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THE SITUATION ROOM

Secretary of State Hillary Clinton?; Laura Bush Speaks Out

Aired November 14, 2008 - 18:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


WOLF BLITZER, CNN ANCHOR: And the first lady, Laura Bush, she is speaking to CNN exclusively about the history-making election and her visit with the next residents of the White House -- all that, plus the best political team on television.
We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

We begin with breaking news, as Barack Obama pops the question to Hillary Clinton, asking if she is interested in becoming the secretary of state of the United States.

Our senior political analyst, Gloria Borger, has been working the story for us. She is here. All right, Gloria, tell our viewers precisely what we know happened at that private meeting yesterday in Chicago between Barack Obama and Hillary Clinton.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, Wolf, multiple Democratic sources tell CNN that when president-elect Obama met with Hillary Clinton, they had a very serious discussion -- and that is the phrase that was used -- a serious discussion to gauge her interest in becoming the secretary of state if he were to offer the job to her.

Now, while we don't know Hillary Clinton's precise response, we do know from sources close to Hillary Clinton that when she left the meeting, she assumed that the job of secretary of state is hers, if she decides she wants it.

BLITZER: That is a pretty powerful assumption. So, she obviously understood what was going on.

BORGER: Right.

And presidents and president-elects don't offer people jobs specifically unless they are sure that they want them. So, this was the first serious discussion to gauge her interest in it. And from what we have seen over the last couple of days, the new Hillary Clinton seems a lot more interested in serving in the Obama administration than the one right after the election.

BLITZER: Yes, I'm hearing from multiple sources myself that she would be pretty interested in that.

Let's continue with Candy Crowley. She's in Chicago, where the transition team is located, including Barack Obama, of course. Candy, what are you hearing? CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Well, at the top of the Obama transition, we are hearing absolutely nothing at this point.

We do know from sources inside the Obama team that, in fact, Hillary Clinton was here. So, Gloria's sources moving the story along, and of course as you all noted that what we don't know is whether Hillary Clinton would accept such a thing, but what we do know is that it sounds like she is considering it.

(BEGIN VIDEOTAPE)

CROWLEY (voice-over): She did not say she wouldn't accept a cabinet position.

SEN. HILLARY RODHAM CLINTON (D), NEW YORK: Let me just say that I'm not going to speculate or address anything about the president- elect's incoming administration. And I'm going to respect his process.

CROWLEY: Then, too, one of the president-elect's favorite books is Team of Rivals by Doris Kearns Goodwin.

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: Talked about how Lincoln basically pulled in all the people who had been running against him into his cabinet, because whatever, you know, personal feelings.

CROWLEY: Obama land is not denying the notion that a Secretary of State Clinton is under consideration, but a Democratic source in a position to know about deliberation says just the suggestion of a Clinton post is problematic.

The worry is that overplaying it inevitably means if she doesn't get it, the actual nominee will pale by comparison in the wow category. Downplay the idea, it looks as though they're dismissing her. As for John McCain, don't bet on it.

SEN. JOHN MCCAIN (R), ARIZONA: I pledged to him tonight to do all in my power to help him lead us through the many challenges we face.

CROWLEY: McCain's Monday meeting with the president-elect shows signs of being a symbol symbolic gesture of bipartisanship. The two do have common issues -- ethics reform, climate change -- where McCain could perhaps be helpful on Capitol Hill. But the session does have the signs of a cabinet post feeler.

It was arranged by Obama chief of staff Rahm Emanuel and McCain best bud Senator Lindsey Graham, both of whom plan to attend the meeting. Not exactly a heart-to-heart.

(END VIDEOTAPE)

CROWLEY: Still, as we have been reporting, even if it doesn't look as though John McCain might get an administration post, increasingly, it is looking like Hillary Clinton might.

As you know, our Gloria Borger reporting that, in fact, there was a serious meeting yesterday, in which Barack Obama was trying to gauge whether Hillary Clinton would take secretary of state, should she be offered it -- Wolf.

BLITZER: Candy, stand by, because James Carville, our political contributor, Democratic strategist, is on the phone to us. James, you are close to the Clintons, as all of our viewers know. What do you think? Do you think she might be the next secretary of state?

JAMES CARVILLE, CNN POLITICAL ANALYST: Yes, I think that the fact that it has gone this far -- obviously, when she went to Chicago, she knew she was not going there to have tea with the president-elect.

And I suspect that when this thing goes this far down the line and any number of people I talk to today have not waved me off, I think this thing is pretty far advanced.

(CROSSTALK)

BLITZER: From what I am hearing, James, she would like to be secretary of state. She thinks she could do a good job, and it would be a pretty serious challenge for her. But tell us what you think.

CARVILLE: Well, first off, think it says a lot positive about president-elect Obama. And I think she would be a terrific secretary of state, and I mean really terrific.

She is also -- should would be giving up a, you know, a long career in the Senate, which she was sort of guaranteed of. So, I think she has to think about -- I think probably has to mull any number of issues.

But as an American, I mean, I hope and I pray that she takes it. And I am really sort of grateful to have a president that would be a big enough person to offer a former rival something like this. I think this is a terrific thing.

And I don't think that the president-elect or Rahm Emanuel or Senator Clinton would let this thing advance to the point that it is without there being a high likelihood that this is going to happen.

(CROSSTALK)

BLITZER: Yes, I think you are right. Based on everything I know as a reporter, James, over the years, this story wouldn't go this far without somebody calling me at a high level and saying, you know, shut up. This is not happening, and making us basically move away from this speculation, if it weren't at a really, really advanced stage. That is the way this business is, as you know.

(CROSSTALK)

CARVILLE: It does. And somebody would have certainly called me and said, would you call your friend Wolf and tell to put a sock in it?

BLITZER: Yes.

CARVILLE: And the fact that I have not gotten any such phone call or you have, and the fact that this thing has gone this far -- and we know that when they met that Senator Clinton and the president- elect knew what the topic was going to be.

But I just think that in politics we are never totally shocked if something happens, but I would be surprised if this thing is not very real and that there is not a high likelihood that it's going to happen.

BLITZER: You and I know James, Rahm Emanuel, for example, very well, and if this story had no basis, you know what he would be doing right now, without a doubt.

CARVILLE: He would have been on the phone to a lot of people. And with the fact that you and I also know what we have not heard -- sometimes, silence is confirming.

BLITZER: Right. Absolutely.

(LAUGHTER)

CARVILLE: And that is what we are seeing right now. So, I think it is terrific.

(CROSSTALK)

CARVILLE: OK. Thanks, Wolf.

(CROSSTALK)

BLITZER: All right, James Carville pretty happy about the possibility -- still a possibility -- that Hillary Clinton is going to be the next secretary of state.

Richard Quest is here. Richard, you just came in from London. There is a whole group of world leaders convening in Washington right now for this economic summit, the president receiving officials at the White House even as we're speaking right now. Tell us about what you would anticipate international reaction to be to Hillary Clinton the secretary of state of the United States?

RICHARD QUEST, CNN CORRESPONDENT: She is an international political rock star. She has access worldwide. She is one of the best known politicians in the world.

There is no question that, love her or hate her, she would be welcomed as the U.S. secretary of state. That being said, the political realities of people overseas would say, how close is she to Obama? How do they get over the nastiness of their campaign? What messages are being sent. But in terms of herself as a person, no question, she would be welcomed. BLITZER: And they're still pretty excited in Europe -- and you just came from Europe -- about Barack Obama being the next president of the United States?

QUEST: Beside themselves, Wolf. They cannot believe what has happened, the euphoria. You know, I was here for the election. I was back in Europe. I have to say it was not that much different between London, New York or Atlanta.

BLITZER: They are just thrilled over there?

QUEST: They are looking for change. They believe change is on the agenda. They probably have got way too high expectations, but the rest of the world believes Barack Obama has a better chance of solving most of the problems than the current administration.

BLITZER: All right, you are here to cover this hugely important economic summit that President Bush has convened this weekend, bringing some 20 international leaders to Washington from the major industrialized powers from around the world.

Is it just going to be a photo opportunity or is something serious going to happen that will try to deal with this global economic recession?

QUEST: They will discuss fiscal stimulus. They will discuss reforming financial regulation.

But, Wolf, what this is about is the Europeans saying clearly and firmly to the United States that they want more administration. It is for the next administration, what this is all about, not tonight.

BLITZER: I'm going to bring your old pal Jack Cafferty into this conversation, as well. You know Jack Cafferty?

QUEST: Unfortunately.

BLITZER: You have met him before, right?

QUEST: Unfortunately.

JACK CAFFERTY, CNN ANCHOR: Oh, that's -- what do you mean unfortunately?

(LAUGHTER)

CAFFERTY: What kind of talk is that?

BLITZER: He is just joking, Jack.

CAFFERTY: You know, the British are much more polite than you are.

BLITZER: Very.

(LAUGHTER) CAFFERTY: The shopping malls, department stores and discount retailers are all doing all they can to let you know that the holidays are almost here.

And, this year, well, they really need your business. Last month, retail sales suffered their worst decline, monthly drop on record. And the outlook is not so bright going into the Christmas season either. The unemployment rate is at a 14-year high at 6.5 percent. Foreclosure rates have spiked across the country. Even if you are fortunate enough to still have a roof over your head and a job to pay for it, your retirement savings have probably taken a pretty good beating as the stock markets continues to head south.

So, spending money this year on holiday travel, food and gifts may be a little harder to swallow. There is a bright spot. Gas prices are down, a lot. So, you can at least drive to your relatives' house. No guarantees what you are going to find on the table or under the tree when you get there, though.

Here is the question: In light of the deteriorating economy, how have your holiday plans changed?

You can go to CNN.com/Caffertyfile and post a comment on my blog -- Wolf.

BLITZER: Thank you very much, Jack. Jack will be back shortly.

During this political campaign season, Republicans tried to tie Barack Obama to a violent 1960s radical.

(BEGIN VIDEO CLIP)

OBAMA: He has never been involved in this campaign, and he will not advise me in the White House.

(END VIDEO CLIP)

BLITZER: Now that former '60s radical, William Ayers, is speaking out publicly on this day. Just how well does he know the president-elect? Stand by. We will tell you what he is saying.

And what a difference a day makes. First, the Senate Banking Committee chairman says no. Now the Senate majority leader says the Senate will vote on an auto bailout. Why the change of heart?

And a CNN exclusive; the first lady, Laura Bush, speaking out about the history-making presidential election.

(BEGIN VIDEO CLIP)

LAURA BUSH, FIRST LADY: I showed her the closets. I showed her all of the things that women are interested in. But I didn't try to give her a lot of advice.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: Let's check in with Brianna Keilar on Capitol Hill. Brianna, the Senate about to vote on some emergency loans for the nation's auto industry? What is the latest?

BRIANNA KEILAR, CNN CORRESPONDENT: Yes, this announcement coming from Senate Majority Leader Harry Reid, Wolf, that the Senate will vote next week on these emergency loans.

Strong opposition to this from some Republicans, though it is hard to gauge exactly by how many, because some of them are being noncommittal about any opposition they may have to this.

Harry Reid saying that he's going to attach unemployment insurance, an extension of that to this legislation, the idea being that Democrats could try to force the hands of Republicans, who may not want to vote against an unemployment insurance extension during these hard economic times.

And basically, this is a bill that would break off part of that $700 billion bailout and give it to the auto industry in the form of loans. A Republican leader, Mitch McConnell, who has expressed some opposition at least to the way that this is being handled, has said along, with the White House, that what he would rather Congress do is to free up $25 billion in loans that were approved in September, this, though, to retool some factories, some auto factories, so that they could better make cars that are more fuel-efficient, Democrats pushing back on that, saying that is not to way to go, that money is for something entirely different.

So you can see here, Wolf, it appears to be increasingly looking like there could be a showdown here on Capitol Hill in the final days of the Bush administration over this aid to auto -- to the auto industry.

BLITZER: We will be watching it with you, Brianna. Thanks very much.

And I am being told right now we are getting new information, more information, about the possibility that Hillary Clinton will be the next secretary of state of the United States. We are going to be speaking with our own Paul Begala. That's coming up shortly. Stand by for that.

In the midst of all of this, there is other action going on up on Capitol Hill. House Republicans vote for their leader next week, and they could be ushering in a huge shakeup.

A California congressman is challenging the House GOP leader, John Boehner, in the wake of last week's election defeats. Representative Dan Lungren says Republicans simply cannot go back to business as usual after losing at least 20 seats. But Boehner still remains a heavy favorite to hold onto his leadership political activity up on Capitol Hill.

Sarah Palin raised lots of eyebrows during the campaign when she accused Barack Obama of -- quote -- "palling around with terrorists." She was referring to Obama's ties with this man, the one-time violent radical William Ayers.

Let's go to CNN's Dan Lothian. He is working this story for us.

Dan, Ayers speaking out publicly today.

DAN LOTHIAN, CNN BOSTON BUREAU CHIEF: That is right, Wolf.

William Ayers is breaking his silence, talking about his past, his relationship with Barack Obama, and the way he was used in the presidential campaign.

(BEGIN VIDEOTAPE)

LOTHIAN (voice-over): Sixties radical William Ayers is no Joe the plumber, but his name was also part of the McCain campaign's effort to raise doubts about Barack Obama.

GOV. SARAH PALIN (R), ALASKA: He didn't know a few months ago that he had launched his political career in the living room of a domestic terrorist?

(BOOS)

PALIN: So, what's next?

LOTHIAN: But, speaking out on "Good Morning America," Ayers called that narrative dishonest.

(BEGIN VIDEO CLIP)

BILL AYERS, FORMER '60S RADICAL: The assumption that, if two people share a cup of coffee, or take a bus downtown together, or have 1,000 other types of associations, that that somehow means they share politics, outlook, policy, or responsibility for one another's actions.

(END VIDEO CLIP)

LOTHIAN: Despite calling Obama a -- quote -- "family friend" in the new afterward to his re-released book, Ayers now describes the relationship this way.

(BEGIN VIDEO CLIP)

AYERS: I knew him as probably as well as thousands of other Chicagoans. And, like millions and millions of other people worldwide, I wish I knew him better right now.

(END VIDEO CLIP)

LOTHIAN: Obama did attend a political reception at his home while launching his run for state office. And the two men served on the same board. But Ayers says that's as far as it went.

(BEGIN VIDEO CLIP)

AYERS: And that relationship was public, always in a large kind of context. It's not at all true that he sought me out to listen to my radical ideas or that I sought him out.

(END VIDEO CLIP)

LOTHIAN: Ayers helped start the Weather Underground, a radical group protesting the Vietnam War that bombed the Capitol and the Pentagon. He remains unapologetic about his militant past.

(BEGIN VIDEO CLIP)

LOTHIAN: Frankly (INAUDIBLE) I -- I don't know we did enough.

(END VIDEO CLIP)

LOTHIAN: During the presidential campaign, Obama condemned those actions and distanced himself from the controversial figure.

(BEGIN VIDEO CLIP)

OBAMA: He has never been involved in this campaign. And he will not advise me in the White House.

(END VIDEO CLIP)

LOTHIAN: Ayers doesn't think their casual connection should be a -- quote -- "demerit" on Obama's record.

(BEGIN VIDEO CLIP)

AYERS: The fact that he's willing to talk to a lot of people from a lot of different walks of life, listen to a lot of opinions, and still have a mind of his own is something we should honor and admire.

(END VIDEO CLIP)

(END VIDEOTAPE)

LOTHIAN: Ayers is now a professor of education at the University of Illinois at Chicago. He has authored seven books. And, Wolf, he says he never spoke out during the presidential campaign because he didn't want to feed into the controversy -- Wolf.

BLITZER: Copy.

All right, thanks very much, Dan Lothian, working that story.

I just want to remind our viewers we are standing by for more on the breaking news, top story this hour here in THE SITUATION ROOM: Hillary Clinton being very seriously -- not only being very seriously considered to be the next secretary of state by Barack Obama, but also leaving a quiet private meeting with him yesterday with the clear impression, according to multiple sources, that, if she wanted the job, the job is hers.

We're going to be speaking with her friend, our political -- our Democratic strategist and political contributor Paul Begala. Stand by for that. That is coming up.

Also, how big is the demand for inauguration tickets? Listen to this: 29,000 requests to just one U.S. senator's office. There is a crush on Capitol Hill.

And Laura Bush, she is talking about Barack Obama's White House visit and more. The CNN exclusive interview, that's coming up.

(COMMERCIAL BREAK)

(NEWS BREAK)

BLITZER: We're also standing by to speak with Paul Begala, our political contributor, the Democratic strategist, on the latest news we have been reporting, the very real possibility that Hillary Clinton will be the next secretary of state. Stand by for that.

Also, it is the hottest ticket in the country. Requests are pouring in from tens of thousands of people who want to attend Barack Obama's inauguration.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: And most of them are requesting four, 10, 20 tickets each. So, we are talking tens of thousands.

(END VIDEO CLIP)

BLITZER: Here's the bad news. Many of them are bound to be disappointed. What officials are doing to try to keep up with the overwhelming demand. At the same time, there is an online crackdown on the sale of tickets to the inaugural -- eBay now taking action.

Plus, the first lady, Laura Bush, she had a very candid conversation with our own Elaine Quijano over at the White House -- what the first lady makes of Barack Obama's historical election.

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

(COMMERCIAL BREAK)

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

Happening now: the first lady, Laura Bush, speaking out about Barack Obama's historic election victory and the Obama visit to the White House this week. The first lady talks about that and more with CNN in an exclusive interview.

Also, a tidal wave of requests for tickets to the Obama inauguration, Senate offices inundated with thousands and thousands of requests -- is the nation's capital ready for the throng of people planning to attend -- millions? Plus, the breaking news we're following -- much more on Barack Obama and Hillary Clinton possibly discussing a role for her as the next secretary of State of the United States.

All of this, plus the best political team on television.

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

We're learning now details of discussions between Barack Obama and Hillary Clinton yesterday about a possible role for her in the next cabinet as the secretary of State. Our White House correspondent, Ed Henry, is working the story for us -- all right, Ed, tell us what you've learned. What's the latest?

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Well, Wolf, a story with enormous ramifications. Democratic sources telling CNN that the president-elect had a very serious conversation yesterday here in Chicago with Senator Hillary Clinton and that she left that conversation with the distinct impression that the secretary of State job would be hers if she wanted it. Now, why would this come about?

It's a clear up side for Barack Obama. Some advisers saying that it would show that he's big, reaching out a rival like that and, in fact, Barack Obama has spoken very favorably of book "Team of Rivals," when Abraham Lincoln basically brought together some of his rivals. And his cabinet had a robust, healthy debate.

The up side for Clinton, of course, would be the fact that she would no longer be one of 100 senators, but she would be a select few in the cabinet and the only one in the cabinet with that kind of international portfolio.

The potential, down side, though, for the Obama team and potential administration that's upcoming is that they had sharp differences, obviously, over foreign policy during those Democratic debates. Also the potential for Barack Obama to overshadow -- for Hillary Clinton to overshadow Barack Obama on issues. And, finally, some of the potential baggage that was brought to the table from the Clintons -- Wolf.

BLITZER: Stand by, Ed, because I want to bring in our political contributor, the Democratic strategist, Paul Begala -- very close to the Clintons, as all of our viewers know -- Paul, tell us what you think about this possibility that Hillary Clinton might -- repeat -- might be the next secretary of State.

PAUL BEGALA, CNN CONTRIBUTOR: Oh, yes, just I get a backache, Wolf, from all the Clinton baggage that I'm carrying. I think she would be extraordinary. It would be a big win for President-Elect Obama, obviously. This is somebody who is a remarkably effective advocate. Nobody knows that better than he does.

I don't have any special knowledge of what's going on. And I'm not trying to get too far out ahead of the story. But I know, as somebody who's worked both sides of the press, that the Obama campaign -- the Obama team has been very, very good about tamping down and killing bad stories, negative stories, false stories. And I don't guess your phone line is burning up with people waving you off of this, is it?

BLITZER: No, it's not.

BEGALA: Right. So this is -- at least it certainly is a legitimate story. Ed Henry is a great reporter. He wouldn't -- he wouldn't be going with this if he didn't have the sources that he said he did. But I do see it as a total win for the president-elect, for some of the reasons Ed stated. He would get somebody who's already an experienced advocate for American interests around the world. She made history going to Beijing for the women's conference there, speaking out very boldly about human rights in a communist country. And she's been honed and toughened and sharpened by all those debates she had against Senator Obama, now President-Elect Obama.

So I think it's nothing but good for him. It's a little bit like choosing Joe Biden to be his vice president. He said at the time he wanted someone who will challenge him. He did not want, you know, someone who was weak or passive as his vice president. And I suspect all through the cabinet, we're going to see a whole lot of strength. That seems to be President-Elect Obama's desire.

BLITZER: You know, during the campaign, as you remember, Paul, they had differences on foreign policy issues -- do you meet unconditionally with some of these tyrants out there or not meet with them, as you know. But by and large, based on -- and I moderated several of those Democratic presidential debates -- I think four, to be precise. There isn't a whole lot of difference on most of the key national security and foreign policy issues between the two of them. Maybe you disagree.

BEGALA: No, I think -- I think you're right. I think that there is a Democratic consensus. You know, years ago Senator Clinton voted for the war in Iraq. Then state Senator Obama spoke out against it. But by end -- by the primary campaign, when they were running against each other, they had the same position, which was a deliberate redeployment of troops -- not anything precipitous. But I think, in fact, they had the same 16-month timetable, basically, of two combat brigades per month. And that advice, by the way, is much more the province of the Secretary of Defense anyway.

But I think that they're very much in sync. Part of the reason that sometimes feelings were hurt in that primary, I think, was because the issue distinctions were so small. And sometimes when there aren't great issue distinctions to fight about, it becomes a little bit more about personalities. But you've got to say, Hillary Clinton, having done 60 or 70 events for Senator Obama, she's really done her part to mend fences. And Senator Obamas, as well, giving her a prime time speech at the convention, giving her husband a prime time speech at the convention, as well.

BLITZER: Yes.

BEGALA: He has bent over backwards, as well, to heal that breach.

BLITZER: All right, Paul. Stand by.

Paul Begala with his thoughts on the possibility that Hillary Clinton might be Barack Obama's secretary of State. We're going to have more on this breaking news coming up.

But let's get to a CNN exclusive right now. Laura Bush is speaking out about the election of the United States' first African- American president and what it means to her and what it means to the world. The First Lady sat down with our White House correspondent, Elaine Quijano, and she opened up about showing off the White House to its next occupants.

(BEGIN VIDEOTAPE)

ELAINE QUIJANO, CNN CORRESPONDENT: The role of the First Lady is something that I'm sure you discussed with Mrs. Obama earlier this week. How did that visit go and could you tell us any anecdotes?

LAURA BUSH, FIRST LADY OF THE UNITED STATES: Well, it went great. It was very private, really. I mean, it was really much more, I think, two mothers talking about home more in this visit, because, of course, I showed her the rooms that are our girls' rooms now, that I think are the perfect rooms for her girls when they move there.

We talked more about really making the White House a home for a family. And what I know from having lived here and from visiting my mother-in-law when she made this family a home, and from reading about all the other families that have lived here is this house really can be home. And I know that they'll make it that way for their little girls.

QUIJANO: Certainly, there must be some increased pressure -- a lot of scrutiny, of course, living in the White House. I was wondering, did you share any advice with her, as a mother who has been through it, having had two daughters spending some formative years?

BUSH: Not really. I mean, I don't -- I think I showed her the closets. I showed her all the things that women are interested in.

(LAUGHTER)

BUSH: I didn't try to give her a lot of advice. I know she knows that she can make it a home and that's what she wants to do.

QUIJANO: Last question then.

Your husband, the day after the election, talked about it being a stirring sight to see the Obamas because of the historic nature of having the nation's first African- American president. I wonder if you could share your thoughts on that, as well.

BUSH: Well, I also think it's very, very important. I think it's important for American history. I think it's a message to everybody in the United States of what's possible, but it's also a message around the world, because I know, because I heard from them, that there were leaders in the -- around the world who didn't think the United States would elect an African-American man. And so, I think it's a really important message about our own democracy to people around the world.

QUIJANO: Mrs. Bush, thank you so much.

BUSH: Thanks a lot. Thanks, Elaine.

(END VIDEOTAPE)

BLITZER: John McCain and Barack Obama are going face-to-face Monday for the first time since the election. Senator McCain pledging to work with the president-elect. And what can we expect from that meeting?

Plus, more on the breaking news we're following -- Barack Obama asking Hillary Clinton if she's interested in being secretary of State. Our sources are talking, but she's not.

(BEGIN VIDEO CLIP)

CLINTON: I'm going to respect his process and any inquiries should be directed to his transition team.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: Let's get some more now on the breaking news we're following. Democratic sources telling CNN Barack Obama has effectively asked Hillary Clinton if she's interested in being his secretary of State. Now she has to decide whether or not she wants to be the secretary of State. A lot of people think she does.

Let's talk about that and more with our senior political analyst, Gloria Borger -- she broke the news here in THE SITUATION ROOM; Tara Wall, the deputy editorial page editor of "The Washington Times;" and David Gergen, our senior political analyst. They're all part of the best political team on television.

Gloria, do you think she wants it, she'll eventually say yes?

BORGER: Well, I'd say -- let's just say this. There's been a definite change and shift in tone from both people who are close to Hillary Clinton and Hillary Clinton herself. After the election, or just before the election, actually, she made it clear she wasn't interested in a cabinet post. And just the other day, she waffled a little bit on this.

And it's clear that she's looking for a way to serve the Obama administration. She's blocked in the Senate in many ways, Wolf. Don't forget, she's just a junior senator from New York. This would a larger tableau, a great challenge. And from Barack Obama's point of view, he gets two for one, doesn't he?

BLITZER: David, what do you think about this? DAVID GERGEN, CNN SENIOR POLITICAL ANALYST, FORMER PRESIDENTIAL ADVISER: This -- well, if she were to accept this post as secretary of State, that would give a dramatic lift to the Obama administration. It would say right up front just what I promised in the campaign, that I'm going to put together a team of all stars, that they're going to represent Democrats and Republicans, that they will be in the mold of Lincoln reaching out to a team of rivals. I think it would give us -- give us the immediate signal that this is a -- going to be a team of heavyweights that are serious about governing.

And from a governing standpoint, it's very clear that now, with the economy continuing to crater, that Obama is going to have to spend most of his time on domestic affairs. In Hillary Clinton, he would have someone who could instantly pick up the reigns on the foreign policy side...

BORGER: Yes.

GERGEN: ...go around the various capitals and be well-respected, well-known, know the issues and could be a full-time traveling secretary of State to help revive the peace process in the Middle East, work on Iraq and Iran and Afghanistan and Pakistan and Russia and all of these other issues that, I think, would be very positive for the administration. She's -- and one final thing. I cannot imagine that he asked her out to Chicago...

BORGER: Exactly.

GERGEN: ...unless he intended to put an offer on the table. And I cannot imagine that she would go to Chicago...

BORGER: Exactly.

GERGEN: ...unless she was very serious about the prospect of accepting.

BLITZER: It's almost...

BORGER: Exactly. But, you know, this is a little kabuki (ph).

BLITZER: I was going to say -- yes, Gloria, it's almost like a summit meeting.

BORGER: Right.

BLITZER: You go into the summit meeting knowing after the aides -- the lower level aides have all done the advance work, you go into a summit basically knowing what the outcome is going to be.

BORGER: Yes...

BLITZER: Tara...

BORGER: And it...

BLITZER: Hold on one second. I want everybody to hold on for a second, because I want to play a little clip -- the "60 Minutes" did an interview with Barack Obama today. It's going to air Sunday. And they've released a clip of what he says he felt like when he learned that he had been elected the next president of the United States. Let me play this clip.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: And when did it sink in?

MICHELLE OBAMA, WIFE OF BARACK OBAMA: I remember we were watching the returns and on one of the stations, Barack's picture came up and it said President-Elect Barack Obama. Wow! What a country we live in.

B. OBAMA: How about that?

M. OBAMA: Yes.

B. OBAMA: And then she said, they -- are you going the take the girls to school in the morning?

M. OBAMA: I did not.

(END VIDEO CLIP)

BLITZER: All right. He's got a good sense of humor. Tara, you know, he obviously was thrilled. Let's get back to the breaking news. What do you think about the possibility of Hillary Clinton becoming secretary of State?

TARA WALL, "WASHINGTON TIMES," CNN POLITICAL CONTRIBUTOR: Well, a couple of points, just to pick up on Gloria's point. I think you looked at even the video of her -- Mrs. Clinton's denial, denial/non- denial, she almost had a smirk on her face, like I know something you don't know. And she really was at the edge of her seat, almost like she wanted to say something, just if you looked at the look on her face.

But I think it's not surprising. What it is, in a sense, though, is ironic, in that if she does accept the position, the two top positions, if you will, in the Obama administration, that of vice president and secretary of State, are, essentially, would -- who were his two rivals, those who said he didn't have the foreign policy experience.

UNIDENTIFIED MALE: Well...

WALL: But I think many would say it says something his leadership to say how much he needs these two, in one way or another...

BLITZER: All right...

WALL: ...and it also says, I think, something for her, in that it's going to beef up those -- I mean I don't think that she has a lot of foreign policy experience, other than, you know, she's visited dignitaries. And we all know about the sniper fire. This will help her, in the long run, should she seek a run for the presidency.

BORGER: Look, I say -- I think it shows that he's a -- he's a leader who's not threatened by taking in former rivals into his cabinet. I think it makes him look like a stronger leader. And if I had to guess right now, Wolf, my sources tell me that she's clearly very interested in this job. And I had to guess, I'd say she would do it.

BLITZER: Yes, my guess would be the same.

WALL: I agree.

BLITZER: I think a lot of people are beginning to assume she's probably going to be the next secretary of State.

David Gergen, there's another big meeting coming up on Monday. Barack Obama has invited John McCain to come to Chicago. They're going to be meeting. How farfetched is the possibility that -- that Barack Obama might ask John McCain, a Republican maverick, as they say, to join his team and do something in an Obama administration?

GERGEN: Wow! I think that is pretty farfetched. I think that's on the far side of the moon. It is -- it's a symbol...

(LAUGHTER)

GERGEN: It's a symbolically very important meeting for the victor and the vanquished to come together. It symbolically sends a wonderful signal to the country that we're all one nation when this hard-hitting campaign is over. We've seen this a few times in the past, not as often as it should have happened. And I think it's a tribute to John McCain's sort of sense of honor that he is going to Chicago. It's not the other way around.

You know, if you're the defeated general, you go and give your sword to the other general. And he's doing that here. And I think he's been gracious. You know, from the day he knew he was losing this until now, he's been extremely gracious. And I think it served him well. It served the country well. And I do think -- Wolf, I don't think he would go to the Defense Department. There's too much of a potential there for a huge conflict over Iraq and withdrawal for Iraq.

BLITZER: Right.

(CROSSTALK)

BLITZER: We've got to leave it right there, guys, unfortunately. But a good discussion -- Gloria, Tara and David.

Coming up, a relative handful of tickets, but overwhelming demand from tens of thousands of people -- hundreds of thousands, in fact, who want to attend Barack Obama's inauguration.

And in light of the deteriorating economy, how have your holiday plans changed? Jack has your answers to this hour's question.

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

(COMMERCIAL BREAK)

BLITZER: It's really the hottest ticket in town -- any town. Barack Obama's inauguration is still more than two months away, but every second counts in the rush to get ready.

Let's to go to Brian Todd, Brian, what are you looking -- what are you hearing about all these massive preparations getting ready for January 20th?

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, this city hasn't seen the likes of this in probably more than 40 years. This is an event that may well break some attendance records and is bringing some extra stress, even to a town that's used to it.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Senator Webb's office. This is Logan.

TODD (voice-over): They light up every few seconds -- almost every call an impassioned request for inauguration tickets.

JACOB TERRELL, AIDE TO SENATOR JAMES WEBB: Everybody's telling us about their 85-year-old grandmother who -- she -- they never thought she would live to see this day. And they're real excited and they've got to have these tickets.

TODD: To say the office of Virginia Senator James Webb is inundated is putting it mildly.

TERRELL: The waiting list is near 26,000.

TODD: The only way you can legitimately get tickets to Barack Obama's swearing in is to call your Senator or Congressman.

JESSICA SMITH, AIDE TO SENATOR JAMES WEBB: Twenty-nine thousand people have contacted our office and most of them are requesting four, 10, 20 tickets each. So we're talking, you know, tens of thousands.

TODD (on camera): And how many allotted tickets do you expect to get?

SMITH: It's unclear. We should find out next week. We think probably in the low couple of hundred.

TODD (voice-over): Senator Webb has asked the Congressional committee in charge of inauguration tickets for more, since his state borders Washington and he expects more requests than most states. But there are 240,000 tickets total available for the swearing in ceremony and the committee tells us each Senator's office will get the same allotment, period.

This is the kind of crush this city is bracing for, as it prepares for an inauguration crowd that could break records. You're talking up to 1.5 million people converging on the Capitol. Can the city handle it?

D.C. Police Chief Cathy Lanier says normally, 4,000 officers make up her force and other law enforcement agencies here, but they're bringing in 4,000 more from other cities. They have to protect the audience, dignitaries, protestors, move human and vehicle traffic.

CHIEF CATHY LANIER, WASHINGTON POLICE: We can't be so focused on any one element that we ignore another element. And fortunately for us in D.C. , we have so many large events here, we're pretty good at kind of juggling all the balls.

(END VIDEOTAPE)

TODD: Now, Chief Lanier says if this wasn't D.C. , this would be incredibly difficult. But because they are so used to working with other law enforcement agencies, like the Capitol Hill Police, the Park Police and the Secret Service, they've become very good at this.

Still, Chief Lanier says there is nothing here in this town -- not the Fourth of July or anything else -- that compares to the challenge of an inauguration. And because Mr. Obama's swearing in is going to be so historic, Wolf, that even adds to the stress of law enforcement -- Wolf.

BLITZER: All right, Brian. Thanks very much. Brian's going to be watching every step of the way leading up to inauguration.

By the way, official inauguration tickets have not been issued yet, but tickets are already being offered for thousands of dollars online. Now eBay is cracking down, trying to put a halt to all of this.

Let's go to our Internet reporter, Abbi Tatton. What's the latest -- Abbi?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, this is people online who are claiming they can get you tickets. And then on eBay, the bids were coming in. Look at some of them from the last week -- over $1,000 offered for two tickets there. Somebody else who's claiming they can get you four great seats wants almost $10,000 for them.

Remember, these are tickets that are supposed to be free and that haven't been handed out yet.

Well, now eBay is saying that they're going to ban the sale of these swearing in tickets for the inauguration on all of their Web sites, this after a meeting with the Congressional committee that organizes inaugural events. That committee now hoping that other Web sites that are hawking these tickets online will follow suit.

The legitimate way to get these tickets online is through the House or Senate members' Web site in your locality. But we've been watching those, Wolf, for the last few weeks and they're filling up with messages like this one: "Due to the high volume, our office is no longer able to accept requests" -- Wolf.

BLITZER: Abbi, thanks very much.

There's going to be a lot of happy people, but many, many more disappointed. Folks, you know what, they'll be able to watch it right here on CNN every step of the way.

Let's go to Jack. He's got "The Cafferty File" -- Jack.

CAFFERTY: The question this hour is: In light of the deteriorating economy, how have your holiday plans changed?

Scott in Tucson says: "We've done our first detailed budget, tracked our spending down to the penny for the last two months to see exactly where we are. The result? In the current spreadsheet, there is no column for gifts. We'll make exceptions, of course, but our plans are very conservative."

M.B. in Virginia: "I'll be driving to visit relatives, rather than flying and spending much less money per person on gifts. But as an adult, the most important thing about the holidays is to enjoy time with family. That doesn't cost a thing."

Gary in North Carolina: "Yes, for the first time in eight years, we can really rejoice. We have a glorious year to look forward to. And since when is happiness and giving related to the economy, anyway?"

Bill in Zion, Illinois: "I guess this year we'll hear even more of the usual lamenting about how the merchants are faring. We gauge our elections by countless polls and our Christmas season by sales receipts. It's pretty sad."

Bronwyn writes: "Every year, we send our family members Virginia hams. This year, due to the failing economy, we're sending Virginia peanuts instead."

Tim in Boulder, Colorado: "Christmas is canceled. Bah humbug."

And Garrick writes: "Jack, my plans are to go stand in front of the White House with my bills and ask Bush to bail me out."

Gary in Woodhaven, Michigan: "Maybe as a people, we will learn what the holidays are really about, which has nothing to do with an economy."

If you didn't see your e-mail here, you can go to my blog at CNN.com/caffertyfile and look for yours there among hundreds of others -- Wolf.

BLITZER: Thanks very much, Jack. We'll take a quick break.

When we come back, there's been word of another high level appointment for the incoming Barack Obama administration. Stand by. We'll share with you what we know.

(COMMERCIAL BREAK)

BLITZER: We're just learning that Valerie Jarrett, a very close friend and close adviser to Barack Obama, has accepted a position in the new White House to be a senior adviser to the president. We're going to continue to watch that story.

And please be sure to watch us Sunday on "LATE EDITION." Among my guests, Ted Turner. "LATE EDITION" -- the last word in Sunday talk, 11:00 a.m. Eastern.

Thanks very much for joining us.

I'm Wolf Blitzer in THE SITUATION ROOM.

Up next, "LOU DOBBS TONIGHT".

Kitty sitting in for Lou -- Kitty.