Obama may have to revise his goal to get all U.S. combat troops out of Iraq within a year-and-a-half.

Let's go to CNN's senior Pentagon correspondent, Jamie McIntyre -- what would this mean, Jamie, for Barack Obama's promise to withdraw thousands of troops?

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Well, you know, it actually might be good. I mean, a lot of people are feeling really good about the election of Barack Obama. And it turns out that some of those people are members of the Iraqi parliament. And that could help Barack Obama. (BEGIN VIDEOTAPE)

MCINTYRE (voice-over): The U.S. military has been sweating the failure of the Iraqi parliament to approve an agreement to allow U.S. troops to continue to operate in Iraq and feverishly working on a fallback -- an extension of the U.N. mandate that expires at year's end. But that was before this.


WOLF BLITZER, HOST, THE SITUATION ROOM: Barack Obama, 47 years old, will become the president-elect of the United States.


MCINTYRE: Suddenly, Iraqi politicians aren't so worried about nailing down a firm departure date for U.S. troops, because President- Elect Barack Obama seems to be on the same page. During the campaign, Obama promised to pull all U.S. combat forces out of Iraq in 16 months, by withdrawing the remaining 14 brigades -- roughly 100,000 troops -- by the summer of 2010.

The Iraqis want a commitment for the U.S. troops to withdraw from their cities by mid-2009 and be gone entirely by the end of 2012. Obama gave himself some wiggle room. He wants to leave an unspecified number of U.S. troops, perhaps as many as 50,000, to fight Al Qaeda and back up the Iraqi forces.

OBAMA: We've got to be as careful getting out as we were careless getting in.

MCINTYRE: To that end, Obama has pledged to consult U.S. commanders and adjust as necessary. If he doesn't know it already, Obama will soon discover the new American commanding general in Iraq, Ray Odierno, is every bit as cautious as his predecessor, David Petraeus. Both advocate a go slow approach to troop cuts.

Contacted by CNN, General Odierno, through a spokesman, provided this statement about speeding up the drawdown. "What we've learned from our conditions-based approach is that we have the possibility of actually moving faster than we initially expected."

But he also stressed, "We want to ensure we redeploy our forces in a careful manner."


MCINTYRE: Already, one Army brigade is coming home early, in part because the Iraqis insist they are ready to step up. Whether that's true will determine how easy it will be for Barack Obama to fulfill his campaign pledge to bring all the troops home -- Soledad.

O'BRIEN: Jamie McIntyre for us. Jamie, thanks.

First, it was Fidel Castro; now his brother, Raul. Cuba has been vexing the White House for five decades. Now Barack Obama's promising change and not everybody is happy about it.

Plus, he made jokes about Obama while he was campaigning for John McCain, but could there be a role for are California Governor Arnold Schwarzenegger in the Obama administration?


O'BRIEN: Fredricka Whitfield is monitoring stories incoming THE SITUATION ROOM right now -- Fred, good afternoon.


Well, after two days of steep losses, the Dow finished the week up more than 200 points. The rally is despite more negative news about the economy, including a jump in the nation's jobless rate.

Another report shows pending sales of existing homes dropped nearly 5 percent in September, after rising more than seven percent in August.

Still, the index remains above year ago levels, with many people taking advantage of properties at discounted prices.

And three years after the Atlanta courthouse shootings, a jury this afternoon found Brian Nichols guilty of the killings that left a judge and three other people dead. Jurors rejected defense claims that Nichols suffers from mental illness. The penalty phase begins on Monday. Prosecutors are seeking the death penalty.

And United Airlines has decided against raising fees on checked bags. The airline was going to raise the fee from $25 to $50 for a second checked bag. United also says customers will receive a 20 percent discount off the $15 fee for their first checked bag when they pay for it online from Monday through January 31st. So hopefully, Soledad, you are carrying on.

O'BRIEN: Oh, always. Always. $50 for a second checked bag?


O'BRIEN: That's ridiculous.

WHITFIELD: Doubled it.

O'BRIEN: That's ridiculous.

WHITFIELD: OK. But that was rejected, remember?

O'BRIEN: Yes. Yes, fully noted.

WHITFIELD: All right. So back to $25.

O'BRIEN: It's still kind of ridiculous. Fred, thank you very much.

Barack Obama's first news conference as president-elect. He lays out priorities, all of them stemming from the country's financial crisis. You're going to hear him in his own words straight ahead. But can he get Republicans on board for a truly bipartisan fix? Ed Rollins and Jamal Simmons will weigh in with us.

And the Obamas are scheduled to visit the White House on Monday, meeting with the current occupants and scoping out their new home, as well. We'll take a look -- a preview of the historic visit.



Happening now, Barack Obama's first news conference as president- elect. What are his priorities and what first steps will he take to fix the economy? We'll bring that to you straight ahead.

Barack Obama says he intends to turn a page on U.S.-Cuba relations, but what will a new strategy really mean? We'll take a closer look at what the president-elect has in store for that communist island.

And they are the hottest tickets in town and they haven't even been issued yet. We've got some details on what could be an Inauguration Day Internet scam.

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

President-Elect Barack Obama laying out his top priorities in his first news conference since winning the election. At the top of the list, America's worst financial crisis in a century and the growing fallout.


OBAMA: First of all, we need a During the campaign, 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.

Second, we have to address the spreading impact of the financial crisis on the other sectors of our economy -- small businesses that are struggling to meet their payrolls and finance their holiday inventories, and state and municipal governments facing devastating budget cuts and tax increases.

We must also remember that the financial crisis is increasingly global and requires a global response.

The news coming out of the auto industry this week reminds us of the hardship it faces -- hardship that goes far beyond individual auto companies to the countless suppliers, small businesses and communities throughout our nation who depend on a vibrant American auto industry. The auto industry is the backbone of American manufacturing and a critical part of our attempt to reduce our dependence on foreign oil.

I would like to see the administration do everything it can to accelerate the retooling assistance that Congress has already enacted. In addition, I have made it a high priority for my transition team to work on additional policy options to help the auto industry adjust, weather the financial crisis and succeed in producing fuel-efficient cars here in the United States of America.

And I was glad to be joined today by Governor Jennifer Granholm, who obviously has great knowledge and great interest on this issue.

I've asked my team to explore what we can do under current law and whether additional legislation will be needed for this purpose.

Third, we will review the implementation of this administration's financial program to ensure that the government's efforts are achieving their central goal of stabilizing financial markets while protecting taxpayers, helping homeowners and not unduly rewarding the management of financial firms that are receiving government assistance. It is absolutely critical that the treasury work closely with the FDIC, HUD and other government agencies to use the substantial authority that they already have to help families avoid foreclosure and stay in their homes.

Finally, as we monitor and address these immediate economic challenges we will be moving forward and laying out a set of policies that will grow our middle class and strengthen our economy in the long-term.

O'BRIEN: President-Elect Obama also took a wide range of questions from reporters, including one from CNN senior political correspondent Candy Crowley. We'll show you the news conference in its entirety in the 6:00 eastern hour. For more on what the president-elect said, we're joined by Democratic strategist, Jamaal Simmons and Republican strategist Ed Rollins. Nice to see both of you. Ed, I'm going to start with you.


O'BRIEN: Very well, thank you. Rate for me the first press conference from the president-elect.

ROLLINS: My impression was other than being a few minutes late, we kind of reminded us of Bill Clinton and other than the fact that he wasn't my party, he had great presence. It didn't bother me seeing him answering questions and being president. I also was very impressed by the cast of characters had he one behind them. One of them I assume will be treasury secretary, others his economic advisors. It was kind of an all-star cast from the other side. I sort of felt very comfortable watching it.

O'BRIEN: He was very presidential even when he was uttering the words I am not the president yet. Ironically enough. Jamaal, what did you think of the press conference?

JAMAAL SIMMONS, DEMOCRATIC STRATEGIST: Its clear there's one president at that time. I think President-Elect Obama is trying to be very mindful of that. He did have a very good group of people up there. Ed just talked about the cast of characters.

There were in fact a couple of Republicans there, people like Richard Parsons from Time Warner, but there were also people there like Jennifer Granholm, the governor of Michigan, David Bonnyer, Robert Rubin. This is a good wide ranging group of people to advise him. That's the way I think he lead the campaign and that's the way I think he'll try to lead the government.

O'BRIEN: CNN's Gary Tuchman is joining us. He's got a look at a conversation with Sarah Palin. We'll get to that in a just few moments if we can. I want to ask you a question about a lot of the things Barack Obama -- let's get to Gary right now in fact. Gary, you interviewed Sarah Palin, the vice presidential nominee for the Republican Party. What did she talk about?

GARY TUCHMAN, CNN CORRESPONDENT: Well Sarah Palin, Soledad, just came back to her office for the first time since the end of the campaign greeted by the workers in the office. We were there when she arrived and we had a chance to talk to her for about 15 minutes, basically very upset about this anonymous criticism.

First thing she said to us was, it's up to you news media folks to let us know who's saying these things even if they're true and we assured her the people are saying them and want to remain anonymous. Based on that, she said it's very unfair, taken out of context. It's mean. She says during debate preparations she talked about NAFTA and the continent of Africa and someone is twisting her words to make it sound like she didn't know that Africa was a continent and what nations were part of NAFTA. She says it's totally wrong, very angry. She says she talked to John McCain just today on the telephone a couple of hours ago, he was very sympathetic and he's not happy about this either. And Sarah Palin said she still loves John McCain.

She also said there's a lot of sexism she never noticed before when she's been governor of Alaska. She says that women are self- sufficient here that sexism isn't noticed much and that's been a big surprise of this campaign. She said no one ever talks about Barack Obama's makeup or Barack Obama's clothes and she says she feels she was a victim of sexism.

Finally she said she really is unhappy with the mass media and I said to her very frankly, I think that's an unfair accusation. Most of what I see and read and I'm a member of the news media seems very fair to me. There may be some exceptions. And she agreed with me. She said you're right, but there are stinky apples. When have you stinky apples, they smell up the whole basket of apples.

O'BRIEN: Gary Tuchman who did an interview with Sarah Palin, we'll get a chance to see that interview a little bit later. Gary, thank you very much. Let's bring it back to Ed Rollins and Jamaal Simmons. OK. You're hearing some of the hostility within the party directed toward Sarah Palin clearly. Ed, let me ask you a question from the Republican perspective. What does Barack Obama have to do to get the Republicans on board to move forward with some of this long list that he ticked of during this press conference, the rescue plan for the middle class, the financial crisis, the global response, the auto industry, energy, health care, the list goes on and on? Each item is a big ticket item.

ROLLINS: First of all, he can move forward without Republicans. I mean Republicans are in a position where we're sort of on the outside rim, and I think the key thing for him is if he communicates with us and basically brings us into the process and obviously, it's at his direction, and he gets some consensus, he benefits long-term and the American public benefits. He wants to end partisanship. I take him at his word. I think the best way to do that is to use those extraordinary communicative skills he has, talk to Democratic and Republican leadership and Republican members.

He's been a senator. He knows the senators. He can bring them into his confident. He can ask for help. John McCain can play a very critical role. John's traditionally gone across the aisle and I think if we can get some -- he's got very tough problems ahead. If he can get some help from Republicans, it will make this that much better.

O'BRIEN: Jamaal I'm going to get to you in just one second but I want to ask Ed one more question. You heard a moment ago what Sarah Palin was responding to and some of the criticism. Do you think she's going to play a critical role? What do you make of what you heard Gary say?

ROLLINS: First of all, everything they've gone to her has been outrageous, these second tier staff people who don't have the courage to stand up and say what they really believe. They're irrelevant. They lost this campaign. They're gone. She's the governor of Alaska. She is still very important to this party. 70 percent of Republicans in the Rasmussen poll said they thought she helped the ticket. 70 percent is a very large number. My sense is John McCain's career as a presidential candidate is over. These guys' staff careers are over. She's a future player in our party and we need her.

O'BRIEN: Jamaal, weigh it on that for me.

SIMMONS: I always thought after our nominations the presidential fight was over, the toughest fight Sarah Palin would have would be with the Republicans many of whom are inclined to work for one of the other people that want to run for president in 2012. She thought Democrats were tough, wait till the Republicans get hold of her.

She said a couple things I want to point out. She said the people didn't focus on Barack Obama's clothes. They did earlier. He was going around without ties and everyone said he was looking like someone else because he was wearing the dark suit and no tie. A lot of these things go back and forth inside campaigns.

O'BRIEN: Jamaal Simmons and Ed Rollins for us this afternoon; gentlemen, thank you very much.

ROLLINS: Thank you very much. Take care.

O'BRIEN: Thank you, likewise.

President-Elect Obama promises to turn the page on Cuba, but will his plan for a new strategy find favor or overwhelming opposition from thousands of Cuban-Americans living in the U.S.?

Obama's first news conference since winning the election. We'll replay the entire session for you coming up. You're in THE SITUATION ROOM.


O'BRIEN: Welcome back, everybody. As you heard a moment ago, Gary Tuchman has just done an interview with Sarah Palin, the vice presidential nominee on the Republican side. After losing, she has been attacked by some anonymous members within her own party. Very angry she said in her interview with those folks. We're going to have that interview for you. We're waiting for the tape to come in. As soon as it does, we'll play it for you right here in THE SITUATION ROOM.

Barack Obama is vowing change, including U.S. policy toward Cuba and not everybody's happy about that. CNN's John Zarrella joins us live. What are you hearing in Miami, John? Good afternoon.


Well, President-Elect Obama made it clear there will be change in policy. In Miami's Cuban-American community, that change for some goes too far and for others may not go far enough.


ZARRELLA: Barack Obama is set to be the next in a long line of U.S. presidents who have tried to bring change to Cuba or at the very least better relations. The Castro brothers have never made it easy. Boat lifts, shooting down rescue planes and imprisoning dissidents. Back in May when Obama spoke in Miami, he promised a fresh look at Havana.

OBAMA: I intend to turn the page. It's time for more than tough talk that never yields results. It's time for a new strategy.

ZARRELLA: Part of that new strategy, end current Bush administration restrictions by allowing Cubans to visit relatives on the island more often and allowing them to send more money to the homeland.

OBAMA: It's time to let Cuban American money make their families less dependent on the Castro regime. That is a commitment I'm making right here.

ZARRELLA: For many Cuban-Americans like Ninoska Perez, that won't accomplish much.

NINOSKA PEREZ, DIRECTOR, CUBAN LIBERTY COUNCIL: Every time they say let's change Cuba policy, why? It's not the U.S. that has to change. It's the Cuban regime that has to change. They're the ones that are oppressing the people.

ZARRELLA: But Cuban exiles no longer speak with one voice. Older Cuban-Americans want a hard line. Many younger ones want change in U.S.-Cuba policies. One exit poll by Bendickson and Associates in Miami Dade found 55 percent of Cuban-Americans 18 to 29 voted for Obama. Ramon Saul-Sanchez, a long time activist says it's time to look hard at the decade's old embargo.

RAMON SAUL-SANCHEZ, DEMOCRACY MOVEMENT: At the very least it needs to be revised and changed and eventually removed because it has not at all in 50 years helped the Cuban people in their struggle for democracy.

ZARRELLA: For now, the embargo does not appear to be on the table.


ZARRELLA: The president-elect says he will use the embargo as leverage if the Cuban regime starts to release political prisoners and moves towards democracy, then he would started to consider normalizing relations but of course, Soledad, we've heard that over the years many times from U.S. presidents and not much has changed in Cuba.

O'BRIEN: Many, many times over the years. John Zarrella for us this afternoon; John, thanks, appreciate it.

Foreign policy, the economy, health care, the big ticket items get lots of attention. But there's a lot more on the president- elect's plate than many people even realize. Miles O'Brien ticks off the list for us --Miles?

MILES O'BRIEN, CNN CORRESPONDENT: The Government Accountability Office out with some issues that are just under the radar for the new administration, the new congress. Let's get right in on Washington and a get a sense. It's going to be a busy place inside the beltway. We'll show you some of the areas where they're going to be focusing on things. Health & human services is a big issue, a big concern according to the GAO.

Look at these two issues. We're talking about SARS back in 2002 in China. The possibility of bird flu becoming a pandemic. GAO says the federal government is not coordinated well, not funded and the entire health care system could easily be swamped by a pandemic.

Next item on the GAO hit list, let's go outside the District of Columbia, Montgomery County, the Food and Drug Administration is located there. The big concern is food safety. According to the GAO, the entire process of food safety and inspections is way too fragmented. The Food and Drug Administration doesn't have the resources to do the job. Listen to the GAO head. GENE DODARO, GOVERNMENT ACCOUNTABILITY OFFICE: The FDA for example has responsibility for overseeing 80 percent of the food supply but only gets about 20 percent of the resources devoted to this area.

M. O'BRIEN: Next item on the GAO hit list, let's go from Maryland back into Washington, Department of Transportation. The GAO worried about our infrastructure. Surface transportation, GAO says there's often competing goals. Also, we fund our improvements with gas taxes and think about this. As we start driving cars with higher mileage, we buy less gas, less money to fix bridges and roads.

Last item on the under the radar GAO hit lists, let's go to NASA the space shuttle, due for retirement at the end of 2010. As it stands right now, the new vehicle won't be ready for five years, a five year gap where U.S. astronauts where U.S. astronauts have to ride Russian rockets. If congress and the administration wants to change that, now is the time to do it -- Back to you.

S. O'BRIEN: Miles, thanks -- CNN's Gary Tuchman just interviewed Governor Sarah Palin. She fires back at McCain campaign staffers who have been trashing her anonymously. You're going to hear that coming up.

Lots of people want to get their hands on tickets to Barack Obama's inauguration. But before you shell out hard-earned cash, wait till you hear what's happening online.

And America's new first daughters. Round the clock secret service protection to a puppy at the White House. Malia and Sasha Obama face life in the spotlight. You're in THE SITUATION ROOM.


S. O'BRIEN: With the inauguration 74 days away, tickets are already being sold for thousands of dollars online. But here's a catch. The tickets haven't been issued yet. Our internet reporter Abbi Tatton gets to the bottom of this. What's the deal with these tickets?

ABBI TATTON, CNN INTERNET REPORTER: Some of the things on offer online so far, on eBay, we've been watching this bid all day, going up to $1200 for a pair of tickets for the swearing in ceremony. Another offer here, four great seats together about 9,000 bucks for this one. On this separate website, wanting $21,000 for a pair of VIP tickets. They guarantee delivery if you read this site.

But organizers of the inauguration are saying be skeptical of any of these offers you see online. The joint congressional commission on inaugural ceremonies say there are about 240,000 tickets that will be issued for the swearing in ceremony but right now they are in a secure situation and not one has been given out yet, and anyone who is guaranteeing delivery they say is not telling the truth.

We put it to people who answered the phone at this website, and no response from them. The committee that is organizing this says that the best way the do this is to go to your house member or the United States' Senator and get on the list for tickets. The demand is so much that some of the house members are already dedicating a special section of the website to deal with the demand -- Soledad?

S. O'BRIEN: All right. Thank you, Abbi.

Some are calling President-Elect Barack Obama the heir to another young American president, John F. Kennedy. Just like the Camelot era, there is going to be young children in the White House for the first time in years. Here is CNN's Randi Kaye.


RANDI KAYE, CNN CORRESPONDENT(voice-over): Talk about extreme home makeover, the Obamas are moving into a new house, the White House.

DOUG WEAD, PRESIDENTIAL HISTORIAN: One of the negatives of the White House is that it is very much a fish bowl.

KAYE: A fish bowl presidential historian Doug Wead says can feel like a trap for the president's children. For the most Sasha and Malia, 7 and 10, have been shielded from the public and limited appearances and one interview that his dad says he regrets.

MALIA OBAMA, DAUGHTER OF BARACK OBAMA: When you come home, you have a big day and you have an empty bag and you leave it in the mud room, you sometimes trip over it.

KAYE: The Obama daughters will have round the clock secret service protection, but even that cannot fend off unwanted attention.

WEAD: There is something Sasha or Malia say or will do, and they will be remember for doing it for the rest of their lives.

KAYE: Wead says the Roosevelt kids were famous for dropping water balloons onto foreign dignitaries and unleashing their pet snake in the dining room. John F. Kennedy, Jr. was known for hiding under his father's desk and the Bush twins, Wead says will be remembered for underage drinking. 13-year old Noah McCullough interviewed dozens of first kids by the same name.

NOAH MCCULLOUGH, AUTHOR, "FIRST KIDS": If you flunk that huge math test, it is on the first page of the newspaper the next day.

KAYE: One of the first big decisions, will it be public or private schools?

WEAD: If they send their child to the private school, they will be called elitist and hypocritical for betraying the public school system.

KAYE: There are advantages to living in the White House, too, a bowling alley, swimming pool and its own movie theater and world leaders and celebrities stop over all of the time and the biggest Easter egg hunt takes place on the front lawn. What child would not like that?

But like those before them, Sasha and Malia will have to endure their father's critics and there may be pressure for them to do what their father did.

MCCULLOUGH: John Quincy Adams' kids went through alcoholism because they could not live up to their father's expectations. My best advice to them is to have fun and be a kid.

KAYE: Michelle Obama is determined to keep it real for her daughters.

MICHELLE OBAMA, BARACK OBAMA'S WIFE: I am a mother first, and I will be at the parent teacher conferences and be at the things they want to attend. I am not going to miss a ballet recital.

KAYE: So much attention when all they wanted was a new puppy promised to them win or lose.

B. OBAMA: You have earned the new puppy that is coming with us to the White House.

KAYE: Randi Kaye, CNN, New York.


S. O'BRIEN: Let's get back to Jack Cafferty -- Jack?

CAFFERTY: The question this hour: Is what does the Republican Party have to do to get back in the game? They had a whooping laid on them again after the one in 2006.

Scott in Wichita, Kansas, says: "Give it ten or 15 years, because it is back and forth ever since the two parties came about and by that time, all of the young voters who put the Democrats in power now will have jobs and they will want to keep the money they earn so they will shift their views on a whole lot of things."

Stacy in Virginia says: "They need to get rid of the virus which is the Christian coalition, and their intolerance disguised as a social agenda tends to drive away potential voters in droves. They need to focus on balanced budgets, the national debt, and homeland security and the economy."

Billy in Las Vegas, Nevada: "Republican Michelle Laxall said it on Larry King Live on Thursday. Her the party needs to get back to the conservative principles of fiscal responsibility and small government and stop trying to be the we know what is good for you and social values party. It is the only way to get the younger voters and minorities in the future."

Lorna says: "They need to go back to their roots. The Republican Party I know is filled with people who don't know what happened to their roots. They let anybody in these days."

And Charles in Florida says: "They have to stop relying on the white racist vote to get elected and promote a platform of inclusion instead of the hate-mongering politics they've gotten so good at over the years."

And Michael in Pensacola: "Use that newfound DNA technology to resurrect the fiscal conservatives of old and get away from the big business, bible-thumping, war mongering wannabes that have hijacked the party."

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

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

Sarah Palin is speaking out to CNN about the ugly rumors from the final days of the campaign. We are standing by with that interview from CNN's Gary Tuchman in Alaska.

And the U.S. auto industry veering towards disaster, GM is reporting huge losses saying it is almost now out of cash, Lou Dobbs will weigh in.


S. O'BRIEN: The U.S. auto industry in trouble and pleading for a bailout, but is Washington receptive? Lou Dobbs is keeping an eye on this. What is it all about, Lou?

LOU DOBBS, CNN ANCHOR: Well, Soledad, obviously the automobile industry like every other industry in the country is in desperate straits, but the automobile industry has been whip sawed by public policies that have given it an extraordinarily disadvantaged position competitively with foreign car makers. They need help. It is part of the national security.

When people talk about the automobile industry as one of the whether or not they deserve the federal bailout or not, the nation deserves that bailout. We have to make certain that those workers and all important manufacturing workers in Detroit working for Chrysler and for ford and general motors are given the full support of the United States government. They absolutely deserve it, and the nation requires it.

S. O'BRIEN: All right. Lou Dobbs for us. Thank you, Lou.

DOBBS: You got it.

O'BRIEN: Happening now, question time for the President-Elect Barack Obama zeros in on the economy in his debut news conference. You will hear it from start to finish straight ahead.

Some of Obama's remarks turned heads and raised eyebrows, too. Standby for the best political team of talk of seances.

And a new report from Sarah Palin about the reported rift with the McCain camp. It is a fresh interview with CNN in Alaska. Welcome to the viewers in the United States and around the world. Wolf Blitzer has the day off. I'm Soledad O'Brien, and you're in THE SITUATION ROOM.