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Extreme Challenges: President Obama

Aired December 4, 2008 - 23:00   ET


ANDERSON COOPER, CNN ANCHOR: Good evening. As President, Barack Obama will face immense challenges when he's sworn into office. Tonight a look at the road ahead; the pressing issues facing Mr. Obama, this country, the world and future generations.
Obama says priority number one is fixing the economic crisis, the housing crash, huge job losses, sinking 401(k)s and more. What must he do to repair the damage and make the economy stronger?

There's also wars overseas, one in Iraq, the other Afghanistan; ground zero in the fight against terrorism. Will he commit more troops in Afghanistan? Will he pull out of Iraq? Should he?

And breaking the gridlock in Washington, he campaigned on a platform of change but is that possible in Washington? Will the right work with him?

Also, there's the environment. Our planet in peril, can the U.S. break its dependence on foreign oil?

These are all tough questions we'll be talking about over the next hour. You're watching a Special Edition of 360, "Extreme Challenges, President Obama."

We begin with the economy.

Joining me are CNN senior political analyst David Gergen who knows a lot about the inner workings of the White House. He's been a presidential adviser to four presidents, Nixon, Ford, Reagan and Clinton. Also with me CNN senior business correspondent, Ali Velshi and Marcus Mabry, international business editor for "The New York Times."

Barack Obama probably faces the worst economic outlook since the Great Depression. What is his number one priority in terms of the economy?

MARCUS MABRY, "THE NEW YORK TIMES" INTERNATIONAL BUSINESS EDITOR: Well first of all he has to do what he calls a job recovery act. It is going to be --

COOPER: Why jobs?

MABRY: Jobs because this is all -- it all comes down to jobs now. We probably have to -- I think, as much as we can shore up the financial system; that sector is probably going to be fine. But talk about the cliff but now the problem is going to be a massive recession. Millions of Americans are going to lose their jobs probably in the coming year. So he's got to in order to keep that recession from being incredibly deep, incredibly painful and incredibly long he needs to make people -- keep people at work, keep people who are out of work back in the work so they can spend.

COOPER: How bad do you think the job losses are going to get?

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Well, in the last recession, we lost three million jobs. We've lost about a million so far this year.

COOPER: We've already lost them --

VELSHI: We've already lost a million. Some estimates that by early spring we may lose another half a million. So this gets serious because at that point you've lost a whole group of people who are paying income tax. You've lost a whole group of people who are buying things and getting the economy going. So what happens is that causes businesses that aren't making money to have to lay off more people.

Now that combined with the financial crisis meant that some businesses that would have otherwise taken a risk and expanded anyway even if business wasn't great weren't getting loans. So you have a two- pronged attack on job creation.

So we're going to have to figure out a way to do this.

Barack Obama's policies suggested that he felt that government could be very, very involved in a program that creates jobs that was different from what the Republicans had largely believed. That tax cuts would help create jobs but now we are ready to do this.

We've got to come up with a solution that is going to cause jobs to be created in this country, and get money back into the pockets of Americans so that they can spend.

COOPER: Well, I mean, he's talked about rebuilding infrastructure and focusing on that. Is that something that he could do to create jobs?

VELSHI: Here's the thing.

Let's talk about this energy infrastructure that he wants to build. This renewable energy infrastructure -- that will take several months to years to get going. But the jobs that we're losing are in construction and in manufacturing; we've been losing those for years.

So even if it did take several months, these are not jobs we're getting back anytime soon. So the idea that we could start to build this green economy, Barack Obama has really suggested that could be the economic driver for years to come. If executed well it could be.

COOPER: David, you've worked in the White House in the past. When a President says, ok, economy is my number one concern, my number one issue, what can the President actually do? I mean, nuts and bolts, how does he get things done? DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Well, to put a larger picture, you know, we've been talking for months that the next president would inherit the worst situation of any president since FDR. And I think two things have happened Anderson, since we started that conversation.

One, the economy we got one heck of a lot worse and started going off the cliff, but secondly, we elected a new president who brings in a great sense of energy and hope from the country. And one of the things we know about a President and we learned this with Franklin Roosevelt and the Depression is that you actually can help to restore confidence. It's not just a question of policies but it is a psychology.

That, you know, when people are down and they're very pessimistic, it's much, much harder to get things going. You've got a fresh administration in there; a Congress that's very aggressively supporting him. Some say too aggressively and you've got a chance of beginning to get the wheels to go a little more easily.

MABRY: And I think the big debate they're having amongst the Obama advisers right now is, do you try to do a lot of this at once or do you pick your shots and go piece meal in a kind of Clintonian way. I don't think they're going that, I think they're actually are going to opt for the big bang theory.

VELSHI: To get the ones that touch people the most. So you're right. I mean, we've got -- there's a really long list of things that they need to do even economically but the bottom line is jobs, homes, income and then eventually taxes and health care. Those are the ones that touch people that they will feel the most.

COOPER: But doesn't every President come in planning to do sort of a big bang theory? Could coming in and planning to do all these things that they've promised to do?

GERGEN: With the country sensing this is the worst since the Great Depression, there's going to be a willingness to go along with a massive renewal effort. In other words, he's got all these problems piled up, he in effect can flip it into saying we've got so many problems, we've got to have these massive national renewal crusade.

COOPER: In a sense, this is what 9/11 was to George Bush?

GERGEN: Absolutely.

COOPER: I mean that it's an opportunity to unify?

GERGEN: That's exactly right. It is an opportunity. And it's window. It's not a big window but it is a window. He'll have a few months when he gets there that I think he really can began to turn things.

And I'm curious, are you both of you put so much emphasis on jobs. I keep hearing the critical issue is housing. We've got the shore up the housing that we're heading toward, you know, if the housing values go down another 15 percent, we've got 15 billion homes in which the mortgages is more than the value of the house. A lot of people are going to foreclose and that will bring everything continuing down.

How does he shore up a housing market?

VELSHI: What I think is interesting is that when it comes to housing, there are three or four options of things that they can do. They can shore up -- what we've done is we've shored up the financial system at the top end hoping it'll trickle down. Now we can shore up the bottom end. And do something for homeowners who are in trouble or encourage people to buy homes in a tough market.

Remember that we're not out of control there yet. We still have low mortgage rates, we still have the ability for those with credit to buy homes. Now how do you keep people in their homes? But I don't think you're going to have substantial philosophical disagreement on that.

Why I worry about jobs is because there's potential for philosophical disagreement on how you create jobs in this country. As you know there are some people who will say government can't create a single job. They can only lower tax and create an environment in which businesses can create jobs including small businesses.

And there are those who feel the government can hit and take a very proactive role in creating jobs and that the truth is somewhere in the middle. So that's why I worry about jobs because they've got to decide on a philosophy and head forward on that.

COOPER: Up next, the challenges of two wars; Iraq and Afghanistan and protecting our home front. We're going to tackle those issues on this "360" Special, "Extreme Challenges, President Obama."


SEN. BARACK OBAMA, PRESIDENT-ELECT OF THE UNITED STATES OF AMERICA: One of the central reasons why I opposed going to war in Iraq is that we had yet to finish the fight against Al Qaeda and the Taliban. That remains true today.




OBAMA: I will end this war. Not because politics compels it. Not because our troops cannot bear the burden as heavy as it is. But because it is the right thing to do for our national security and it will ultimately make us safer.


COOPER: President-elect Obama is inheriting two wars, Iraq and Afghanistan; both with huge challenges. So how might the U.S. strategy change under an Obama administration? Here to talk it over, CNN's chief international correspondent, Christiane Amanpour; CNN's senior political analyst and a former presidential adviser, David Gergen; also, CNN's Baghdad correspondent Michael Ware and CNN's national security analyst, Peter Bergen.

Barack Obama has made a lot of promises on Iraq and also on Afghanistan. On Iraq, he's promised within 16 months U.S. troops coming home; perhaps one battalion every month. Can he still live up to that?

MICHAEL WARE, CNN BAGHDAD CORRESPONDENT: Well, in many ways Anderson, it's already entrained (ph). I mean, the timetable is being set between Baghdad and Washington by the Bush administration is not that different a timetable to what President-elect Obama wants.

Under the current agreement, U.S. forces have to retreat to their bases by the middle of next year. And under the agreement --

COOPER: So does that means what no patrols?

WARE: This is what we're still going to have wait and see. Basically, U.S. forces are going to be stuck in their bases and they have to coordinate with the Iraqi government to basically seek permission to go out and conduct some massive operations.

COOPER: How does that jive with the Petraeus strategy of having smaller forward operating bases and communities?

WARE: Well, they're going to have to define which bases, and how many bases are going to work for this and certainly the JSS within Baghdad itself, with this tiny outpost I will suspect they're going to have to be shut-down and handed over to Iraqi security forces.

Now, if you're going out hunting and you're going to ask permission of the Iraqi government, well, many of your targets are linked to the Iraqi government.

Plus, U.S. forces have to be out of that country by the end of the 2011. Now, that's only two years away. And Obama wants people out in 16 months. So there's not a great deal of difference in the timetables.

The question is, what are you going to do to back fill the vacuum that you're leaving? 140,000 U.S. troops currently the referee in the ring of the heavy weight bout with at least three contenders there if you don't include Iran which is the real story.

COOPER: Well, you also have these Sunni groups which are still are armed, still are trained and still have their hierarchy in place they've just been paid to be on our side.

WARE: Well, they're the American militia. I mean, this is the Sunni insurgency who basically came to the Americans in 2003 and said, we don't want to fight you. But the American administration at that point wasn't listening so eventually after four years you put 100,000 Sunni insurgents, form buffers on the payroll. They were then sent out as an indirect assassination program that eliminated Al Qaeda in Iraq and reduced them to what they are now. They're also an American counter weight to the Iranian-backed militias and the Iraqi government. They are a stick with which to beat that administration because that administration is more closely aligned with Tehran than Washington.

Now, what are you going to do with them, they're handling them under the Iraqi government, the government hates them. These U.S. allies hate the Iraqi government.

CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: I think Obama also will vastly benefit from the deceleration of anti- Americanism. The enemy was anti-Americanism over the last eight years and that is going to have the knees, the legs knocked out from under it because Obama will present a different vision of American foreign policy. And I think that will help him a lot, particularly in these very difficult deals that he has to make and decide.

COOPER: In his vision, though, the central front on the war of terror has never been Iraq, it is Afghanistan. And also I guess to a lesser extent Pakistan. What are his options in Afghanistan?

PETER BERGEN, CNN NATIONAL SECURITY ANALYST: They're pretty limited right now. When he assumes office on January 20th, even if he said let's move a lot of people to Afghanistan which I think is unlikely because of problems they would have in Iraq --

COOPER: But that is during the campaign some of what he said. Some of these troops from Iraq would be going to Afghanistan.

BERGEN: You can't get them there magically. You know, it takes -- it would take them probably until July just to show up in terms of redeploying, there's logistics involved. That's a problem because the new Afghan fighting season begins in the spring of next year.

It's also a problem because the crucial presidential election is in August. At least it's scheduled in August of 2009 and that election is the most critical part of, you know, the next Afghan political cycle.

So according to U.S. military officials the best that they can be done is two brigades by the spring. Two brigades is not a game changer. That's 7,000 combat soldiers with support staff. That's not a game changer in Afghanistan so obviously it's a campaign promise but there are some realities about the size of the U.S. military right now.

COOPER: Up next, keeping America safe. What can President Obama do to reassure that more than 55 million people who didn't vote for him that he'll keep us safe at night? Our panel weighs in on that, coming up.


COOPER: Joining us again: CNN chief international correspondent, Christiane Amanpour, CNN senior political analyst and former presidential adviser, David Gergen, as well as Baghdad correspondent, Michael Ware and national security analyst, Peter Bergen.

GERGEN: My question to you guys is does President Obama have to lower expectations about Afghanistan? He keeps talking about winning Afghanistan.

WARE: Yes, destroying Al Qaeda. At least he's going to have to change his expectations.

AMANPOUR: Well, you know what, you have to win. You have to win.

WARE: Well, they're not doing what needs to be done.

AMANPOUR: Yes, you can. You can do it. It is a question of re- strategizing, re-prioritizing. You can.

WARE: Agree. Agree.

AMANPOUR: Afghanistan was almost won.

WARE: True.

AMANPOUR: It is a massive, huge, right here in the middle of this volatile region a massive block of receptive Muslims. Many of them moderate. This has to be won and it can be won but it really has to have its eye kept on the ball. It has to have a proper military, both hard power and soft power which Robert Gates, the Defense Secretary, has talked about over and over again and it has to have the focus on it.

The reason it is the way it is right now is because the eye was taken off the ball.

COOPER: Can the same strategy in Iraq work in Afghanistan in terms of --

WARE: The surge?

COOPER: The surge or trying to turn over some Taliban elements negotiations.

WARE: Well, this is where we get to. The problem of Afghanistan is not here. The problem of Afghanistan is here.

COOPER: Pakistan.

WARE: In Pakistan.

Now, General Petraeus, the new CentCom commander, the GAO back in May, everyone says it's agreed that the Al Qaeda leadership including Osama is here.

COOPER: North of Waziristan.

WARE: Northwest Pakistan, yes, the tribal areas and also here in Baluchistan with the Taliban. Now, they said that the leadership is there, it's regenerated and according to the GAO, they said they've reconstituted their ability to attack America.

Now, you're not going to get it any of those people physically there. But you can throw as many troops as you like at the Afghan mountains but they swallow divisions whole and they can't cross the border. And --

GERGEN: So can you win?

WARE: You can win but you've got to do lot of things and primarily the first target has to be the Pakistani intelligence agency, basically Islamabad's CIA.


WARE: The ISI because elements within that are very closely aligned to the Taliban and Al Qaeda. And the civilian government in Islamabad has very little control over these guys.

AMANPOUR: They're fundamentally linked. Hamid Karzai says that they are reaching out to the Taliban even to Mulla Omar. They are apparently Saudi sponsored talks, which is very similar to the Sunni awakening in Iraq. We'll see how that goes.

America doesn't like it. Because they think it's negotiated to a position of weakness, to an extent it is. But that process may be under way and that's really, really important to be able to try to see whether they can bring those people on board.

COOPER: But the urgency, though, is there, and Peter, you've traveled there a lot. We have been there together. It is deteriorating rapidly. I mean, the number of attacks, the number of suicide attacks; something you really never used to see in Afghanistan back in 2003, 2004. Something you see now all the time.

BERGEN: A classified review by the White House is going to kind of conclude that the situation is dire. It is in fact somebody involved in the review said to me that the media, this is an unusual thing for somebody in the Bush administration to say is actually not portraying how bad it is in Afghanistan right now.

And a very leading indicator is that support for international forces has dropped by 33 percent in the last few months according to this review that is going to be published by the National Security Council.

GERGEN: It's dropped within Afghanistan?

BERGEN: Within Afghanistan.

AMANPOUR: Because of the killing of the civilians.

BERGEN: Civilian casualties is an enormous kind of problem. We just -- 40 people at a wedding party.

COOPER: Because there haven't been enough U.S. forces, because there's concern about going into some of these regions, they've been using air raids to go after targets but there's a lot of civilians getting killed, as well?

AMANPOUR: Correct and that the one Hamid Karzai said that has to stop in order to keep the goodwill. It's happening in Pakistan, too.

COOPER: Which is something that Barack Obama referenced during the campaign and got hammered for it McCain and Sarah Palin.

BERGEN: No, so the situation is not good as Christiane said, it's still winnable. Afghanistan still, you know, there's still favorable views of the American-led invasion unlike in Iraq from pretty much the beginning. And in any kind of insurgency, the center of gravity is really what the people think.

We're losing -- the United States and it's allies is losing some of the goodwill but there still remains I think a reservoir on which it can be built. And by the way Obama, when I was in Afghanistan in July, just doing informal polls with the Afghans, I mean, they love this guy. They think that he's going to take it to Pakistan and sort of be more aggressive there which --

GERGEN: Good luck with that.

BERGEN: He may or may not do. But that's their view; he is very popular politician --

GERGEN: But he now seems to feel that Karzai is actually a reliable partner in all of this.

AMANPOUR: Interesting you say that.

GERGEN: My understanding that he's corrupt and he's weak and he's lost the support of the people.

COOPER: There's been allegations about his brother in the narcotics trade.

WARE: I think it's fact. I mean, to survive in Kandahar as a power player and you have to be a warlord. And his brother is currently the head of the Karzai tribe. So to lead their tribe, you think he can disrupt the peoples' opium fields? Do you think he can disarm his men? If he does he's got nice stake --

COOPER: Right now 95 percent of the world's heroin comes from Afghanistan.

AMANPOUR: But again, that was something that had been lower in 2001 and could have been turned around to do other kinds of crop harvests and other kind of economy and again, the eye was taken off the ball.

WARE: But what ability does he got to extend power beyond Kabul? I mean, he is in this tiny little enclave here.

GERGEN: Can we get to victory with Karzai? Or we have to have somebody else?

AMANPOUR: He is who you have right now. You have an election coming up that he says despite what the Americans want which is to delay the elections that he says he doesn't want to. And I think the strategy has to be reshaped and you can bet your bottom dollar that's what General Petraeus is doing right now. He's just recently been there and they're looking at it and trying to figure out how to turn it around. And I don't think it's impossible.

COOPER: Up next, we continue to look beyond our borders. How can President Obama boost our image in the world and at the same time handle potential nuclear threats like Iran and Russia? We'll dive into those challenges in a moment.



OBAMA: And all those watching tonight from beyond our shores, from parliaments and palaces, to those who are huddled around radios in the forgotten corners of the world, our stories are singular but our destiny is shared. The new dawn of American leadership is at hand.


COOPER: Let's look at some of the other extreme challenges in terms of foreign policy for Barack Obama. Russia. North Korea. What are the other major challenges?

AMANPOUR: Iran, of course.

WARE: Yes. That's who you're really at war at.

AMANPOUR: Number one because none of this, Afghanistan, Pakistan, Iraq, the Middle East -- in the considered view of many former U.S. officials, Secretaries of State and many people in the region -- will not be fully resolved and solved without a mature relationship of some sort based on mutual interest with Iran which believes itself to be the superpower in the region and certainly acting as if it is.

WARE: Yes, regionally it is a super power. As Teheran tells the visitors from Iraq, from the Iraqi government, we are a regional superpower. We will be a nuclear power of some sort and unlike the Americans we're never going anywhere. So they're the practical political realities within that region.

AMANPOUR: And from all my conversations and deep reporting over the last couple of years and particularly during this campaign I believe that they want to do business with the United States.

In other words I think they want a paradigm shift. I think the door is open. You saw from the letter of Ahmadinejad, I know people in the United States tend to laugh at that, but it was unprecedented that an Iranian President sent a letter of congratulations. And just recently after that, the speaker of the parliament in Iran has told all his MPs not to talk to the foreign press. They don't want to make a mistake.

BERGEN: I think his biggest test is going to be potentially unilaterally Israeli strike on Iran. Because I don't think that Israel at a certain point they regard it as existential the nuclear program in Iran. And they are not necessarily going to ask permission.

And so what happens when you get either information or intelligence leading to believe -- this obviously changes the game enormously in Iraq. American military commanders in Iraq are extremely concerned about such an attack because they believe that the Iranians would interpret it as something that we have sanctioned.

COOPER: How likely do you think such an attack is?

AMANPOUR: Well, there's been a lot of fear about it. And not just the Israeli attack but an American attack. Both the chairman of the joint chief of staffs here in the United States and seniors officials and just like the outgoing Israeli Prime Minister Ehud Olmert had sort of rolled military resolution back.

In other words, Olmert has said, all these hard liners, all these people in Israel who are talking about a military solution to Iran, they need to really think carefully about -- he said that in an interview on the record. Remarkable.

WARE: I don't even think there is a military solution.

COOPR: Striking Iran is not like striking Iraq.

WARE: No, no it's not going to work.

AMANPOUR: And the truth of the matter is that the Israeli part of this equation will put pressure on the next administration and it will be more difficult to open dialogue with Iran because they do -- they are suspicious about that.

GERGEN: Does that mean the first task of the next secretary of state should be to take all this on?

AMANPOUR: For the Middle East peace process.

GERGEN: The Middle East peace process.

AMANPOUR: I think it's going to take a very considered, very careful look because, obviously, Iran, both inside Iran and inside the United States is a very political hot potato.

You've got hard liners on both sides who don't want it to happen. In Iran, you've got a presidential election that's coming up that both sides, reformists and hard liners seem to want to use opening the American door to benefit themselves.

On the other hand, very, very senior people in the U.S., all the Secretaries of the State that we've interviewed have all said --

GERGEN: You had five.

AMANPOUR: Five. Across --

GERGEN: Republican and Democrat.

AMANPOUR: Republican and Democrat from Powell to Baker, to Christopher, to Kissinger and Albright, all have said that that must be a priority. Sensibly, properly, the right way but without preconditions to start some kind of change of paradigm here a change of relationship.

GERGEN: A dialogue.

AMANPOUR: A dialogue, yes, of course.

GERGEN: A serious dialogue. A diplomatic offensive.

AMANPOUR: Absolutely.

WARE: And I've actually sat down with the man America has been talking to so far. It's the Iranian ambassador in Baghdad. Now, he himself is a member of the Kud Force, the elite military unit that's been helping to kill the American soldiers in Iraq.

Now, while as stony-faced or poker-faced as he is in that embassy or the two talks he's held with the American ambassador, the fact that he is there, the fact that he's shaping a framework for any kind of a discussion, even though it may not have progressed too far yet is a positive sign. They're there to listen but they want to see what you got to put on the table and unfortunately for them that's mostly about leverage within the nuclear issue.

AMANPOUR: And just very quickly, it was Iran that helped the United States in Afghanistan.

GERGEN: How important is it to get to Russia engaged with the Iranian issue?

BERGEN: It's vital.

GERGEN: Do we need Russia as a partner in all of this and therefore all these other issues we have got with Russia become -- you know, complex?

WARE: Absolutely. Russia's also looking for its own leverage.

COOPER: Russia's already testing Barack Obama. I mean, threatening to put missiles on their border if the U.S. goes ahead with a defensive missile shield.

AMANPOUR: They are. They're breast beating, chest beating. Again, I think they also will have a problem because up until now, for the last several years, they have been able to capitalize internally on virulent anti-Americanism that has spread over the last eight years of the Bush administration. That's going to decrease and it's going to be more difficult for them to use the American bogeyman to justify their actions.

COOPER: Up next, your health, your wallet. As president, Obama said he wants to make sure insurance is available to everyone who wants it. With the shaky economy, can he follow through with that promise?


ERICA HILL, CNN CORRESPONDENT: I'm Erica Hill with your "360 News and Business Bulletin." We'll return to "Extreme Challenges: President Obama" in just a moment. But first, the headlines.

Humility today from the big three automakers; their CEOs back in front of the senate banking committee pleading their case for a now $34 billion bailout.


RICK WAGONER, CEO OF GENERAL MOTORS: We're here today because we made mistakes which we're learning from, because some forces beyond our control have pushed us to the brink and most importantly because saving General Motors and all this company represents is a job worth doing.



SEN. CHRISTOPHER DODD, (D) CONNECTICUT: In my view, we need to act. Not for the purpose of protecting a handful of companies. If that were the extent of the issue, I would let them fail. I acknowledge that those who advocate such a course on the assumption that pressure from the outside will produce the desired results. My concern with such an approach is that it plays Russian roulette with the entire economy of the United States.


HILL: After the hearing today, Senator Dodd and other Democratic leaders once again called on the White House to act on its own to help Detroit using money from the bank bailout fund.

Chilling new allegations about a teenager and what he went through during a year's captivity in this northern California home. Prosecution documents say his alleged captors used a belt, knife and bat on him. Two of the three arrested appeared in court today but did not enter any plea. The judge ordering them held on $2.2 million bail each before he slapped a gag order on that case.

And sentencing tomorrow in Las Vegas for Clark County inmate number 02648927, better known as O.J. Simpson. He's facing anywhere from six years to life in prison after his conviction back in October for kidnapping and armed robbery. Simpson's lawyer today called his client quote, "a very resilient guy" and quote "O.J. comes in with a lot of baggage."

Finally, take a look at this. It is not the White House. But it's home. The new home for George and Laura Bush when they go back to being known as George and Laura Bush. It is in Preston Hollow, which is a pretty exclusive part of the Dallas. About 8,500 square feet; the price a little over $2 million. And that's your "360 Bulletin;" I'm Erica Hill. Back to "Extreme Challenges: President Obama" after this short break.


COOPER: Welcome back to "Extreme Challenges: President Obama."

Let's turn to medicine and money. Mr. Obama faces some hurdles getting approval for his health care reform plan. Let's review his goals with "360" M.D. Dr. Sanjay Gupta.

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well, Anderson, President-elect Barack Obama promised to make health care reform a priority in his first 100 days. We've been talking about that.

His number one goal -- to make insurance and access available for everyone who wants it. He wants to make the same health insurance that's available to government employees also available for every citizen, whether you're currently uninsured, you can't afford it or simply don't like your current insurance you will be eligible for this public plan.

The biggest challenge here, money; the estimated cost, $50 billion to $65 billion a year once it's fully phased in, according to him.

The Tax Policy Center research group places the cost closer to $160 billion a year. President-elect Obama says the money's going to come from rolling back Bush's tax cuts.

Second goal -- lowering health care costs overall. His idea, get more people in the pool and that's going to drive the premiums down. They estimate the average family will save around $2,500 a year. The challenge, people still have to buy into the plans for this to work. Young, healthy people may still choose not to buy it because there is no mandate.

The third goal -- an emphasis on preventive services; keeping people well instead of taking care of them after they're sick. The challenge, with the country that has two thirds of its adults overweight or obese and people skipping recommended screenings, this is as much a cultural shift as it is a health shift.

Of course, all of his plans are going to require the approval of Congress in the midst of what you've been talking about, a flailing economy. Health care may take a backseat and a lot of time may pass before the changes, if any of them, actually get made -- Anderson.

COOPER: Thanks, Sanjay.

In the end, it will come down to money and political ability.

Joining me again: CNN's senior political analyst and former presidential advisor, David Gergen; CNN's senior business correspondent, Ali Velshi and another CNN senior political analyst, Gloria Borger.

Let's talk about Sanjay's last point. With this flailing economy, can Obama pay for all the promises he's made on health care?

GERGEN: Well, there's a view among some liberal Democrats that if you have a trillion dollar deficit already and rising, what's another $50 billion, $60 billion, $100 billion more on top of it? Let's just go ahead and throw it in there and get started.

I think the moderate Democrats are going to say, hold on. The deficit's getting too big. Let's slow this down a little bit.

Health care maybe ought to be a next year or the year after kind of proposition because it's not at all clear how much it actually costs for the insurance as Sanjay just said. And also this effort to hold down costs it is not at all clear that his plan for holding down the costs will actually work.

Many experts believe you would be far better off to invest in electronic health records and really maybe even make that part of the infrastructure, expenditure. That would actually do a better job of holding down costs and bringing fewer errors and that sort of thing as the Veterans Administration has discovered.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: You know, Obama has already talked about doing children's health care.

COOPER: Right.

BORGER: That's very important to Democrats in Congress. It was vetoed by President Bush. So there is a sense that if he doesn't start out with health care right away he could start out at least with the children's health care portion of that which would cost less money; certainly get approved by Congress.

GERGEN: And would get every child insured.

BORGER: And would every child insured. And that would be the down payment on the rest of his health care plan. So I think they're likely to do that very quickly, actually.

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: You know, we saw this season, the movie, IOUSA; the discussion about the national debt. It was such a complete non-issue during this election cycle and as David said, it's going to be a non-issue for a little while.

But at some point once we have the new stimulus program in and once we start to see the bottom of this recession, we are going to have to switch our attention -- the Republicans will switch the attention to the deficit so there might be less currency in doing any of these big- ticket items later on while we still -- right now, people are saying let's spend to get things done.

BORGER: Well, that may speak for doing the big things right up front. That's the tension.

VELSHI: That's the tension, yes.

BORGER: That's the tension in this White House. COOPER: What are the lessons learned from Hillary Clinton's effort to revamp the health care system?

GERGEN: Want to ask David that one?

GERGEN: Do we have time for dinner right now and breakfast?

I think first of all it is very, very important to do anything in public and not go behind closed doors, so there's a transparency about the process and all the hearings and everything else, he should promise that.

Secondly, it's important, one of the lessons from the Hillary experience was if you overreach and if you try to do massively everything up front, you can lose the whole thing.

And that goes to Gloria's point. I think the likelihood is what we are going to see is that they'll go for the children's health first, it's called S-chip. Get that done and then over time, over the course of the first term, go for the more massive program; maybe go for s- chip and electronic records.

BORGER: Yes. And I think Hillary's problem also was that she didn't bring in Republicans.


BORGER: And it wasn't --

COOPER: And that's essential to success.

BORGER: And it wasn't an open process as David was talking about. Obama has said we're going to let the public in on the meetings with the health care lobbyists, with the drug companies.

They're going to bring everybody in. They're going to bring Republicans in, they're going to bring the lobbyists in and it is going to take a long time as a result but the people are going to at least feel engaged with the process as opposed to locked out of the process.

And we learned that with the Bush administration's energy policy where everybody was locked out. We couldn't even get the names of the people who were in the meeting. This is going to be just the opposite.

GERGEN: One difference though that does exist that I think helps Obama is that in the Clinton years, much of the business community was opposed to health care reform at the time it was proposed. In this case, companies, one company after another wants it; they see this as a way to lower costs.

VELSHI: I was going to say the numbers of Americans uninsured a as percentage is significantly larger than it was then at the time. It just wasn't regarded as the national priority that it is right now. One thing no matter who you voted for, both candidates proposed massive changes to the way we pay for health care.

So we had all agreed one way or the other we were going to undergo changes in the health care system. I think public support is behind this a little bit more.

COOPER: When we come back, more extreme challenges. We'll look at the issue of energy independence and also governance. Can Barack Obama govern effectively and if so, how?

We'll be right back.



OBAMA: It is time to free ourselves from the tyranny of oil, stop funding both side of the war on terror. Time to save this planet for our children.


COOPER: The environment, global warming and oil addiction; Barack Obama used the words planet in peril a lot on the campaign trail but as president can he really do much to help planet earth?

Joining me again, CNN's David Gergen and let's bring in CNN's Joe Johns.

In terms of extreme challenges, energy independence. I mean, that has been a goal of the Obama administration and it's seen almost as a national security issue now. But is it, -- is it possible. But isn't one of the biggest impediments to energy independence is the American people, I mean, us?

JOE JOHNS, CNN CORRESPONDENT: I could tell you as far as I'm concerned, probability every president since something like Richard Nixon has talked about making America more energy independent. It's very difficult to actually do though it's very easy to talk about.

This president, though, should have more of an opportunity to do something, simply because America is more ready. We've been through the problems with the gas; we have seen it go up and down. We've been through a whole list of concerns connected to energy. So perhaps this is the time. This is the time for him to do something.

COOPER: But Americans are ready when gas prices are high. Gas prices have already started to go down and all of a sudden you start traveling again, you start driving again and it kind of -- if the past is an indication, then people forget.

GERGEN: Yes. Anderson, I actually wrote some of those early speeches for President Nixon and President Ford with the energy independence. They were very effective. Our independence went like that.

I've come to believe that energy independence is a mirage. We ought to be talking about energy security, not independence. We'll never be independent of international sources of energy. But what I do think has changed is given our dependence and given this global warming, there is now a consensus among business, consumers, environmentalists and the like that we do need serious changes in policy and I think Obama has a chance now to put together the first comprehensive energy plan that America's had.

And that would rely heavily on making our buildings, our cars more efficient. It would rely heavily on renewables and would continue to rely heavily on fossil fuels but trying to make them carbon neutral.

So I think the -- and business is pushing hard to get some new rules. They want to know how to invest. Should they invest in nuclear? Should they invest in wind or solar? Until they know what the rules of the road are from government, they don't know how to make their investment decisions.

So there's a sense of urgency of business, there's a sense of urgency from the environmentalists because global warming. The hard part is how do you get carbon down because that's expensive. And how do you put on extra costs in the midst of this economic meltdown?

COOPER: There's also all this talk about green technology and green collar jobs. Is that real?

JOHNS: Well, Obama talks so much on the campaign trail about clean coal technology. This is one of those sort of flash point issues. The problem with clean coal technology, for example, is that it probably takes 15 years to get there. We're talking about a lot of R&D. How many jobs can you create in R&D?

Because remember, again and again they say they'd like to link energy policy to the idea of strengthening the economy. So, yes, sure, it is a great idea. I would love to see a lot more people out there who could come to my house and analyze and tell me how much energy I'm using. I'd love to see somebody I could just get on the street to come and install a solar panel.

But how many jobs does that create? He is talking about, what? $150 billion or something in the program. It is a good idea but it's a lot of, you know, infrastructure you have got to build in order to make those jobs viable.

COOPER: Whether it's the environment, the economy, health care or any other big-ticket legislation, can President Obama truly make change a reality? Can he crush the Washington gridlock? We'll explore that when "Extreme Challenges: President Obama" continues.



OBAMA: We are not as divided as our politics suggest; that we are one people. We are one nation. And together, we will begin the next great chapter in the American story with three words that will ring from coast to coast, from sea to shining sea. Yes, we can.


COOPER: Barack Obama won the White House on a platform of change. Calling for change though and making it happen are two different things. Will he see results and be able to transform how things are done around Washington?

Back with me, CNN's David Gergen, Joe Johns and Gloria Borger.

COOPER: One of the biggest challenges for Barack Obama is the issue of governance. Can he actually get things done in Washington?

BORGER: That is the big question, Anderson. He has got Congressional majorities. He's got a political vacuum in Washington which he is clearly rushing to fill.

And I think right now, the answer is, yes, he can, but there's a huge financial crisis. He's got to take care of that first. And everything else will follow out of that.

COOPER: When you say, yes, he can, is that a honeymoon period that he has?

BORGER: I think it's a different kind of honeymoon period because there's a crisis. And people have a sense you have to act in a crisis.

COOPER: It's sort of what you talked about before, the idea that, I mean, this is to Barack Obama that 9/11 perhaps was to George Bush.

GERGEN: Yes. I think that's right. He's the first president in memory who comes in with this enormous reservoir of goodwill and support and excitement. I think he is going to have -- you know, the hotels in Washington are sold out for the inauguration. He is going to have hundreds upon hundreds of thousands of people there for his inauguration; many, many people pulling for him.

It's going to be very difficult for the Republicans to stand up against him early on because they'll pay a price given the goodwill and the desire for him to succeed that you find all across the country.

I think this gives him the -- an opportunity few presidents have had. Not only the size of the victory, not only the fact he's got the Democrats in Congress, not only the Internet where he can mobilize a lot of his supporters, but just a sense of, you know, we are in a crisis. We have just one president. We have one shot at this. Let's give him all the help we can.

COOPER: I mean, Democrats may say, look, let's come together, let's sing "Kumbaya," let's give him every benefit. There are a lot of Republicans who say, look, we're the opposition, it's our job stand in opposition to some of his policies.

JOHNS: It is a lot harder to govern as president when you're a Democrat with a Democratic Congress than some people think.

COOPER: Why is that?

JOHNS: Well, Democrats are not necessarily that united all the time. If you look back to the health care issue with Bill Clinton and Hillary Clinton, it was Democrats who had a lot to say about that going down at the end of the day. So it's very hard to get them altogether. It was very complicated.

But two things I will say.

Number one, this president will have to be very careful not to make a stupid mistake early that gets the country off the mark and probably the other thing is he has watch out for, I guess, you call the arrogance of power; sort of feeling your oats as you come in the door. Those are probably the two things he wants to watch out for with his staff early on so he doesn't end up with, you know, a big problem at the beginning.

BORGER: I also think he has to say no to Democrats if he is going to govern from the center, he's going to have to take those liberal pent up Democratic constituencies who want to do everything all at once and say, you know what? Hold off. Not now.

And he has to have that fight within his own party. Right?

GERGEN: This is the most -- I can't remember a time when actually during the transition, the party in power is actually jumping out ahead of the president-elect.


GERGEN: And they're making policy, you know, right and left on Capitol Hill.

COOPER: Congress.

GERGEN: While he is sitting out in Chicago. And there is -- it's raising questions about who's actually going to be governing in January. Are they going to look to him?

COOPER: Do you think they're consulting with him?

GERGEN: I think there are going to be a lot of these issues where they're -- Nancy Pelosi and Barney Frank and John Dingle and Harry Reid and all these guys, they're ready to make policy up there.

BORGER: But that's why Rahm Emanuel is so important because Rahm gets it. He knows where everybody is on Capitol Hill and he's really a centrist in his on way and he is the guy to say, "Sorry, can't do. Can't do it now."

GERGEN: I think the goodwill is great for him but I think it's going to be tricky. I think that's quite clear.

JOHNS: He has to watch out. It was Tipp O'Neil looking at Jimmy Carter and said, "I'm going to cause real problems for you." I can't actually use the quote I think. COOPER: All right, a lot of challenges ahead.

Thanks very much, Joe, Gloria, David. Thank you.

Barack Obama faces many extreme challenges when he moves to 1600 Pennsylvania Avenue. Many of which we talked about tonight. As you have heard, there are no easy answers. But we hope we've helped you see what is at stake over the next four years for Mr. Obama, for our nation and our world.

I'm Anderson Cooper. Thanks for watching.