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Auto Bailout Deal Moving Forward?; Fixing Roads, Making Jobs

Aired December 8, 2008 - 18:00   ET


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

The Big Three bailout moving closer to getting a green light right now, and auto workers rallying at the U.S. Capitol. They're trying to make sure their interests are protected. The White House right now reviewing a Democratic plan to quickly provide up to $15 billion in loans, but with some serious strings attached.

Let's go to our congressional correspondent, Dana Bash. She's watching the story for us.

Where does it stand, Dana, right now?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, as we speak, Wolf, White House officials are actually here on Capitol Hill. They're hunkered down with congressional Democratic staffers. And they're going over the fine print of this 31-page draft proposal that they sent over to the White House today.

And what they're trying to figure out is how to give short-term help to Detroit with conditions.


BASH (voice-over): Under the Democrats' draft proposal, auto companies would get $15 billion in bridge loans as soon as next week, Monday, December 15th. It's just a fraction of the $34 billion auto companies asked Congress for, but enough, lawmakers hope, to keep the big three afloat as they answer Washington's calls for a major overhaul.

SEN. HARRY REID (D-NV), MAJORITY LEADER: It will provide funds to see the auto companies through to the end of the first quarter of next year. But this is no blank check or blind hope.

BASH: To ensure restructuring in Detroit, the president would appoint a so-called car czar who, by January 1st, would set up guidelines for struggling auto companies to reorganize, prove they can be profitable. If by February 15th that government-appointed czar does not see enough progress from the auto companies, he could recall their government loans.

That point, forcing Detroit to overhaul its business plans in exchange for any taxpayers dollars, has been a central Washington demand. But administration sources say they're concerned the Democrats' proposal does not go far enough in passing President Bush's main test, that only viable companies would get government financing. Congressional Republican leaders agree.

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: Troubled automakers cannot expect taxpayers' help without a serious commitment to change their ways permanently.

BASH: Democrats insist their plan is tough on Detroit, giving auto companies a March 31 deadline to produce plans showing long-term viability. House Speaker Nancy Pelosi said that will require concessions from labor, management, and banks, all aspects of the auto industry.

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: We call this the barbershop. Everybody is getting a haircut here in terms of the -- in terms of the conditions of the bill.


BASH: Now, earlier today, both at the White House, here on Capitol Hill, there was some hope that they could get an agreement by the end of the day. It is unclear if that is going to happen. But they certainly are trying.

There are some things that are still giving them problems, but between the two sides, for example, Wolf, the Democratic bill prevents automakers from using taxpayer-backed money to prevent or at least to try stop states from putting limit on greenhouse gas emissions for cars. That's something that Republicans in the White House oppose, just one example of some of the things that they're working on behind closed doors as we speak here -- Wolf.

BLITZER: Dana, thank you. Dana is going to continue to work the story for us.

But let's get to the Barack Obama transition right now, the president-elect juggling economic policy, Cabinet nominations, and serious talks with many of the political movers and shakers.

Let's go to Chicago. CNN's Jessica Yellin is watching all of this unfold.

Are we hearing something new today from the president-elect and his team, Jessica, about the economy and the key issue of jobs?


Barack Obama is unveiling the largest jobs program in 50 years. His aides tell us it will be part of a larger stimulus package that right now they think will cost under $1 trillion. That's $1 trillion. And they say that they expect Barack Obama to sign this stimulus package into law almost immediately after he takes office.

(BEGIN VIDEOTAPE) YELLIN (voice-over): When it comes to the recession, Barack Obama is preparing Americans for a long winter, telling Tom Brokaw on Meet the Press ...

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: As tough as times are right now -- and things are going to get worse before they get better.

YELLIN: But he vows to turn the economy around, offering hope to hard-hit Americans.

OBAMA: We're looking at pink slips, jobs being shipped overseas that devastate entire towns. And that's why my number one priority coming in is making sure that we've got an economic recovery plan that is equal to the task.

YELLIN: Obama is proposing a program that would save or create 2. 5 million jobs, putting people to work making public buildings green, improving the nation's highways and modernizing public schools. The top Democrat on the Senate Public Works Committee has already started identifying projects.

SEN. BARBARA BOXER (D), CALIFORNIA: What we're doing is just getting our work ready so that if we have to move quickly to help him, we will.

YELLIN: In a letter to Obama released today, she says 585,000 bridges need improvement. Up to $286 billion a year is needed through 2020 just to repair the transportation infrastructure. And every $1 billion of highway construction spending supports 35,000 jobs.

Separately today, Democratic mayors were on Capitol Hill urging Congress to start that investment.

MANNY DIAZ (D), MAYOR OF MIAMI: We are here to help build out America and put Americans back to work.

RICHARD DALEY (D), MAYOR OF CHICAGO: No handout, no bailouts. We're not here begging. This will be good for America.


YELLIN: Now, Wolf, there is opposition to this stimulus plan by fiscal conservatives. Some argue that a tax cut would do more to stimulate the economy. But that opposition does not seem to be forceful enough or large enough to block an Obama stimulus plan in the new year -- Wolf.

BLITZER: And, Jessica, we learned today that Al Gore, the former vice president, the Nobel Peace Prize winner, would be meeting with Barack Obama tomorrow. What's this all about?

YELLIN: That's right.

Wolf, first of all, we're told Al Gore is very happy with his day job, so don't look for any announcement. Al Gore is not expected to join the administration. But, as I just reported, one of the components of the stimulus package Obama plains to unveil includes green jobs and transferring, updating buildings to be energy-efficient. These are pieces of what Al Gore has promoted as part of his energy reform package for some years now. And so Barack Obama and Al Gore will be talking about climate change and other policies that Obama can promote when he takes office. It's a meeting of the minds -- Wolf.

BLITZER: We will watch that meeting of the minds tomorrow, together with you, Jessica. Thank you.

The governor of Illinois, by the way, is siding with some of those laid-off workers who are refusing to go quietly. They're demanding what they say they were owed and now their battle is going to a whole new level.

Let's go to Chicago. Susan Roesgen is watching all of this going on.

And it's pretty dramatic and important. It says a lot about the overall U.S. economy, Susan, right now.


And if these folks are successful, it might mean a change in tactics all over the country for workers who are laid off. Federal law requires that a major company, a big company like this window factory notify the workers at least 60 days before any kind of layoff.

Here now, just three weeks before Christmas, 300 workers laid off. They didn't get notice. They have not yet had any severance pay. But they are getting support, Wolf, support from political leaders who just don't want to see another company close.


GOV. ROD BLAGOJEVICH (D), ILLINOIS: We, the state of Illinois, will suspend doing any business with the Bank of America. And we hope that this kind of leverage and pressure will encourage the Bank of America to do the right thing for this business.

ROESGEN (voice-over): Illinois governor Rod Blagojevich has declared war on Bank of America, blaming it for putting 300 workers out of a job. No state agency is allowed to do business with Bank of America, potentially costing one of the nation's biggest lenders millions of dollars. And it puts the state on the side of the little guy.

APOLINAR CABRERA, UNION WORKER: I lose everything right now. I got a house to pay, like everybody here, like you, maybe like you, too. So, it's tough. It's really tough.

ROESGEN: Last week, Republic Windows and Doors gave its workers just three days' notice that it would be closing. Since then, some 200 union workers have taken turns camping out inside the factory, refusing to leave until they get assurances that the company will pay them what federal law requires, 60 days' pay.

CROWD: Yes, we can! Yes, we can!

ROESGEN: Company managers have been laying low, no public comments since the factory closed, leaving the workers to wonder if the factory will ever reopen, and leaving the company's lender, Bank of America, to take the blame.

But Bank of America says it's the company's responsibility to pay its workers. "Neither Bank of America, nor any other third-party lender to the company has the right to control whether the company honors commitments to its employees. Compliance with laws is the obligation of company management."

Still, union workers say they smell a rat, and so do the Illinois state attorney general and the U.S. Justice Department. Both may be investigating. In the meantime, the workers say they are staying put.


ROESGEN: And a lot of the people you see here behind me actually belong to other unions, Wolf. They have come here in support of the electric workers union here.

And, again, there is a meeting going on right now between union leadership and Bank of America and some political leaders. We don't know yet what the outcome may be, but we have been told they will come here after that meeting and talk to the employees here and tell them what's been decided -- Wolf.

BLITZER: We will watch it with you. Lots at stake there in Chicago. Thanks very, Susie, for that.

Jack Cafferty is off today. He will be back tomorrow.

Imagine you're sitting at home and out of nowhere, a military jet crashes through. That's what happened in one neighborhood today. We are going to take you to the scene.

She's instantly recognized and has a world-famous name, but is Caroline Kennedy qualified to be a New York senator?

And he's Barack Obama's pick for Veterans Affairs, but he was previously caught up in controversy. We will tell you what we know about Eric Shinseki. Stand by. Jamie McIntyre is over at the Pentagon.


BLITZER: A powerful new vote of support for Caroline Kennedy becoming a United States senator.

The New York mayor, Michael Bloomberg, said today Kennedy is a very experienced woman and can -- quote -- "do anything." The former first daughter reportedly is open to replacing Hillary Clinton in the U.S. Senate if and when Senator Clinton is confirmed as the secretary of state.

Let's bring in Brian Todd. He's looking at this story for us.

Brian, a little bit of different Caroline Kennedy, a different side of her we're seeing now.

BRIAN TODD, CNN CORRESPONDENT: It certainly appears that way, Wolf. She's never held public office or expressed much public interest in doing so. But she has already said that Barack Obama's campaign has inspired her, much like her father inspired others. And now there's talk of another senator candidate.


TODD (voice-over): Over the past year, she's become more publicly involved in politics than ever.

CAROLINE KENNEDY, DAUGHTER OF JOHN F. KENNEDY: I have never had someone inspire me the way people tell me my father inspired them. But I do now -- Barack Obama. TODD: Now Caroline Kennedy may be ready to dive much deeper into the arena. She recently called New York Governor David Paterson and asked about the Senate seat that would be vacated if Hillary Clinton's confirmed as secretary of state.

GOV. DAVID PATERSON (D), NEW YORK: She just called me and asked me a few questions. And I'm sure if she's interested, she'll call back.

TODD: Whether she'll make that call depends on who you talk to. We couldn't reach Caroline Kennedy. A source close to the family and other Democrats say it's more than a passing thought.

DONNA BRAZILE, DEMOCRATIC STRATEGIST: I hear that she's interested. She's testing the waters, she's talking to people who know a little bit about that race because, of course, if Governor Paterson decides to choose her, she would have to run in 2010 and for a full term in 2012.

TODD: One Kennedy associate tells us she's not close to a final decision. If she wants the appointment and gets it, Caroline Kennedy would be an instant star in a seat that's had several, from her own Uncle Robert to the woman whose opponent she so famously endorsed this year. She could clearly raise the estimated $30 million needed to win the seat outright in two years, but there are questions over whether the woman widely described as shy and self-deprecating has the resume or personality for the post.

FREDRIC DICKER, STATE EDITOR, THE NEW YORK POST : The general sense in New York now is that this state is in desperate straits, the massive deficits, the loss of upstate population, facing calamitous tax increases, and that we need fighters in Washington.


TODD: So, while the debate continues on whether Caroline Kennedy has the personality for that fight, it's worth looking back at the folks in her family who have had that and who she would be compared to.

Her father, John Kennedy, spent nearly 14 years in Congress before his election as president. Her uncle Robert elected to the same seat she might be holding, that was back in 1964. Her uncle Ted, who she is said to be very close to, serving in the Senate now since 1963. And then there is her generation. Caroline's cousin Joe Kennedy served in Congress from 1987 to 1999. Another cousin, Patrick, still a congressman from Rhode Island, he has been there since 1995.

Wolf, a lot to live up to in the family. going to We will see what her decision is probably pretty soon.

BLITZER: I think they have to make a decision fairly soon. All right, thanks very much for that, a lot of pressure on the governor of New York, David Paterson.

So, what's it really like to be the nation's top diplomat? That's what Hillary Clinton may be asking Condoleezza Rice. They likely incoming secretary of state met with the outgoing one today over at the State Department, that according to a source. The source also telling CNN Clinton will have dinner at Rice's home later tonight.

Meanwhile, I spoke with the secretary of state yesterday. And she summed up her likely successor.


BLITZER: Do you think she'll be a good secretary of state?


BLITZER: You have confidence in this new national security team that Barack Obama is putting together?

RICE: They're all people I know and they are all people of substance. And the most important thing is that they are all people who are going to have the fundamental interests and values of the United States at the core of what they do.

BLITZER: I know you were watching when we reported that Barack Obama would become the 44th president of the United States. What went through your mind as you saw that dramatic historic moment in the United States?

RICE: Well, I will tell you, from -- a kid from Birmingham, Alabama -- in segregated Birmingham, Alabama, it was quite a moment. It means this country has come an enormous distance.

It means that the United States of America is what it claims to be, which is a place of opportunity for all. I don't think, by the way, that we're still colorblind. It's remarkable that we have an African-American president. We've had back-to-back African-American secretaries of state. We have African-American heads of major corporations. But still, we see race and that's fine. But increasingly we don't see race as all-defining, of who one is and what one can be. As long as we pay attention to opportunity -- to making educational opportunities available, which is really what got me to where I am and I think President-elect Obama would tell you the same thing.

BLITZER: So if he asks you for some help...

RICE: I think we'll do -- I think America will do all right.

BLITZER: But if he asks you for some help, would you be more than happy to help him?

RICE: Well, he is not going to need my help. He has got plenty of help. But of course, he is someone that I admire. He was on my committee, the Foreign Relations Committee. We have talked a number of times. He is going to do very well for the country.

But eight years is a long time. The American people are wise in wanting change. Two terms is plenty. And I'm going to go back to California and on to other things.


BLITZER: And we're going to talk more about Senator Clinton's State Department visit and how she might lead it if, in fact, she's confirmed as the next secretary of state. That's straight ahead.

Bailing out the U.S. auto industry, is it saving American jobs or is it just throwing away money for political reasons? The best political team on television standing by live to weigh in.

And repairing roads and bridges -- mayors from across the country are drawing up a list of projects that could create thousands of jobs, possibly in your city.

And forgotten papers of Martin Luther King Jr. up for sale by an entertainment legend.

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



BLITZER: He's the first Japanese-American ever to become an Army four-star general and would be the first Asian-American ever to led the government's second largest agency. We're talking about retired U.S. Army General Eric Shinseki, Obama's pick to become the next secretary of veterans affairs.

Those facts aside, there are apparently some other myths surrounding General Shinseki.

Let's go to our senior Pentagon correspondent, Jamie McIntyre, who covered him for a long time. What is this about, Jamie?

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Well, Wolf, a lot of the people think General Shinseki spoke truth to power and was punished for it, but the facts tell a slightly more nuanced story.


MCINTYRE (voice-over): For better or worse, General Eric Shinseki's distinguished 38-year Army career has been largely reduced to these 29 words, uttered in a Senate committee almost six years ago.


GEN. ERIC SHINSEKI, ARMY CHIEF OF STAFF: I would say that what's been mobilized to this point, something on the order of several hundred thousand soldiers, are probably, you know, a figure that would be required.


MCINTYRE: That off-the-cuff guesstimate just a month before the invasion of how many U.S. troops it would take to secure Iraq turned Shinseki into a poster boy for Bush administration critics.

For years, they have argued the general's sage advice for a larger ground force was ignored by his civilian bosses, Defense Secretary Donald Rumsfeld and his deputy, Paul Wolfowitz, who famously dismissed the high-end estimate.

In naming Shinseki as his pick for veterans secretary, president- elect Obama seemed to be subtly rebuking Rumsfeld, calling Shinseki someone who always stood on principle.

OBAMA: No one will ever doubt that this former Army chief of staff has the courage to stand up for our troops and our veterans.

MCINTYRE: But Shinseki has critics, too, who say, in fact, he never stood up to Rumsfeld, never pressed for more troops in Iraq, and when asked in a private meeting of the Joint Chiefs if he had concerns about the war plans, never said a word, according to two people who were in the room.

Asked by "Newsweek" two years ago to respond to the criticism he didn't press his concerns, Shinseki e-mailed back: "Probably that's fair. Not my style."


MCINTYRE: Well, Wolf, here's the difference. Now he's been hired by a president who is going to seek his counsel and wants him to make a major difference in the lives of tens of thousands of wounded U.S. soldiers and their families -- Wolf.

BLITZER: And we wish him only success in that new mission of his. And I know you do as well, Jamie. Thanks very much. Hillary Clinton may be getting a few tips from Condoleezza Rice. The outgoing secretary of state goes one-on-one with her likely successor. Will the transition be a smooth one? The best political team on television is standing by.

Plus, the road to recovery. Is there any reason not to repair the crumbling infrastructure and create thousands of new jobs to boot?

And new information about that fighter jet that crashed into a residential neighborhood.

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


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

Happening now: Hillary Clinton gets to quiz Condoleezza Rice. The likely incoming secretary of state is due to have dinner tonight with the outgoing one. That is what a source is telling CNN. So, what's on the menu? We will ask our panel of experts.

Also, the Big Three bailout. Automakers could get up to $15 billion in federal loans as soon as December 15. Is that a bad idea?

And an aide defends Barack Obama's White House appointments from critics in the party's left wing. They say they're not progressive enough. We will talk all about that and more with the best political team on television. They're standing by live.

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

The nation's mayors today are promoting an idea to create thousands and thousands of new jobs across the country and to do it fast. Their cities would get something out of it as well.

Let's go to CNN's Abbie Boudreau. She has been following this story for us.

All right, Abbie, What's going on?

ABBIE BOUDREAU, CNN SPECIAL INVESTIGATIONS UNIT: Well, Wolf, mayors throughout the country say their cities are falling apart and need a big piece of the new administration's economic stimulus package. They list specific projects that are ready to go. Now they say they just need the money to get started.


BOUDREAU (voice-over): Several big city mayors made their case on Capitol Hill to fund decaying highways, schools, mass transit and other public works projects.

MAYOR MANNY DIAZ, MIAMI: Our plan calls for investments that will stimulate our economy by quickly creating jobs, fixing our aging and crumbling infrastructure, increasing our global competitiveness and further reducing our carbon footprint.

BOUDREAU: This report from the United States Conference of Mayors lists more than 11,000 projects, from 427 cities, at a cost of $73 billion. The mayors say the projects could start quickly in 2009.

MAYOR MICHAEL BLOOMBERG, NEW YORK: Washington, we think, should use our recovery funds to create middle class jobs and invest in the future by rebuilding the key elements of our instruction and by renovating and expanding our mass transit networks.

BOUDREAU: President-Elect Barack Obama has also endorsed overhauling the nation's infrastructure as part of his economic stimulus plan.


OBAMA: We will create millions of jobs by making the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s. We'll invest your precious tax dollars in new and smarter ways. And we'll set a simple rule -- use it or lose it.


BOUDREAU: The mayors' report comes on the heels of another study that CNN first reported on Friday from the American Association of State and Highway Transportation officials. The group focuses on more than 5,100 highway and bridge projects that it says need repairs, such as Interstate 95 in Philadelphia, that we saw firsthand. Parts of the Interstate had to be shut down earlier this year after cracks were found in the concrete columns supporting it.

CHARLES DAVIES, PENNSYLVANIA TRANSPORTATION DEPARTMENT: These structures are reaching the ends of their service life. And many of them have structural details that did not lend themselves to being maintained very easily.


BOUDREAU: Now what's interesting about the list from the Conference of Mayors is that it named specific projects in cities throughout the country. So you can actually pull up the list and see what types of projects are ready to go in your own community. We have that link to -- that link is now on our Web site at -- Wolf.

BLITZER: Abbie, thank you.

Meanwhile in San Diego right now, some residents are stunned after a nightmare came crashing down. A U.S. military jet slammed into some homes. Now some people are dead and many others are trying to figure out what happened.

Let's go to CNN's Chris Lawrence.

He's on the scene for us with more.

This is a very, very shocking development. It -- rarely does it happen. But tell our viewers what we know -- Chris.

CHRIS LAWRENCE, CNN CORRESPONDENT: Well, Wolf, I just spoke with the mayor of San Diego, as well as several witnesses who actually saw the crash. And from what they are telling me and what they believe right now, it looks like the family that lived in the one house that was destroyed was a grandmother, a mother and two children.

Police have confirmed that there were two bodies found in that house. They also tell us that there are two other people unaccounted for right now and that officers and firefighters are moving through what is left of that house, trying to figure out exactly what happened with those two other people.

You can take a look behind me and you can see that they've still got a tremendous amount of the area blocked off. That is the neighborhood right down there. Again, some of these witnesses say that this was just an incredible situation. You know, students at a nearby high school were standing outside on a lunch break. Other people were outside decorating their homes for Christmas. Some were inside watching TV.

All of them are telling us somewhat of the same story -- that they heard what sounded like a whine -- a whine of an aircraft coming down. Some of the witnesses say they actually saw the plane. And I asked one man did you see any smoke coming out of it?

Did you see it wobbling?

He said he did not. But he said he saw it coming in very quickly. A lot of people thought it was going to crash very near them and they saw it come down. And they heard one pop, which they believe it was hitting the first house. And then a second one, where it hit the second house.

It is amazing, when you consider what this area looks like and the tremendous speed that this jet may have been traveling at, that there was not more damage.

As for the pilot, we know he did eject. He's in stable condition now at a nearby hospital -- Wolf.

BLITZER: And there was just one pilot on that Marine Corps F-18, is that right?

LAWRENCE: Yes. A two-seater, but only one pilot.

BLITZER: Thanks very much.

Chris is going to work this story for us -- a very sad story, indeed.

They're dining together tonight -- tat would be Hillary Clinton and Condoleezza Rice. The outgoing secretary of State goes one-on-one with her likely successor. The best political team on television is standing by live. And Barack Obama criticized by some on the left for administration picks that aren't -- supposedly -- progressive enough. Now Team Obama says chill out.

And it's most exclusive zip code -- it's the most exclusive zip code in Dallas, Texas. It's about to become the welcome home sign for two new residents -- George and Laura Bush. We're going to take you on a tour of their new neighborhood.

Stay with us.




UNIDENTIFIED MALE: I just want to say how happy we are to be back in your lives, America. You voted for change, but you ain't never going to change this.


UNIDENTIFIED FEMALE: We Clintons are here to stay. You may think we're down, but like the South, vampires and Britney Spears, we will rise again.



BLITZER: From the White House to the Senate, the Clintons certainly have had a powerful hand in U.S. government now for 16 years. And Hillary Clinton is poised to become the next secretary of State -- the nation's top diplomat.

Let's talk about this 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".

It's funny, "Saturday Night Live," but there's an element of truth there. They're here.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: They're here. They're not back, because they've never left, right?

And I think -- everyone I talk to thinks that Barack Obama made a brilliant move in appointing Hillary Clinton, for many reasons we've been talking about for weeks. But the most important is that she is now part of his team -- and so is Bill Clinton.

BLITZER: Yes. He's got them both.

DANA MILBANK, CNN CONTRIBUTOR "WASHINGTON POST": He does. And we've got them, too, which will be of endless delight to "Saturday Night Live" and possibly even here in THE SITUATION ROOM from time to time.

But, yes, it's -- look, we can at least say at this point that it hasn't backfired yet.

BLITZER: And Hillary Clinton is going to be having dinner tonight with Condoleezza Rice. This is going to be their first face-to-face meeting since Barack Obama asked Hillary Clinton to become the next secretary of State.

Yesterday, when I spoke to Condi Rice, she was very, very complimentary -- thinking Hillary Clinton is going to be an excellent secretary of State.

STEPHEN HAYES, SENIOR WRITER AT "THE WEEKLY STANDARD": Yes, I think she would say that. I mean, if you look at the contours of Bush administration foreign policy under Condi Rice, I don't think we're going to see major changes under -- under Hillary Clinton. They'll have a lot to agree on, I think, when they talk today.

BLITZER: But there will be a much greater emphasis on diplomacy, as opposed to the stick, isn't that right?

HAYES: Well, I don't know. I mean, Condoleezza Rice, when she came in at her original confirmation hearing, said the time for diplomacy is now. I think she tried to start doing that, maybe not as effectively as some people would want. But she certainly was much more open to diplomacy -- her kind of diplomacy -- than we saw in the -- in the first term.

BORGER: More like the second term Bush than the first term Bush, yes...

HAYES: Right.

BORGER: ...than the first term Bush.

BLITZER: Is this deal that they're apparently very close to working out -- Congressional Democrats and the Bush White House, Dana -- $15 billion in emergency loans to the big three automakers -- is that going to work or is it just $15 billion that the U.S. taxpayers are throwing away?

MILBANK: It's funny, now that we talk about it, with all of these vast gobs of money, that $15 billion is so cheap. It's like a door buster prize at Best Buy or something like that.


MILBANK: But I think we were talking earlier about how they had to do something. And this is a way to just, you know, to keep bankruptcy at bay, allow them to regroup and reconsider this later on.

So it's a lot of money, but it's cheap compared to what it could be.

BORGER: But, you know, what I'm struck by is the notion that this -- they're going out of their way to make sure that this is no blank check, that it has lots of strings attached, that there's going to be a car czar, that they're going to have limits on executive compensation -- no golden parachutes, no airplanes jetting you around. That I think the Congress has heard the message from the American public, which is we'd -- we'd rather not be doing this.

HAYES: Well, it -- basically, it allows them to go out and tut- tut about how tough they are and how much they're really holding their feet to the fire and not giving them this free pass. And then, of course, they're going to give them $15 billion and invite them back in six months to ask for more money at some point. I mean...

BORGER: But I don't think they'd be doing it at any other moment in -- other than in the midst of this crisis. They really don't have any choice.

BLITZER: Because a lot of people make the point -- and I think it's a fair point -- if the U.S. taxpayers can shell out $30 billion -- or whatever we shelled out -- to save Bear Stearns, the investment bank, why not $30 billion or $35 billion to save the pillar of American manufacturing?

MILBANK: Well, I think, actually, that argument is why conservatives and Republicans are having such a time -- a tough time arguing against this. And I would say there's a difference there. When you're talking about bailouts to the financial system, you're talking about sort of the circulation flow in the body and keeping it going. This is -- this is different altogether.

BORGER: And you're going to have problems with Republicans in the Senate voting for this -- for this bailout package. I think there's going to be a bunch of them that are going to say no.

BLITZER: Yes. Well, Shelby, you know...

BORGER: Of course.

BLITZER: ...he's making it clear he's not. And Corker...

BORGER: Led by Dick Shelby of Alabama.

BLITZER: Yes. And a bunch of others.

All right, let me read to you what Steve Hildebrand -- I think you guys know him. He was the deputy campaign manager for the Obama campaign. He's responding to some of the critics from the left who say these -- some of these appointments are simply not progressive enough.

"This is not a time for the left-wing of our party to draw conclusions about the cabinet and White House appointments that our president-elect, Barack Obama, is making. Some believe the appointments generally aren't progressive enough. Having worked with former Senator Obama for the last two years, I can tell you, that isn't the way he thinks and it's not likely the way he will lead."

Is this likely, Gloria, to reassure those on the left who are getting a little antsy right now about some of these names?

BORGER: No. I don't think it will reassure them. And I think what Steve Hildebrand is saying is that Barack Obama sees that there are big problems. And believe it or not, he actually wants to govern. And in order to govern, you've got to have a variety of points of view and you've got to listen to everybody. That's the way it's going to be.

MILBANK: It sort of amounts to a trust me strategy. And they're saying well, OK, we're appointing all these moderates, but when they're actually out there -- sort of a Trojan horse thing -- that Obama, through his policies, will bring out the inner radical of Gates and Clinton and Jones.

Now, I mean, that is an argument they're giving to the left, to say please don't start rioting just yet, you know, hold your fire.

BLITZER: Well, you saw Peter Beinart, our old friend, writing in "Time" magazine saying, you know what, this is a great cover for Barack Obama...

BORGER: Absolutely.

BLITZER: ...because he now has the cover he needs to move to the left...


BLITZER: ...because he's got people like Robert Gates over there at the Defense Department.

HAYES: Peter is smart. And that's a very good point, I think.

When you look at what Barack Obama is pledging to do, I mean talking about a second New Deal, he's talking about policies that would move the country fundamentally very far to the left. And he's doing it with the cover of these centrists.

And I think if he gets this kind of sniping from the political left -- from the fringe left, that some might call them -- that's going to help him.

BORGER: But it...

HAYES: It's going to help him make his case.

BORGER: And talking to people who have worked with Obama for a while, they say, look, his instincts are to the left. And sometimes he wants to hear people to draw him a little bit more to the center. And he's willing -- he's willing to do that. And, by the way, that might mean getting something done in Washington, shocking as that seems.

HAYES: Right.

BLITZER: Well, let's see, because we...

BORGER: All right. We'll see. BLITZER: ...he hasn't even been inaugurated yet. But we'll watch.

MILBANK: Good point.

BLITZER: All right, guys, thank you.

Let's check in with Lou to see what's coming up that top of the hour -- Lou, what are you working on?

LOU DOBBS, CNN ANCHOR: Thank you, Wolf.

Coming up tonight at 7:00 Eastern, we'll be reporting on last minute negotiations about the bailout of Detroit and new demands by some Democrats for the firing of G.M.'s CEO, Rick Wagoner.

Why do they want him fired?

He's the only CEO that knows anything about the car industry.

Well, we'll be talking about that.

And rising outrage after Merrill Lynch's CEO, John Thain, demands a $10 million bonus. This is the same John Thain, by the way, who led Merrill Lynch while it ran up nearly $12 billion in losses, receiving billions of dollars in federal government aid. The man obviously deserves a bonus.

And President-Elect Barack Obama -- well, he's trying to launch the biggest public works program in half a century.

Will that money, however, be spent in this country or overseas?

Join us for all of that and more at the top of the hour -- all of the day's news from an Independent perspective -- Wolf, back to you.

BLITZER: Lou, thank you very much.

DOBBS: You got it.

BLITZER: Five bedrooms, 8, 500 square feet -- and that's considerably smaller than their current place. We're in Dallas with a Closer Look at the $3 million spread President Bush will soon be calling home.

And a third day of rioting -- injuries and property damage mounting -- the latest on the turmoil that's rocking Greece right now.


BLITZER: Deborah Feyerick is monitoring some other important stories incoming into THE SITUATION ROOM right now -- Deb, what's going on?

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, Wolf, thousands of young people are rioting in Greece for a third straight day. The violent protests are taking place in several cities and towns. The riots began Saturday after police shot and killed a 15-year-old boy. The officer who fired the shot has been charged with manslaughter and suspended from duty. The riots have left dozens of people injured, scores of businesses have been burned or smashed and looted.

And some previously unknown documents from Dr. Martin Luther King, Jr. will be auctioned off this Thursday at Sotheby's in New York. Singer/actor Harry Belafonte owns the documents. One is an original handwritten outline for King's first speech condemning the Vietnam War. King's notes for a speech he planned to give in Memphis three days after he was assassinated are also up for sale. So is a letter of condolences from President Lyndon Johnson to King's widow.

And check out the green CNN logo on the bottom of your screen. Well, why the color change?

CNN is gearing up for a new "Planet In Peril" special with Anderson Cooper, Dr. Sanjay Gupta and Lisa Ling. It airs Thursday night at 9:00 Eastern here on CNN -- and, Wolf, somebody asked me whether, in fact, it was green because the Dow was up.

BLITZER: No. It's green because of "PLANET IN PERIL"...

FEYERICK: Exactly.

BLITZER: And I'm looking forward to seeing it Thursday night.

Thanks very much for that, Deb.

When he leaves the White House for good next month, President Bush and his wife Laura will be moving into much smaller digs in Dallas.

Our Ed Lavandera meets the neighbors.


LAVANDERA (voice-over): It's the hottest tourist attraction in Dallas -- an endless stream of gawkers peeking in on what's expected to be President Bush's new home.

UNIDENTIFIED FEMALE: I think it's great. We love Bush. We're glad to have him back in Dallas.

UNIDENTIFIED CHILD: Get your hot chocolate.

LAVANDERA: The current homeowners aren't talking. But their kids are cashing in...


LAVANDERA: ...selling hot chocolate -- about $100 in profits so far. This is life when a president moves next door.

UNIDENTIFIED FEMALE: Well, thank you, sweetie.

LAVANDERA: Doug Fletcher lives across the street and says the Bush family will love the neighborhood.

DOUG FLETCHER, NEIGHBOR: It's quiet, very quiet. You know people tend to mind their own business and, you know, help out each other if they need it. So that's probably where he would like to live.

LAVANDERA: The first family already has visions of a simpler life here.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: And she's got this great idyllic vision of me kind of with the little apron...

LAURA BUSH, FIRST LADY: Yes, exactly, with the new barbecue tools.

G. BUSH: It says "Barney's dad," on it, you know?


G. BUSH: He's flipping burgers.


LAVANDERA: The five bedroom, 85,000 square foot home is tucked away in a quiet cul-de-sac. The house sold for $3 million. But in this neighborhood, that's considered low end. People here have estates.

The Bush's new neighbors include Mark Cuban and Ross Perot. This is a majestic cocoon of wealth. But real estate agent Doug Newby says the Bushs' home is not gaudy.

DOUG NEWBY, REAL ESTATE AGENT: This is a very quiet, subtle house. It's been renovated in a contemporary fashion.

LAVANDERA: Lots of Republicans in Preston Hollow, too -- which makes it safe for a president with dismal approval ratings.

NEWBY: The big rumor in town is where is Cindy Sheehan going to live?

LAVANDERA: But Skip Hollandsworth, who has written several profiles of the Bush family for "Texas Monthly" magazine, says Bush isn't coming home to the same Dallas he left 14 years ago.

SKIP HOLLANDSWORTH, "TEXAS MONTHLY": No matter where he goes, he is not going to be met with adoring crowds. There are going to be just as many people sticking their fingers out the window at him when the motorcade drives by -- even in Dallas.

LAVANDERA (on camera): As soon as the Bush family gets settled into their new home, President Bush says he will begin writing his memoirs and working on his library, which is just down the road. And Laura Bush says she looks forward to doing a lot of volunteer work.

Ed Lavandera, CNN, Dallas. (END VIDEOTAPE)

BLITZER: On our Political Ticker, the U.S. Supreme Court today rejected an emergency appeal that claimed Barack Obama is not eligible to be president. A New Jersey man filed suit, arguing that Obama is not a natural born citizen because his Kenyan father was a British subject. The high court threw out the appeal without comment.

Kiss and make up -- our Jeanne Moss has a closer look at that and other "Moost Unusual" moments from President Bush's final days in office.

Also ahead, the view from the Hajj among our "Hot Shots" from around the world.


BLITZER: Here's a look at this hour's "Hot Shots."

In the Gulf of Aden, a Dutch soldier stands guard and looks for pirates.

In Malaysia, landslides force a woman and her dogs to leave home.

In Saudi Arabia, Muslim pilgrims pile on top of a van, as they make their way to the Hajj.

And in Ohio, a man dressed as Santa Claus avoids the rain and sleet with an umbrella.

Some of this hour's "Hot Shots."

With only weeks left in office, President Bush isn't missing a beat.

Jeanne Moss has a "Moost Unusual" look at the last days of his presidency.


JEANNE MOOS, CNN CORRESPONDENT (voice-over): For a minute, it looked like we might be treated to another "George W. Bush boogies" moment.


MOOS: But though he never quite broke into dance, this holiday reception for kids brought out the kid in the president. The mugging...


MOOS: The shrugging...


MOOS: The tapping and nodding.


MOOS: The waving.


MOOS: The shrugging and waving. The circular waving -- something they should consider amending the Constitution to ban. When the rhythmic clapping breaks out...


MOOS: The president should abstain.


MOOS: Actually, President Bush has seemed relaxed and playful these final months -- fist bumping Santa...


MOOS: Using gallows humor at the unveiling of his own portrait.

G. BUSH: Welcome to my hanging.


MOOS: He's getting his kicks where he can. For instance, when he spotted a teed up football before the start of the Army-Navy game...


MOOS: And after the coin toss, the president got to keep the coin. He even kissed his showbiz nemesis, Barbara Streisand, as she was being honored at the Kennedy Center gala. The only time we've ever seen these two kiss was two years ago...


MOOS: ...when Streisand teamed up with an impersonator.


BARBRA STREISAND, SINGER/ACTRESS: Can you believe it, for a second, we were in harmony?


MOOS: What fun is it to have Mr. Cool for president?

What are we going to do without W?

(on camera): He's not even gone yet and I miss him already. Of course, I said the same thing about Hillary Clinton when she lost to Obama -- and now she's back. (BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: You thought I was gone, didn't you?


UNIDENTIFIED FEMALE: You may think we're down, but like the South, vampires and Britney Spears, we will rise again.



MOOS: But the Bush administration is setting and soon all we'll have is what Beyonce honored Babs by singing.


MOOS: Jeanne Moos, CNN, New York.


BLITZER: I promised you Jeanne Moos would be here and she is every day here in THE SITUATION ROOM.

Thanks very much for joining us.

I'm Wolf Blitzer. Up next, "LOU DOBBS TONIGHT" -- Lou.