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Half-Million Jobs Gone; President Bush Uses the "R" Word; Simpson Gets At Least 15 Years; Obama Sets Fund-Raising Record; Retiring Clinton's Debt; Castro: Cuba Can Talk to Obama; Lawsuit: Obama Can't Be President

Aired December 5, 2008 - 17:00   ET


Happening now, the U.S. economy hemorrhaging jobs. November's numbers just out -- the worst in 34 years, leaving the newly unemployed desperate and scrambling.

Also, a remarkable statement coming from an American leader. Even President Bush is now talking openly of recession.

But will he back a bailout for the auto industry?

And judgment day for O.J. Simpson today. His emotional plea for mercy and his sentence for armed robbery.

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

It's a vital sign indicating the health of the U.S. economy. And one look at the new jobless numbers shows the patient right now in very poor condition. The Labor Department reporting 533,000 jobs lost in November. That's the largest single monthly drop since December 1974. And behind the statistics are millions of Americans right now scrambling to find any job they can.

Let's go to CNN's Mary Snow. She's working the story for us.

Mary, there are a lot of very, very anxious -- shall I say, even desperate people out there.

MARY SNOW, CNN CORRESPONDENT: Yes, there certainly are, Wolf. And, you know, job counselors say they're seeing such a diverse group of job seekers. And with only conditions only expected to get worse, these counselors say they're also finding people willing to move out of state, even out of the country to find work.


SNOW (voice-over): With the number of unemployed Americans climbing, job centers like this one are being flooded. People come not only to look for work, but get coached on how to go about it.

UNIDENTIFIED MALE: Most success is based upon your own persistence. SNOW: At the Yonkers Employment Can't, staffers say what is striking is people seeking jobs from a wide range of industries, such as financial services that haven't been as hard-hit in the past.

LILLIAN MORALES, YONKERS EMPLOYMENT CENTER: Everybody comes in and talks about the economy and how fearful they are and wanting to grab something before it becomes worse. So we kind of, kind of try to manage the fear.

SNOW: A majority of Americans are confident the economy will improve as President-Elect Obama takes office, according to a CNN/Opinion Research Corporation poll.

BARACK OBAMA (D), PRESIDENT-ELECT: And as we chart a course...

SNOW: Obama says he wants to create jobs by spending money on infrastructure projects, such as building roads and bridges. His goal is to create two-and-a-half million jobs by the end of 2010.

Nobel Prize winning economist Joseph Stiglitz says that won't be enough and says Obama needs to double that number.

(on camera): Five million jobs by the end of 2010 -- the end of 2010.

JOSEPH STIGLITZ, ECONOMIST, COLUMBIA UNIVERSITY: That's right. That's -- that would seem to me the kind of level of aspirations. We may not make it, but clearly we need a more ambitious agenda if we're going to restore the economy to a strong situation.

SNOW: While economists expect conditions to get worse before they improve, some aren't spelling doom.

LAKSHMAN ACHUTHAN, ECONOMIC CYCLE RESEARCH INSTITUTE: The sharper the recession, the sharper the recovery. Now, in this very dire kind of circumstance, we're in a sharp recession -- that may be a silver lining to take advantage of with the policy decisions that we're taking going forward.


SNOW: Now, economist Lakshman Achuthan says the timing of a second stimulus package will also be key. He says it will more effective if it's not spent until we can see signs the economy is starting to stabilize -- Wolf.

BLITZER: I know Mary, you've been speaking to a lot of economists.

What are you hearing about when we'll see some sort of recovery for this U.S. economy?

SNOW: There's no definite answer, but some say they think, under the best case scenario, it would be the middle of next year. But it's so hard to say because if people -- more people are out of work, they're not spending, businesses aren't spending and then the cycle keeps going downward.

BLITZER: All right, Mary.

Thanks very much. Mary Snow is in New York.

We want to go right over to the White House right now to hear what the president is saying -- he's now, Elaine Quijano, using the "R" word -- recession. He's using it publicly, I believe, today for the first time.

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Well, that's right. And it's coming on the heels of the official declaration by that panel of economists. Wolf, you're absolutely right, President Bush today using the word that he has been loath to use before -- recession.


QUIJANO (voice-over): It was a remarkable statement coming from an American president -- underling the bleak economic conditions in the United States.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: My administration is committed to ensuring that our economy succeeds.

QUIJANO: But that commitment did not stop the U.S. economy from shedding 533,000 jobs last month -- a far cry from success, as the president publicly acknowledged what a panel of economists officially declared this week -- that the United States is in a recession.

BUSH: Today's job data reflects the fact that our economy is in a recession.

QUIJANO: With Congress considering a bailout plan for U.S. automakers, the president said is he concerned about the big three and their employees. But...

BUSH: Likewise, I'm concerned about taxpayer money being provided to those companies that may not survive.

QUIJANO: The president urged Congress to act next week on a plan to redirect $25 billion in loans meant to help Detroit develop more fuel-efficient vehicles. But he insisted Ford, Chrysler and G.M. will have to make tough business choices to prove they deserve taxpayer dollars.

BUSH: And it's important to make sure that taxpayers' money be paid back if any is given to the companies.


QUIJANO: Now while Democrats and Republicans continue debating the possibility of a bailout for U.S. automakers, attention is also focused on the possibility of another stimulus package. But today a White House spokesman said officials here say that will happen in the next administration -- Wolf. BLITZER: Elaine, the president would like to use that $25 billion that was approved by Congress in an Energy Department bill to help the auto industry. But I understand there's even a problem there.

QUIJANO: Well, that's right. The Congressional Budget Office, in fact, has just come out with some concerns about that, saying that the legislation, as it stands right now, would only initially make available $7.5 billion -- thus further complicating the picture for Congress if they did decide to go this route. That is something that they certainly would have to adjust to deal with. And on top of that, Wolf, again, we're only talking up to $25 billion. As you know, Wolf, that is far short of the $34 billion that U.S. automakers say they need right now -- Wolf.

BLITZER: And they say they need it before the end of the year. So they don't have a lot of time to waste.

All right. Thanks very much, Elaine, over at the White House.

A compelling exchange on Capitol Hill today during this, the latest round of hearings on a possible auto industry bailout. A California Congresswoman was questioning an expert on the global economy about public opposition to the rescuing of the big three.

Listen to this exchange.


REP. JACKIE SPEIER (D), CALIFORNIA: The American people right now are damn mad. They do not want us to bail out this industry. And if we then pump tens of billions of dollars into this industry over the course of the next six or eight months, and the American people continue to be angry about that, they aren't going to buy the cars.

So where are we?

PROF. JEFFREY SACHS: Congresswoman, they're mad that unemployment jumped to 6.7 percent today and 560,000 jobs were lost. They're going to be very mad when unemployment reaches 9 percent. They will be really mad if unemployment reaches 12 percent.

If we allow the most important industry in this country to disintegrate, believe me, the fury will be nothing like what will happen when they hear about a $25 billion bailout. We have to take the macro economics seriously right now. We're in the steepest descent we've been in in modern times.

SPEIER: All right.

SACHS: This is crucial to stop this. So the American people need to understand, this isn't a favor for the industry. This is a favor for the American people.


BLITZER: Wow! Tough words there from Jeff -- Professor Jeffrey Sachs.

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

A lot of people who support the auto industry are saying you know what, if they got billions for Fannie Mae and Freddie Mac and AIG and Bear Stearns, why not help the auto industry -- Jack?

JACK CAFFERTY, CNN ANCHOR: Well, that's a -- that sounds like a pretty reasonable argument, especially when you consider that there has been no oversight, to speak of, of the several hundred billion dollars that's already been handed out to companies like AIG and Goldman Sachs and some of the big banks. No oversight. That money has just disappeared into the safes of those financial institutions. And $25 billion, by comparison to what's been given to the Wall Street and the banking community, is a much smaller amount.

Israel -- this is an interesting story.

Israel is apparently considering a strike on Iran's nuclear facilities without our help. "The Jerusalem Post" reports that Israel is drawing up options to attack Iran without coordination with the United States. Coordination would be helpful, because the U.S. controls Iraqi air space and the U.S. Air Force could then give the necessary codes to the Israeli Air Force.

A top official with the Israeli defense ministry told the newspaper that while it's certainly better to coordinate an attack, they are considering options that don't include our help.

Various news reports have said that President Bush has refused to give Israel a green light on this, but that will not necessarily stop an attack. Israel has acted unilaterally before.

Officials in Tehran are reportedly skeptical that Israel will actually strike. There's apparently still some time left to decide on making a move.

Israeli officials say that while Iran is making progress, they don't expect them to have enough enriched uranium for a nuclear bomb until the end of next year.

So here's the question -- should Israel attack Iran's nuclear facilities without coordination with the United States?

Go to and post a comment on my blog.

The timing would have to be a little tricky, at this point, with the United States changing administrations and all. But apparently, there are some contingencies being discussed.

BLITZER: Yes. They're always -- in defense ministries, over at the Pentagon, they always have contingencies. The question is how serious those contingencies are.


BLITZER: All right, Jack. Thanks very much.

He's almost the billion dollar man -- Barack Obama shattering all fundraising records. His team has just released the new numbers and we're crunching them for you.

And it wasn't the maximum, but it was far from the minimum. O.J. Simpson -- he's heading to prison for armed robbery. We're live at the court in Las Vegas. And our senior legal analyst, Jeff Toobin, is standing by. He wrote the book on the O.J. Simpson trial.

And Cuba's Fidel Castro making an overture to Barack Obama.

We're going to Havana for the latest. You'll want to see this, right here in THE SITUATION ROOM.


BLITZER: O.J. Simpson sentenced to at least 15 years in prison for his part in an armed robbery of two sports memorabilia dealers last summer in Vegas. The sentence handed down after the former football star made a rambling and emotional plea for leniency.

Let's go to CNN's Kara Finnstrom. She's is in Las Vegas. She watched it all unfold.

All right, Kara, where is Simpson right now?

KARA FINNSTROM, CNN CORRESPONDENT: Well, right now, he's just about 200 yards away from here in the local jail. He'll stay there for a couple of days, perhaps, until the next prison bus can take him to the High Desert facility. That's where he'll be evaluated. He'll get a medical screening, a psychological screening and they'll determine at that point where would best for him to serve his sentence.


UNIDENTIFIED FEMALE: Conspiracy to commit a crime, one year in the county jail. Count two...

FINNSTROM (voice-over): Former football great O.J. Simpson, known for his remarkable agility, has just side-stepped the threat of a life sentence in Las Vegas.

YALE GALANTER, SIMPSON ATTORNEY: We -- you know, Gabe and I are pleased. You know, it could have been a lot worse. My expectations today were that it was going to be a much higher sentence.

FINNSTROM: Simpson now faces a maximum of 15 years behind bars, but will be eligible for parole in as few as nine.

Clarence Stewart, one of Simpson's cohorts in the crime, was given a similar sentence -- both convicted of kidnapping and armed robbery for their role in staging a holdup involving guns to recover sports memorabilia from a hotel room.

Simpson told the judge he was sorry. O.J. SIMPSON, FORMER FOOTBALL PLAYER: I am sorry. I didn't mean to steal anything from anybody. And I didn't know I was doing anything illegal. I thought I was confronting friends and retrieving my property. So I'm sorry. I'm sorry for all of it.

FINNSTROM: Judge Jackie Glass, who is known for issuing harsh sentences, lectured Simpson.

JUDGE JACKIE GLASS, CLARK COUNTY, NEVADA, DISTRICT COURT: And I said to Mr. Simpson, I didn't know if he was arrogant or ignorant or both. And during the trial and through this proceeding, I got the answer. And it was both.


FINNSTROM: Now, Judge Glass also stressed that in no way should her sentence be tied to the acquittals that Simpson saw in the 1994 slayings of Ronald Goldman and Nicole Brown Simpson, that she didn't want it to be seen as payback in any way.

The Goldman family was here today. Fred Goldman, Ron Goldman's father, and his sister Kim. And after the proceedings, they did issue a brief statement. They said that this couldn't offer closure to them, that just wasn't possible. But they are glad to see him behind bars -- Wolf.

BLITZER: Kara Finnstrom in Las Vegas for us.

Kara, thank you.

Let's go right to our legal analyst, Jeff Toobin. He is the author of a book many of you will remember, "The Run of His Life The People Versus O.J. Simpson" about the infamous murder trial.

What do you think about this sentence -- 15 years but eligible for parole after five?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST, "NEW YORKER" MAGAZINE COLUMNIST: You know, I have to admit to mixed feelings about this case, Wolf, because, you know, as I wrote in my book, I think O.J. Simpson is absolutely and totally guilty of the murders. I think he deserves to be in jail to this day and for the rest of his life for those murders.

But this case always struck me, from the beginning, as a little strange. And I think 15 years is a long sentence for this case.

So I shed no tears for the fact that O.J. Is in prison. Given his conduct in this case, I think it's a long sentence.

BLITZER: Well, do you think there was a connection -- could the jurors, could the judge simply focus in on this particular case and block out of their minds what happened way back when?

TOOBIN: Boy, you know, that's the $64 question about this case. And I can't read their minds. I think the key decision here was the decision to bring the case in the first place. Once the prosecutors brought the case, I think the judge and the jury probably behaved appropriately. And this sentence is consistent with sentences for armed robbery and kidnapping in Nevada.

So I think the real hard question is did the prosecutors, in deciding to bring this case, consider the criminal case.

They said no. I take them at their word. But, boy, I have to say, I have some doubts.

BLITZER: Well, let's talk about the next few years. He's going to have to spend at least five years in prison right now. He's 61 years old. In five years, he'll be 66 years old. Assuming he's a model prisoner and does everything perfectly, what are the chances of getting out after five years?

The full sentence would be 15 years.

TOOBIN: Well, the chances are pretty good because, you know, there are not many prisoners in our system, state or federal, who are in their 60s. The system tends to let people out. The idea is they're not dangerous to the community at that age, by and large. And if they've served a good part of their sentence, they generally get parole.

O.J. Simpson is O.J. Simpson. So the rules might not necessarily apply. But I would very much doubt that he'd serve anything like 15 years. Somewhere in the range of five, six, seven is probably more likely, I think.

BLITZER: Although, one of the problems he's probably going to have, even though no one's going to talk about it publicly, is the parole board remembering that he was acquitted, what, 10 years ago or whatever. They're going to say you know what, maybe he should spend the full 15 years in jail -- not necessarily for this crime, but for the other -- the other allegations against him.

TOOBIN: That's what's hovered over this whole case, is how much is it about what went on in this, frankly, rather ridiculous confrontation in the Las Vegas hotel room and how much is it about what went on, far more seriously and far more tragically, in Brentwood, California in 1994?

BLITZER: If his lawyers appeal this sentence right now -- and appeal the guilty verdict, do they really, realistically, based on what you know about this case, Jeff, have a chance to succeed?

TOOBIN: Well, I always start from the premise that the vast majority of convictions and sentences are affirmed on appeal. And I think that is certainly the likely outcome here. The fact that this case was such a long sentence for such an odd crime -- this is not what most of us think of as kidnapping. Yes, it fit the elements of the crime. But this was a long way from spiriting someone off in return for ransom. I think an appeals court will take a very hard look at the case. But chances are that in -- like in most cases, it will be affirmed.

BLITZER: He wrote the book on O.J. -- "The Run of His Life

The People Versus O.J. Simpson." There you see the book cover. It was a great book, one of the many great books that Jeff Toobin has written.

Thanks very much, Jeff, for coming in.


See you.

BLITZER: He built an unprecedented fundraising machine that helped propel him to the presidency.


OBAMA: It was built by working men and women who dug into what little savings they had to give $5, $10 and $20 to the cause.


BLITZER: But you might be stunned at how it all added up -- details of Obama's fundraising record. We have new information and new numbers.

Plus, missing ballots add to the mayhem in Minnesota -- the state senate race still very much undecided.


BLITZER: Fredricka Whitfield is monitoring some other important stories incoming into THE SITUATION ROOM right now -- Fred, what's going on.

WHITFIELD: Hello, again, Wolf.

Well, deadly violence today in Northwestern Pakistan. A car bomb detonated near Peshawar's famed Storytellers Bazaar, killing at least 20 people. The blast also wrecked a Shiite Muslim mosque and a hotel, setting cars on fire. The attack intensified tensions in a region already on edge after last week's terror strike in Mumbai, India. It is still unclear who carried out today's attack in Peshawar.

Minnesota's tight U.S. Senate race still isn't resolved. A statewide hand recount of ballots in the race between Republican Norm Coleman and Democrat Al Franken wrapped up today -- except for 130 ballots in a missing envelope from Minneapolis. Officials there are still looking for it. Fifty-four hundred ballots challenged by the two campaigns also hang in the balance. The state canvassing board will meet December 16th to decide exactly what to do with those.

And Honda Motor Company is pulling out of Formula One racing. The company announced the decision today, blaming plummeting car sales. Honda says the move could save it hundreds of millions of dollars. Honda reported a 32 percent drop in U.S. car sales in November from the same time a year ago. Five automakers remain in Formula One competition, but Honda's departure raises speculation that others just might follow suit.

And a top homeland security official has been arrested -- for hiring illegal aliens. Lorraine Henderson, Boston area port director for U.S. Customs and Border Protection, allegedly employed three Brazilian women to clean her condominium. Well, the women had illegally crossed the Mexican border into the U.S. Henderson later was secretly recorded allegedly encouraging one of them to stay. If convicted, Henderson could face 10 years in prison -- Wolf.

BLITZER: All right. What a story that is.

All right, thanks very much for that, Fred.

An historic election in more ways than one -- Barack Obama not only shattered the race barrier, he also set a record for fundraising. Details of where the money came from and where it went. Stand by.

Also, the horrible economic news, potentially, could be some good news for the Obama agenda. Details of what his predecessor, President Bill Clinton, is saying about that. You'll want to hear it.

And is life imitating art?

Barack Obama, Hillary Clinton and the old TV show "The West Wing" -- we're looking at remarkable similarities.

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


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

Happening now, President-Elect Barack Obama making more history. The final numbers say his campaign shattered fundraising records.

Meanwhile, his would-be secretary of State, Hillary Clinton, has a big debt to retire. Can her new boss help? Stand by.

Louisiana voters could make their own history tomorrow in a Congressional contest postponed by Hurricane Gustav. On the ballot, Representative William Jefferson. His challenger could become the first Vietnamese-American in Congress. Sean Callebs is standing by with a preview of that race.

And the Supreme Court may take up a challenge to Barack Obama's future presidency. Our own Kelli Arena examines why some believe it's illegal for him to take the oath of office in January. Is this really serious?

I'm Wolf Blitzer. You're in THE SITUATION ROOM. Barack Obama is making history in more ways than one. The country's first African-American to be elected president also raised a record amount of money for his campaign -- not just surpassing, but totally smashing the previous high mark.

Let's go to CNN's Samantha Hayes. She's crunching all the numbers for us.

How much money, Samantha, are we talking about?

SAMANTHA HAYES, CNN CORRESPONDENT: Wolf, nearly $750 million -- the largest privately financed campaign. And what's really interesting is how and when he spent that money.


HAYES (voice-over): When it was all said and done, Barack Obama thanked the little people for his big victory on election night.


OBAMA: It was built by working men and women who dug into what little savings they had to give $5, $10 and $20 to the cause.


HAYES: It added up.

UNIDENTIFIED MALE: He really showed that he could successfully up sell these people with every milestone of the campaigns -- keep them engaged, keep them giving him money.

HAYES: But a closer look at Obama's fundraising showed 80 percent of the money Obama raised came from large donors, according to the Campaign Finance Institute, which studied the numbers through August. For some, that's a call for reform.

MARY BOYLE, COMMON CAUSE: President-Elect Obama has said he is committed to fixing the presidential public financing system. And that he is a supporter also of public financing for congressional races. So we are optimistic.

HAYES: Other candidates may not be. You can see the difference. Especially in battleground state advertising. Obama spent four times as much as McCain in Florida. 7 million more than the GOP candidate in both Ohio and Pennsylvania and outspent McCain three to one to win Virginia. Timing was also important. 100 million in the final weeks before the election.

LARRY SABATO, UNIVERSITY OF VIRGINIA: Money alone doesn't determine presidential elections. But you would sure rather be the candidate who is spending more rather than less.

HAYES: Even with 30 million left over, Obama's team is asking supporters for more in an effort to fill party coffers, and this time, you get a t-shirt. SABATO: Just wait till they see what he's going to race in 2012. That will probably end up deterring serious democratic primary challenges and keep a lot of big players out of the picture.


HAYES: Hillary Clinton's primary campaign on the other hand, ended million of dollars in the red and now that she may become Obama's secretary of state, time for her to retire that debt is running out. The rules state that Obama can't do much to help her.

WOLF BLITZER, CNN ANCHOR: Interesting stuff. Samantha Hayes crunching the numbers. Thank you.

Senator Clinton's campaign debt is still roughly $7 million. And the online pleas to help retire that debt before she becomes the secretary of state are increasing. Let's go to our internet reporter Abbi Tatton who's asking for the money?

ABBI TATTON, CNN INTERNET REPORTER: This morning it was an e- mail from vice president-elect Joe Biden an email to Obama donors that said our campaign pledged to help Senator Hillary Clinton retire her campaign debt. I hope you will show her support. These pleas are coming in thick and fast online at the moment. Hillary Clinton's own supporters got this e-mail from Dorothy Rodham inviting them to spend $250 to get a signed copy of this Hillary Clinton inspired children's book. Yesterday, there was this invite to Hillary Clinton supporters to a conversation with Hillary Clinton and bill Clinton, a fund-raiser in New York City. $1,000 for the most expensive tickets there hosted by actress America Ferrera. There have been other pleas as well as online by this DVD. And an e-mail from Bill Clinton once confirmed as secretary of state, federal law will restrict her ability to solicit contributions.


BLITZER: Abbi, thanks very much.

Let's talk a little bit more about the president-elect and the secretary of state designate and her campaign debt. We're joined by our CNN contributor Bay Buchanan and democratic strategist Steve McMahon.

You know a lot about campaign money, Steve. What do you think? Can she retire that will $7 million debt between now and the time she becomes secretary of state?

STEVE MCMAHON, DEMOCRATIC STRATEGIST: Well, I'm not sure that she can. I'm sure that Barack Obama can if he decides to. This is a campaign that raised almost $1 billion between what it raised in the campaign and what it sold in commemorative items. If the campaign decides they want to retire this debt, it will be retired.

BLITZER: Do you think?

BAY BUCHANAN, CNN CONTRIBUTOR: There's no question. What I can't understand is her endorsement of Barack Obama was invaluable. That should have been done immediately. This is a weekend's work for the Obama people.

BLITZER: One of the problems, as you know is Mark Penn, one of her top strategists, the chief strategist, if you will. His firm is owed a lot of that, I don't know how many of the millions of dollars his firm is owed. And apparently there's no love lost there between some other democrats and Mark Penn.

MCMAHON: Right, right. You know, I think that that's certainly true and there are people who probably don't want to contribute because it might go to Penn's debt. On the other hand, Hillary Clinton's endorsement was critical. It did make a difference for senator Obama. She is going to be his secretary of state. I think for peace and harmony in the family, if she decides she wants to pay that debt, that's up to her.

BUCHANAN: Wolf, this is traditional. Ronald Reagan stepped in 1980 and had a huge fund-raiser. Any of the primary people who had debts were allowed to join in. He raised money. We divvied it up. I'm astounded she still has debt.

BLITZER: It would be totally inappropriate for her to go out and do political fund-raising once she becomes secretary of state. Listen to her husband, the former President Bill Clinton, he was out in Malaysia, speaking today. Actually, I'm going to read it to you. This is the president according to the associated press. "The big risk now for America and the world is deflation, contraction, dropping asset prices. We have to stimulate the economy which means in the short run he has to take America into even more debt. There is no alternative," referring to the president-elect. What do you think of that advice from President Clinton?

MCMAHON: Sadly I think it's probably true. It wasn't just Bill Clinton saying it, it was Bill Gates, as recently as yesterday, saying President-Elect Obama needs to do more. Needs to get more money into the economy. Deflation is a very real concern because if people think something's going to be cheaper next month and it is today, they won't spend the money. If they stop spending money, we'll slide further into recession. We need to prime the pump.

BLITZER: As important as the national debt is, it's gone to more than $10 trillion over the past eight years from under $5 trillion, getting the jobs back on track, getting the economy going is more important than worrying about that right now. I assume you agree.

BUCHANAN: I agree that we do have to get the economy moving but the way to do it not for government to start creating jobs. That's not real wealth. We need to get the money back into the system by giving it to the businesses and the people who are the one who's create the jobs, the permanent jobs. I think if spending would solve the problem, we would be doing terrific today. We are spending like nobody's ever spent before. I think it's clear we have to be very, very cautious how we run up this debt is it with tax cuts and credits to encourage the private sector or are we just going to create projects and spend the money which will be gone in two years. MCMAHON: Bay's right where the money goes. You look at $300 billion goes to AIG or I'm sorry to Citigroup and we're arguing whether or not the automakers which is the backbone of the manufacturing industry in this country should get $30 billion. The government might be better off to put money into low interest mortgages so everybody who owns a home can refinance and have a lower payment and they can put that money back in the economy. I'm not sure Citigroup is going to put it back in. Homeowners would.

BUCHANAN: Steve is right. We can't let the auto industry go under. This is 3 million middle class jobs easy. That is something that is critical. You let that go under, I don't care how much you spend, we'll have trouble getting out of this mess.

BLITZER: The left and right agree at least on this point. Thanks very much for coming in.

Will the Supreme Court stop Barack Obama from becoming president?

UNIDENTIFIED MALE: Always been understood to be if you are born here, you are a natural born citizen.

BLITZER: With less than two months to go before the inauguration, a lawsuit now challenging Barack Obama's U.S. citizenship status. Obama's opponents just aren't giving up. They're even hoping the nation's highest court will have a final say. How serious is all this? Kelli Arena, our justice correspondent is about to fill us in.

He's been a long nemesis of American presidents. Fidel Castro is reaching out to Barack Obama. Could a meeting be in their future?

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


BLITZER: Long-time U.S. nemesis Fidel Castro is now holding out the olive branch to president-elect Barack Obama. Let's go to Havana. Morgan Neill is standing by.

What's the latest, Morgan?

MORGAN NEILL, CNN CORRESPONDENT: The election of Barack Obama has brought hope here for a change in relations with the United States. It's not just the people here who seem to be open to new possibilities. Both Raul and Fidel Castro have said they would consider a sit-down with Barack Obama.


NEILL: A new overture from Cuba read allowed on state TV. With Obama one can talk wherever he wants because we're not preachers of violence or war. Reads a newest say from Fidel Castro which goes on to add that the U.S. president-elect "must be reminded that the carrot and stick theory cannot be applied in our country." the second time in recent weeks Cuba's leaders have said they're open to a meeting with Obama. Though the ailing Fidel Castro has only been seen in photos and video for the last 2.5 years, his brother President Raul Castro appears to be thinking along the same lines. In the latest issue of "The Nation," actor Sean Penn writes of his recent conversation with Raul during a visit to Havana. According to Penn, Castro told him "perhaps we could meet at Guantanamo. We must begin to solve our problems and at the end of the meeting, we could give the president a gift. We could send him home with the American flag that waves over Guantanamo bay." but in Havana, there are still skeptics.

Obama is a product of the American empire says this man.


NEILL: Now it's worth pointing out here in Cuba, the idea of a meeting with Obama didn't even make the headlines today because in large part at least the way people here see it, the main obstacle to such talks hasn't been Cuba. It's been the United States, Wolf.

BLITZER: Our man in Havana, Morgan Neill. Thank you.

Election 2008, guess what, it's not over with yet. Voters head to the polls in Louisiana tomorrow in two congressional races postponed by hurricane Gustav. One of them pits democratic incumbent congressman William Jefferson who's been indicted on bribery charges against a Vietnamese immigrant and relative political newcomer. Let's go to New Orleans. CNN's Sean Callebs is standing by.

It could have some historic implications, set the scene.

SEAN CALLEBS, CNN CORRESPONDENT: Yeah, exactly. We have heard that term, historic during this election season and perhaps once again and turnout is going to be key. A lot of people down here simply election weary. A lot of folks are watching to see who turn out tomorrow.


CALLEBS: Louisiana will either be remembered for electing the first Vietnamese American to congress, Joseph Dao or returning his opponent indicted Congressman William Jefferson to the seat he has held since 1991. Cao says couple this race with the recent election of Bobby Jindal as the first Indian American governor in the nation and it sends a strong message.

JOSEPH CAO (R), LOUISIANA CONG. CANDIDATE: We can finally get away from the image of David Duke and some of the other politicians that have given Louisiana a bad name.

CALLEBS: Jefferson is under indictment on bribery charges after $90,000 of federally marked money was found in his freezer back in 2005. His trial is slated to start soon. We tried to talk with him about the race. But calls weren't returned. Analysts say Jefferson's troubles are Cao's platform.

SILAS LEE, POLLSTER: I am not William Jefferson. I will not embarrass this district. CALLEBS: Jefferson has been popular among African-Americans in the past helping Katrina victims and the elderly. The indictment hurt his popularity and earned a local nickname of dollar bill. It's expected to be a tight race. Cao says if he's going to win in this mostly black, mostly democratic district, he needs African-American support.

CAO: Just to still have this strong core of supporters who will vote for him no matter what.

CALLEBS: And experts say turnout will be key.

LEE: I don't think we will have a 10% turnout if that much. A few thousand votes can determine who will win this election.



CALLEBS: Cao has widespread support in New Orleans growing Vietnamese community. He calls himself a moderate republican agreeing with John McCain on the issue of immigration saying it's unrealistic to deport an estimated 12 million illegal aliens. He wants to find a way to make them productive citizens in the U.S.

CAO: I know the struggles that families who are separated go through. So, I believe that with my own personal experience and with my knowledge of our immigration system, I can contribute tremendously to that issue in the congress.


CALLEBS: Cao came to the United States just before the fall of Saigon and he was not reunited with his mother and father till 1991. We'd like to show you some motion pictures of that but he says he lost pictures and many other treasures when hurricane Katrina washed out his New Orleans home.

BLITZER: Sean Callebs going to tell us tomorrow what's happening in New Orleans down there. Thanks very much.

There are some other congressional races that still have not been decided. There are vote count disputes in Virginia and Ohio over two GOP has claimed victory in a battle for California's fourth congressional district, as well.

It just a TV show or at least was it just a TV show? Or is it?

UNIDENTIFIED MALE: How about secretary of state? Secretary of state?

BLITZER: "The West Wing" eerily predicted Barack Obama tapping a key rival for secretary of state. That's not all it got right.

Plus, Barack Obama's birth certificate. Says he was born in Hawaii. It's been certified as authentic by the state. So why is a lawsuit questioning whether he's a natural-born American citizen? The U.S. Supreme Court may step in. Kelli Arena standing by with a closer look.

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


BLITZER: The U.S. Supreme Court is being asked to take a case challenging Barack Obama's eligibility to be president of the United States. How serious is this really? CNN's Kelli Arena is working the story for us.

Kelli, what is the background and what is going on? Because a lot of people are scratching their heads wondering if it is a serious challenge?

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Well you know Wolf, we won't know if the court accepts the case until Monday. But it was originally filed eight days before the November election and has been making its way through the courts and it all centers around the definition of "natural born citizen."


ARENA: He won the election fair and square. End of story are, right?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, there are some people out there who wish to believe that there is something illegitimate about the candidacy and now his presidency.

ARENA: The latest effort to rewrite the election of 2008, the accusation that Barack Obama is not a legitimate natural-born American and so he can't be sworn in.

SCHNEIDER: There is always that charge hanging out there that there is something really not American about him. There is a small group of people who just want to keep that discussion going.

ARENA: The argument, which is being taken all of the way to the Supreme Court, goes like this. When Barack Obama was born in 1961, Kenya was still a British colony, and Obama's father was from Kenya and therefore a British citizen, and that British citizenship automatically passed on to his son and that means that Obama who was born in the U.S. was born with dual citizenship, but is that enough to disqualify him from being president?

THOMAS GOLDSTEIN, SUPREME COURT LEGAL ANALYST: The law has always been understood that if you are born here, you are a natural born citizen and that is particularly the case when you have a U.S. parent like Barack Obama's mother.

ARENA: The campaign says that the proof of the U.S. citizenship is right on his birth certificate, case closed. What is more, his Kenyan citizenship automatically expired when he turned 21. Legal experts do not expect the Supreme Court to take the case even though it has never defined what it means to be a natural born citizen.

GOLDSTEIN: It is probably one of the terms to stay ambiguous in the law, because the courts don't want to step in when what they are going to be doing is to overrule the will of the voters. It is a so- called political question.


ARENA: And Wolf, this is only the tip of the iceberg. There are dozens of similar lawsuits nationwide trying to overturn the election results. Amazing.

BLITZER: All right. Thanks very much. Stay on top of this one for us. Appreciate it.

Hollywood predicts the real life and Brooke Anderson is showing us an eerie similarity of the old TV show "West Wing" and incoming Obama administration.


BROOKE ANDERSON, CNN CORRESPONDENT: A new president offering his rival the position of secretary of state.

UNIDENTIFIED MALE: How about secretary of state? Secretary of state?

ANDERSON: In the final season of "The West Wing" imaginary presidential elect offered his then rival secretary of state, and show off of the air for almost four year, but seemingly able to predict the 2008 presidential campaign and transition. Eli Attie was the writer on the show who scripted the fictional run to the white house which was started by casting Jimmy Smits as Santos.

ELI ATTIE, SUPERVISING PROD., "THE WEST WING": The funny thing was at that time four years ago there was no precedent for a Latino candidate or any minority candidate and the closest I could find was then state Senator Barack Obama. So the character was not created to be Barack Obama, but as I started to fill in those first big episodes and define who he was, that was the first place I really looked for inspiration.

ANDERSON: And so the "West Wing" wound up with a young minority candidate who would beat a favored democratic rival in the primary and a moderate republic maverick in the general election, but Attie who worked in the Clinton/Gore administration said it did not take a sidekick to see who would see the theme to dominate.

ATTIE: It was coincidence and both gave speeches of hope and talked about the future and politicians have been doing it for a long time and not as carefully scripted actor on TV show or Barack Obama.

ANDERSON: Not that he is not surprised to see the future unfold along the lines of his creation.

ATTIE: The interesting thing is that something like having Matt Santos choose his rival for a powerful cabinet post was wishful fulfillment and what if you had a candidate who didn't hold grudges and wanted to bring in the right people, and it is amazing to write your gauzy, flag-waving script on CNN live.

ANDERSON: Brooke Anderson, CNN, Hollywood.


BLITZER: All right. Thank you Brooke.

The Pentagon has just wrapped up a news conference on its brand new missile shield system, the something that went wrong with the missile system. Jamie McIntyre is working the story. It is coming up.


BLITZER: Getting right to Jack in the Cafferty File. Jack?

JACK CAFFERTY, CNN CORRESPONDENT: Wolf, the question this hour is should Israel attack Iran's nuclear facilities without the United States' coordination? There is a piece in the Jerusalem newspaper saying there are options to explore just that.

And Bob writes, "What gives them the right to attack them with or without the U.S. participation? Do they not know it is not being used for peaceful purposes?"

And Doug in New Mexico says, "Very dangerous game indeed and what happens if it escalates in another war in the Middle East? Do we then back Israel? Do we say you're on your own? What if it becomes nuclear? The days of quick draw McGraw are leaving with George W. Bush and I don't want to return to the days of yesterday."

Richard in Enoch, Utah, "It would be a big mistake for that happen and the start of a world war and something needs to happen, but give President-Elect Barack Obama chance to get into office as president and use Hillary to try to calm things down."

Gigi says, "Well, they should retaliate but a preemptive attack, no way. One George Bush in the world is more than enough, thank you."

Tom in Minnesota writes, "Only if Israel wants to further alienate itself from the rest of the Middle East and perpetuate the anger of the eastern world. It would be no more right than it was for us to attack Iraq. Let Israel and Iran fight their own war. Now is the time to focus on ourselves. We need to mind our own business. We have given Israel enough military power and we must cooperate with the U.N. this is a time to build up our country from the recession and do not support anybody else's war."

If you didn't see your email here, you can go to my blog at and check for it there.


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