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America's Recession Deepens; Hillary's Replacement?

Aired December 5, 2008 - 18:00   ET


WOLF BLITZER, CNN ANCHOR: And, to our viewers, you are in THE SITUATION ROOM.
Happening now: Jobs disappear and America's recession deepens, over half-a-million American workers slashed from the payrolls just last month, just in November. And the president-elect is warning there is no quick fix.

Plus, the search for a compromise on bailing out the U.S. auto industry. Did another round of congressional hearings today move the ball forward?

And who could fill Hillary Clinton's shoes in the U.S. Senate? How about Caroline Kennedy? The best political team in television is listening to all the latest buzz.

We want to welcome our viewers in the United States and around the world.

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

It is an astounding number: nearly two million jobs gone so far this year. And the year is not even over with yet. Over half-a- million of those jobs vanished in November, the biggest loss in three decades. And even more layoffs are out there on the horizon.

Check out some of the worst corporate cuts announced recently, AT&T, for example, slashing 12,000 positions, DuPont slashing another 2, 500 jobs, the Avis Budget Group cutting 2,200 jobs, and Viacom axing 850 positions.

President-elect Barack Obama is warning it could get worse.

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

Candy, these new numbers are tough. They're difficult. What is the reaction from Obama?


CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): November brought the worst monthly job loss figures in more than 30 years. Barack Obama's transition office issued a written statement with the usual warning. The economy, Obama said, is likely to get worse before it gets better, but now is the time to respond with urgent resolve. But for Obama, now is in 46 days, when he can begin to implement his plan to create jobs. That includes pumping federal money into states for road and bridge and public school projects, offering a temporary $3,000 tax credit to companies that add jobs, and eliminating the capital gains tax for investments in small businesses.

On Capitol Hill, there is a growing fear that 46 days will be too late to solve the most urgent business at hand -- what to do about the big three. The president-elect says the auto industry cannot be allowed to go under, but Democrats want more.

SEN. CARL LEVIN (D), MICHIGAN: I hope that the president-elect would also take a more forthright and positive and public stand now that these hearings are over.

CROWLEY: This is as much about politics as policy. Obama's support for the plan could provide some cover for lawmakers who see the polls.

In the latest CNN/Opinion Research Corporation poll, six in 10 Americans oppose federal assistance for the auto industry. But Obama's politics are different. If he were to put his stamp of approval on a plan, it could fail, a loss of political capital before he ever takes office.

SEN. CHRISTOPHER DODD (D), CONNECTICUT: I don't think he necessarily wants to get drawn in -- and I wouldn't blame him -- to a situation he cannot really effectuate.

CROWLEY: Still, Capitol Hill sources say the Obama team, at many levels, have discussed the bailout, including talks between the president-elect and the congressional leadership.


CROWLEY: In fact, the Obama team has been keeping fairly close tabs on what is going on inside the Treasury with that $700 billion pocket, but at this point, there is nothing in the Obama camp that leads anyone to believe he is going to come out forcefully in favor of one plan or another -- Wolf.

BLITZER: And, Candy, what is this about a Barack Obama news conference on Sunday?

CROWLEY: Yes. We will be having a news conference on Sunday, which is the anniversary of Pearl Harbor. As you know, he is from Hawaii, so although obviously Pearl Harbor happened a lot earlier than he was born, but, nonetheless, he is going to use this news conference the pay tribute to those who have served in the armed services. And we will get a chance to ask him a couple questions.

BLITZER: And we will have live coverage. It's at 1:00 p.m. Eastern. Is that right, Candy?

CROWLEY: Yes. BLITZER: One p.m. Eastern, right after "LATE EDITION" on Sunday, the Barack Obama news conference -- 1:00 p.m. Central time -- excuse me -- so it is at 2:00 p.m. Eastern. Thanks, 2:00 p.m. Eastern on Sunday, Barack Obama's news conference in Chicago.

CNN, of course, will have live coverage of that.

The 533,000 jobs lost last month certainly does not tell the whole story. We will bring in our chief economic correspondent Ali Velshi.

Let's bring in our chief business correspondent, Ali Velshi.

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Wolf, the numbers for November are stunning. But let alone the unemployment number.

The numbers of jobs lost in the United States, let me show you. I will take you over to the wall and give you a sense of this. This is a look at the numbers of jobs lost in the United States since January on a scale of zero to 600,000. It looks kind of steady all the way through to August. And then look at that.

In September, when that first financial crisis first hit, it starts to fall off of a cliff and now in November 533,000 jobs lost. The expected number was 320,000.

Let me show you how this would look in a healthy economy. Economists tells us that in a healthy economy you should be growing or adding 100,000 to 150,000 jobs a month. So, look at that. That yellow line above 100,000 is where we should be -- 100,000 a month would be 1.2 million a year we should be up by. We are down by 1.9 million and we are not even done. We're not even at the end of the year yet. We are going to cross two million.

Now, this housing crisis that we had brought us into this recession, but let's talk about housing for a moment. Let's talk about some new foreclosure numbers. In November, it was reported that foreclosures are up 76 percent to 1.3 million.

Now, when you take foreclosures, foreclosures are after you have missed three payments on your house, and then the bank moves in to foreclose your property. Before that process, you are delinquent if you miss a payment. If you add foreclosures and delinquencies together, they add up to just under 10 percent of all mortgages in the United States.

It started as a subprime problem, people who were in over their heads, had bad credit ratings, had exotic mortgages, but now that has leveled off and because of the job losses what you are finding is people who were prime, who had good credit ratings, who weren't in over their heads are now defaulting on their mortgages or delinquent on their payments.

So, the housing crisis triggered a recession that we are in. That cost jobs and now those job losses are bleeding right back into the housing and mortgage system, creating a particularly dire situation.

BLITZER: Getting from bad to worse.

All right, thanks very much, Ali, for that.

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

JACK CAFFERTY, CNN ANCHOR: President-elect Barack Obama's inaugural election is going to be a huge celebration, bringing millions of people to Washington, D.C., to party.

In order to literally keep that party going all night long, the Washington City Council passed emergency legislation this week which will allow bars, nightclubs and restaurants to remain open around the clock from January 17 until January 21.

Rational people could disagree about whether this is a really great idea. Yesterday, the leader of the Washington, D.C., police union told "The Washington Post" he is concerned that police resources will be insufficient during inauguration weekend because of extended hours for clubs, bars and restaurants. He said the officers in the seven precincts that serve the District will be spread thin and the amount of manpower needed for these extended bar hours is unknown.

What is known or could be reasonably assumed is that between three and five million people descending on Washington, D.C., for the inauguration, coupled with the bars being open around the clock, that could cause problems.

Here is the question. Is this a good idea, to keep the bars in Washington, D.C., open 24 hours a day for four days during inauguration week?

Go to, post a comment on my blog.

My sense is, this is not a grand idea at all.

BLITZER: It's a good idea for the bars and the restaurants, though.

CAFFERTY: Well, yes.


BLITZER: They will making some money.

CAFFERTY: They will make a killing those four days. That's true.

BLITZER: Yes, good for the economy, at least that part of the economy. We will see the fallout.

Jack, you are in New York. I'm here in Washington. I have got to live with this. But maybe you will come down for the inauguration.

CAFFERTY: Can I stay at your house? BLITZER: Of course.

CAFFERTY: Then I will be there.


BLITZER: OK. Jack Cafferty will be at our house. Thank you.

There is a cliffhanger out there on Capitol Hill. Will lawmakers bail out automakers or will the Big Three car companies collapse and take down millions more jobs? Ford, Chrysler and GM's CEOs, they are back on Capitol Hill today, but the new job loss numbers are providing a twist.

And surprising evidence suggesting, guess what, you are going to be seeing and hearing a lot from Sarah Palin for a long time.

And it is meant to protect you, but will cost you billions in taxpayer dollars. Today's test of a planned missile defense system, shall we say, didn't go exactly as planned.

Stay with us. We will explain right here in THE SITUATION ROOM.


BLITZER: It is the $100 billion question: Can the Pentagon's costly missile defense shield really protect U.S. cities from attack?

Let's go straight to our senior Pentagon correspondent, Jamie McIntyre. He has been looking at this story for us.

There was a test today, Jamie. How did it go?

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Well, Wolf, if the Missile Defense Agency hoped to provide the new president with evidence that the missile defense shield is ready for prime time, this was not the test they were looking for.

While the Pentagon is hailing it as a success, when it comes to answering a key question, it missed the mark.


MCINTYRE (voice-over): The Pentagon crowed, the 13th test of its long-range missile shield was a smashing success, shooting down a mock airhead in space high over the Pacific Ocean. But the intercept failed in a key objective, to show the interceptor can tell the difference between the real target and a fake. The decoys that were supposed to deploy to test the system's seeker did not.

The Pentagon blamed the fact it was using a 40-year-old target system.

LT. GEN. PATRICK O'REILLY, MISSILE DEFENSE AGENCY DIRECTOR: This was the last test using this particular target configuration. And we have a new target. MCINTYRE: The Missile Defense Agency says the system is capable today of protecting the U.S. from a single missile launched from North Korea or Iran, but critics argue the claims are wildly exaggerated. And even missile defense supporters are skeptical.

REP. ELLEN TAUSCHER (D), CALIFORNIA: It needs more testing. And that is one of the things that we're going to stress in this new Congress, that the system needs to be tested and before we do anything else, including in Europe, we need to make sure that we have a system that -- that works and achieves credible deterrence.


MCINTYRE: Well, Wolf, what went wrong?

Well, let's take a look at this animation that we can see here. Here is the interceptor vehicle releasing what is known as the kill vehicle. The kill vehicle is just a little spacecraft really and it looks for the target.

And this test was supposed to include -- and if we stop this, here you can see not just the target vehicle, but also a decoy, something to distract the target. And when the kill vehicle was zooming in and looking at it, it is supposed to look for the heat signature of the warhead. And you can see here, here is the decoy and there is the target as the kill vehicle is looking for it.

What happened is that decoy didn't deploy, so they couldn't answer this key question if it could tell the difference. If it works right, the kill vehicle gets right in the way of the incoming warhead and destroys it. So, what they say they going to do, back to the drawing board. Get a new target with better defenses, better countermeasures that can be deployed and try it again -- Wolf.

BLITZER: All right, Jamie, thanks very much. A lot of money at stake in that defense missile shield.

Now, let's get to Capitol Hill right now. These certainly are heady days for Democrats in Washington, but the chairman of the House Ways and Means Committee, Charlie Rangel, he is taking some new hits. At issue, the political cash he paid to his son to create a Web site.

What if anything was wrong with that and what should the House Speaker, Nancy Pelosi, do about it?

Brian Todd has been looking into the details -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, you have seen Charlie Rangel in action. He's made a career out of fighting the power here in Washington, holding others accountable. Now he is facing a wave of political crises and new questions about his own ethics.


TODD (voice-over): He's one of the most powerful managers of your money in Washington. Now, Charles Rangel's own financial dealings are putting more pressure on his boss, House Speaker Nancy Pelosi, to replace him as chairman of the Ways and Means Committee.

Rangel's latest problem? He paid nearly $80,000 in campaign money to an Internet company run by his son for political Web sites. That's according to the watching group the Center for Responsive Politics, which looked over Rangel's campaign finance reports. The group says there doesn't appear to be anything illegal about the payments, but:

MASSIE RITSCH, COMMUNICATIONS DIRECTOR, CENTER FOR RESPONSIVE POLITICS: He spent tens of thousands of dollars more than the typical member of Congress appears to have spent for their own Web site. Moreover, he's not been in a competitive race recently. So, he could put up a pretty simple page with his picture on it and still get reelected.

TODD: This is the Web site Rangel paid all that money for: several spelling errors, a disclaimer saying, "Much of our content is currently unavailable."

Rangel wouldn't do an interview with us. His son, Steven, now a lawyer for another House committee, didn't return our calls and e- mail. Rangel's office issued a statement saying it's misleading to compare what congressmen pay for Web sites and that, in this case, they paid for what they call an aggressive Web presence.

But Rangel has other problems. "The New York Times" recently reported he fought to preserve a tax break for an oil company run by a big-money donor for a school named after Rangel. He denied playing a role in the tax break. But Rangel is also being investigated by the House Ethics Committee for using congressional stationary to seek donations for that school and for a host of other financial dealings. It's an investigation that he himself called for.

Pelosi pledged to drain the swamp of ethics violators when she took over. She now says she will wait until the Ethics Committee wraps up its probe, but doesn't foresee Rangel losing his committee chairmanship.

CHRIS SMITH, "NEW YORK": I don't see what it gains her to challenge or confront Rangel. It probably, at this stage, would cause her more trouble than it's worth.


TODD: That is not going to stop the Republican charge against Charlie Rangel.

House Minority Leader John Boehner has called for him to step down, but analysts say, considering the support he has elsewhere in Congress, it will take an indictment for that to happen, and there is no indication that any criminal investigation is under way -- Wolf.

BLITZER: There is sort of a war going on between Charlie Rangel and "The New York Times" over that last report that "The Times" had.

TODD: Right. BLITZER: Update our viewers on that part of the story.

TODD: Well, that really provoked an unusual public back and forth between Charlie Rangel and "The Times." Rangel at the time fired back a lengthy statement denying any wrongdoing in that. Nothing unusual about that, but then "The Times" took an extraordinary step of counterattacking, breaking down Rangel's arguments point by point.

It's been an ongoing battle now for a couple of weeks -- actually, months that "The Times" has been looking after Rangel's activities. So, it is a battle worth watching.

BLITZER: All right, thanks very much, Brian Todd.

Could there soon be another Kennedy filling a power position in Washington, D.C.? The rumors of Caroline Kennedy and where she might end up. Stand by.

And imagine hundreds of thousands of jobs here in the United States simply waiting to be filled. One organization says they are within reach. It just requires the government to do one thing. You're going to find out how. And O.J. Simpson back in court for his sentencing -- he makes an emotional, rambling appeal to the judge.


O.J. SIMPSON, DEFENDANT: My kids had pictures. My oldest son has his own family now. He wanted the picture in the Oval Office with Gerald Ford when he was 5 years old. Stolen.




BLITZER: Proposition 8, the California ballot measure banning gay marriage, passed last month, but those against it are still fighting, and they are fighting hard. Now some celebrities are showing their opposition in a Web video that has become an overnight hit.

Let's back over to our Internet reporter, Abbi Tatton.

Abbi, who is in this video?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, Jack Black, for a start, in a starring role as Jesus. Here he is explaining why the Bible should not be the basis for modern-day law.


JACK BLACK, ACTOR (singing): You can stone your wife or sell your daughter into slavery.

UNIDENTIFIED MALE (singing): Well, we ignore those verses.

BLACK (singing): Well, then, friend, it seems to me, you pick and choose.

UNIDENTIFIED MALES AND FEMALES (singing): We pick and choose.

BLACK (singing): Well, please choose love, instead of hate. Besides, your nation was built on separation of church and state.


TATTON: This is "Proposition 8: The Musical" on the Web site Funny or Die, a star-studded cast who tell you in the end that gay marriage can even save the economy..

It's had in two days two million views. The composer of this musical, Marc Shaiman, writing online that he should have thought of this six weeks ago -- Wolf.

BLITZER: All right, thanks very much. Very funny stuff out there.

New fuel for supporters of a Big Three bailout -- the dismal new jobs market is adding to the fireworks as automakers appeal to Congress again.

Plus, over a million jobs that could be created in a matter of months, we are going to tell you what those jobs are, where they are, who is standing in the way.

And Caroline Kennedy as a U.S. senator? It may be a very real possibility for the former first daughter who has been often been pressed about a future in politics.

Stay with us.


ANDERSON COOPER, HOST, "ANDERSON COOPER 360": Do you see a role for yourself moving forward in this campaign?

CAROLINE KENNEDY, DAUGHTER OF PRESIDENT JOHN F. KENNEDY: I just want to be with the best political team on television as much as I possibly can.


COOPER: That is so the right answer.



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

Happening now: Nearly two million new jobs could be created right here in the United States very quickly. One group describes how that could happen. We have that story coming up.

Big Three CEOs getting a grilling once again on Capitol Hill, but there has been a new development in the past few minutes involving congressional lawmakers and the White House. Stand by.

And guess who's the Republican favorite for 2012? It might not necessarily be the person you think. We have the latest poll numbers -- all of this, plus the best political team on television.

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

We're going to go right to Dana Bash. She is working a story for us.

All right, Dana, what do we know? There is a new development in the potential bailout of the Big Three U.S. automakers.


And this is what we know, and that is that the House speaker, Nancy Pelosi, who has been adamantly opposed to helping Detroit by tapping a $25 billion fund that is intended for fuel efficiency research, she has been adamantly opposed to that, but now we understand that she is reversing that, and she is softening that opposition.

According to two officials, she made clear to the White House today that she is now opening to use -- open to using part of those funds in order to help Detroit. And this is really significant, because that has been part of the deep divide here on Capitol Hill about just how to help Detroit, and the divide has been where the money should come from.

And Nancy Pelosi, again, has been adamant it should not come from that fund. And why is she changing her stance right now, Wolf? Well, the answer is according, to one official, because of the fact that these job numbers were so bad today that it is time to help Detroit. And that was a abundantly clear in the hearing today.


BASH (voice-over): Auto executives returned minutes after news broke of the worst unemployment report in three decades. And the committee chairman called it evidence why Washington cannot let Detroit fail.

REP. BARNEY FRANK (D), FINANCIAL SERVICES COMMITTEE: In the midst of the worst economic situation since the Great Depression, it would be an unmitigated disaster.

BASH: Skepticism still dominated about whether 34 billion taxpayer dollars can put struggling auto companies on the road to profitability.

UNIDENTIFIED MALE: We need to encourage Americans to start buying cars again and that is not in the plans. BASH: And concern that an estimated three million more jobs could be lost if the big three collapse yielded signs lawmakers may finally be ready to seriously look for compromise.

REP. DONALD MANZULLO (R), ILLINOIS: But the fact is I think the time for posturing is gone, the time for partisanship is gone and we have to address this very, very seriously.

BASH: One idea gaining traction among Democrats -- condition any loan on the government restructuring the auto companies, by either an oversight board or individual appointed by the president.

But leading Republicans say they'd only go for that if auto unions gave concessions on wages and benefits. And the United Auto Workers opened up the door to that.

RON GETTELFINGER, UAW PRESIDENT: Yes, sir, we are willing to go back to the bargaining table, providing everybody else comes to the table, as well.

BASH: But it could be near impossible for deeply divided lawmakers to quickly agree on major restructuring in Detroit. So one veteran Democrat suggested a short-term bridge loan to G.M. and Chrysler to avoid collapse, but along with his idea, a lecture.

REP. PAUL KANJORSKI (D), PENNSYLVANIA: It almost looks to me like you hope that with that target coming down on us, you're going to get us to do something and just throw the money out there and say go ahead, do with it as you will.


BASH: Now, Congressional leaders and, we assume, the White House, are going to be working all weekend to try the find some kind of legislative package to help Detroit. In fact, the Senate majority leader, Harry Reid, he has instructed the top officials in the Senate to spend all weekend doing that.

The hope is for the Democrats in the Senate to meet on various options on Monday and perhaps come up with a package that they could bring to the Senate floor by mid-week.

Earlier, we thought that was -- was truly an optimistic goal, but given the development that perhaps Nancy Pelosi is willing to give on something she was adamantly opposed to, in terms of how to fund this bailout for Detroit, that could be a sign that maybe they are a little bit closer to compromise than we earlier thought. There's still probably a long way to go, though -- Wolf.

BLITZER: We'll see what happens, because the clock is ticking dramatically.

Thanks, Dana.

Nearly two million jobs lost this year.

Could nearly two million jobs be created quickly?

One group thinks so and describes a not so secret way to do it.

Abbie Boudreau of CNN's Special Investigations Unit has been looking into this story -- Abbie, what's this all about?

ABBIE BOUDREAU, INVESTIGATIVE CORRESPONDENT: Well, Wolf, imagine if 1.8 million new jobs could be created?

That's what the American Association of State Highway and Transportation Officials says could happen if states get the money to pay for critical road and bridge projects.

We were given exclusive access to the Association's new report that puts the cost of all these projects at a staggering $64 billion.


BOUDREAU (voice-over): The report lists more than 5,100 projects around the country that the Association says could be started within six months -- if they only had the money.

JOHN HORSLEY, ASSOCIATION OF HIGHWAY & TRANSPORTATION OFFICIALS: You've got states in every part of the country that have needs and have practical projects ready to go that can put a lot of people to work.

BOUDREAU: John Horsley, the group's executive director, says the new construction and repair work will generate just the kind of economic stimulus the Obama administration is looking for -- creating a possible 1.8 million new jobs.

Just this past week, President-Elect Barack Obama told the nation's governors he's looking forward to listening.

BARACK OBAMA (D), PRESIDENT-ELECT: Where you think an investment on the part of the federal government will make the biggest difference, how we can reduce health care costs, rebuild our roads, our bridges, our schools and ensure that more families can stay in their homes.

BOUDREAU: The report says Utah needs $10.8 billion for crumbling roads and bridges; Florida, $6.9 billion; California, $5 billion. Pennsylvania needs $1 billion, partly for fixes to Interstate 95 in Philadelphia -- fixes that could begin shortly after a check is written.

I went along with bridge inspector James White (ph), as he examined an elevated section of I-95 built in the 1960s.

(on camera): But this stretch of road has already had its problems. I know it's been shut down due to structural problems just once before, not too long ago.

JAMES WHITE: That's correct. The 95 was closed down just a little further north of our location right now. BOUDREAU: Right. And that was in March, when an inspector actually found a large crack in one of the support beams. And it was two inches wide and six feet long. And it caused an emergency closure of part of this road.

(voice-over): This was that giant crack. And this is what the closure looked like.


BOUDREAU: Charles Davies, with the Pennsylvania Department of Transportation, says there is state money for basic maintenance, but he worries without federal funding, needed overhauls won't get done. I asked him if he fears something bad could happen.

DAVIS: You sort of become fatalistic. You know, I sort -- I sort of think, well, my luck's going to run out at some point. It just is.

BOUDREAU: But Pete Sepp of the National Taxpayers Union cautions that it's a bad idea for Congress to pick up the tab for something the states are supposed to pay for.

PETE SEPP, VICE PRESIDENT FOR COMMUNICATIONS, NATIONAL TAXPAYERS UNION: Many parts of our infrastructure need to be repaired, need to be fixed. But they need to be done in a thoughtful manner. Throwing money out of Washington, D.C. and showering it across the country on state and local projects is not the way to do it.


BOUDREAU: Sepp says a better way to fund infrastructure is to send more federal fuel tax money back to the states. The Highway Association maintains a federal investment in -- will pay off with better roads and, of course, all those new jobs.

BLITZER: Infrastructure is critically important to the future of this country and a lot of jobs could be created in the process.

Thanks very much for that.

Abbie Boudreau.

She certainly has many, many fans in the party base, but there's one possible presidential contender for 2012 even more popular among Republicans right now than Sarah Palin.

Plus, O.J. Simpson pleading -- pleading desperately for leniency as he's about to be sentenced.


O.J. SIMPSON: I mean I just wanted my personal things. And I realize now I was stupid.

I am sorry. (END VIDEO CLIP)


BLITZER: Caroline Kennedy's name is among those being floated as a possible replacement for Hillary Clinton when she leaves the U.S. Senate to become the next secretary of State.

Let's discuss that and more with our CNN senior political analyst, Gloria Borger; and our CNN political contributors, Dana Milbank of "The Washington Post" and Steve Hayes of "The Weekly Standard." They're all part of the best political team on television.

I've heard that, you know, she's a pretty serious candidate for David Paterson, the governor of New York, to nominate to -- to name to replace Hillary Clinton.

GLORIA BORGER, SENIOR POLITICAL ANALYST: You know, if she were to become the senator from New York, there's a little poetry in that. Of course, it would be Robert Kennedy's seat. She would be working in the Senate with her uncle. The down side...

BLITZER: Her uncle, Ted Kennedy.

BORGER: Her uncle, Ted Kennedy.

The down side, of course, is that she'd have to run in 2010 in a special election and then again in 2012, when Hillary Clinton's term is up. And she also has one child in high school.

So I think those are the considerations going into it.

I'm sure if she were not interested, we would have all heard today from the Kennedy folks saying ridiculous, ridiculous, ridiculous. But we heard no such thing.

BLITZER: Yes. No, I hear she -- there is a move afoot to try to convince Governor Paterson to bring her in.

DANA MILBANK, CNN CONTRIBUTOR "WASHINGTON POST": It certainly is a strong possibility. And it strikes me that the whole discussion is odd -- nothing against Caroline Kennedy, of course.

But doesn't it sound like it's like a replacement for the House of Lords, like a Clinton goes, you replace it with a Clinton or a Cuomo or a Kennedy?


MILBANK: And it definitely seems like we have these inherited positions. Isn't it...

BORGER: And then Jeb Bush could be in the Senate.

MILBANK: Right. And then her -- and her uncle is already there. There's many members of the Senate that have a family member who was there first.

BLITZER: But Caroline Kennedy -- I mean she's an intelligent woman.


BLITZER: And she did play an important role in the vetting process for the vice presidential nominee...

MILBANK: Absolutely. There are certain...

BLITZER: ...and she, in her own right, she's got some...

MILBANK: She would...

BLITZER: ...absolutely be terrific. But there are tens of millions of other potential people with -- who are not named Kennedy.

STEPHEN HAYES, SENIOR WRITER AT "THE WEEKLY STANDARD": Well, I think she would be -- she would be an important voice for New York with the Obama White House, given her experience working on the vice presidential selection committee, helping with the transition and giving general sort of informal advice.

I think the person likely to be the most upset if she were to be named would be poor Chuck Schumer.


HAYES: I mean this is a guy who's the senior senator, who loves the spotlight. And first he's overshadowed by Hillary Clinton and then maybe a Kennedy?

BORGER: Well, right. But she would come in like Hillary Clinton, in many ways, because Hillary Clinton did not have seniority, but she had a certain stature when she came into the Senate by virtue of who she was. And I think Caroline Kennedy would have the same kind of celebrity, if you will.


MILBANK: And Schumer would have to give even more press conferences to counter that kind of thing.


HAYES: Oh my god.


BLITZER: Let's talk about -- (LAUGHTER)

BLITZER: Let's talk about Sarah Palin right now and Republicans.

We did a CNN/Opinion Research Corporation poll. And we asked Republicans only -- only Republicans -- if they were very likely to support these respective candidates -- these respective politicians as a presidential candidate in 2012.

Huckabee got 34 percent; Palin, 32 percent; Romney, 28 percent; Gingrich, 27 percent. Look at Rudy Giuliani with 23 percent; Bobby Jindal, 19 percent; the Florida governor, Charlie Crist, at 7 percent.

What do you think about that?

I mean Sarah Palin is right there at the top.

BORGER: Yes, I think this, at this point, it's just people's names that they know.

BLITZER: It's only three years until the Iowa caucuses.

BORGER: Oh my god. No.


BORGER: It's just -- it's all name recognition, Wolf. I don't think this tells us much of anything.

MILBANK: Well, let's remember that a poll done at a similar time about the Democrats the last cycle around had Hillary Clinton with 40 percent, John Kerry with 20 percent and they hadn't even heard of this guy named Obama.


BLITZER: Well, we had heard of him, but...

MILBANK: Not -- the pollsters weren't even asking his name (INAUDIBLE).

BLITZER: Yes, right. He had given the keynote address at the Democratic Convention.

MILBANK: Exactly.

BLITZER: But go ahead.

HAYES: Well, we shouldn't -- we shouldn't draw -- Gloria is right. We shouldn't draw too many conclusions from this. The one thing that I thought was interesting, though, was 19 percent for Bobby Jindal, given the fact that the others -- Mike Huckabee ran; Sarah Palin was the vice presidential nominee; Mitt Romney, very well-known. Bobby Jindal is not. I mean he's the governor of Louisiana, whose name has been bandied about lately. But the fact that he's even sort of in the discussion, I think is interesting.


BLITZER: And he's young. He's still in his 30s.


BLITZER: So he's got a huge future ahead of him. And he's pretty popular down in Louisiana, as well.


BLITZER: Barney Frank, he says Barack Obama, the president-elect, needs to do more right now.

Listen to Congressman Frank.


FRANK: It's probably the case that he's going to have to be more assertive than he's been. I know what he says is well, we only have one president at a time. My problem is at time of great crisis with mortgage foreclosures and autos, he says we only have one president at a time. I am afraid that overstates the number of presidents we have.



BLITZER: Leave it to Barney Frank.


BLITZER: But should Barack Obama be more publicly assertive out there?


BLITZER: I'm sure behind-the-scenes he's weighing in.

BORGER: He is weighing in. He's weighing in. His incoming Treasury secretary is working with Hank Paulson. They're talking to folks on the Hill.

I think what Barney Frank may be upset about is that, you know, obviously, you're going to have unions giving a lot of concessions. And they're going to have -- they're talking to the Democrats on the Hill, whereas they're not dealing with Barack Obama on this, which is a pretty decent position for Obama to be in at this point.

I think Democrats have to make a lot of tough decisions.


BORGER: They'd like to have some cover right now.

MILBANK: Right. It's also not entirely clear what Obama could do.

Is -- should he have General Jones invade the White House and say OK, right, I'm in charge here now?

He can't do that sort of thing. In fact, he -- I guess his answer to Barney Frank today was announcing that they're going to go to Hawaii for the holidays.


BLITZER: For -- well, that's where he's from. He was born in Hawaii -- at least most people believe he was born in Hawaii.

MILBANK: There's nothing wrong with that. In fact, I (INAUDIBLE)...

BLITZER: There are a few elements out there who aren't so sure about that.

What do you think?


BLITZER: Should he be doing more or should he be more assertive out there?


HAYES: I mean, look, probably for the country, you know, he could step up and say more and provide some leadership. But for his own political future, he needs to have a series of wins, starting right when he gets into office. And coming out in favor of something that's not popular, where he can't affect much, at this point, seems to me like a stupid political move.

BORGER: Can we just give the guy some credit?

He's appointed more cabinet members faster than any president in my memory.


BORGER: He's started on a bailout plan. It isn't even January 20.

BLITZER: Guys, stand by, because we're going to continue the conversation. Not today -- you're going to have a great weekend -- but next week.

Thanks, guys.

Proximity to power -- will it translate into an Obama bump in home values for his Chicago neighbors?

And we're on the ground in the presidential election's Hyde Park neighborhood.

Also, O.J. Simpson's emotional plea to the judge about to sentence -- who is about to sentence him for kidnapping and armed robbery.

And is it a good idea to keep the bars in Washington, D.C. open 24 hours a day during Inauguration Week?

That's Jack's question. He has your e-mail.

Much more coming up right here in THE SITUATION ROOM.


BLITZER: Now, there's breaking news coming into THE SITUATION ROOM about a case that sparked anti-American sentiment in Iraq and throughout the Middle East -- the case against U.S. military contractors working for Blackwater. And we're just learning details of new indictments.

Let's go back to our justice correspondent, Kelli Arena.

What are you learning -- Kelli?

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Well, Wolf, sources tell us that five Blackwater guards have been indicted and a sixth is in plea negotiations. As you remember, the guards were involved in a shooting in September of 2007 in Baghdad that killed 17 Iraqis.

Now, Blackwater has maintained its guards were under fire. But there's been no proof to back it up. It was unclear whether the guards could be charged under U.S. law. But apparently, prosecutors found a way. And we don't know the exact charges, Wolf. But we know that the prosecutors are considering murder and assault.

Defense attorneys haven't returned our phone calls yet. We're still trying. We are told the charges could be made public as early as Monday.

But currently, they're under seal. So we can't have at them yet.

BLITZER: We'll watch the story as it unfolds.

Kelli, thank you.

The one-time football great, O.J. Simpson, will be spending at least -- at least the next nine years in prison for his Las Vegas conviction on armed robbery and other charges. Before his sentence was handed down, Simpson made a rambling and emotional statement, appealing for leniency and apologizing for the Las Vegas hotel room holdup that got him arrested last year.


SIMPSON: In no way did I mean to hurt anybody, to steal anything from anyone. I spoke to Bruce before I left the room. He told me what was his. And I called him when I got to the car. And I said exactly what do you have, I want to send it back to you.

I talked to the police officers. I volunteered immediately to come back and show him what was taken and to tell him what took place -- before anybody talked to the police. I was the first guy that volunteered to do it. And I heard on the tapes that they thought I was stupid for doing it.

Look, I didn't want to steal anything from anybody. I don't think anybody there said I wanted anybody else's stuff -- just my own. I wanted my -- my daughter Miss. Brown gave her her mother's wedding ring -- stolen. You know, my kids have pictures -- my oldest son has his own family now. He wanted the picture in the Oval Office with Gerald Ford when he was five years old. Stolen.

All of these things are gone. My family knew what we were doing. And I didn't want to hurt Bruce. I didn't want to hurt any of these guys. I know these guys. These guys have eaten in my home. I've done book reports with their kids. I've sung to their mothers when they were sick.

You know, I wasn't there to hurt anybody. I just wanted my personal things. And I realize now it was stupid of me. I am sorry. I didn't mean to steal anything from anybody. And I didn't know I was doing anything illegal.


BLITZER: Moments later, the judge in the case pronounced sentence, but not before she let Simpson know that she was unconvinced.

Now, under the sentence, by the way, of at least 15 years in prison, the 61-year-old Simpson will not become eligible for parole for nine years. If he gets parole in nine years, he'd be 70.

Let's go to Jack Cafferty.

He's got The Cafferty File -- Jack.

CAFFERTY: He's about to meet a whole bunch of new friends, isn't he?


CAFFERTY: What a jerk.

The question this hour -- is it a good idea to keep the bars in Washington, D.C. open 24 hours a day for four days during inauguration week?

Here's a hint -- probably not. David in Wisconsin: "It might keep the alcohol sector from needing a bailout. And 96 hours of binge drinking for large crowds, well, that always ends well."

Frank in Canada: "Speaking from experience, when I was a habitual drunk, I can tell you for certain that closing a bar won't keep anyone from getting drunk if they're so inclined. People who think closing bars will keep people from drinking alcohol are the same ones who think teaching kids abstinence will keep them from having sex."

Ken writes: "Ah, jeez, please, let us party. It's been a very long election."

Lucy in Massachusetts: "Close the bars on time. Even in New Orleans on Mardi Gras night, when the clock strikes 12, the party is over. Bars which usually stay open in New Orleans until 4:00 close and everybody gets off the streets." Dan in Washington: "I thank all the people who don't live in D.C. for their concern. But letting people go home at their own pace rather than everybody at 2:00 a.m. will ease congestion, limit drunken conflicts and help the crush on D.C. 's arcane taxi infrastructure."

Jason in Pennsylvania: "With the last eight years and the current state of the country, I think it's a shame it isn't countrywide."

And Buster in Poughkeepsie: "Road trip -- damn, Jack, my New Year's resolution was going to be to knock off these 96-hour drinking binges. Oh, well, maybe next year. Hey, if you and Wolf aren't busy, I'll see you at the Capitol Lounge Bar. I'm buying."

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

My guess is this is a decision the city fathers in Washington, D.C. will live to regret -- Wolf.

BLITZER: But did Buster of Poughkeepsie, New York say he's buying, Jack?

CAFFERTY: He did say he was buying.

BLITZER: All right.

CAFFERTY: And he'd meet us at the Capitol Lounge Bar.

BLITZER: All right.


BLITZER: Wherever that is. There's a lot of them, I've got to tell you.

CAFFERTY: Perfect.

I'm sure.

BLITZER: Thank you, Jack.

CAFFERTY: See you later.

BLITZER: Have a great weekend.

CAFFERTY: You, too.

BLITZER: It's a real estate mantra -- location, location, location.

And what better location for people looking to buy or sell homes than Barack Obama's Chicago neighborhood?

Stand by.


BLITZER: The mortgage crisis has been devastating to one community after another across the United States. But "for sale" signs may get eager buyers into one area of the country. It just happens to be Barack Obama's Chicago neighborhood.

And our Susan Roesgen is taking a drive-through.

Let's go there -- Susan.


We're here in Obama's neighborhood. It's a very nice neighborhood. And we're seeing a few "for sale" signs. And some sellers are hoping that because Obama's house is here, they might get what they're calling the Obama bump.


OBAMA: Now, we're keeping our house. We are -- we're staying in there for a while.

ROESGEN (voice-over): When the president-elect said he'll hang on to his Chicago house even after he moves to D.C. , his neighbors were glad to hear it.

DIANE ALTKORN, NEIGHBOR: Well, we're certainly hoping there's going to be an Obama bump. There have been a number of houses around here that have been on the market for a long time. And I'm sure those owners are hoping the added cachet of being three blocks from the president will help their selling efforts.

ROESGEN: Even though home values are sagging, just as they are in neighborhoods nationwide, most of the houses here are pretty pricey to begin with. Many were built in the gilded age of the late 19th century -- big houses that sell for big bucks.


ROESGEN (on camera): $2 million?

UNIDENTIFIED MALE: No, $3 million.

ROESGEN: $3 million?


JEANNE SPURLOCK, OWNS CENTURY 21 BRANCH: I think one thing that is especially beautiful is...

ROESGEN (voice-over): Realtor Jeanne Spurlock, who owns the local Century 21 office, has been selling homes in Obama's Hyde Park neighborhood for 28 years.

SPURLOCK: What I think has happened is that the world now knows about Hyde Park. And I think it validates what all of Hyde Parkers have known for many, many years.

ROESGEN (on camera): Which is?

SPURLOCK: That it's a fabulous community to live in.

ROESGEN (voice-over): In fact, some people think the Obama bump will make this neighborhood a fabulous investment -- for at least the next four years.


ROESGEN: Now whether or not having Obama's house in this neighborhood will really boost house prices or house sales, we don't know. But most people are just glad that Obama's home is Chicago -- even if his next address will be 1600 Pennsylvania Avenue -- Wolf.

BLITZER: Susie Roesgen, thank you, in Chicago.

Among my guests this Sunday on "LATE EDITION" is Secretary of State Condoleezza Rice. We'll talk about the attacks in Mumbai, President Bush winding down his term in office and a lot more. She's just back from India and Pakistan. "LATE EDITION" airs 11:00 a.m. Eastern this Sunday.

Until then, thanks very much for watching.

I'm Wolf Blitzer in THE SITUATION ROOM.


Lisa Sylvester sitting in for Lou -- Lisa.