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Big Three Bailout; Obama Meets With Nation's Governors

Aired December 2, 2008 - 18:00   ET


WOLF BLITZER, CNN ANCHOR: And, to our viewers, you're in THE SITUATION ROOM.
Happening now: Barack Obama face-to-face with anxious governors, including Sarah Palin. He's turning back to the economy, and he's on the brink of another Cabinet announcement. Stand by.

Also this hour, new blueprints for a bailout of U.S. automakers. The Big Three spell out what they want from Washington and what they're willing to sacrifice.

And the secret meeting between the president-elect and the defense secretary. Did Barack Obama and Robert Gates -- did he ask Robert Gates, that is, the right questions before deciding to keep him around? The best political team on television is standing by.

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

The president-elect offering more evidence today that he's willing and even eager to work with his former opponents. CNN has learned Barack Obama will name a primary season rival, the New Mexico Governor Bill Richardson, as his choice to become the next commerce secretary, that announcement tomorrow, and all of this on the heels of Obama's first face-to-face meeting with a more recent adversary. That would be the Alaska governor, Sarah Palin.

Mr. Obama met with the nation's governors today.

Our senior political correspondent, Candy Crowley, is covering the transition to power in Chicago.

So, what was the basic message we heard from the president-elect today, Candy?

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Well, basically, we are back to the economy. And after yesterday's rollout of his foreign policy team, we are now seeing Obama return to issue number one. His basic message as he met with the nation's governors was, help is on the way.


CROWLEY (voice-over): Forty-one governors project red ink in their state budgets this year or next. So they were glad to see them.

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: I hope you don't mind. I have to shake everybody's hands.

CROWLEY: And they were happy to hear this...

OBAMA: We're going to need action, and we're going to need action swiftly. That means passing an economic recovery plan that helps both Wall Street and Main Street. And this administration does not intend to delay in getting you the help that we need.

CROWLEY: The president-elect is talking about the stimulus package his economic team is putting together. Sources suggest it could run as high as $700 billion, and is likely to include money for roads, bridges, mass transit and schools, ready-to-go projects underfunded in states which could use the influx of jobs. Direct money to taxpayers would also boost state revenues. Still, so much money is needed in so many places, the stimulus package remains a work in progress.


BLITZER: We have had a technical problem there.

Candy Crowley, in Chicago, I don't know if she's still there.

Are you still there, Candy?

CROWLEY: Wolf, I'm still here.

You know, what these governors basically are looking for is about $140 billion out of that stimulus package that they believe they can pump into the so-called ready-to-go projects, bridges, roads, schools, any kind of infrastructure which would not just only help the nation's infrastructure, which really hasn't been paid much attention to for a couple of decades.

But it would also bring much-needed jobs, that is, taxpayers who would then be able, of course, to put money into the state coffers and help kind of balance the books, as they say -- Wolf.

BLITZER: Good. All right, thanks very much, Candy, for that.

Stay with CNN, by the way, for live coverage of president-elect Obama's expected announcement of Bill Richardson as the next commerce secretary. The Obama news conference scheduled to begin at 11:40 a.m. Eastern tomorrow. We will have live coverage.

There are new numbers coming in from the auto industry. And they drive home the reason why U.S. carmakers want a bailout from Washington. November proved to be the worst single month for car sales in this country in a quarter-century. Sales plunged for both domestic and imported cars, with General Motors losing the most -- the losses are the most severe.

The Big Three now have told Congress what kind of help they need to survive.

Let's go to CNN's Kate Bolduan. She's up on Capitol Hill. What do we know, Kate, about these latest proposals, because, for the Big Three, this could be life or death?

KATE BOLDUAN, CNN CORRESPONDENT: Absolutely, Wolf, life or death.

And that's what they're saying. Well, we now know at that Big Three have all handed in their proposals to Congress. They have met their deadline. They're repeating their call for -- their plea for an emergency loan. And they're also trying to repair their public image.


REP. GARY ACKERMAN (D), NEW YORK: It's almost like seeing the guys show up in the soup kitchen in high hat and tuxedo.

BOLDUAN (voice-over): Mocked for taking private jets to ask for a taxpayer bailout, this time they are driving -- Ford's CEO, in an Escape Hybrid, and GM's top executive in a Malibu Hybrid -- making the nearly nine-hour trip from Detroit to Washington to ask again for a $25 billion loan. Job one is salvaging a P.R. gaffe. Ford's CEO is making the case through a new Web site and YouTube.

ALAN MULALLY, FORD CEO: And we'll get through this and we'll come out the other end as a turbo machine.

BOLDUAN: Chrysler's vice president warning Maryland dock workers about the fallout if the Big Three fail.

JIM PRESS, VICE CHAIRMAN PRESIDENT, CHRYSLER LLC: The campaign that we are on is a real simple one. It's about saving jobs and preserving our way of life in America.

BOLDUAN: Congressional leaders demanded accountability and proof the Big Three can survive. Ford, the first to submit its proposal, is asking for access to up to $9 billion. Ford says it may be financially strong enough to not need the cash but wants it available. And like the other automakers, it would step up production of electric and fuel-efficient vehicles.

Ford also would get rid of its five corporate jets. And all of the CEOs are promising to work for $1 a year.


BOLDUAN: Now, Ford says that pay cut for their CEO will take effect if they use the bailout money, use the bailout money.

Wolf, now, Chrysler's proposal just in, that company is requesting $7 billion from the federal government. All three automakers will face the music once again as they head back here to Capitol Hill for another round of hearings Thursday and Friday -- Wolf.

BLITZER: We will have extensive coverage of that. Thank you, Kate, very much. The Microsoft founder, Bill Gates, by the way, as all of you know, has had a major impact on America's economy over these years. And now he's speaking out how to fix it right now. Bill Gates will be our guest here in THE SITUATION ROOM tomorrow. You can still send us some videotaped questions for him. Go to We will try to choose some of your questions for Bill Gates tomorrow right here in THE SITUATION ROOM.

Let's go to Jack Cafferty, though, right now for "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Notice how they hastily -- they pointed out that those CEOs were driving in hybrid cars from Detroit to Washington?

BLITZER: Yes, I noticed that.

CAFFERTY: The stagecraft and -- they should have walked and begged for their meals and lodging along the way. It would have resonated even more.


CAFFERTY: The nation's retailers got a bit of a boost on Black Friday, sales for Friday Saturday actually up 2 percent from a year ago, according to the research firm ShopperTrak.

But the Christmas shopping season has got a long way to go and the jury is still very much out on whether the beleaguered consumer has got enough left in his jeans to make the thing a success for the nation's retailers.

Federal Reserve Chairman Ben Bernanke says the bad times are going to be around for a while. The Dow plunged 680 points yesterday on the news that the U.S. economy has officially entered a recession and has been in one for a year.

Manufacturing has dropped to a 26-year low. The fate of the auto just industry being discussed remains uncertain, unemployment standing at 6.8 percent. And news of layoffs continued today in both the public and private sector. Washington Mutual announced its plans to cut 9,200 jobs. The city of Atlanta is going to lay off 222 city workers.

There isn't a lot out there to put you in the holiday spending mood. Here's the question. How has the economic crisis affected your Christmas shopping plans?

Go to and post a comment on my blog.

Are you going to spend as much on my gift this year as you did last year?

BLITZER: What did I spend last -- how much did I spend?

CAFFERTY: Nothing. Zero. BLITZER: Well, I will spend even more this year.



BLITZER: Jack, thank you.

Barack Obama meets friends and political adversaries with a sort of a peace offering. Listen to this.


OBAMA: I'm going to seek your counsel. And, by the way, I'm going to listen to you, especially when we disagree.


BLITZER: And that's to the nation's governors. You're going to hear more on how Barack Obama hopes to help them and ultimately help you.

Condoleezza Rice and John McCain, they are traveling to India right now, hoping to keep the lid on the tensions between Pakistan and India after the terror attacks.

And you're used to hearing Richard Nixon unleash political venom on those infamous Nixon tapes. But now new recordings just revealed today, they show an emotional moment he shared with none other than a very young U.S. senator, Joe Biden. You will hear it for the first time right here in THE SITUATION ROOM.


BLITZER: They should help him help you. That's what Barack Obama essentially told the nation's governors today, Republicans and Democrats. And, as you just heard, he and the vice president-elect, Joe Biden, attended the National Governors Association meeting in Philadelphia.

Here now, more of what the president-elect told the governors.


OBAMA: Every single one of you is struggling to come up with a budget at a time when you're facing great and growing needs. More and more people are turning to you for help for health care, for affordable housing, to prevent foreclosures even as the credit markets are tightening and tax revenues are making it more difficult to provide that help.

Forty-one of the states that are represented here are likely to face budget shortfalls this year or next forcing you to choose between reining in spending and raising taxes. Jobs are being cut. Programs for the needy are at risk. Libraries are being closed. Historic sites are being closed. Right here in Philadelphia, as Ed has already remarked, we've got over 200 workers being laid off, hundreds of positions are being left unfilled or being eliminated.

Meanwhile, virtually all of you are facing the additional challenge of state constitutions that require you to balance your budgets. So you are placed in an extraordinarily painful choice of violating your constitutional responsibilities or upholding those responsibilities at expense of helping families.

So to solve this crisis and to ease the burden on our states, we're going to need action and we're going to need action swiftly. That means passing an economic recovery plan that helps both Wall Street and Main Street. And this administration does not intend to delay in getting you the help that we need. We intend to help save or create 2. 5 million jobs. We intend to put tax cuts into the pockets of hard-pressed middle class families in your states. And we intend, as has already been discussed, to start making a down payment on the critical investments that are going to be necessary to sustain long- term economic growth as well as pull us out of the current slump.

But the reason this meeting was so important to Joe and myself is because we recognize that change is not going to come from Washington alone. It's going to come from all of you. It will come from a White House and state houses all across the country that are working together. And that's the kind of partnership that I intend to forge as president of the United States.

I hope that this is the beginning of laying that foundation. Over the next few hours, I'm looking forward to hearing from you about the problems you're facing, learning about the working that you're doing, experiments that are working, things that are not working, where you think an investment on the part of the federal government will make the biggest difference, how we can reduce health care costs, rebuild our roads, our bridges, our schools, and ensure that more families can stay in their homes.

But the partnership we begin here cannot and will not end here. As president, I'm not simply asking the nation's governors to help implement our economic plan. I'm going to be interested in you helping to draft and shape that economic plan. My attitude is that if we're listening to the governors, then the money that we spend is going to be well spent. And it means that it's going to get working faster, and the people in your states are going to experience prosperity sooner.

Now, let me just wrap up by saying this. I know these are difficult times. I don't think anybody here is viewing the situation through rose-colored glasses. We're going to have to make some hard choices in the months ahead about how to invest these tax dollars. We're going to have to make hard choices like the ones that you're making right now in your state capitols, we're going to have to make in Washington.

And we are not, as a nation, going to be able to just keep on printing money. So at some point, we're also going to have to make some long-term decisions in terms of fiscal responsibility. And not all of those choices are going to be popular. But what I can promise you is this. That I'm going listen to you. I'm going to seek your counsel. And, by the way, I'm going listen to you especially when we disagree because one of the things that has served me well at least in my career is discovering that I don't know everything. And all of you, I think, are going to be extraordinarily important in keeping us on track, not allowing Joe and myself to get infected with Washingtonitis, and to constantly be reminded of the realities that are happening to folks back home.

A special message I want to deliver to my Republican colleagues who are here.

I offer you the hand of friendship, the same commitment to partnership as a do my Democratic colleagues. There is a time for campaigning, and there is a time for governing. And one of the messages that Joe and I want to continually send is that we are not going to be hampered by ideology in trying to get this country back on track.


BLITZER: All right. So, there he is, speaking to the governors earlier today, Barack Obama, the president-elect.

The secretary of state right now on an emergency mission.


CONDOLEEZZA RICE, U.S. SECRETARY OF STATE: I want to consult with the Indian government further about what we can do to help. I have already noted that everyone should cooperate fully, and Pakistan in particular.


BLITZER: Can Condoleezza Rice keep nuclear-armed neighbors from letting things spiral out of control?

And Barbara Bush, she's out of the hospital, back at home, as doctors win praise from a former president.

And another headache for Republicans right now -- one of their senators says he won't seek reelection. The best political team on television tells us what it means.

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



BLITZER: Less than an hour from now, a Senate cliffhanger may finally be decided. And the stakes are rather high.


SEN. SAXBY CHAMBLISS (R), GEORGIA: Having 41 votes, Republican votes, in the Senate is critical.

JIM MARTIN (D), GEORGIA SENATORIAL CANDIDATE: Electing somebody who wants to be a firewall will just continue that partisanship in Washington. And I don't want to change -- I want to change that.


BLITZER: We have a live report on the showdown in Georgia and what it means for the balance of power here in Washington.

Plus: Condoleezza Rice's emergency mission in India, how she's trying to prevent a potential nuclear dustup, after the massacre in Mumbai, and how John McCain is helping her out.

And Robert Gates spills the beans. He's talking about the secret meeting he had with president-elect Obama to stay on as defense secretary.


ROBERT GATES, U.S. SECRETARY OF DEFENSE: As I said, yesterday in Chicago, there were no negotiations or anything like that. The discussion, really, was focused on, how will it work?



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

Happening now: Former presidential candidate John McCain and Secretary of State Condoleezza Rice, they are teaming up in India. Can they defuse tensions with Pakistan after last week's Mumbai terror attack?

A make-or-break runoff today in Georgia. The race could tip the balance of power in the U.S. Senate.

And a phone call from President Nixon to a then-young Senator Joe Biden on the day of a major family tragedy. President Nixon's softer side caught on tape -- all of this coming up, plus the best political team on television.

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

They show moments before, during and after terrorists unleashed hell. We have new video from the Mumbai attacks captured by closed- circuit TV in a train station. You can see people ducking as gunmen spray the air with bullets and people running for their lives. This was one of several sites that was attacked.

Secretary of State Condoleezza Rice on her way to India right now.

Our State Department correspondent, Zain Verjee has more -- Zain.


ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Wolf, any tensions between India and Pakistan could lead to problems for the U.S. America's top diplomat is heading to the region to cool down a potentially dangerous situation.

(voice-over): On an emergency mission with just weeks left on her calendar, the U.S. secretary of state is flying to India to make sure the nuclear-armed neighbors don't go one step too far.

RICE: I want to consult with the Indian government further about what we can do to help. I have already noted that everyone should cooperate fully, and Pakistan in particular.

VERJEE: India blames Pakistani-based militants for the Mumbai terror attacks. It's demanding answers and action from Pakistan. Condoleezza Rice's visit calls a time-out.

THOMAS SANDERSON, CENTER FOR STRATEGIC INTERNATIONAL STUDIES: One, give a little bit of breathing space by talking to the Indians for the Pakistanis to conduct their investigation. And the other half of that coin, the side of the coin, is she needs to push the Pakistanis to do it well and do it quickly, because we don't want this pressure to boil over.

VERJEE: The same message in Washington to India: don't retaliate.

UNIDENTIFIED MALE: We don't give green lights to any countries, green or red lights.

VERJEE: Reinforcing the same, Senator John McCain in New Delhi, meeting with India's prime minister.

The stakes are high for the U.S. and its fight against terrorism along the Pakistan/Afghanistan border.

SANDERSON: We're counting on Pakistan to cooperate in the tribal areas against foreign fighters and against the Taliban.

VERJEE: This was supposed to be a farewell tour with U.S. allies for Rice, with Rice even playing the piano for the queen at Buckingham Palace. But she cut her European trip short to manage the crisis in South Asia.

(on camera): Tensions between India and Pakistan will likely end up in the lap of the new secretary of state. Secretary Rice wants to make sure that, by then, it's not a full-blown crisis -- Wolf.


BLITZER: Zain Verjee, thank you.

We're going to be seeing very, very soon the climax to a political cliff-hanger. It's the run-off race for a Georgia Senate seat many people are watching, surely including the president-elect, Barack Obama.

Let's go to CNN's Dana Bash. She's in Atlanta. She's watching it up close. The polls in Georgia are about to close and we will know, presumably, fairly soon who the Senate -- who the Senate winner is.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: That's right. The polls are going to close in just about a half an hour here in Georgia. Hopefully, we will know tonight who the winner in this Senate runoff is. And there certainly has been a lot of national attention on the State of Georgia over the past month. And it's because it really will have an impact on the new president's agenda.


BASH (voice-over): Georgia's Republican senator dials for last minute votes...

SEN. SAXBY CHAMBLISS (R), GEORGIA: Well, this is Saxby Chambliss, guys. How are you all this morning?

BASH: ... Urgently calling radio stations. Around the corner, an army of volunteers remind GOP voters that it's election day in Georgia -- again.

UNIDENTIFIED MALE: The polls will be open until 7:00 p.m. Tonight.

BASH: Getting fatigued voters back to the polls is the name of the game for both incumbent Saxby Chambliss and Democratic challenger Jim Martin.

JIM MARTIN (D), GEORGIA SENATORIAL CANDIDATE: We want to go to Washington to change things.

BASH: In a runoff because both fell short of a required 50 percent threshold on November 4th. It's been a four-week Georgia campaign about the balance of power in Washington. Chambliss warns that if he loses, Democrats could have 59 senators -- almost a filibuster-proof majority, with a Democratic president.

CHAMBLISS: Having 41 votes -- Republican votes in the Senate -- is critical. It's very important because, otherwise, if you have one party in control, then the voices of Georgians are not going to be heard.

BASH: Martin calls that a false argument.

MARTIN: Electing somebody who wants to be a firewall will just continue that partisanship in Washington. And I don't want to -- I want to change that. I want to work with our new president.

BASH: On issues, the candidates sparred over the economy and veterans' benefits, using millions that poured into both candidates' runoff coffers to bombard voters with harsh ads.

(BEGIN VIDEO CLIP) UNIDENTIFIED MALE: Martin voted for the largest tax increase in Georgia history.



ANNOUNCER: Saxby Chambliss doesn't understand what a recession means?


BASH: To keep voters engaged, a parade of political celebrities appeared for both candidates. Chambliss closed on a four-stop tour, luring conservatives with Sarah Palin...

PALIN: Send Saxby back to the United States Senate.

BASH: .. As Martin tried to rally African-American voters with hip-hop artists like Ludacris.

CHRISTOPHER BRIDGES, PERFORMER "LUDACRIS": I definitely feel like we need a senator who -- who is going to work with Mr. Obama.


BASH: Now, again, polls will close at the top of the hour. We are hearing that turnout has been steady, but also pretty light, which isn't unusual for a runoff.

But, also, Wolf, early voting did look like it was looking positive for the Republican incumbent, Saxby Chambliss. Voting was up among white men, who tend to vote Republican, and it was down among African-Americans who, at least November 4th, really helped Jim Martin get in the game in this Georgia Senate race.

But runoffs are very hard to predict. We'll just have to wait, We're going to have to wait, as you said earlier, and get the votes the old-fashioned way -- Wolf.

BLITZER: That's a good idea, Dana. Thanks very much. Dana is on the scene for us.

The Georgia Senate candidates, by the way, are getting some last minute help online. Barack Obama's campaign Web site is playing a role.

Let's go to our Internet report, Abbi Tatton. She's looking at this. What's going on -- Abbi?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, the presidential election might be over, but Barack Obama's online network of supporters are still very much up and running online. And they've been getting involved in Georgia. This is the MyBarackObama Web site -- mapping out over 100 events today for Jim Martin. There are people knocking on doors in Atlanta. There are online phone banks happening in houses around the state. Get out the vote efforts that are still going on right now all mapped out on this Web site that, during the general election, volunteers used to organize more than 200,000 events for Barack Obama and that campaign staffers say will now remain online for this very purpose -- so volunteers can use it still to organize.

Now voters in Georgia might also be hearing from supporters of Mike Huckabee. The former presidential hopeful, on his Web site, had an online phone bank of his own -- this one in support of Senator Saxby Chambliss -- Wolf.

BLITZER: Abbi, thank you.

Barack Obama meets the nation's governors.


OBAMA: We are not going to be hampered by ideology in trying to get this country back on track.


BLITZER: But can the president-elect make good on this bipartisan pledge? The best political team on television is standing by.

And more trouble for Republicans -- one of their senators says he's had enough.


SEN. MEL MARTINEZ (R), FLORIDA: The inescapable truth from me is that the call to public service is strong, but the call to home, family and lifelong friends is even stronger.



BLITZER: Former Republican vice presidential candidate Sarah Palin coming face-to-face today with the man who defeated her and John McCain. That would be Barack Obama. She also came face-to-face with Joe Biden once again. So is all forgiven or will she be a thorn in the side of this new administration?

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

Here's a little clip, Gloria -- I'll play it -- of Biden speaking about Sarah Palin.


SEN. JOSEPH BIDEN (D-DE), VICE PRESIDENT-ELECT: It's great to see you, Governor, and thank you. And I -- by the way, I think it's -- I hope, you know, the whole country can see a sort of metaphor for the fact that this election is over. And here we are, we're altogether and we're all dealing with a common problem.


BLITZER: And they're all saying they want to work together and get things done for the country.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: And he doesn't have to debate her again.



BORGER: So that's -- that's pretty good.

Look, I think Sarah Palin is a star in the Republican Party. She will continue to be a star in the Republican Party. But what the Republican Party is searching for right now is not new personalities. They're searching for new ideas in order to get themselves out of the mess they find themselves in. And if she comes up with some new ideas, I'm sure they'll welcome her as a leader.

BLITZER: Yes. And she's -- you know, she's obviously very visible at this Republican -- at this governors convention, but also, a few weeks ago at the Republican Convention, she was sort of sucking -- sucking up all the oxygen.

DANA MILBANK, CNN CONTRIBUTOR "WASHINGTON POST": Sure was. I'm surprise she didn't answer him by saying there you go again, say it isn't so, Joe.


MILBANK: And what happens now...

BORGER: Good to meet you.

MILBANK: It's good to meet you. And what happens now is it's like this quadrennial ritual. They all get together and say yes, this time we're all going to get along, we're all here together. And, of course, nobody means it and they know exactly where we're going to be in 90 days time. And then Sarah Palin knows exactly where she needs to be and that is not in lockstep with this new administration.

BLITZER: What do you think?

STEPHEN HAYES, SENIOR WRITER AT "THE WEEKLY STANDARD": I think Dana is far too cynical. I think they're going to all get along and work on policies together.


HAYES: No, I think he's right. I mean, basically, I think you have everybody making nice now. It's sort of the "Kumbaya" period in American politics. And you're likely to see her take shots when she can and be sort of opportunistic about it. Where she can challenge the administration, she will. And where there's times when they can work together, they will.

BLITZER: Well, usually when there is a crisis...

BORGER: Right.

BLITZER: ...and this is a huge economic crisis the country is going through right now -- arguably the worst since the Depression -- you know, everybody tends to rally around the president...

BORGER: Right.

BLITZER: ...or the president-elect and do what's right for the country.

BORGER: You know, I'm going to be the Pollyanna here, because I think the public is looking to get something done. They don't want obstructionists. And so Republicans can oppose, but they have to have substitute ideas to oppose with. You just can't say no because that won't go over with...


HAYES: I'm not sure. I think there's a -- there's a strong part of the country -- more than 50 percent in a lot of polls -- that are just opposing right now, that are very skeptical of these bailouts. And I think if you have somebody like a Sarah Palin or another Republican who can articulate that opposition by presenting alternatives...


BORGER: But what are the alternatives?

That's the point.

HAYES: Well, one would be not...

BORGER: You have to have them.

HAYES: know, $7.4 trillion giveaways.



MILBANK: Well, they've got to be careful the way they do it. They're going to be intimidated by Obama's numbers, which look to be very good. And if he's running at 70 percent approval, they're going to go well -- they're going to -- he's going to have a little longer honeymoon in that case.


MILBANK: But, clearly, they're -- it's just a matter of biding the time until there's an opportunity. BLITZER: You know, Bob Gates, the incoming secretary of Defense and the current secretary of Defense, he really opened up in talking about this effort to get him to stay on by Barack Obama, including that secret meeting they had out at Reagan National Airport when Obama was here a few days again the election. Listen to Gates.


ROBERT GATES, U.S. SECRETARY OF DEFENSE: There were no negotiations or anything like that. The discussion really was focused on how -- how will it work -- how do we make this kind of an appointment that, as I indicated, really has no precedent -- work in practice? So it was more focused on that and relationships than it was on substantive issues.


BLITZER: He's -- he's, you know, I think speaking from the heart.

BORGER: Yes. These two men know what each other believes. It's very clear. They have a lot of things in common -- for example, that Gates believes in cultural and social diplomacy abroad is very important to him.

Clearly, he understands that Obama wants to get out of Iraq within a certain time period, in consultation with the generals. And so they were just trying to work out the logistics because I think there was an understanding that, for the country, in a crisis, in a time of war, this needed to work.

MILBANK: Yes. They may not have discussed specifics and agreed to particular things, but Obama did say that he got one crucial agreement and that is you are going to implement my policies. So...

BORGER: Right.

MILBANK: I mean what Obama ultimately has is -- you know, he has his finger and he can hit the eject button and thereby satisfy the left-wing, that's very unhappy with this.

BLITZER: But I think that Gates is really patriotic and he thinks this is for the good of the country right now...


BLITZER: ...that there be this transition in the midst of two wars.

HAYES: Yes, I think he does think that. And I also agree with Gloria's point that his policies were well-known. I mean he co-chaired something in 2004 for the Council On Foreign Relations about re- engaging with Iran, having a new diplomatic, conciliatory approach to some of our adversaries.

You know, the Bush administration's second term foreign policy is going to be, I think, a lot closer to the Obama administration's first year foreign policy than a lot of people have suggested.

BLITZER: Guys, we'll leave it right there. A good discussion. Thank you.

Richard Nixon and Joe Biden at a very sensitive moment three decades ago. Listen.


UNIDENTIFIED FEMALE: Mr. President, sir, Mr. Biden for you.



NIXON: Hello.

UNIDENTIFIED MALE: Just a minute, Mr. President.

BIDEN: Hello, Mr. President. How are you?


BLITZER: All right. You're going to hear the just released tape of then President Richard Nixon's call to a very young senator-elect after a shocking personal tragedy.

We'll be right back.


BLITZER: Lou Dobbs is getting ready for his show, that begins right at the top of the hour and he's standing by with a little preview. What are you working on -- Lou?

LOU DOBBS, CNN ANCHOR: Wolf, thank you.

Tonight, we're going to reporting on startling new evidence that one in five young adult Americans is suffering from serious psychological problems. Many of our young adults abusing alcohol and drugs. We'll tell you what parents, school administrators and teachers should know about all of this and what's causing.

Also, President-Elect Obama challenging governors -- both Democrat and Republican -- to help end this recession. Three of my favorite talk show hosts join me here tonight. We'll have all of that.

And New York City Mayor Michael Bloomberg demanding New York Giants wide receiver Plaxico Burress be prosecuted to "the full extent of the law" after Burress shot himself by active duty. This, as Mayor Bloomberg refuses to enforce federal laws one of the most critical national security issues facing the country. We'll have that report.

Also, join us please at the top of the hour for all of the day's news, and much more, from an Independent perspective -- Wolf, back to you. BLITZER: All right, Lou. Thank you.

Let's go right to Jack Cafferty right now.

He's got "The Cafferty File" -- Jack.

CAFFERTY: The question this hour is: How has the economic crisis affected your Christmas shopping plans?

Lou writes: "It hasn't at all. And judging by the line I stood in at Target the other day, I would say it hasn't slowed down a lot of people. I gave myself an early Christmas gift by deciding to shut off the TV and throw away the paper. Getting a break from the doom and gloom media has been the best thing I could have done -- and maybe the best thing we could all do for the economy." Let's don't be hasty.

Dan in Virginia writes: "I guess it means a lot more parents will be trying to convince their kids that time together with the family is the true meaning of Christmas. I don't think it will go over very well."

Randy writes: "Actually, I'm expecting a great Christmas this year. I've submitted my request to Congress for both a bailout and an economic stimulus package and my wife and kids are anxiously waiting for the checks to arrive."

David in San Diego: "We plan to do almost nothing. We are feeling quite well off financially. It's time to become a less materialistic society and focus on the meanings of things that really matter -- like football."

Cheryl in Westfield, Massachusetts: "About the same. And for the first time, being the poor hand-to-mouth member of my family is paying off. You can't lose what you don't have invested."

Lester writes: "If I can't bake it, cook it or find it in the house, it will not be a Christmas present. I'm not spending any money -- not even wrapping paper. I lost my job, I'm looking for a new one. Times are thin."

And Ken in Seattle writes: "I had to take you and Wolf off my Christmas list. Sorry, guys. Maybe next year."

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

BLITZER: Something special, Jack, I can get you this year? Anything you need?

CAFFERTY: Let me give it some thought.


BLITZER: Yes, give it some thought, because I definitely want to do better this year than I did last. CAFFERTY: Well, yes, anything would be an improvement. You spent buckus last year.

BLITZER: I know.

CAFFERTY: Nothing.

BLITZER: Nothing.


BLITZER: All right, Jack. Thank you. Stand by for this year.

Let's get to a fascinating flashback right now to the vice- president elect, Joe Biden's, early years in the U.S. Senate. It turns out he had a rather emotional phone conversation with the then president of the United States, Richard Nixon.

Brian Todd is coming up with this new audiotape that's just been released and it's pretty interesting.

BRIAN TODD, CNN CORRESPONDENT: It is just released -- hundreds of hours of phone recordings from the Nixon Presidential Library and Museum. As were coming through this, an official of the National Archives directed us to this conversation. We're going to set it up for you.

It is December 19th, 1972 -- more than a month after Joe Biden has been elected to the U.S. Senate, but just one day Biden's wife Neilia and his year-old daughter Naomi were killed in a car accident in Delaware.

Here is President Richard Nixon talking to a very distraught 30- year-old Joe Biden.


UNIDENTIFIED FEMALE: Mr. President, sir, Mr. Biden for you.



NIXON: Hello.

UNIDENTIFIED MALE: Just a minute, Mr. President.

BIDEN: Hello, Mr. President. How are you?

NIXON: Senator, I know this is a -- a very tragic day for you, but I wanted you to know that all of us here at the White House were thinking about you and praying for you and -- and also for your -- your two children. And we...

BIDEN: I appreciate that very much.

NIXON: ...we know that -- I understand you were on the Hill at the time and your wife was just driving by herself.

BIDEN: Yes, that's correct.

NIXON: So -- so the -- but in any event, I mean looking at it in a -- as a -- as you must, in terms of the future, because you -- you have the great fortune of being young. I remember I was two years older than you when I went to the House. But the main point is you can remember that she was there when you won a great victory. And you enjoyed it together and now I'm sure that she'll be watching you from now on. Good luck to you.

BIDEN: Thank you very much, Mr. President, for your call.


BIDEN: I appreciate it.


TODD: Biden's two young sons, of course, were injured in that same accident, but they recovered -- Wolf, fascinating to listen to the president trying to find the words to console the 30-year-old Joe Biden. He hadn't even been sworn in as a U.S. senator yet.

BLITZER: It doesn't get more difficult and painful than that. In a recent CNN documentary, we also learned how distraught Joe Biden was then.

TODD: That's right. He -- he had considered, according to our documentary, he had considered stepping aside, not even taking the oath as a senator. He had considered suicide, according to what we reported in that documentary. But, you know, he was then famously sworn in by his young son's bedside, in the hospital, and when out from there to the distinguished career. I mean you've got to -- you know, it leaves you wondering what would have happened if he had thought otherwise at any moment in that sequence.

BLITZER: Brian Todd, thank you very much. Fascinating, fascinating historic material.

So how do you cool things down when an argument gets heated? Nothing says it quite like water.

CNN's Jeanne Moos is standing by. She'll take a closer look at some classic water wars.

And Lance Armstrong on the fly -- just one of today's "Hot Shots."

You're going to see this and more, 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 Iraq, police cadets celebrate after graduating from training school.

In Afghanistan, a boy prepares to sell sheep at the livestock market for an upcoming festival.

In Spain, Lance Armstrong bikes to his hotel after a training session.

And in Turkey, Sarah the walrus -- check it out -- imitates her trainer by pretending to play a saxophone.

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

In Romania recently, a pair of candidates didn't come to blows, but they did get a little soaked. The incident got CNN's Jeanne Moos thinking and she dredged up some other "Moost Unusual" moments when things got all wet.


JEANNE MOOS, CNN CORRESPONDENT (voice-over): At least these two knew to drink their water, not douse each other with it. But during a political debate in Romania the other day...


MOOS: ...the female candidate apparently called the male Senator a badday (ph) and he replied that her face looked like a badday. Watch her knock the glass his way.


MOOS: But why stop at water when there's wine?

Remember when Joran van der Sloot -- in the cap -- a suspect in the Natalie Holloway case -- got angry over questions from a crime reporter on Dutch TV and tossed a glass of wine at it.


MOOS: And then there was Paul McCartney's ex-wife, Heather Mills. She dumped water on Paul's attorney inside the courtroom.


MOOS: The press watched the attorney walk in dry and walk out wet. The incident even became a computer game.


MOOS: Players throw water on Paul and his lawyer for a bigger settlement.

Tom Cruise got squirted a few years back by British TV pranksters wielding a fake mike.

TOM CRUISE, ACTOR: Come here. Come here. Why would you do that?

Hey, hey, no, no. No, no. Don't run away. Don't run away. You're a jerk.

MOOS: Whether acting like a jerk on YouTube...


MOOS: ...or joking around on "The Colbert Report"...




MOOS: least no one melts, like the wicked witch.


UNIDENTIFIED FEMALE: I'm melting, melting!


MOOS (on camera): Now, all these water throwing incidents have involved cold water. Now the story heats up.

(voice-over): A guy wearing a bra and panties and exposing himself kept going through the drive-through at this Java Girls Joint in Washington State.

UNIDENTIFIED FEMALE: Oh, and then he has underwear over his face and there's a little peepy hole like so you can see.

MOOS: But the third go around, a bikini barista threw boiling hot water on him. Police recently arrested the flasher. Sometimes it's not whether the glass is half empty or half full, but where it lands.

UNIDENTIFIED FEMALE: On his face and his chest. And he said, ooh, yes.

MOOS: Jeanne Moos, CNN, New York.


BLITZER: Tough. Wow! All right, thank you, Jeanne.

We want you to check out our political pod cast. To get the best political team to go, you can subscribe at A good idea.

And also, this programming note. Tomorrow right here in THE SITUATION ROOM, the Microsoft founder, Bill Gates. He'll be our guest tomorrow. And you can be a part of the interview. Send us your videotaped questions for him to We'd like to hear from you. We're going to choose some of the best questions and we'll get them to Bill Gates tomorrow. He'll be here in THE SITUATION ROOM. The interview will focus on the economy and what can be done to fix what's going on right now. You're going to want to see that.

Until then, thanks very much for joining us.

I'm Wolf Blitzer in THE SITUATION ROOM.

Up next, "LOU DOBBS TONIGHT" -- Lou.