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Obama Makes History Again; Auto Companies Ask Congress For Help

Aired November 18, 2008 - 18:00   ET


Happening now: more surprises from Barack Obama. He has apparently made his choice for the nation's highest law enforcement post. Eric Holder would make history as the next attorney general, but who is he and why does Barack Obama want him? Stand by.

Warnings of misery, catastrophe and job cuts like you have never seen. If you think that times are tough right now, the big three automakers are warning it is about to get a lot worse if their companies collapse. Should you worry about your job?

And what would make a Vatican cardinal say that Barack Obama's vision is apocalyptic? All of 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 are in THE SITUATION ROOM.

One history-making turn could cause another. The nation's first African-American to win the White House apparently wants to see the first black person running the Justice Department -- Democratic sources telling CNN president-elect Barack Obama wants Eric Holder to become the next attorney general.

Let's get more from CNN's Jessica Yellin. She is working this story for us. All right. What do we know about Eric Holder, Jessica?

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Wolf, sources close to Barack Obama say the two men became very close during the V.P. selection process. Eric Holder was one of the people who helped oversee that committee that selected Biden to be the vice president and Barack Obama came to trust him, we are told, implicitly.

Eric Holder is a man who was once a federal prosecutor. He helped oversee public integrity prosecutions and he was a deputy in Janet Reno's Justice Department. So, the pluses there, Barack Obama, we are told, has a very similar views to Holder's when it comes to legal issues. Eric Holder also has enormous experience inside the Justice Department, so could hit the ground running.

On the other side, here is another person of a person Obama is naming to his administration who already worked in the Clinton administration, so not necessarily a face of change, and, of course, there's some controversy around him, because, as deputy attorney general, he failed to raise red flags when President Bill Clinton pardoned Marc Rich, the fugitive from justice who was a very wealthy man and stirred up quite a bit of controversy when he got that pardon.

Still, I spoke to one of the top Democratic aides in the Senate. And they say there's almost no negative talk about Holder up there. He is highly respected and should get through the Senate without a flap -- Wolf.

BLITZER: Jessica Yellin in Chicago, stand by.

John King is here. He's our chief national correspondent. Both of us, we covered the Clinton White House, we covered the Clinton administration. Eric Holder was a very, very influential and powerful figure at the Justice Department in those days.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: And, as Jessica noted, Janet Reno's deputy, in charge, essentially, of the day-to-day management of the department.

It is because of that, we are told, that Barack Obama wanted him to come take to take this job, knows the Justice Department, knows that building, was a U.S. attorney, so he knows the system around the country as well, also served as a judge here in the District of Columbia, and as Jessica noted was a public integrity prosecutor.

So he's a man with impeccable legal credentials. And that department, although now most Democrats and Republicans admire the current attorney general, Mike Mukasey, President Bush's choice, you know all the criticism under Ashcroft, then under Gonzales when he moved over from the White House. It a department with a morale crisis.

And our Terry Frieden, our Justice producer, already seeing indications told many Democratic who served previously who now have lucrative private sector jobs saying, you know what, we like this guy so much, we might even come back into government. That kind of morale is what they're looking to restore at the Justice Department.

BLITZER: And he's a lawyer in a major firm, Covington & Burling, Eric Holder, right now. And, obviously, he would give that up to take the job at the Justice Department.

What does it say though about Barack Obama that he wants Eric Holder who served in the Clinton administration, but was a strong supporter of Barack Obama for the Democratic presidential nomination -- he didn't support Hillary Clinton. He supported Barack Obama. What does it say about his selection and speaking of Hillary Clinton, the possibility he might ask Hillary Clinton to be the nation's top diplomat?

KING: If he keeps going to all these Clinton people, maybe you and I need to go back and cover the White House, right?



KING: But, look, a lot of Democrats have been complimentary. People who weren't involved in the campaign, but are involved now in the transition, say that Barack Obama is thinking big, that he wants to bring in big names, that it shows his self-confidence, that he is not afraid to bring in powerhouse people, like Hillary Clinton, potentially, as secretary of state.

They are bringing in a lot of former Clinton names, Rahm Emanuel, who you just mentioned, Greg Craig for White House counsel. Ron Klain over in the vice presidential shop, he was in the Justice Department and in Al Gore's V.P. shop.

And now this Eric Holder announcement. Many are going to say, that is not change. That's the Clinton administration. But remember Bill Clinton was the last Democratic president. He served for eight years. So, the people who worked in the trenches of government in high-level, mid-level and even low-level jobs, were in the Clinton administration.

So, you're going to get a fair mix of people from the Clinton days. As they fill out the entire Cabinet, I think you will see a broader portfolio of newcomers and new faces as well. But in these highly sensitive jobs, you want people who know the territory, can manage the department and people you trust. And Barack Obama trusts Eric Holder.

BLITZER: And these are guys, people from the eight years of the Clinton administration, who have the experience, because if you go back to an earlier Democratic administration, you go back to the '70s and Jimmy Carter and some of those folks may be a little bit too old right now to serve.

KING: And the most important thing is to get off to a good start.

BLITZER: I want go back to Jessica Yellin, because she is also looking into the possibility that Hillary Clinton might become the next secretary of state. Jessica, what does that do, though, to her need to pay off millions in campaign debt that she accrued during the course of her race for the Democratic nomination?

YELLIN: It complicates it, to say the very least, Wolf. Senator Clinton right now has $7.6 million worth of debt outstanding. That is excluding the money she put in. That is just to her vendors. And her says tells us that she is committed to paying that down. Now, there are no laws that prohibit her from raising money as secretary of state, but it could be tricky if she takes that post -- Wolf.

BLITZER: All right, we will watch to see what happens and we will see what Barack Obama does as far as her campaign debt is concerned as well. Thank you. On Capitol Hill, meanwhile, an urgent appeal and dire warning, auto executives and workers representatives essentially telling lawmakers, throw us a lifeline or the boat that is the auto industry may sink and possibly take down millions of American jobs.

Our congressional correspondent Dana Bash is up on Capitol Hill. Dana, they are pleading and pleading for an industry bailout just ahead of a key vote.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: They are. And they are doing that as we speak. They are basically telling these senators that the credit freeze threatens bankruptcy for their companies and not just millions of jobs lost, but loss of health care, loss of pensions, but they are speaking to senators who are quite skeptical and also to a Senate that is now in stalemate over how and whether to help them.


BASH (voice-over): One after another, the chief executives of Detroit's big three automakers pleaded with Washington to rescue them.

RICK WAGONER, CHAIRMAN & CEO, GENERAL MOTORS: This is all about a lot more than just Detroit. It is about saving the U.S. economy from a catastrophic collapse.

ALAN MULALLY, CEO, FORD MOTOR COMPANY: We must join our competitors today in asking for your support to gain access to an industry bridge loan that would help us navigate through this difficult economic crisis.

ROBERT NARDELLI, CEO, CHRYSLER: We are asking for assistance for one reason, to address the devastating automotive industry recession caused by our nation's financial meltdown.

BASH: But before these auto executives even got to speak, senators on the committee spent an hour-and-a-half expressing heavy skepticism about helping the ailing industry.

SEN. CHRISTOPHER DODD (D), CONNECTICUT: Their discomfort in coming to the Congress with hat in hand is only exceeded by the fact they are seeking treatments for wounds that I believe to a large extent where self-inflicted. No one can say that they didn't see this coming. The companies have been struggling for years.

BASH: Democrats and Republicans alike suggested that the collapsing economy is not the only source of their woes; it is mismanagement.

SEN. MICHAEL B. ENZI (R) WYOMING: Labor costs, enormous legacy liabilities, and inefficient production have also contributed to the current crisis in the auto industry. Isn't it prudent for us to consider how the taxpayers' $25 billion will go to addressing these issues before we authorize the spending?

SEN. CHARLES SCHUMER (D), NEW YORK: We must be assured that whatever aid we give you is accompanied by a real plan that shows you recognize the direction that this industry must take in order not to survive, but to thrive.


BASH: Now, the auto executives are right now trying to answer the criticism and the questions that they are getting from these senators. They are insisting that they have restructured, that they are trying to modernize.

But despite those pleas, Wolf, it is quite apparent in talking to senators all day here and really listening to them on that panel, that the $25 billion that these auto executives are seeking for help, that it is very, very unlikely at this point that that will get passed through the United States Senate. The Democrats, the leaders, at least, are still saying that that money should come from the $700 billion Wall Street bailout. And Republicans and the Bush White House are still saying no go.

BLITZER: Dana is up on the Hill watching this important story. Thank you.

By the way, if you think economic conditions are a nightmare right now, many are warning of even higher, more serious horror if the auto industry actually were to collapse. And that could hit many of us rather hard. If the big three automakers failed, for example, their 250,000-plus workers could all lose their jobs.

Also, many estimates say that at least 2.3 million jobs tied to the industry could also be lost. Some estimates by the way put that even higher. That is about 2 percent of the U.S. work force. Wow.

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

JACK CAFFERTY, CNN ANCHOR: I read something the other day. Unemployment could hit 10 percent if Detroit goes under.


CAFFERTY: That is scary stuff.

Don't have the tell you this. Americans are feeling cash- strapped these days. And because of that, state government budgets are being squeezed hard, a lot of states watching tax revenue simply melt away, whether it is sales tax, corporate taxes, capital gains taxes. People are not shopping like they used to and traveling like they used to. The stock market is killing everybody, all of which is hurting the local governments.

And those states with high foreclosure rates, they are getting hit hard, too. According to a liberal-leaning center on budget and policy priorities, at least 37 of the 50 states have faced or are facing budget deficits in the 2009 fiscal year totaling $56 billion.

Take California. Two months ago, they had a deficit of $15 billion in California. Suddenly, that number has shot up to $26 billion. And California may not be able to pay its bills come spring. New York State not much better. It is facing a $12.5 billion deficit for 2009. Cuts here expected to include health care and education.

The governors of both New York and California have called special legislative sessions to try to deal with this financial crisis as the economy continues to deteriorate. States are facing increasingly difficult choices.

And that is the question this hour: Would you rather your state cut services or raise taxes to cover their budget shortfalls? Go to You can post a comment on my blogs.

Like, you want the bad news or the worse news? I mean, there's no easy choices here.


BLITZER: Bad and bad worse. We will watch this, Jack. Thanks very much. Good question.

A growing effort in Congress aimed at repealing the controversial don't ask/don't tell policy on gays in the military.


REP. ELLEN TAUSCHER (D), CALIFORNIA: I think that we can do that in certainly the first year of the administration.


BLITZER: But this is the same issue that stymied the Clinton administration in its first year, so what is different now? And what can Barack Obama learn from earlier mistakes?

Also, a presidential inauguration possibly unlike any other. Officials here in Washington are bracing for crowds in the millions.

Plus, African-American members of Congress, they are speaking candidly, emotionally about their reactions to Barack Obama's election victory.


REP. DANNY DAVIS (D), ILLINOIS: I can tell my grandchildren that these hands that I used to use to pick cotton, I used to help pick a president.



BLITZER: It is the moment that surely will long inspire this question: Where were you when? It is what many Americans will long ask about the moment the United States elected its first African- American president. Now some black members of Congress are openly sharing how moving that moment was for them.

Let's go to CNN's Dan Lothian in Boston. He is watching this story for us. And we are speaking specifically, Dan, about members of the Congressional Black Caucus.

DAN LOTHIAN, CNN BOSTON BUREAU CHIEF: That is right. And it was very emotional for them. They were part of a forum that dealt with the issue of race in the aftermath of a historic election.



LOTHIAN (voice-over): The Congressional Black Caucus unplugged, deeply moved by Barack Obama's victory.

REP. DANNY DAVIS (D), ILLINOIS: I can tell my grandchildren that these hands that I used to use to pick cotton, I used to help pick a president.

REP. JOHN LEWIS (D), GEORGIA: That night, I must tell you, I did cry. I think I had what I call an out-of-body experience.


LEWIS: I jumped. I shouted for joy. I didn't think my feet were ever going to touch the ground again.

REP. JAMES CLYBURN (D), SOUTH CAROLINA: And I looked first in the face of my daughter, my eldest, and tears were streaming down her face. I lost it at that moment. And I think I was shedding tears of vindication.

LOTHIAN: As Obama and his family thank the nation, most members say they also cried. Doubters became believers.

REP. DIANE WATSON (D), CALIFORNIA: And my emotion came about because I did not believe there were areas in the country that were ready to vote for a black man. And, so, it took me hours to really let it soak in that he had won.

LOTHIAN: As they talked the historic election at Williams College in Massachusetts, James Clyburn, the highest-ranking black leader in Congress, admitted, he didn't always believe his own rhetoric, that pep talk to his children and grandchildren.

CLYBURN: As I told them that they could grow up to be whatever they wanted to be, quite frankly, they didn't believe it, and I didn't believe it when I was telling them.


LOTHIAN: He sure does now. And, soon, with a black family in the White House, the Congressional Black Caucus hopes a new picture will emerge. DEL. DONNA CHRISTENSEN (D), U.S. VIRGIN ISLANDS: It's going to have a transformative effect, impact on how people around this country see the African-American.

LOTHIAN: Like many Americans, they have high expectations of president-elect Obama, who must tackle not a black agenda, but an American agenda, the battered economy, energy, education.

REP. SHEILA JACKSON LEE (D), TEXAS: But this will require some heavy lifting. Let's help him. We are in a historic moment with a historic opportunity, with historic responsibility.

LOTHIAN: And one of those responsibilities they will focus on out of the gate, getting people back to work.

LEWIS: I think the number-one thing is jobs, number two, jobs, number three, jobs. It's going to be jobs, jobs, jobs.


LOTHIAN: The members say they are inspired by what Obama represents and the potential to turn things around.

BLITZER: Emotional moment for a lot of folks out there. Thanks very much for that, Dan Lothian, reporting.

President-election Barack Obama has pledged to lift the ban on gays serving openly in the United States military, but he is determined not to repeat some of the political blunders of the past.

Let's get the latest from our Pentagon correspondent, Jamie McIntyre, working the story for us. We are talking about the don't ask/don't tell policy.

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: That's right, Wolf. And, as you know, it's going to take an act of Congress to change that. And, up on Capitol Hill, members of Congress are getting their act together.


BLITZER: If you think it is time to get rid of the Don't Ask Don't Tell policy in the U.S. military, raise your hand.

MCINTYRE (voice-over): On CNN last year, President-elect Barack Obama raised his hand to show allowing gays to serve openly in the military is a change he believes in. But two months ago, Obama signaled he would move cautiously, telling a gay newspaper he would first get the military on board.


SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: Although I have consistently said I would repeal don't ask/don't tell, I believe that the way to do it is to make sure that we are working through processes, getting the Joint Chiefs of Staff clear in terms of what our priorities are going to be.


MCINTYRE: Gay rights activists say it is important for the new president to avoid the ham-fisted effort President Clinton tried in 1993, when he naively promised to lift the ban by executive order. The roiled the Pentagon brass, including then Joint Chiefs Chairman Colin Powell, and provoked a fierce backlash from conservatives in Congress.

As a result, Congress stripped President Clinton of his power to change the policy, and forced him to accept the don't ask/don't tell compromise, a law that can only be repealed by Congress.


MCINTYRE: But, after 15 years and four wars, attitudes in the Pentagon and among the public have changed dramatically.

A Washington Post /ABC News poll this summer found, 75 percent of Americans support allowing gays to serve openly, compared to only 45 percent back in 1993.


MCINTYRE: So, while gay rights advocates think next year might be their year, they also realize that president-elect Barack Obama will have some big problems on his plate when he first takes office, like the economy and the wars in Iraq and Afghanistan -- Wolf.

BLITZER: Jamie McIntyre is working the story at the Pentagon.

President-elect Obama's attorney general pick will be the first African-American in that post, but Eric Holder certainly has his roots in the Clinton years. Does that bode well for an Obama administration? Stand by.

And $2 million for a pair of washers. The Pentagon wises up and prosecutes a company who took it to the cleaners.

Also, Democratic leaders give Senator Joe Lieberman a pass. He ticked them off, but he gets to keep his chairmanship.


SEN. HARRY REID (D-NV), MAJORITY LEADER: It is all over with. Joe Lieberman is a Democrat. He is part of this caucus.




BLITZER: A scathing diatribe against the president-elect by a Roman Catholic Cardinal. (BEGIN AUDIO CLIP)

CARDINAL JAMES FRANCIS STAFFORD: His rhetoric is post-modernist and marks an agenda and mission that are aggressive, disruptive, and apocalyptic.


BLITZER: Now that Cardinal is speaking to CNN, trying to explain what is behind that blistering attack.

Also, should the government bail out the big three automakers in the United States? If not, what are the consequences? The best political team on television is here to discuss.

And the nation's capital preparing right now for a historic inauguration and possibly unprecedented crowds.


ADRIAN FENTY (D), MAYOR OF WASHINGTON, D.C.: We should be prepared, as a city, for, you know, in the range of three to five million. You know, we don't want to be caught by surprise.



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

Happening now: A top Vatican official says the president-elect's stance on abortion is, in his words, hostile towards unborn children. But what about American Catholics who helped elect Barack Obama? Brian Todd standing by with a report.

Also, unprecedented crowds -- officials say as many as five million people may turn out for Barack Obama's inauguration. It's a huge security challenge. We're going to update you on all the preparations already under way.

And Clinton administration veterans returning to the White House. Obama is reportedly ready to name the former Deputy Attorney General Eric Holder to head the Justice Department. Can he and other former Clinton administration officials help bring change to Washington?

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

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

Aggressive, disruptive and apocalyptic, those surprisingly harsh words being used against president-elect Barack Obama, even more surprising considering the source, a Roman Catholic cardinal.

CNN's Brian Todd is working the story for us. Brian, what is this about? BRIAN TODD, CNN CORRESPONDENT: Wolf, this cardinal told me he wants to make sure his words are not taken out of context, but he is not backing down from some very strong criticism of Mr. Obama.


TODD (voice-over): Swept into office with help from the Catholic vote, Barack Obama now finds himself the target of harsh criticism from a Vatican cardinal. James Francis Stafford, former archbishop of Denver, said this recently about Obama's support for abortion rights.


CARDINAL JAMES STAFFORD, APOSTOLIC PENITENTIARY, THE VATICAN: His rhetoric is post-modernist and marks an agenda and ambitions that are aggressive, disruptive and apocalyptic. Catholics weep over these words. We weep over the violence concealed behind the rhetoric of our young president-to-be. What should we do with our hot, angry tears of betrayal?


TODD: We reached Cardinal Stafford in Rome. He didn't want our phone conversation recorded, but said he believes his remarks can be misunderstood. He says his take on the word apocalyptic is different from common Western references to the end of the world.

In his understanding, he says, apocalyptic means resistance to what calls the divine and natural laws on reproduction and the preservation of human life. He says he does believe Obama's stance on abortion rights condones violence toward unborn children. Cardinal Stafford told us he does not speak for the Vatican.

Contacted by CNN, a Vatican spokesman would not comment on his remarks. The Obama transition team also had no comment.

President-Elect Obama won the Catholic vote by a solid 9 points over John McCain. But analysts say American Catholics have at least one key disconnect with the church.

WILLIAM GALSTON, BROOKINGS INSTITUTION: Many Catholics who are opposed to abortion believe that birth control, through means other than the so-called rhythm method, are perfectly legitimate and that when the Catholic hierarchy took such a firm position against the acceptability of birth control, that it began to undermine its own moral authority.


TODD: Still, Cardinal Stafford says he does not understand how a Catholic voter could look favorably at the president-elect when "he is hostile to the life of an unborn child" -- Wolf, holding firm there.

BLITZER: So he's not really expressing any regrets over his remarks? TODD: He really is not. But he says he wants to make sure we understand this is not a political thing with him. He himself has been critical of President Bush for the Iraq War, the interrogation program. He says this is not political, it just has to do with abortion rights, in his view.

BLITZER: Brian Todd, thank you very much.

TODD: You're welcome.

BLITZER: The size of the crowd expected here in Washington for Barack Obama's inauguration on January 20th might be matched only by the size of the security efforts.

Our homeland security correspondent, Jeanne Meserve, reports on the preparations.



JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT (voice-over): The National Mall is made for public gatherings -- both celebrations and protests. But as the city gets ready for January 20, the mayor expects something unprecedented.

ADRIAN FENTY (D), MAYOR OF WASHINGTON, D.C.: We should be prepared, as a city, for, you know, in the range of three to five million. You know, we don't want to be caught by surprise.

MESERVE: As a candidate, Barack Obama could draw crowds of 100,000. Two hundred and forty thousand gathered in Chicago's Grant Park to hear his acceptance speech. And there is consensus that the historic swearing-in of the nation's first African-American president will be huge.

Washington does inaugurations every four years. And the Secret Service says it can adapt existing plans and do a little innovation to make the swearing-in and the inaugural parade safe and secure -- no matter how big the crowd.

MALCOLM WILEY, U.S. SECRET SERVICE: We've got subcommittees specific to airspace security, to prevention and to crisis management, to civil disturbance. And on each of those subcommittees, we've got members of the federal government, from the military, from the city.

MESERVE: Will Obama take a page from Jimmy Carter or Bill Clinton and walk through the throngs?

WILEY: We would prefer, of course, that he stay in the car, but that's not our call.

MESERVE (on camera): Whose call is it?

WILEY: It's his call. MESERVE (voice-over): How will everyone else get around in a city so jam-packed with people? Metro, the city's mass transit system, says it is still planning, but promises it won't shut subway doors, no matter how many people show up.


BLITZER: Jeanne Meserve reporting.

For some perspective on all those estimates, about 250,000 people heard Dr. Martin Luther King, Jr. give his famous "I Have A Dream" speech during the 1963 March on Washington. More recently, organizers say about 1.5 million people packed onto the mall for the March for Women's Lives rally back in 2004.

And as you just heard Washington's mayor says they're planning right now for perhaps three to five million people, which got us thinking if five million people actually show up for President-Elect Obama's inauguration on January 20th, could they all fit? The answer is yes -- but they'd each have just about one square foot of ground the stand on.

On another question, where will they all sleep? Our Internet reporter, Abbi Tatton, is working this story for us. It's not going to be easy to find bedrooms for all these folks.

ABBI TATTON, CNN INTERNET REPORTER: Wolf, there's only so many hotel rooms in Washington. Local residents know that. And they're going onto sites like Craigslist in their hundreds to offer their sofa, their basement for a fee.

Now, if you want to stay close to the inaugural site, it's going to cost you. Some of the ads around Capitol Hill -- $15,000 for the week for a three bedroom town home. And people are renting anything and everything.

If we can advance that photo, the owner of a catamaran says that he's going to dock this at a downtown marina for the week if you pay him $4,700. And he's already getting inquiries.

Now, if that's out of your price range, there's plenty more on offer if you travel out of town just a little bit. Silver Spring, Maryland here -- for free, you can pitch a tent in this person's front yard. He was saying that if you, though, actually want to use the facilities in the house, it's going to cost you about $100 a night.

Wolf, we're seeing people renting their places all over the place. We've got Baltimore. There's also West Virginia homes being shown, as well. Williamsburg -- two-and-a-half hours out of town. We talked to a woman who said that she's doubling her fee for a timeshare for that week.

BLITZER: January 20th in Washington, it could be cold. So I don't recommend the tent --

TATTON: Pitching the tent. BLITZER: Not a good idea.

TATTON: Maybe not the best idea.

BLITZER: All right, thanks very much. We'll watch this story.

The president-elect's choice for attorney general may make history. But Eric Holder's appointment also raises some questions. He served in the Clinton administration. So will that hurt or help an administration advocating change?

Mending fences -- Senator Joe Lieberman keeps his chairmanship by the skin of his teeth after ticking off Democratic leaders.


SEN. JOSEPH LIEBERMAN (I), CONNECTICUT: There are other statements that I made that I wish I had made more clearly. And there are some that I made that I wish I had not made at all.



BLITZER: President-Elect Barack Obama picking another Clinton administration alumnus for his administration, asking former Justice Department official, Eric Holder, to become the next attorney general.

Joining us now to talk about that and more, our CNN senior political analyst, Gloria Borger; our CNN political contributor, Dana Milbank, of "The Washington Post;" and our other CNN political contributor, Steve Hayes, the senior writer for "The Weekly Standard." Guys, thanks very much for coming in.

Are there too many Clintonites being asked to come into this new administration of change?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, not if you ask the Clinton people.


BORGER: Look, they're the only ones who have actually been around while there was a Democratic administration and they know what it's like to run the government. Many of them did not support Hillary Clinton. Greg Craig, for example, is going in as White House counsel. He was a very strong Obama supporter. Eric Holder, you just mentioned. He did work in the Clinton administration -- another Obama supporter.

So, I think, you know, we can overdo that, saying oh, my God, it's all the Clinton people. There's no change, no change, no change. Let's see where these cabinet members all come from. By the way, Hillary Clinton --

BLITZER: She was a major --

BORGER: -- should she become secretary of state --

BLITZER: She was a major Hillary Clinton supporter --

BORGER: She's a Clinton person.


BLITZER: -- in the race for the Democratic nomination.

BORGER: Exactly. Exactly.


DANA MILBANK, CNN CONTRIBUTOR "WASHINGTON POST": Yes. You know, I just wonder -- settling on Eric Holder, it must mean that they tried to get Janet Reno, but she --

BORGER: They couldn't, right?

MILBANK: She couldn't come through for them. But --

BORGER: She was at the dance (INAUDIBLE).

MILBANK: But it is an extraordinarily -- an extraordinary line of everybody from Ron Klain over to Rahm Emanuel and Greg Craig, as you mentioned. It is a change. It's just a restoration of the monarchy. This is going to aggravate the left-wing. But, you know, with the exception of some certain personal indelicacies, they didn't do such a bad job.

BLITZER: But if you want experience, Steve, you've got -- and you're a Democrat, you could go back to the Jimmy Carter administration in the '70s. But if you want a little bit more, you know, younger folks, you've got to go with the folks who had the experience in the Clinton administration.

STEPHEN HAYES, SENIOR WRITER AT "THE WEEKLY STANDARD": Yes. And politically, I'm not sure it would be that smart to go back to the Carter years.


HAYES: Look, on the one hand, on a practical level, they sort of have to do this. I mean these are the people --


HAYES: -- as Gloria said, who have experience. They know how this works. And Barack Obama wants to be able to come in and sort of hit the ground running, as they say. On the other hand, this is a guy who ran about change for 21 months. This is not the change that people were talking about, I think.

BORGER: Let's see how it all looks when it's finished, OK?

Let's see -- BLITZER: Because Gloria makes a good point. There's -- this is still very early.

BORGER: This is very early --

BLITZER: And there are thousands of job out there that he has to appoint. And the beginnings, maybe some people in the Clinton administration with experience and there will be others who won't.

HAYES: Yes, I bet --

BORGER: In the cabinet.

HAYES: But I bet we'll have more who are former Clinton administration.


BORGER: Well, but, also, you'll -- you have to populate the -- you know, the deputy level and the levels below that. And there are lots of people you're going to see coming in from the states --

HAYES: But think about that --

MILBANK: That is a --

HAYES: -- think about that, as a practical manner, when he was campaigning.

MILBANK: Well --

HAYES: If he would have said look, I'm going to -- I'm going to restore the Clinton administration at all the senior levels, but my deputies will be different.

MILBANK: Right. But he also --


HAYES: We would have mocked him.

BORGER: But it's not all senior levels, though.

MILBANK: But at this point, he also needs --


MILBANK: -- to instill some confidence in the markets and all. The mood has changed since the heat of the campaign.

BLITZER: He needs the best qualified, the most experienced people, because this is an enormously difficult period this country is going through right now. So I don't think he can worry about, you know, rancoring -- angering some folks --

MILBANK: Right. BLITZER: -- on the left or the right or whatever. He needs really good people.

BORGER: Well, but it will be interesting, for example, to see if Larry Summers becomes secretary of the Treasury. He's very well regarded by the Obama team. But he was also Treasury secretary during the Clinton years.

BLITZER: Dana, listen to Joe Lieberman today, because he got what he wanted. He stays as a Democrat and he got -- he stays as chairman of the Homeland Security Committee. Here's how he responded, though, to some of the questions that came up.


LIEBERMAN: There are other statements that I made that I wish I had made more clearly. And there are some that I made that I wish I had not made at all. And, obviously, in the heat of campaigns, that happens to all of us. But I regret that. And now it's time to move on.


BLITZER: You know who led the fight to protect Joe Lieberman?

That would be Barack Obama, his fellow senator, even though Obama was the recipient of that criticism at the Republican convention in St. Paul. Here's the question -- what does this say about Barack Obama?

MILBANK: Well, I mean, he is aiming to be a conciliatory leader. And he certainly has achieved that here. They had an overwhelming vote in the Democratic Caucus, 42 or 43 of them saying let's give this guy a break.

On the other hand, they're doing so gritting their teeth. And there's a lot of aggravation there.

That press conference you showed, that was Harry Reid's press conference that Joe Lieberman hijacked. He took over the thing.


BORGER: Joe Lieberman looked about as comfortable as someone doing a hostage tape --

MILBANK: Yes. Yes.

BORGER: You know, like --


BORGER: -- like he had rehearsed these lines.

MILBANK: But it's -- it's left a lot of bad feelings there on Capitol Hill, which could come back to --


HAYES: Yes, but I think --

BLITZER: What do you think, Steven?

HAYES: Look, if Barack Obama can forgive Joe Lieberman, I think his argument would be the rest of you can do it, too. I think it's also very smart. If I were him, I actually would have doubled down, in effect, and made a big public peace offering with Joe Lieberman and said, hey, look, I'm bringing you back in, we need your support. We're going to -- we're going to govern together. This is how I campaigned. But, still, I think just what he's done is -- it's probably enough.

BLITZER: Gloria, what are the stakes right now -- political stakes in this battle over whether or not the federal government should spend billions to bail out the big three automakers?

BORGER: You know, this is a very difficult political decision for these folks, because they're trying to get the big three automakers to do in a week what they haven't done in the last 10 years, which is, OK, if we give you this $25 billion, you're going to change your way of thinking. And you can't accomplish all of that in a week in a lame duck session in one vote.

And so it's tough, because these folks on the Hill, they don't -- they don't want to just throw this money at the automakers. They know they've done things that are wrong. And they -- they have to get some --


BORGER: -- some proof that they're going to change the way they think.

MILBANK: It's very unlikely anything happens. And I think that's because, as the auto bailout goes, Republicans are pretty confident they can be back seat drivers here.


MILBANK: Obama is the guy who's going to be in the driver's seat when people look for some blame down the road, shall we say.

BLITZER: Who writes all those -- the little metaphors for you?

MILBANK: I told you, Gloria gives me --

BORGER: Some (INAUDIBLE) metaphors.

MILBANK: -- everything in the green room.

BLITZER: That's good.

BORGER: Stop that metaphor.

BLITZER: Good stuff. Go ahead. Button this up. BORGER: I'm going to put it on my seat belt.

HAYES: I have no metaphors. But I think it benefits Republicans, if they make their message well, that this would be yet another giveaway that would do nothing, really, to save autoworkers at the end of the day.

BLITZER: He's got some good metaphors there. Keep writing those things.

MILBANK: I'll see what I can do for you.

BORGER: No. Stop all metaphors.

BLITZER: We read your column in "The Washington Post."

BORGER: Stop them.

BLITZER: All right, guys, thanks very much. We'll do this again tomorrow.

Solar power, wind power, biofuels -- the president-elect speaking on climate change and America's energy future. His message to a climate change summit -- stand by.

And forget the cabinet -- there's huge anticipation over the Obama's selection of a new dog. And only Jeanne Moos is on our puppy watch.

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


BLITZER: In today's "Political Ticker," bipartisan focus on climate change. Republican Governor Arnold Schwarzenegger of California opens a climate change summit in Beverly Hills. People from 19 countries are there. But one person there in spirit was the president-elect, Barack Obama. He addressed those gathered in a taped video.


OBAMA: We'll invest in solar power, wind power and the next generation of biofuels. We'll tap nuclear power while making sure it's safe. And we will develop clean coal technologies.

This investment will not only help us reduce our dependence on foreign oil, making the United States more secure, and it will not only help us bring about a clean energy future -- saving the planet. It will also help us transform our industries and steer our country out of this economic crisis by generating five million new "green jobs" that pay well and can't be outsourced.


BLITZER: All right, let's go to Jack Cafferty. He's got "The Cafferty File" -- Jack.

CAFFERTY: Does Beverly Hills seem like a strange place to you for a climate change summit?

BLITZER: Yes. It seems like a good place to have lunch at Nate'n Al's.

CAFFERTY: Yes. Or go out and help put out the 500 fires that are burning around the countryside out there.

The question this hour: Would you rather your state cut services or raise taxes to cover its budget shortfall?

J. writes: "To put it bluntly, you can only cut services so much before you end up hurting a lot of people. The anti-taxers have had their heyday. Now they're going to have to bite the bullet. What you want from government, you have to expect to pay for."

Josh in Minneapolis writes: "Cut services. I can't afford to pay higher taxes. I make too much to qualify for any services, but I make too little to pay my expenses. How is raising taxes going to help me? Simple -- it won't. Maybe I should not work at all so I could qualify for services. I think the government has serviced us enough."

Mithra writes: "Cut neither. Reduce waste, reduce redundancy, reduce favoritism, reduce graft. Local and state governments are run like General Motors."

Lynne in Boise, Idaho: "I don't think most states need to go to either extreme. Having worked in both federal and state government, I can tell you with certainty, there is a lot of wasted time and money. I think state governments should employee commonsense cost saving measures, cut unnecessary expenditures and come up with some out of the box ideas for improving efficiency."

Mike in New Orleans, Louisiana: "I would say that my state should cut services. But since Bobby Jindal became governor, we don't have any."


CAFFERTY: Joe in Tucson, Arizona: "Raise my taxes, please. Education in the country has suffered long enough. We have to look to the future."

And Dave in St. Louis writes: "Now that we have elected Barack Obama, it doesn't matter, because in two months, the light will shine down and America will be debt free and the world will be at peace."

If you didn't see your e-mail here, you can go to my blog at There's some pretty funny stuff for that last question. Check it out -- Wolf.

BLITZER: Let's get back to Beverly Hills and a climate change summit. They've got some hotels there. I guess they could meet in the ballroom and discuss. CAFFERTY: Well, yes. And all those limousines, you know, that they ride around in. They'll all come pulling up there with the carbon monoxide spewing out the back end. And you've got the smog that gathers in the Los Angeles Basin anyway. And then you've got the smoke from all the wildfires. I mean it seems like a perfect setting, right?

BLITZER: Perfect. Yes.


BLITZER: All right, Jack. See you tomorrow.

CAFFERTY: Good-bye.

BLITZER: Thank you.

The soon to be president, Barack Obama, opened -- promised his kids a puppy, but he opened up a can of worms. Now puppies are everywhere keeping us entertained until the Obamas get settled and pick their little doggie. CNN's Jeanne Moos is on our puppy watch.

And here's one way to settle a score in a war zone -- more of today's "Hot Shots," coming up right here in THE SITUATION ROOM.


BLITZER: Here's a look at some of the "Hot Shots" coming in from our friends at the Associated Press -- pictures likely to be in your newspapers tomorrow.

In Congo, women receive plastic sheeting from the World Food Program as fighting continues.

In Colombia, protesters pile on top of a van to push for land rights.

In Iraq, U.S. and Iraqi soldiers take part in a friendly arm wrestling match.

And in Malaysia, John McEnroe celebrates a victory at the Showdown of Champions match.

Some of this hour's "Hot Shots" -- pictures worth a thousand words.

It's the talk of Washington and a lot of other places, as well, as everyone takes a pause to guess what breed becomes the first dog. CNN's Jeanne Moos on puppy watch to see who's begging for the role in her "Moost Unusual" way.


JEANNE MOOS, CNN CORRESPONDENT (voice-over): Who needs a first dog when you can watch six puppies? And who wants to be a dog in the White House anyway? Even the highbrow "New Yorker" is imaging a dog's life among politicos. (BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Blathering about the Middle East. And one of them turns to me and says and what do you think, Barney? What do you think we should do? And all I could come up with was woof. I felt like such an ass.


MOOS: There's even the Obama dog blog, featuring a cartoon showing the first dog lifting his leg on a house plant while President Obama says, "No you can't." And we can't leave out the latest jingle, "Howl to the Chief."

But now the Obamas say they're going to hold off on getting a puppy until they've settled in.

(on camera): Now, if we're going to have to wait for months for this White House dog, we need a puppy fix right now.

(voice-over): And here it is -- puppy nanny cam.


MOOS: A San Francis couple set up a webcam --

JOHN HAM, ESTREAM CEO/FOUNDER: Well, the family wanted a way to be able to check in on the puppies while they're at work.

MOOS: They used a free service called USTREAMTV that lets you stream live video over the Internet. Now, millions have watched the puppies scratch, lick and wipe out on the wee-wee pads. They play with Mr. Carrot --


MOOS: They fight with each other --


MOOS: They are Shiba Inus, a Japanese breed born six weeks ago. Fans have watched their mom feed them on the run. And now they run for the dog dish. Their owners have remained anonymous.


MOOS: All we ever see is a pair of shoes. Sometimes you want to warn them, look out, the pup just sprinkled where you're about to walk in your bare feet.

Occasionally, we're treated to a disembodied hand.


MOOS: The pups are not for sale. All six are spoken for. They've become such a Web sensation, that they're already being spoofed by people pretending to be them. One of the pups has literally wiped a smile off the pumpkin's face. And notice the moving lump as one crawls around under the bed.

Maybe the Obamas should consider a puppy nanny cam in the Lincoln Bedroom.

Jeanne Moos, CNN, New York.


BLITZER: Tomorrow, by the way, the former Republican governor and former presidential candidate, Mike Huckabee, will be here in THE SITUATION ROOM. You can be part of the interview. Submit your video questions at We're going to try to get some of your questions to Mike Huckabee, right here in THE SITUATION ROOM tomorrow.

Until then, thanks very much for watching.

I'm Wolf Blitzer in THE SITUATION ROOM.


Kitty Pilgrim is sitting in for Lou -- Kitty.