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Obama Ponders Possible White House Car Czar; Government's $700 Billion Flip-Flop; Interview With Governor Sarah Palin

Aired November 12, 2008 - 16:00   ET


WOLF BLITZER, CNN ANCHOR: And happening right now, Sarah Palin unplugged. She's here in Miami and she lays blame for her ticket's loss, expressing no regrets for slamming Barack Obama during the campaign. And find out why she says this to the president-elect, and I'm quoting now, ""My son's life is in your hands." Stand by.
We're also hearing that Barack Obama is considering something major that's not exactly been done before. It's designed to stop economic pain hitting one industry and many of you rather hard.

And some call it a bailout flip-flop. The government bails on its key argument for getting $700 billion for Wall Street, prompting questions if it misled Congress and owes the American public an apology.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Governor Sarah Palin is free from campaign constraints right now, so she's not biting her tongue anymore. I'm here in Miami, where I interviewed the governor just a short while ago. She's here for the Republican Governors Association meeting.

Our interview covered a broad range of topics, but one thing clearly was on her mind, and that would be Iraq, for general and very personal reasons.


BLITZER: Are you worried about the incoming commander in chief who's going to be his commander, in effect?

GOV. SARAH PALIN (R), ALASKA: Well, you know, we've got to make sure there, too, that Barack Obama surrounds himself with strong commanders who understand that our boys, our girls with their boots on the ground, their lives, my son's life, is in his hands.


BLITZER: Governor Palin also talks about why her ticket loss, if she's ready to help Barack Obama as president of the United States, and if she'll run for president in four years. You're going to hear all of that straight ahead. Stand by for the interview.

We're also hearing that among Barack Obama's considerations right now is a major idea designed to help one struggling industry and possibly many of you. Let's go straight to our White House Correspondent Ed Henry. Ed, this is about helping auto manufacturers. Tell us the latest.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, that's right. It's all about the auto industry. Literally millions of jobs are at stake, and that's why to borrow a line from Bill Clinton, Barack Obama is here in Chicago focusing on it like a laser beam.


HENRY (voice-over): President-elect Barack Obama spent the day huddled behind closed doors in Chicago mulling additions to his team. Sources close to the transition say one option getting a serious look is a new White House job dubbed "car czar," a point person to deal with crisis in the auto industry.

Among the names starting to circulate for that post, David Bonior, a former Michigan congressman with close ties to the labor unions who helped elect Obama and are fretting about dwindling manufacturing jobs. Auto industry officials also taught Dan Tarillo, a trade expert serving as Obama's transition chief on auto issues.

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: I would like to see the administration do everything it can to accelerate the retooling assistance that Congress has already enacted.

HENRY: Beyond creating more bureaucracy, Obama wants drastic action, urging President Bush to support an emergency aid package for the auto industry. In a show of Democratic force, Speaker Nancy Pelosi is turning up pressure on the White House by vowing to consider a $25 billion rescue Bill next week in a lame duck session of Congress. But the Bush administration remains skeptical of yet another government bailout unless the big three agree to drastic changes.

HENRY PAULSON, U.S. TREASURY SECRETARY: We need a solution, but the solution has got to be one that leads to viability.

HENRY: Obama, too, wants Detroit to fix its business model and help clean up the environment by sharply increasing production of green vehicles. But he's also suggested some long-term solutions may have to wait to help prevent a short-term catastrophe.

OBAMA: 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.


HENRY: Now, some critics will say that someone like David Bonior is too close to the auto industry to actually shake it up. Other critics will say that Barack Obama doesn't need another layer of government, just needs to figure out how to move forward with presidential action on his own. It gives you an idea of the tough balancing act that the president-elect is facing as he tries to assemble this new team -- Wolf.

BLITZER: Tough indeed. Ed Henry's covering the transition to power in Chicago. Thank you.

Another major story we're following right now, the treasury secretary announcing the government is bailing on one of its arguments for that $700 billion Wall Street bailout. And that's prompting serious questions if he misled Congress and you.

Our White House Correspondent Elaine Quijano is watching this part of the story. Elaine, Henry Paulson also talked about the idea of helping automakers.

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Well, that's right, Wolf. And on those points, aides here say there is absolutely no reason they should apologize. And when it comes to the automakers, no reason for the president to shoulder any blame.


QUIJANO (voice-over): If Congress crafts legislation to rescue financially troubled U.S. automakers, will President Bush sign it? Too early to tell, say aides. But from the Bush administration's perspective, one thing is clear.

DANA PERINO, WHITE HOUSE PRESS SECRETARY: The state of the automakers right now is not the president of the United States' fault.

QUIJANO: But as Congress looks at possibly giving Detroit a chunk of the $700 billion under the bailout plan, Treasury Secretary Henry Paulson announced a significant shift in the program.

PAULSON: When we went to Congress, illiquid assets looked like the way to go. As the situation worsened, the facts changed.

QUIJANO: Originally sold to Congress as a way to take troubled assets off banks' books, Paulson today said he changed his mind.

PAULSON: I will never apologize for changing an approach or a strategy when the facts change.

QUIJANO: Paulson said he no longer thinks the government buying up bad mortgage-related debt would be effective.

TAMI LUHBY, CNNMONEY.COM: Why consumers should care about this is because once the government owned these troubled mortgages, they would be able to modify the loans in a much easier way, in a much more streamlined way. And now they can't do that because they're not planning to buy any mortgages.

QUIJANO: Instead, the bailout money so far has been set aside to buy shares in banks, $250 billion, $40 billion to AIG, and $60 billion yet to be committed, leaving the remaining $350 billion for future use.

(END VIDEOTAPE) QUIJANO: Now, Secretary Paulson also announced the bailout would expand to include consumer finance institutions like credit card and auto and student loan companies, but experts say it could take months, Wolf, before the average consumer would actually find an increase in the number of loans -- Wolf.

BLITZER: All right, Elaine. Thank you. Elaine Quijano working this story for us.

Let's check in with Jack. He's got "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: U.S. automakers need a lifeline. What's not clear at this point is whether the Bush administration is willing to throw them one.

So, a lame duck session of Congress could be Detroit's best bet, and House Speaker Nancy Pelosi is pushing help for the automobile industry. She says if the administration doesn't step in to help, then " -- it needs to be done one way or another."

Congress could convene as early as next week to sort this out, among other economic concerns, and that could set up a clash between the Democratic leaders in Congress and the lame duck president. And it may not make the cash-strapped American public very happy either.

A Gallup poll released yesterday found that only 20 percent of adults say that providing loans and other aid to automakers is crucial or very important to improving the economy. That's slightly less than the 21 percent who say it was crucial or very important to aid large financial institutions. And both figures are well below the 34 percent calling for a second stimulus plan, where the money would go to individuals as opposed to large corporations.

So here's the question: What does it mean that only 20 percent of Americans consider aid to large corporations crucial or very important?

Go to You can post a comment on my blog -- Wolf.

BLITZER: Jack, thank you.

Sarah Palin worries about someone Barack Obama knows. Listen to this.


PALIN: Well, I still am concerned about that association with Bill Ayers. And if anybody still wants to talk about it, I will, because this is an unrepentant domestic terrorist who had campaigned to blow up, to destroy our Pentagon and our U.S. Capitol. That's an association that still bothers me, and I think it's still fair to talk about it.

(END VIDEO CLIP) BLITZER: The Alaska governor expresses no regrets for her criticisms, slams of Barack Obama during the campaign. You're going to hear why in my full interview with the Alaska governor. That's coming up.

For the first time, John McCain is now talking about losing the election. You're going to find out what he said on late-night TV.

And Barack Obama sends this message to federal lobbyists hoping to help his transition: We don't need your help. We don't want your money.

Stay with us. You're in THE SITUATION ROOM.


BLITZER: Governor Sarah Palin is looking back at her ticket's failed campaign. She's also looking ahead at the possibility -- the possibility -- of challenging the man who beat her team. So what does she think about this historic election?


BLITZER: And joining us now, the governor of Alaska, the -- I guess you can call her now the former vice presidential nominee, Sarah Palin. Governor, thanks very much for coming in.

PALIN: Thanks. You could call me the has been.

BLITZER: No. You're not a has been. A lot of people know that. Let's talk a little bit about what's going on in our country right now.

It's a pretty historic moment, when you think about it, the first African-American president, President-elect Barack Obama. This is historic. What does it mean to you?

PALIN: It's historic, and I think this time is full of optimism. And it's an opportunity for everybody to get it together and start working together. For us, as Republicans, to reach out to Barack Obama and the new administration that will be ushered in, and offer the solutions that we see for meeting some of America's great challenges right now.

This is an opportunity to all be working together. And of course President-elect Obama had promised also bipartisan efforts to meet the challenges. So let's seize this opportunity. Let's take him up on that offer. And let's all start working together.

BLITZER: Are you ready to help him?

PALIN: Absolutely, especially on energy independence, energy security that we need for this nation. Being the governor of an energy-producing state, knowing that we have the domestic solutions there in our state and in other energy-producing states, I'm more than willing and able to help President-elect Obama to start tapping into the domestic solutions that we have now so we can put these lines (ph) on foreign sources of energy.

BLITZER: So if he reaches out to you and says, "Governor Palin, I need your help on energy," or some other issues, kids with special needs, for example, and says, "I want you to be part of a commission," you would be more than happy to say, "Yes, Mr. President"?

PALIN: It would be my honor to assist and support our new president and the new administration, yes. And I speak for other Republicans, other Republican governors also. They being willing, also, to, again, seize this opportunity that we have to progress this nation together, a united front.

BLITZER: Because, you know, during a campaign, every presidential campaign, things are said that's tough. As you well know, it gets sometimes pretty fierce out there.

And during the campaign, you said this. You said, "This is not a man who sees America as you see it and how I see America." And then you went on to say, "Someone who sees America, it seems as being so imperfect that he's palling around with terrorists who would target their own country."

PALIN: Well, I still am concerned about that association with Bill Ayers. And if anybody still wants to talk about it, I will, because this is an unrepentant domestic terrorist who had campaigned to blow up, to destroy our Pentagon and our U.S. Capitol. That's an association that still bothers me, and I think it's still fair to talk about it.

However, the campaign is over, that chapter is closed. Now is the time to move on and to, again, make sure that all of us are doing all we can to progress this nation. Keep us secure, get the economy back on the right track. And many of us do have some ideas on how to do that, and hopefully we'll be able to put all that wisdom and experience to good use together.

BLITZER: So, looking back, you don't regret that tough language during the campaign?

PALIN: No, and I do not think that it is off base, nor mean- spirited, nor negative campaigning to call someone out on their associations and on their record. And that's why I did it.

BLITZER: And just one historic footnote. Was that your idea or did somebody write those lines for you?

PALIN: Oh, it was a collaborative effort there in deciding, how do we start bringing up some of the associations that perhaps would be impacting on an administration, on the future of America? But again though, Wolf, knowing that it really at this point, I don't want to point fingers backwards and play the blame game, certainly on anything that took place in terms of strategy or messaging in the campaign. Now is the time to move forward together, start progressing America.

BLITZER: Let's talk about some of the current issues on the agenda right now. And I speak to you as someone who's emerging as a potential leader not only of the Republican Party, but maybe if you want to run again for president or vice president down the road.

Right now a big issue, should the U.S. government, the federal government, bail out Detroit, the big three automakers?

PALIN: Well, that is the discussion of the day. And there's going to come a point here where absolutely, the federal government must play an appropriate roll in shoring up some of these industries that are hurting and will ultimately hurt our entire economy, and the world's economy if there aren't some better decisions being made.

But we also have to start shifting some debate here in our country and start talking about personal responsibility, and responsibility of management in some of these corporations and companies, so that from hence forth, it's not assumed that the federal government is going to be bailing out everybody who's going to soon line up, Wolf, for more taxpayer assistance. And I'm talking about personal responsibility, too, in terms of homeowners and in terms of folks who maybe have extended their own credit.

Sure, predatory lenders are to blame in all of this also, but we have got to make sure, for instance, we're not talked into buying a $300,000 house if really we know we can only afford a $100,000 house. And we've got to start living those lessons that we try to teach our children in terms of not living beyond our means and extending our own personal credit to the point of not being able to pay our monthly bills and then expecting government to grow and be the answer?

BLITZER: So I'm still waiting for the answer. Should the government bail out the big three automakers?

PALIN: Well, it's in debate right now, and I'm listening closely to the debate. And there's a lot of information that even you and I certainly aren't privy to understand all the ramifications if the federal government were going to step in and bail out.

But we do know that the auto industry is that important and certainly it needs to be considered. But I'm not going to ignore the debate again that I think needs to lead to the personal responsibility, the management decisions that have been made in some of these companies and corporations that have also led us to where we are.

BLITZER: So I hear you saying you need more information then?

PALIN: Yes, I do.

BLITZER: What about the $700 bailout of the financial industry? Was that the right thing to do with hindsight, based on what you know right now, or the wrong thing to do?

PALIN: I still believe it was the right thing to do to be able to propose this rescue package, certainly in the home mortgage industry, because with foreclosures up 71 percent compared to where we were last year on foreclosures, this is bad ultimately for our entire economy. And it doesn't do any neighborhood, or any community, any state, any good to see the rate of foreclosures that we have. So with home mortgages and overall with the general bailout plan, yes, I think it was the right thing to do. The federal government had to take some action. But it cannot be assumed again that taxpayers can be looked to for all of the bailouts as more and more corporations, companies, entities come forward with their hand out for government to continue to bail.

BLITZER: Should Congress go forward right now with another economic stimulus package to help the struggling middle class?

PALIN: I do want to see the struggling middle class be the ones at the end of the day who are not stuck with the bills and stuck with the burdens. But I am not one, again, to believe that it should be just assumed that it's a taxpayer bailout that will be the solution to all the problems, all the financial challenges that our nation is facing.

Supportive of $700 billion initial, now hearing more rumor, more speculation of even greater amounts being poured into that. There again, need more information, but not being so enthused about a second, a third, a fourth stimulus package.

BLITZER: President Bush only has, what, two and a half months or so left. What would you like to see him do in these remaining days and weeks? What's the most important thing he should be doing right now?

PALIN: He's already doing that, and that's reaching out to Barack Obama and to those potential new cabinet members also, and those whom we know will be in the cabinet. Reaching out to them and not being one to stay away, to shy away from addressing the challenges that we have today, working with the new administration, and start ushering in some new solutions. So I appreciate that he's already done that.

And that bodes well for our president also. And other things also that bode well for President Bush and keeping our country safe for the last seven years with no new attack on the homeland, those things I think we cannot lose sight of that President Bush has allowed for progress in those areas in our nation. You know, I'm going to do a shout-out to our president and thank him for that.

BLITZER: Even though he may have hurt you and John McCain in terms of becoming president and vice president?

PALIN: You know, I think that there is so much blame to go around, if you will, in terms of why it was that the Republican ticket did not win. And you know, that's being attributed to, we didn't get the Hispanic vote, that really hurt; we were outspent tremendously because, of course, Obama took the private financing, John McCain had stuck to his promise of just keeping the public financing in the campaign, so greatly outspent.

Barack Obama was a great campaigner. He had a very strong organization. So many reasons. I'm not going to look backwards there, again, and point to just President Bush and the administration as to why our ticket didn't prevail.

BLITZER: You look back and say to yourself, I wish I would have done something differently? Is there anything you look back and say, you know, I think I could have done something differently that might have helped?

PALIN: I just wish there had been more hours in the day, been able to speak to more Americans through the media. I would have loved to --

BLITZER: We tried. We tried. God knows we tried.

PALIN: I'm sorry. All right. That's why we're here today, Wolf. Yes.

But just more hours in the day so that we could have reached more Americans with that message of who it is that John McCain is. He is a true American hero. He does have solutions in mind for this country to get the economy back on the right track and to win the wars. But he now, as a leader in the Senate, we're going to be looking to him, again, being able to unite the party.


BLITZER: AND we're going to have a lot more of my interview with Governor Palin. We're only getting started.

She also talks about the possibility perhaps of becoming a United States Senator, now that the Alaska Senator Ted Stevens has been convicted on seven felony counts. We don't even know if he's going to be re-elected. We talk about the possibilities in Alaska for that.

And she also offers both Obamas some advice on raising children in the White House.

A lot more of this interview coming up. Stand by for that.

In his first public appearance since election night, John McCain is asked by Jay Leno why he seems more relaxed right now. And his answer brought roars of laughter from the audience. You're going to want to see it. That's coming up ahead, as well.

Also, another airline adds another fee for checking even one bag. Which airline and how much you'll be paying.

Stay with us. You're in THE SITUATION ROOM.



BLITZER: To our viewers, you're in THE SITUATION ROOM.

Happening now, plum assignments up for grabs. Thousands of jobs opening up in the new Barack Obama administration. The positions and what they pay all listed in one big, thick book. We'll have a sneak peek. Stand by.

Also, the disgraced former U.S. congressman Mark Foley breaking his silence over the sex scandal that ended his political career. He speaks out about his interaction with pages on Capitol Hill and his very troubled childhood -- an emotional interview you won't want to miss. Stand by for that, as well.

And Iran, North Korea, and naming key people to his administration all challenges facing Barack Obama. We will take an in-depth look at what the president-elect's transition team is facing in the coming weeks.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

To any federal lobbyists hoping to help Barack Obama's transition, he's sending this message, thanks, but no thanks. He's rejecting money and help from those Washington power-brokers.

CNN investigative correspondent Abbie Boudreau is over at the CNN Center. Abbie, you have the specifics. Share them with our viewers.

ABBIE BOUDREAU, CNN CORRESPONDENT: Wolf, the new rules mostly deal with federal lobbyists. They can't give money to the transition team. They can no longer lobby if they work for the transition. And there's also a 12-month wait for anyone who worked on the transition team before they can lobby. All of these changes are meant to help reduce the influence of special interests.


OBAMA: I don't take a dime from Washington lobbyists and special interests.

BOUDREAU (voice-over): For months, president-elect Obama has promised tough reform.

OBAMA: They do not run my campaign. They will not run my White House.



BOUDREAU: Obama's message is critical in this class for lobbyists in training at Georgetown University's law school.

CHAI FELDBLUM, PROFESSOR, GEORGETOWN UNIVERSITY LAW SCHOOL: You heard from, during this just campaign, right, president-elect Barack Obama saying, it's not going to be the same. We're not going to have lobbyists controlling things.

BOUDREAU: Michael Lewan could be teaching the class. For 16 years, he's lobbied for some of the biggest corporations in America.

MICHAEL LEWAN, LOBBYIST: It's a dirty word, partially because we have made it so as an industry, but perhaps more so because it has just gotten to be such a mantra out there on the campaign trails.

UNIDENTIFIED MALE: -- nothing but the truth --

BOUDREAU: Lewan says, in the wake of former lobbyist Jack Abramoff's conviction of influence-peddling on Capitol Hill in 2006, Congress passed stricter rules. Lewan and other Washington lobbyists say, the crackdown is long overdue.

LEWAN: Over the course of the campaign, all of us that lobby were vilified. It's my hope that we could sort of bring down that level of vilification by -- by cooperating with the new administration.

BOUDREAU (on camera): We have all of these professional, trained lobbyists, and then we have you.


BOUDREAU (voice-over): Emily Yoffe writes for the Slate Web site. She wanted to see if only the powerful lobbyists had the influence.

YOFFE: After Jack Abramoff was sent off to the slammer, my editor said, "Well, can anyone be a lobbyist?" and said, "You come up with an organization and go up on the Hill and see where you get."

BOUDREAU: So, she came up with SNOP.

YOFFE: Spay and Neuter Our Pets.

BOUDREAU: Yoffe said even she was surprised how far she got.

(on camera): And how seriously did the staffers take you?

YOFFE: My longest meeting was 40 minutes --


YOFFE: -- which I couldn't believe.

BOUDREAU (voice-over): She never met with a member of Congress, but she does feel ordinary people do have influence.

Professor Chai Feldblum says now many other grassroots groups may have a stronger voice.

FELDBLUM: We will see change in this city after January 20.


BOUDREAU: And, Wolf, there's already changes. Earlier today, I talked with an Obama spokesperson. He told me the team will not accept gifts worth more than $20, except from a family member or a close friend, and no gifts from lobbyists will be allowed.

BLITZER: All right, Abbie, thanks very much. Meanwhile, the Obamas are looking into options regarding where to send their two daughters to school in Washington -- CNN now confirming that they have been in contact with D.C. public school administrators.

In a statement a short time ago, a spokeswoman for the District of Columbia's public schools says that the decision should be based -- and I'm quoting now -- "solely on the best interests of the child."

This week, Michelle Obama visited several private schools in the Washington, D.C., area as well -- no final word on where the girls will go to school.

Vice president-elect Joe Biden and his wife, Jill Biden, will soon be getting a tour of their new Washington, D.C., residence as well. The Bidens are scheduled to visit Vice President Dick Cheney and his wife, Lynne Cheney, tomorrow at the official vice presidential residence over at the Naval Observatory on Massachusetts Avenue in Washington, D.C.

In his first television interview since election night, John McCain had the studio audience laughing on the "Jay Leno" show last night. He was asked why we didn't see the more of a sense of humor during the campaign.


JAY LENO, HOST, "THE TONIGHT SHOW WITH JAY LENO": When you sit with friends and you discuss it, it does seem like, as -- viewing this, knowing you, I would see sort of two McCains. Sometimes, I would see one McCain. And then the times when you were being funny, like at the Al Smith Dinner and "Saturday Night Live" and certain things, oh, that was -- I said, ah, why can't we get -- where's that McCain? That one didn't seem to be quite as visible. Is it the pressure, the tension over the --

SEN. JOHN MCCAIN (R), ARIZONA: No, I think it -- I think these are tough times, and you have to --

LENO: Yes.

MCCAIN: And campaigns are tough.

I don't, frankly, think a lot of people wanted a stand-up comic. They wanted to know how we were going to address the issues. That's why I didn't worry about your write-in candidacy.

LENO: Right.


MCCAIN: But -- but, you know, you -- you just do the best that you can. And, again, it's an incredible honor.

LENO: Let's talk about Governor Palin now. The polls show that she hurt you. I know you're too much of a gentleman to probably answer this question, but did she? Do you think it hurt you at all? MCCAIN: No, look, I couldn't be happier with Sarah Palin. And she's going back to be a great governor. And I think she will play a big role in the future of this country. And I'm very grateful.

LENO: Did she ever get off message at one point?

MCCAIN: Did you expect mavericks to stay on message?


MCCAIN: You know, I'm sure that from, time -- but she was -- look, I -- we did a lot of things together, a lot of these rallies. The people were very excited and inspired by her. And that -- that's what really mattered, I think.

LENO: Going to give it another shot?

MCCAIN: Yes, I'm ready to go again.

LENO: Ready to go again?



MCCAIN: I don't -- I don't -- I wouldn't think so, my friend.


MCCAIN: It's been a great experience. And, you know, we're going to have another generation of leaders come along, and I will hope that I can continue to contribute. That's all.


BLITZER: Senator McCain also had some praise for Barack Obama, saying he has inspired millions of young people. And McCain also urged all Americans to now come together to support the new incoming administration.

A defeated Republican congressman now talking about how his party lost its way. Is the Republican Party really reduced to having few -- a few -- only a few good ideas?

And plum jobs in what's called the plum book. How much might the Obama administration pay some key White House staffers? We have all the details.



REP. CHRISTOPHER SHAYS (R), CONNECTICUT: We had a party that thought they could gain and maintain control by impeaching Bill Clinton. And we got off the ideas that we got excited about in '94. The party of ideas began to be the party to impeach Bill Clinton and hold on to power. And we began to be a party that said, if we raise more money than our opponents, that's how we're going to win. Ideas were pushed aside.


BLITZER: It's a time of soul-searching for Republicans, in the wake of last week's election.

Joining us now for today's "Strategy Session," Democratic strategist and CNN political contributor Paul Begala, and Republican strategist and our political contributor Bay Buchanan. Guys, thanks very much.

Bay, is Chris Shays, who lost his bid for reelection -- there are no more Republican members of Congress from New England right now, only three from New York State -- is he right that the Republican Party simply lost its way?

BAY BUCHANAN, CNN POLITICAL CONTRIBUTOR: I would agree with him on that. I wouldn't agree with all the details, Wolf, but there's no question that we have walked away from our principles, our values.

We have not governed as the people in this country expected us to, as we promised we would. And, so, it is time to get -- make certain we define the party as something that believes in something, not just something -- a country club with R behind our names. It really is very, very important we get back to our principles. I agree with him on that count, yes.

BLITZER: I can't tell you, Paul, how many Republican governors and other Republicans here in Miami right now -- I'm at the Republican Governors Association meeting -- have been coming up to me throughout the course of this day, lamenting what's gone on in the Republican Party, that it simply hasn't been able to reach out to the moderate middle. They have -- they have lost the Hispanic, the Latinos out there, that it's becoming a really, really limited political voice right now. And they're upset about it, and that's their biggest challenge right now, to do something about it.

PAUL BEGALA, CNN POLITICAL ANALYST: Absolutely, not only Latinos.

You know, President Bush got 44 percent of the Latino vote. That's collapsed down. John McCain only got about 32, I think. Worse is young voters. George W. Bush and Al Gore split young voters even- steven. Gore won young people by one point.

Barack Obama won them by 30 points. So, this is a disaster for the Republicans, but it is good that they are doing this soul- searching. It's important for them, Wolf. And I know they're doing it in Miami. If, however, they turn to the subject of your interview in THE SITUATION ROOM earlier, the governor of Alaska, who seemed to want to keep regurgitating the same failed divisive attacks, they're going to fail. They need some new ideas. They need to go to that moderate middle. And, if they go -- if they -- I'm telling you, as a partisan Democrat, I would love to see Sarah Palin run again. I will pay her filing fee.


BEGALA: But, as an American, who wants to see two parties to be strong in competing for the middle, they could do a lot better.

The governor of Florida, where you are right now, Charlie Crist, formidable. There's a lot of other Republicans I think could have much more appeal in the center than the governor of Alaska.


BUCHANAN: You know, Wolf, we make a mistake, though, when you start saying, well, we lost the youth. I mean, Obama obviously attracted all kinds of new young people. And, of course, they were his voters.

But, also, when you start saying Hispanics or women, the key here is 90 percent of Americans thought we were in the wrong direction. So, we lost everybody, basically. We lost the election.

Well, how do you get it back? First, you have to go to who you are and make certain you're proud of that and you're articulate. We are conservatives. The party is conservative, fiscally, socially. That's who we are. And we have got to make certain, as Obama starts proposing one policy after another, that we're there to embrace it if we agree it, but to make certain we're the loyal opposition, proud to be there, to let the American people know, we don't think this is the best way to take the country.

BLITZER: Do you think this decision now by the Bush administration, Paul, to go ahead and use some of that bailout money to actually help people who face foreclosure on their homes, is it going to make a difference this late in the game right now?

BEGALA: I hope so, Wolf.

You know, the Bush administration came to the Congress with a theory. And that theory was that we will buy out these so-called toxic assets and that will free up banks to capitalize and to loan out to business. Democrats and lots of independent economists said that was a bad idea. They pushed it through anyway.

Now the theory has met reality, and they're finally, belatedly, adapting to reality. The problem is the opportunity cost. The time that we have wasted pursuing a theory that was never going to work is just going to hurt the economy more.

And one thing I hope we learn out of this transition is that we are in a terrible, terrible economic mess. I don't know that it will be 13 years long, like the Great Depression, but it's not going to be just six months or a year. I think we're in a very, very long terrible economic period.

And I hope our president-elect continues to lift our sights and to try to remind us, it's going to take a long time. We didn't get in this overnight. We're not going to get out of it overnight.

BLITZER: All right, Bay, go ahead.

BUCHANAN: You know, when it comes to Fannie and Freddie, unfortunately, we now are in control of those. They're ours.

And, so, the best thing for to us do is listen to the experts, whomever they might be, and make certain we use the money in a way that makes them stable, so we can send them back out into the marketplace, get rid of them.

The government should not be in the business of banking. And the sooner we can make it so that they can be -- hold up on their own or be bought out by other groups, break them up, whatever we have to do, that is what should -- should be our goal.

BLITZER: Bay Buchanan, Paul Begala, guys, thanks very much.

BEGALA: Thanks, Wolf.

BLITZER: Sarah Palin answering questions submitted by you, our viewers.


UNIDENTIFIED MALE: Governor Palin, before the election, you were speaking with James Dobson, and you said you were confident that God would do the right thing for America on November 4. Did God do the right thing for America?


BLITZER: All right. You're going to hear her answer, what she says in response to that question. That's coming up -- more of my interview with Governor Palin.

Also, from cheering crowds to awkward moments, some of the comments about Barack Obama's skin color overseas, and they're making Americans wince.

Stay with us. You're in THE SITUATION ROOM.


BLITZER: Ahead, Governor Sarah Palin has advice for Barack Obama on bringing Republicans and independents into his incoming administration.

Also, how Google is going to help you fight the flu.

Stay with us. We will be right back.


BLITZER: Jubilant headlines from Europe last week celebrated the election of Barack Obama as America's first African-American president. But is Obama's popularity there evidence that racism has essentially been wiped out of Europe?

CNN's Carol Costello went looking for answers -- Carol.

CAROL COSTELLO, CNN CORRESPONDENT: Wolf, some of this stuff is insensitive, and some of it's just plain ugly.


COSTELLO (voice-over): Remember the love for Barack Obama in Germany?


COSTELLO: It was a thing to behold. In Kenya, couples are naming their babies Barack and Michelle.

But those heartwarming images don't tell the whole story. Some European leaders seem confused about how to talk about America's first black president -- Italy's prime minister, for one.

SILVIO BERLUSCONI, ITALIAN PRIME MINISTER (through translator): He's young, handsome and even tanned.

COSTELLO: Berlusconi was quick to say it was a joke.

But France's first lady, Carla Bruni, who was born in Italy, found it offensive, adding, "I am pleased to have become French."

Still, international relations experts say Berlusconi's comment might have been insensitive, but not necessarily racist. After all, Berlusconi's comment is not so very different than what Joe Biden once said about his new boss during the primary.


SEN. JOSEPH BIDEN (D-DE), VICE PRESIDENT-ELECT: I mean, you have got the first sort of mainstream African-American, who is articulate and bright and clean and a nice-looking guy. I mean --


COSTELLO: But other things are harder to brush off. A Polish lawmaker, Artur Gorski, called Obama's victory --


COSTELLO: -- "the end of the civilization of white men."

Take a look at this front-page story from a newspaper in Germany. This was its June headline, translation, "Uncle Barack's Cabin." Editors called it satirical, though some didn't get the joke. Also, according to the French press, a German lawmaker issued a press release concerned about Obama's popularity in Germany. He said, "Obama fever resembles an African tropical disease."

We should point out, that lawmaker belongs to a German neo-Nazi Party, a fringe party the majority of Germans despise.

ANNETTE HEUSER, EXECUTIVE DIRECTOR, BERTELSMANN FOUNDATION: In Germany, we still have, unfortunately, this very right-wing party NPD, but they are representing an absolutely tiny minority view. And they are not representing how Germany and the German citizens define democracy in today's world.


COSTELLO: Keep in mind, in Germany and in Poland, the politicians talking trash about president-elect Obama were widely condemned. The majority of Europeans are truly excited about an Obama presidency -- Wolf.

BLITZER: There's no doubt about that, Carol. Thanks very much.

A new site from Google could predict where flu outbreaks will occur up to two weeks more quickly than previous government data.

Our Internet reporter, Abbi Tatton, has been looking into this story. Abbi, how does this work?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, take a look at this map of flu activity from Google, most of the country low activity right now, like Colorado. Go to a state in the Southeast, like Georgia, the flu activity is moderate.

And that activity is based not on doctors' reports or lab results, but because more people in those states are currently Googling on flu symptoms. For the last year, Google has been working with the Centers for Disease Control to compare this search data with the CDC's own data, and they found that the search terms are a pretty good indicator of flu activity.

So, they're putting this information online now. The CDC does caution that it's all very new, but they do say that it does have the potential here of getting information on the spread of flu quicker. It takes one to two weeks for the CDC to get their information in from labs and doctors, whereas Google can look at what people are looking for online with a quicker turnaround -- Wolf.

BLITZER: Abbi, thank you.

Voters like you want -- want to ask Governor Sarah Palin why her ticket lost and what Republicans should do now.


UNIDENTIFIED MALE: What would you propose the GOP do to reconcile this ideological shift, in order to regain moderates and independents, who so convincingly voted for president-elect Obama?


BLITZER: That's just one question for Governor Palin from our I- Reporters. Wait until you hear her advice on how Republicans should pick up the pieces. More of my interview, that's straight ahead. That's coming up here in THE SITUATION ROOM.

And Obama supporters want a little payback, the group that is pushing for Bill Richardson to take over one tough Cabinet job.

Lots more news coming up -- right here in THE SITUATION ROOM.


BLITZER: Let's get back to Jack. He's got "The Cafferty File" in New York -- Jack.

CAFFERTY: Wolf, the question this hour is: What does it mean that only 20 percent of Americans consider government aid to large corporations crucial or very important?

Tony in Michigan says: "Corporate greed, outsourcing of jobs, pay cuts, benefit reductions, golden parachutes, the list goes on and on. Many of these large corporations act as if they are entitled to this money, or else. We should not reward such poor performance."

Richard in McKinney, Texas: "It is really simple, Jack. Most people see anything that makes more money than they do as evil or bad. They don't think about those corporations providing jobs, insurance, and benefits for others. Of course, now, if it is their corporation going under, then, by all means, bail me out, federal government. It all depends on where you are standing."

John in California writes: "Our industries must compete with companies that get assistance from their governments, which is why our corporations are getting clobbered. If our government assists our industries, we change the way we have been doing business. There is nothing in the Constitution that says what kind of economy we're supposed to have."

Veronica in California: "Maybe we can give you back a question: What would happen if they filed for Chapter 11? Would it give them time to reorganize and maybe give us products we need or want?"

Susan in Canada: "I am surprised the number is so high. Where do the bailouts stop, and how do you get in line for one? If we always do what we always did, we will always got what we always -- we will always get what we always got. Maybe it's time to sweep the executive offices out and bring in new blood. It was shameful to see AIG host a conference for 150 people that cost almost $350,000."

And Simon in Syracuse, New York: "Could it be perhaps, Jack, that 80 percent of us drive Toyotas and shop at Wal-mart for cheap Chinese products? It's just a theory I'm kicking around." If you didn't see your e-mail here, you can go to my blog at Look for yours there, among hundreds of others -- Wolf.

BLITZER: Thanks, Jack.

And, to our viewers, you're in THE SITUATION ROOM.