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Automaker Bailout Stalls; Stock Market Plunges

Aired November 20, 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, to our viewers, you're in THE SITUATION ROOM.
Happening now: Lawmakers tell automakers, you have a lot more convincing to do before you get a dime of taxpayer money.

And the stock market punishes investors once again big time today.

Also, as people compete to work for Barack Obama, is one woman turning her back on a top economic post?

And you are going to find out why some Obama voters fear who he is getting advice from.

All of this, 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.

There's no such thing as easy money. That is essentially the message from lawmakers to automakers. Today, Democratic leaders in Congress laid out exactly what the Big Three must do if they want even a penny of the $25 billion bailout.

It includes demands, deadlines and a bit of derision.

Let's go straight to our congressional correspondent, Dana Bash. She's on Capitol Hill watching this story for us.

The stakes clearly are enormous right now. The automakers know it, Dana. So do the lawmakers.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: They absolutely do, but this is a Congress, Wolf, suffering from bailout fatigue. So, what Democratic leaders told automakers today is that, if they want a lifeline, they are going to have to prove they are worth it.

(BEGIN VIDEOTAPE)

BASH (voice-over): A hastily arranged news conference to announce that struggling auto companies will get no federal assistance until they present viable business plans.

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: Until they show us the plan, we cannot show them the money. BASH: Well aware that they risk blame for leaving Washington and doing nothing, Democratic leaders emerged from a closed-door meeting determined to put the onus on Detroit, a December 2 deadline for the auto companies to present a business plan. Congress would return in mid-December, only if lawmakers deem the Big Three proposals acceptable.

SEN. HARRY REID (D-NV), MAJORITY LEADER: Yes, we are kicking the can down the road, because that will give us the opportunity to do something positive. But that will only happen if they get their act together.

BASH: Lawmakers are frustrated that auto CEOs spent two days pleading for help, but could not answer key questions.

RICK WAGONER, CHAIRMAN & CEO, GENERAL MOTORS: ... total availability against that facility to GM of $10 billion to $12 billion.

REP. PAUL E. KANJORSKI (D), PENNSYLVANIA: Maybe I am dense or something, Mr. Wagoner. I don't quite understand what the hell you just told me.

BASH: And executives undermined their quest for taxpayer money by flying to Washington on private jets.

REID: I know it was not planned, but these guys flying in their big corporate jets does not send a good message to people in Searchlight, Nevada, or Las Vegas or Reno, or any other place in this country.

BASH: The decision to reject an auto bailout now undercut lawmakers pushing a compromise idea to help the industry immediately.

SEN. GEORGE VOINOVICH (R), OHIO: If we don't get this done, and they do go under, I believe that we're going to have a deep recession, and, quite frankly, from what I can pick up, we may just go over the cliff.

BASH: But Democrats leaders said, because of skepticism towards Detroit, no compromise could pass.

REID: What kind of message do we send to the American people by having a bunch of failed votes here?

(END VIDEOTAPE)

BASH: Now, auto companies released statements saying that they welcome the chance to address Congress' concerns.

But one thing that is really murky, Wolf, is, what exactly will constitute a viable plan? How will Congress decide whether or not they get one? Well, one Democratic leadership aide simply said, we will know it when we see it -- Wolf.

BLITZER: Hopefully, we will see something pretty soon, one way or another. Thanks, Dana.

A brutal day, another really brutal day on Wall Street and Main Street. The plunging Dow lost $700 billion in market value, and the number of new unemployment claims has surged to the highest level in 16 years. Congress and President Bush are taking notice.

(BEGIN VIDEO CLIP)

DANA PERINO, WHITE HOUSE PRESS SECRETARY: Because of the tight job market, the president believes it would be appropriate to further extend unemployment benefits, and he would sign legislation that is now in front of Congress. We hope that they will be able to pass that before they leave for their recess.

(END VIDEO CLIP)

BLITZER: Let's go right to our chief business correspondent, Ali Velshi.

Dare I ask, Ali, is there any sign of a hope?

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Yes, you know, it is a market, so there is always is. There are a lot of people out there saying, wow, is this really a bottom? Because we thought maybe 8500 was a bottom on the Dow, and then 7600, and now we are down below that.

So, there are a lot of people that are some companies -- think of a Kraft or a Procter & Gamble or a Kellogg, companies that make things that people will continue to buy matter what -- they are going to make some money. The problem is, we have got the auto sector in disarray; we have got financial stocks continuing to lose money, but that unemployment number is the most serious thing of all.

And I will tell you why, Wolf. Fundamentally, when we try and think about how this economy will recover, this is an economy that is dependent on the spending of Americans. And they can't spend if they don't have jobs.

Take a look at this. Last week, the number of new unemployment claims, number of new people filing for unemployment, going to their unemployment office, was 542,000 in one week. That brings the number of people on to -- the continuing number of people on claims, the number of people claiming for unemployment to more than four million. We have not seen that number since the early 1980s.

And by the way, there are some people who have fallen off the unemployment rolls, because they have run out of unemployment insurance. So that is not even a full reflection of the number of people on unemployment. But these numbers are very serious. There are some expectations, after losing 1.2 million jobs so far this year, that in the remaining two months of the year, because we haven't got numbers for November yet, November and December may add another half a million or more to the unemployment rolls, taking us into 2009 and the inauguration with nearly two million jobs lost in one year -- Wolf. BLITZER: And we have talked about it before and we will talk about it right now. With the Dow closing at around 7500, it was not that long ago, last year, it was more than 14000. That is about half of the value of all these stocks simply gone.

VELSHI: Just over one year ago, the Dow hit its all-time high above 14000, now 7500.

BLITZER: All right, Ali, thanks for that.

Amid all this economic gloom, there is a ray of hope for thousands of struggling right now. Fannie Mae and Freddie Mac, they say they will suspend foreclosures during the holiday season. That goes into effect on November 26 and it goes through January 9. During this time period, the mortgage finance companies will look at whether borrowers qualify for a new loan modification program aimed at trying to keep them from losing their homes.

Let's go back to Jack Cafferty for "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: On Election Day, Wolf, California voters approved Proposition 8, a constitutional amendment that overruled the state supreme court's decision this past may to legalize gay marriage in California.

Protests and petitions by gay right groups and supporters quickly followed in the days after the election. And now the California Supreme Court has agreed to hear three legal challenges to the state's new ban on gay marriage. All three cases claim that Proposition 8 steps on the civil rights of a -- quote -- "vulnerable minority group" -- unquote.

And while the court agreed to review the cases, it stopped short of suspending the ban. An estimated 18,000 same-sex marriages were certified in California between the spring and Election Day. And many of these couples now have been placed in a court of legal limbo, if you will.

According to one gay rights group, the California Supreme Court has heard nine cases challenging ballot initiatives or legislative acts in the last century, nine. The court eventually overturned three of them.

Here is the question. Should the California Supreme Court stay out of the recently passed ban on gay marriage? Go to CNN.com/caffertyfile. You can post a comment on my blog -- Wolf.

BLITZER: Thanks, Jack.

Growing buzz about who will be in the Barack Obama Cabinet, now one contender taking her name out. We have details of a new developments in the transition to power.

Also, as pirate attacks surge in one of the world's most important waterways, we find out how ship's crews can defend themselves. Plus, some on the left are unhappy with the Obama Cabinet picks so far -- why they are growing increasingly angry.

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

(COMMERCIAL BREAK)

BLITZER: In this historic presidential transition, there is another development involving a very important economic post in the future Obama administration.

Let's get the details. Let's go to Chicago. Jessica Yellin is standing by with the latest.

What do we know, Jessica?

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Wolf, we are learning that these Cabinet positions are a moving target. Nothing is a done deal until the Obama transition team officially announces it.

(BEGIN VIDEOTAPE)

YELLIN (voice-over): Chicago businesswoman Penny Pritzker says she is not a candidate to be secretary of commerce in the Obama administration.

Pritzker told CNN's Don Lemon, there were informal and preliminary discussions, but she decided not to submit the paperwork all candidates must supply.

Pritzker says: "I have obligations here in Chicago that make it difficult for me to serve at this time, adding, "I think I can best serve our nation in my current capacity, building businesses, creating jobs, working to strengthen our economy."

Though multiple Democratic sources told CNN Pritzker was the leading candidate for the role, an aide says her paperwork was never submitted for their vet.

KENNETH GROSS, ETHICS ATTORNEY: There is no question about the fact that the burdensome nature and the probing nature and the disclosure required for people coming into the administration is a deal-killer for them.

YELLIN: As finance chair for the campaign, Pritzker drove then candidate Obama's record-breaking fund-raising efforts. Transition spokesperson Robert Gibbs says: "Pritzker is a trusted adviser and valued friend to the president-elect and played a critical role in his campaign. She would be an enormous asset to an Obama administration, but she is not interested in serving at this time. She will continue to be a close economic adviser to the president-elect and his team."

(END VIDEOTAPE)

YELLIN: And, Wolf, multiple people close to the vetting process say that this year's process is so what they say excruciating, they used the word stressful, that it is not surprising that someone who has spent their lives in the private world would decline to participate -- Wolf.

BLITZER: Jessica Yellin in Chicago.

Let's take a closer look at some of the high-profile Cabinet picks, some of those names being mentioned. Rahm Emanuel is Obama's pick for White House chief of staff, not a formal member of the Cabinet, but a critically important job. And of course there's much speculation over whether or not Hillary Clinton will become the secretary of state -- more on that coming up this hour.

But in terms of Cabinet appointments we know about, so far, former Senate Majority Leader Tom Daschle apparently Obama's pick to become the next health and human services secretary. Eric Holder, a former top official in Bill Clinton's Justice Department, is apparently Obama's pick for attorney general. And the current Arizona governor, Janet Napolitano, appears to be the pick for homeland security secretary.

The Pentagon is urging shipping companies to do everything they can to help protect themselves against a wave of pirate attacks. Somali pirates have seized dozens of ships in the waters off of East Africa.

Let's go to our senior Pentagon correspondent, Jamie McIntyre. He is in the Port of Baltimore right now, where you have been studying, Jamie, how these ships can protect themselves from pirates.

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: That is right, Wolf.

We are standing on a fireboat in the Port of Baltimore. And just in the distance in the darkness are a couple of U.S. Navy cargo ships. And you can see how, when it gets dark, it is really easy to get close to these ships without anybody seeing you.

So, one of the things that the U.S. Navy is telling these merchant ships is, they ought to take very simple protection procedures, such as using more floodlights to flood the area by the ship, just so they can see the pirates coming more -- when they are farther away.

The other thing they can do is just like very simple measures, like putting barbed wire over the gunwales, or greasing the gunwales, so they are not so easy to climb up.

And, of course, another protective measure they are telling these ships is to go is just go a lot faster. Go at top speed and take evasive maneuvers. Another non-lethal defense a lot of ships have is -- this is a fireboat, as I said, so we have this water cannon here. These kind of fire hoses or water cannons can be used to repel the pirates if you see them coming.

But the main point that the U.S. Navy is telling a lot of these shipping companies is they have got to be responsible for their defense. And if you have a security team on board, if the pirates see that you are ready for them, they are likely to let you go by and wait for a ship that is more vulnerable -- Wolf.

BLITZER: So just have armed guards aboard those vessels and make that very clear, Jamie?

MCINTYRE: Yes, that's right, show -- a good defense in this case is what appears to be an even better defense. That is, and they don't have to have a lot of lethal weaponry. Just the fact that they have taken a lot of protective procedures can be enough to dissuade the pirates.

Of course, some shipping companies are taking the other way out. That is, they are going around the problem, taking the long way around the Cape of Good Hope to get their ships where they need to go.

(CROSSTALK)

BLITZER: Jamie McIntyre, watching the story, thanks.

According to the International Maritime Bureau, by the way, Somali-based pirates have attacked some 95 ships in the Gulf of Aden and the Indian Ocean this year. And they are holding 17 ships captive right now. More than 700 crew members have been hostage, with 314 still in captivity.

Pirates are demanding $25 million in ransom for one Saudi super oil tanker. They also want $8 million for another captured vessel that was carrying battle tanks to Kenya. The unusual ransom demand per ship -- the usual ransom demand, that is, $1 million.

Concerns about the makeup of Barack Obama's Cabinet -- we're going to tell you about what some anti-war activists are saying about the president-elect and those he wants to surround himself with.

Also, the vetting process, is it simply too tough for some people, for some people candidates for top posts in Barack Obama's Cabinet?

And eHarmony for gays -- the online dating service starts a new matchmaking Web site to settle a lawsuit.

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

(COMMERCIAL BREAK)

(NEWS BREAK)

BLITZER: Settling allegations that eHarmony violated discrimination laws, the online dating giant will start a new service catering to same-sex couples.

Let's go to our Internet reporter, Abbi Tatton. She is watching the story -- Abbi.

ABBI TATTON, CNN INTERNET REPORTER: Well, Wolf, this is eHarmony's ads have looked like in the past, heterosexual couples delighted that they found each other online.

Well, pretty soon, you are going to see gay and lesbian couples amongst them. Three years after a New Jersey man filed a discrimination complaint, there has been a settlement -- eHarmony will create a service to match same-sex couples as well.

And they say that they're calling this single individuals who are generally seeking long-term relationships. The company had been criticized for refusing to make these same-sex matches and other online dating firms had seized upon it. These are ads from Chemistry.com that does accept same-sex matches.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: No, still gay.

(END VIDEO CLIP)

TATTON: Now eHarmony is saying the same-sex matching project a business priority. Their new service, though, will be on a separate Web site that is called Compatible Partners -- Wolf.

BLITZER: Thanks very much for that, Abbi.

Some people on the left apparently right now unhappy with the way Barack Obama's Cabinet is taking shape.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I'm very concerned that some people in this administration are not going to be the change that we thought might happen. It is a concern. I would like to see maybe somebody like a Bill Richardson, who has advocated for a complete withdrawal from Iraq even when he ran in the primaries.

(END VIDEO CLIP)

BLITZER: But are they already starting to turn on the president- elect even before he takes office?

Also, Rahm Emanuel, Barack Obama's incoming White House chief of staff, meeting with congressional Republicans today. What role will they play in the new administration?

And tens of thousands of workers waiting to see if Washington will come to the auto industry's rescue.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It scared me to death at first. But then, you know, after listening to the news a little bit and everything, we have high hopes that things will be all right within the next few weeks.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

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

Happening now: Barack Obama has not taken even office yet, and already some liberals are not happy with some of his decisions. We are going to hear about their concerns -- their concerns -- about the president-elect's Cabinet.

Also, a powerful national security Republican advising president- elect Barack Obama right now on some of the major issues he will be facing in the Oval Office. We are going to tell you what is going on.

Plus, the vote on bailing out automakers now put on hold, as Democratic leaders in the Congress tell the Big Three what they must do to get even a penny of a $25 billion bailout -- all of this, plus the best political team on television.

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

You may be surprised by what we have learned here at CNN today -- Barack Obama getting some advice from an unlikely source. And that is also raising eyebrows because of what it might mean for the Defense Department, the national security apparatus, under Barack Obama.

Our White House correspondent Ed Henry has more from Chicago -- Ed.

(BEGIN VIDEOTAPE)

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Wolf, some new information that the president-elect is getting private advice from a close ally of Defense Secretary Robert Gates, which may be a sign that Gates could stick around in a Democratic administration.

(voice-over): Guess who has been privately talking to president- elect Barack Obama about foreign policy? Republican Brent Scowcroft, national security to former President George Herbert Walker Bush.

Scowcroft, who opposed the war in Iraq, is a fierce critic of the current Bush administration's approach.

BRENT SCOWCROFT, FORMER NATIONAL SECURITY ADVISER: Yes, I think we have developed in the Republican Party a -- well, the buzzword for it is neoconism. But I think what it is, it is a ideology -- it is really an idealistic approach to things, but it is a combination -- combination of idealism and, if you will, brute force.

HENRY: Two sources familiar with the conversations confirm to CNN that Obama has been reaching out to Scowcroft for phone chats even before he ran for president. And it has continued in recent days.

A senior Obama aide told CNN the president-elect -- quote -- "respects and admires General Scowcroft's bipartisan, pragmatic approach to foreign policy and looks forward to continuing the dialogue with General Scowcroft, as well as other key Republicans, Democrats and independents, to get the very best advice." What makes the conversations intriguing, Scowcroft is very close to Defense Secretary Bob Gates, at a time when the president-elect is thinking about keeping Gates on the job.

And Scowcroft recently said it would be a wise move for Obama.

SCOWCROFT: I actually think it would send the kind of signal that I think the president-elect intends -- or what he spoke about in his campaign. And that is that we need to work together. We need to work as Americans. And I think -- I think giving Bob Gates some more time to do the kinds of things he's doing would be a very wise course of action.

(END VIDEO TAPE)

HENRY: A senior Obama aide told me not to read too much into these conversations, that Obama was an admirer of Scowcroft long before he was putting together a cabinet.

But I can tell you, several foreign policy insiders are reading the tea leaves and wondering whether Scowcroft could emerge as sort of a go-between for Obama and Gates -- Wolf.

BLITZER: Ed Henry.

He's covering the transition for us in Chicago.

Barack Obama is receiving highly classified government briefings, but it appears some secret information is still off limits to his transition team

Let's go straight to our Pentagon correspondent, Barbara Starr -- Barbara, it involves the Pentagon, the Defense secretary. Some sensitive stuff out there.

BARBARA STARR, PENTAGON CORRESPONDENT: Wolf, the transition is underway here. But a lot of secrets are still being kept -- and the ultimate one is what Bob Gates will do.

(BEGIN VIDEOTAPE)

STARR (voice-over): Behind closed doors, Defense Secretary Robert Gates had his first meeting with President-Elect Barack Obama's transition team. The meeting, scheduled for 45 minutes, focused on the immediate military issues facing the new administration.

But for now, the Obama team isn't getting access to the big secrets. A Pentagon memo spells out that "disclosure of sensitive information about current military operations and intelligence will not be provided until arrangements for security clearances are worked out."

But topic number one at the Pentagon -- will Gates say on the job for President Obama?

Has he even been asked? Bob Gates, a former CIA chief, is determined to keep what may be his biggest secret, even as the press corps tries to crack the spy master. This was Gates in June.

ROBERT GATES, SECRETARY OF DEFENSE: Well, I've learned a long time ago never to say never. So my answer is the circumstances under which I would do that are inconceivable to me.

(END VIDEO CLIP)

STARR: This was Gates just days before the election.

GATES: Well, let me just say that I'm getting a lot more career advice and counseling than I might have anticipated.

STARR: And this week on Capitol Hill?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Mr. Secretary, are you going to stay in the Obama administration?

STARR: Just a friendly smile.

BASH: Is that a yes?

(END VIDEO TAPE)

STARR: And, Wolf, so far, the spy master isn't cracking no matter how often we ask him. He's playing his cards close to the vest -- Wolf.

BLITZER: I love it when Dana Bash shouts those questions.

All right, thanks very much for that.

He's not behind the Oval Office desk yet, but is the honeymoon already over for Barack Obama?

Some -- repeat some -- liberal supporters are seeing red over his rumored cabinet picks.

Let's bring in our Samantha Hayes.

She's looking at this story for us.

How upset are they?

SAMANTHA HAYES, CNN CORRESPONDENT: Well, Wolf, in short, you know, some voters voted for Obama because he promised to end the war. They don't want to see Obama appoint a defense team that supported the invasion of Iraq.

(BEGIN VIDEOTAPE)

HAYES (voice-over): Early in his presidential campaign, Obama won support with his opposition to the war and this pledge to voters when he announced his candidacy. OBAMA: America, it is time to start bringing our troops home.

HAYES: However, there's word Obama may keep President Bush's Defense Secretary, Robert Gates, and that Senator Hillary Clinton, who initially supported the war, might become his secretary of State. Clinton never apologized for her vote, which angered many on the left. Joe Biden, the vice president-elect, also voted for the war.

GEOFFREY MILLARD, IRAQ VETERANS AGAINST THE WAR: I'm very concerned that some people in this administration aren't going to be the change that we thought might happen.

HAYES: Anti-war activists like Geoffrey Millard, who served in Iraq for 13 months with the National Guard, have another concern -- Afghanistan, where Obama has said he wants to commit more troops and find Osama bin Laden.

MILLARD: It is concerning to me when I see that there's a possibility that we're just going to -- instead of taking and bringing our troops home, we're going to bring our troops into another war.

HAYES: But until Obama's cabinet decisions are final, many liberals are willing to take Obama at his word and believe it's his policies, rather than the people that he appoints, that will set the agenda.

TOM ANDREWS, WIN WITHOUT WAR: He's a very skilled guy and I think he'll -- I think he'll make the right decision. But for us, again, the bottom line is putting people in place that are going to actually fulfill the mission -- step one, get us out of Iraq within 16 months.

(END VIDEO TAPE)

HAYES: Sixteen months -- that's what we heard over and over again from Obama during the campaign. In a recent interview with "60 Minutes," he described his strategy, but without a timetable.

BLITZER: We'll watch and see how this part of the story unfolds.

Samantha, thank you.

Did the Obama's team vetting process scare off a potential cabinet pick?

It is simply too rigorous -- too tough?

The best political team on television is standing by to discuss.

We'll also talk about Rahm Emanuel. He's been meeting with the Congressional Republicans today.

How will the next White House work with them?

(BEGIN VIDEO CLIP)

REP. RAHM EMANUEL, (D), ILLINOIS: That there is enough area and enough goodwill for ideas from both parties to solve those challenges.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: The next White House chief of staff, Rahm Emanuel, meeting today with the Republican leaders on Capitol Hill.

Let's talk about this and more with our senior political analyst, Gloria Borger; our political contributors, Dana Milbank of "The Washington Post" and Steve Hayes, the senior writer for "The Weekly Standard."

Does it signal that there's going to be, at least at the beginning, some real cooperation between this new White House and the Republican leadership?

GLORIA BORGER, SENIOR POLITICAL ANALYST: Well, you know, this is something we really haven't seen around Washington for eight years, actually somebody going up to the Hill, who understands the Hill, who comes from the Hill, who has the ear of the president, talking to folks of the other party, trying to get something done.

I'm beginning to think change is actually about something coming out of Congress and getting something done. I think it's great.

BLITZER: But, as you know, Dana, he's got a real reputation as a partisan lightning rod, in effect. We're talking about Rahm Emanuel.

Is he the guy that can bring Republicans and the Obama team together?

DANA MILBANK, CNN CONTRIBUTOR, "THE WASHINGTON POST": Well, that's a curious question. I mean he is famous for supposedly once sending a dead fish to a pollster with whom he had some disagreements.

(CROSSTALK)

MILBANK: So I suspect that if the Republicans were told today that if they don't want get some dead fish on their doorstep, they're going to get in line here.

So I mean it's a gesture of -- a conciliatory gesture just to have him up there. But it's, perhaps, not the friendliest face for, say, the House Republicans.

BLITZER: But he has spent the last several years as a member of the House, so he knows the body.

STEPHEN HAYES, SENIOR WRITER AT "THE WEEKLY STANDARD": Yes, he has. I mean I think there are a lot of Republicans -- and particularly a couple of people in leadership -- who like Rahm Emanuel personally. Whether they're going to cooperate with him and if they're suddenly going to, you know, sing "Kumbaya" and they're going to vote for global -- you know, global warming bills President Barack Obama wants, I think that remains to be seen. I'm a little skeptical.

BORGER: But they're going to talk. And nobody at the White House will be surprised about what the Republicans are thinking and vice versa. I think they're going to be able to pick up the phone and call Rahm if they want to.

BLITZER: Yes. And he's not a shy guy about picking up the phone, either.

BORGER: That's right.

BLITZER: So -- as probably all of us know.

BORGER: Right.

BLITZER: Let's talk a little bit about Penny Pritzker. Yesterday, we thought she was in line to become the Commerce secretary. She was incredibly efficient in raising campaign money for Barack Obama.

BORGER: Right.

BLITZER: She's the heiress out to the highest fortune in Chicago. But all of a sudden today, we learned she's not interested in becoming the Commerce secretary. And a lot of speculation maybe this vetting process -- these tough questions are just simply too much for a lot of people to endure.

I know you've all been reading some of those questions.

Let's go through -- Gloria, what's your favorite one?

BORGER: OK. Well, my favorite one, Wolf, is about e-mails, because of course, none of use e-mail in this group, right?

And the question is, "If you've ever sent an electronic communication, including, but not limited to an e-mail, text message or instant message, that could suggest a conflict of interest or be a possible source of embarrassment to you, your family or the president- elect, please describe.

(LAUGHTER)

BLITZER: Who can remember all those e-mails?

BORGER: I can't remember everybody.

(LAUGHTER)

BLITZER: Go ahead.

BORGER: I don't know.

MILBANK: No. I wouldn't pass that test.

My favorite is number 61: "Have you had any association with any person, group or business venture that could be used, even unfairly, to impugn or attack your character and qualifications?"

So for...

BORGER: This group.

MILBANK: Yes. So, for example, instantly we're disqualified for being here with Hayes.

(LAUGHTER)

BLITZER: Steve Hayes...

(CROSSTALK)

BLITZER: ...because obviously, you wouldn't...

(CROSSTALK)

BORGER: He's obviously bad.

MILBANK: This is a bad association.

(CROSSTALK)

MILBANK: And it's on video, too.

(LAUGHTER)

BORGER: I think it's worse for Hayes, though, right?

BLITZER: Yes.

HAYES: Mine might not strike people as interesting at first, but it is: "Please provide the names, addresses and telephone numbers of three professional references. If possible, please furnish names of individuals with whom you have worked as a peer, a subordinate and as a supervisor."

Now, political appointees up and down the incoming Obama administration are being asked these questions. And so for lower level appointees, they're sort of fitting.

But I keep thinking of who is Hillary Clinton going to put as her references, or Tom Daschle or, you know, other senators?

I mean who does he list?

It would be interesting to know.

BLITZER: You know, it just...

(CROSSTALK)

BLITZER: But it does raise a very -- all of this raises a very serious question. Good people who want to be public servants...

BORGER: Yes.

BLITZER: ...who want to work in the government, they're just being, you know, saying to themselves, you know what, this is ridiculous.

Who's going to be left to work in the government?

BORGER: Well, you know, I was talking to somebody today who's involved in the vetting process. And he said, look, it's very highly structured and it's very intensive, yes. But there is -- there are no shortage of applicants. And, also, the -- really, the more pertinent problems are the ethics laws -- this no revolving door.

If you were an environmental lawyer, you cannot work at the EPA, for example.

And when you get out, if you decided to work at the EPA and you came from something else, you couldn't go work back in the environment.

So it's -- it's very difficult in terms of this lobbying issue.

(CROSSTALK)

BLITZER: Dana, some of this criticism that's -- that we're now hearing of the potential Obama cabinet coming from the left, disappointment some folks from the Clinton administration, some folks who initially supported the war in Iraq, is this just to be expected or is this a serious issue?

MILBANK: No, I think it's surprising the way Obama has come out so quickly with, I think, controversial figures for the left. Now, ultimately, they may be very happy with where he goes with this. But I have been struck the extent to which he sort of brought in the old guard, from the Clinton folks and making (INAUDIBLE)...

BLITZER: Including Hillary Clinton herself.

MILBANK: Well, among others. She would certainly qualify as a Clinton person -- and for that matter, the Bush holdovers, potentially. So it's not necessarily such a bad for Obama to have a little squabble with his base right now.

BLITZER: It sort of reminds me of some of the criticism of the Bush people when they brought in a moderate Republican or a mainstream Republican, some, you know -- real, the base out there, the conservative base, they weren't happy with someone who wasn't exactly perfect, from their perspective.

HAYES: Yes, I think, to a certain extent, this happens in every administration, as you say. And the base -- you know, the base needs something to do. They just won an election. They need something to get agitated about. So this might be it.

On the other hand, if you look at the range of people that he's putting in high-powered offices right now, I mean this is essentially the Democratic establishment in Washington, D.C. . So people who voted for Barack Obama because he was promising change or bringing change, there's some change in that it's not Republicans, but this is the establishment, make no mistake.

BORGER: But, again, I go back to our first discussion, which is change may actually mean getting something done, getting something out of Congress.

Congress has, what, a 12 percent approval rating?

So if you can appoint some Republicans, some Democrats who actually know how to work with the Hill, some moderates -- maybe, actually, we'll see something happen in Washington.

BLITZER: Wouldn't that be good?

BORGER: It would be shocking.

BLITZER: Wouldn't it be excellent?

MILBANK: Well, it depends.

BLITZER: Guys, thanks very much.

BORGER: I'm a Polly Anna.

BLITZER: See you...

BORGER: I'm a Polly Anna.

BLITZER: See you tomorrow.

California voters approve a gay marriage ban -- should the California Supreme Court, though, stay out of it?

They're considering it now. Jack Cafferty with your e-mail.

Plus, autoworkers hoping for help, but lawmakers towing a tough line.

(BEGIN VIDEO CLIP)

STAN REEVES, G.M. WORKER: I want to survive, too. You know, I'm -- I really wanted to have a pension and a 401(k), which we know that's in the toilet now. But, you know, just hopefully things can come back. And I think the big three, we just need a little bit of help right now.

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: Until they show us the plan, we cannot show them the money. And that is really where we are with this.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: The nation's automakers right now are on the brink, pleading for $25 billion in federal aid. Among them, G.M.

Here's some information you need the know. For every one of its workers, there are about 10 dependents -- meaning retired workers and their families. These so-called legacy costs add up to $2,000 a car.

G.M. has seen its market share, by the way, shrink from more than 50 percent back in 1962 to only 22 percent right now. And G.M.'s stock has gone from more than $90 a share in 2000 to a low this morning of just $2.50 a share.

In the meantime, the vote that could bring some help right now on hold.

Brooke Baldwin is in Michigan -- Brooke.

BROOKE BALDWIN, CNN CORRESPONDENT: Wolf, as you can imagine, nerves are running very high here in Southeastern Michigan. People here fear a great real economic calamity if the government doesn't somehow provide funds to the big three car companies.

Take a look around. This is really the scene in Warren, Michigan, in Dearborn and a lot of these auto communities. People have been sitting around -- and you can see business isn't so great this evening. But people have been sitting around watching the news out of Washington.

And one gentleman who's been doing that we found, Stan Reeves.

Stan is with General Motors.

You've been with General Motors for 28 years?

REEVES: Yes, correct.

BALDWIN: And what did you say to me earlier, you're hoping you'll make it to...

REEVES: To 30.

BALDWIN: But you're nervous about that?

REEVES: Well, yes. I think that the -- you know, I worked for preproduction operations. And we do all the future cars. And now they've halted, you know, future development. And it just has us scared to death, because if we didn't have the Volt right now, we would really have nothing.

BALDWIN: A lot of people have been watching the news coming down from Capitol Hill today.

And were you disappointed in seeing that it's sort of stalled, any sort of decision?

REEVES: Well, it scared me to death at first. But then, you know, after listening to the news a little bit and everything, we have high hopes that things will be all right within the next few weeks. BALDWIN: Have you ever seen -- just talking about the Michigan economy, looking around -- have you ever seen it this bad?

REEVES: Not this bad. Not in my lifetime. 1981 was a really horrible economy, but, no. This is the worst I've ever seen.

BALDWIN: The bottom line, you are hopeful that the big three will get some money, not to thrive, but to survive?

REEVES: Oh, exactly. You know, I want to survive, too. You know, I'm -- I really wanted to have a pension and a 401(k), which we know that's in the toilet now. But, you know, just hopefully, things can come back. And I think the big three, we just need a little bit of help right now.

BALDWIN: All right, Stan, I really appreciate it.

Good luck to you.

And you heard it. You know, people are nervous, they're anxious. In fact, take a look at this -- anxiety here, Wolf, is the new normal.

BLITZER: Brooke Baldwin.

Yes, I guess a lot of people would just like to escape to Tahiti or Bora Bora or some place.

Jack Cafferty, you know, the economic numbers in the news, pretty depressing.

CAFFERTY: You know, the CEOs of those three companies didn't do themselves any good flying their private corporate jets down to Washington so they could, you know, lobby for this $25 billion handout. They should have ridden the bus. I mean it just -- you know, it just doesn't make the right impression.

The question this hour -- should the California Supreme Court stay out of the recently passed ban on gay marriage, Proposition 8?

Raphael in New York: "Yes, Jack. They ought to stay out. Whatever the merits of gay marriage, the people have spoken and as to whether they feel they want it in their state or not, for those who disagree with the final decision, I suggest they move to a state where the people have voted in a way that they would agree."

Daniel in Indiana: "No. It's a civil rights issue -- the rights of a minority are being stomped on and it needs to be corrected. Should the U.S. Supreme Court have remained silent on "Brown v. The Board of Education" or "Roe v. Wade?" Not in the least. They intervened and set right cases of discrimination."

Kevin in Oregon: "The courts should interfere. The bottom line, it's discrimination. It sets a specific set of laws for a portion of the population. The courts interfered years ago when the majority voted to ban interracial marriage. The majority isn't always right." Bill in West Virginia: "I've always been understanding and tolerant toward gays. I've always bee supportive of civil rights for others. But gay marriage goes over the line. It's not a civil rights issue and communities should have the right to accept it or not."

Michael in Canada: "The fundamental question that needs to be addressed is this -- is marriage strictly a religious right or is it strictly a legal entity that provides certain benefits and rights? If it's a religious right, then the courts should stay out. But if marriage is to be held strictly as a legal entity, then the courts should be involved."

And Mary in California: "Unfortunately, those that want same-sex marriage are pushing the courts to overturn what was finalized in the election. The protests are not exactly quiet. They do have the right to protest. They do not have the right to push their opinions down other people's throats, who believe that marriage is between a man and a woman."

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

BLITZER: Jack, see you tomorrow.

Thank you.

Why were President Bush and other world leaders not shaking hands at the recent G20 summit in Washington?

Our own Jeanne Moss has a Moost Unusual perspective.

And peacefully, side by side, activists and soldiers -- Hot Shots, coming up.

(COMMERCIAL BREAK)

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

In Guatemala, an activist covered in white walks past soldiers as he participates in a campaign supporting local corn production.

In Iraq, a child holds a plastic rifle as U.S. soldiers complete a routine house-to-house searching patrol.

At the International Space Center, an astronaut cleans a robotic arm during a space walk.

And in New Jersey, the original Bill of Rights on display during the 219th anniversary of New Jersey's becoming the first state to ratify the Bill of Rights.

Some of this hour's Hot Shots -- pictures worth a thousand words. There's video viral -- there's a video that's going viral, I should say, on the Internet, of world leaders seeming to ignore the president and not shake his hand at this past weekend's economic summit. It seems like Moost Unusual snub, but there is an explanation.

Here's CNN's Jeanne Moos.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): This is the story of the snub that wasn't. Take one unpopular American president hosting a summit, surround him with world leaders shaking hands with everyone but him -- the next thing you know, it's the 'dis heard around the blogosphere, linked back to CNN.

(BEGIN VIDEO CLIP)

RICK SANCHEZ, CNN CORRESPONDENT: I want you to look at this video, all right. It seems almost sad.

(END VIDEO CLIP)

MOOS: "The Daily Show" placed it as the show closing moment of Zen.

(VIDEO CLIP)

MOOS: The White House probably wasn't feeling so Zen when it heard interpretations like this.

SANCHEZ: And he seems like the most unpopular kid in high school that nobody liked -- you know, the one with the cooties?

MOOS: Cooties?

You can't shrug off cooties.

GEORGE BUSH, PRESIDENT OF THE UNITED STATES: How are you doing?

UNIDENTIFIED MALE: Thank you very much.

BUSH: Good morning, my friend.

Steven, how are you doing?

UNIDENTIFIED MALE: Fine.

How are you?

BUSH: Good.

Thank you.

MOOS: It turns out the president had already shaken everybody's hand earlier that same day. In fact...

BUSH: That looks like a good (INAUDIBLE).

MOOS: ...he'd shaken most of their hands twice -- starting the day before.

Responding to the "where's the love" perceived snub, the White House noted the president had already greeted all of those leaders prior to this picture, whereas the other leaders had not had an opportunity to greet each other yet that morning.

(on camera): When it comes to diplomatic protocol, there is one unshakable rule -- shake hands, no matter how much you like or dislike a leader, unless you're outright enemies.

(voice-over): The snub that wasn't occurred as the leaders were lining up for a group photo. They took the picture and then had to turn around and do it again because Argentina's first female president arrived late. Whoops. Take two.

Despite the snubber-in-chief talk, there was plenty of back slapping and patting at this summit. As for likening the president to...

SANCHEZ: The one with the cooties.

MOOS: ...tell that Italy's prime minister. He and President Bush palled around like a couple of old coots.

(VIDEO CLIP)

MOOS: Jeanne Moos, CNN, New York.

(END VIDEO TAPE)

BLITZER: They're pals, obviously.

All right, Jeanne Moos, thanks very much.

We want you to check out our pod cast. To get the best political team to go, subscribe at CNN.com/situationroom. A good idea for you to do that.

Thanks very much for joining us.

I'm Wolf Blitzer in THE SITUATION ROOM.

Up next, "LOU DOBBS TONIGHT".

Kitty Pilgrim is sitting in for Lou -- Kitty.