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Interview With Ron Gettelfinger; Interview With Senators Ensign, Casey

Aired December 14, 2008 - 11:00   ET


WOLF BLITZER, HOST: This is LATE EDITION, the last word in Sunday talk.

BARACK OBAMA, PRESIDENT-ELECT: This Senate seat does not belong to any politician to trade.

BLITZER: Illinois's governor accused of trying to sell Barack Obama's Senate seat. How much damage will the scandal do to the president-elect? We'll talk with a panel of journalists following the scandal. Plus, insight and analysis from David Gergen, James Carville, Ed Rollins and three of the best political team on television.

A deal to save U.S. automakers crashes and burns in the Senate. Should the White House come to the rescue? We'll talk with two senators, Democrat Bob Casey and Republican John Ensign.

SEN. BOB CORKER, R-TENN.: The only way a bill was going to pass out of the Senate and the House on the Democratic side was for the UAW to say we release you to vote for this.

BLITZER: Are labor union costs at the heart of the big three's woes? United Auto Workers President Ron Gettelfinger weighs in. An auto industry on life support, a volatile stock market and the highest jobless rate in years. Two views on what to do about an economy in crisis from former Clinton White House economic visitor Gene Sperling and the "Wall Street Journal's" Stephen Moore. The first hour of LATE EDITION begins right now.


BLITZER: It's 11:00 a.m. here in Washington, 10:00 a.m. in Chicago and 7:00 p.m. in Baghdad. Wherever you're watching from around the world, thanks very much for joining us for LATE EDITION. At this hour, President Bush is on a surprise farewell visit to Iraq. He's holding talks in Baghdad right now with the country's top leaders. He's also meeting with U.S. troops. We're going to have much more coming up later this hour. We'll go to Baghdad live. Our own Michael Ware is standing by for details.

But let's begin right now with the Illinois corruption scandal. The state legislature meets tomorrow to decide whether to remove the Governor Rob Blagojevich from office. He's accused of trying to sell President-elect Barack Obama's U.S. Senate seat to the highest bidder. And there's a new report out about conversations about that Senate seat between the governor and Barack Obama's incoming White House Chief of Staff Rahm Emanuel.

Let's talk about all of this and more with three guests who have been following this story very closely. In Chicago, radio talk show host and CNN contributor Roland Martin. In Chicago as well, CNN's own Drew Griffin from our investigative unit. And here in Washington, Jill Zuckman from the "Chicago Tribune," who has been all over this story. Drew, you actually managed to do what a lot of reporters would like to do. You briefly caught up with the embattled governor on Friday and you had this little exchange. I'll play it for our viewers who haven't yet seen it.


GRIFFIN: Drew Griffin with CNN. Can you say anything to the people of Illinois. Do you have anything to say?

GOV. ROD R. BLAGOJEVICH, D-ILL.: I will at the appropriate time, absolutely.

GRIFFIN: Are you going to resign, sir?

BLAGOJEVICH: I'll have a lot to say at the appropriate time.

GRIFFIN: Governor, are the authorities right in their petition of a criminal complaint? Did you do what they say you did? Governor? Just 30 seconds for anybody for the state of Illinois?


BLITZER: He obviously didn't answer, but Drew, the latest developments include, we're told, a meeting he had with a high-profile criminal defense attorney yesterday in Chicago. Is that right?

GRIFFIN: That's right. When he showed up for court Tuesday, the question was who was this attorney he was with, Stephen Sarkowski (ph). But on Saturday, yesterday, he spent about four hours with a well-known criminal defense attorney, Ed Genson. Genson, who's represented Conrad Black, R. Kelly, the rapper and even Congressman Mel Reynolds. He's a very high profile lawyer in town. They spent about four hours in there. The governor slipping out and ducking through a gift shop of the building which, by the way, is directly across from the Dirksen Federal Building where he'll have to answer these charges. But still, no official statement from the governor on what he plans to do. And Wolf, I just communicated with his press secretary this morning, who says the governor is not, emphatically not, planning to resign tomorrow. That's from the governor's press office. So we still don't know really what this governor is going to do or even who his lawyer really is.

BLITZER: Roland, because there's a story in the "Chicago Sun- Times" today, I'll read a little bit of it. It says this. It says, "Governor Blagojevich will decide early next week, perhaps as early as Monday, whether he should resign. A source close to the governor told the "Chicago Sun-Times" he was blind sided by this," the source said. "He needs some time to digest what's going on. He's going to make his position clear shortly."

What are you hearing, what do you sense Roland? Because you're there in Chicago. You know the story quite well.

MARTIN: I talked to several different people. He is going to resign. He has to -- he recognizes what is going on. You also see a delay somewhat in terms of how one of his main rivals, House Speaker Mike Madigan has been reacting to this. Of course you saw his daughter, Attorney General Lisa Madigan come out strong against the governor on Friday. He recognizes he's in an untenable position. It's a matter of how do you put this all together, how do you exit properly. So he understands that. There's no doubt that the House is going to meet tomorrow. They have to bring forward the call for impeachment. The Senate, they operate as a jury. It is not going to get that far. He has to step aside. It's a matter of simply, when not if.

BLITZER: About the attorney general, Lisa Madigan, she was on NBC's "Meet the Press" earlier. Jill, listen to what she said about the possibility of the governor making this decision to step down.


LISA MADIGAN (D), ILLINOIS ATTORNEY GENERAL: We have heard that there is a possibility that tomorrow he will make an announcement that he will step aside. I don't know if that means he will resign or take another option that is provided under the Illinois constitution where he can voluntarily recognize that there's a serious impediment to his ability to carry out his duties and therefore temporarily remove himself.


BLITZER: What are you hearing? What's your newspaper suggesting might happen in the next 24, 48 hour?

ZUCKMAN: There's an immense amount of pressure on Governor Blagojevich right now. But one thing that often happens in this kind of situation is the person who holds the office negotiates with the prosecutor. Their lawyer negotiates and part of a deal is I agree to step down. So he may not want to relinquish his seat unless he knows he's going to get something out of that. BLITZER: And Drew, that's an excellent point, because very often in the situation like this, if you're in legal trouble, and you're a public official, one of the only pieces of leverage you might have, especially in this case, the governor of Illinois is you know what, I'll step down, but you've got to give me a lesser plea or drop charges or whatever.

What are you hearing about that possibility? Have there been any far as you know, any serious discussions between a lawyer or lawyers, people representing the governor and the U.S. attorney, Patrick Fitzgerald?

GRIFFIN: I think we can draw the conclusion that there haven't really been any discussions. Because he's still trying to figure out who his criminal defense lawyer is. Who is going to be the person who's going to negotiate with the U.S. attorney? Ed Genson told one of the newspapers, or I think one of the TV stations yesterday that he's not sure he'll represent Governor Blagojevich. The two men are deciding that right now.

So who's going to negotiate this deal? I think the other thing you have to look at, Lou (sic), is this is a U.S. attorney who doesn't turn quick deals. This is a methodical guy, who's both been going after the corruption in Chicago for years now, picking off people one at a time. And I think if the governor was blind sided, I think we can also draw the conclusion that the U.S. attorney really rushed this arrest of the governor.

And that if you look at the 78-page complaint that was released with all the details of all of these deals, not just the U.S. Senate seat, but all these other deals that supposedly the governor was involved with, you just got two charges coming out of that. I think there's going to be a lot more charges to come. So what I'm suggesting to you is, I don't think the U.S. attorney or the governor are right now in the position to discuss any kind of deal making that would bring this to a rapid end by let's say tomorrow or this week. I think it's only the beginning.

MARTIN: And Wolf, also, if you look at this complaint, the reality is the allegations regarding the Senate seat are not a part of the two charges they brought against him. The other point is I spent a lot of time the last couple of days talking to criminal defense attorneys, but also other state officials who are elected officials. And that is, what he's being accused of, none of these deals were consummated. He talked about it, in terms of the Senate seat. He talked about the children's hospital, in terms of what I want to get, but when you read it, you do not see where money was ever exchanged.

So you have some folks who are saying wait a minute, unlike Governor George Ryan, who they got because he actually received funds, these were deals he was trying to make, as opposed to those that were consummated. I believe that also plays a part in terms of how far does it go, in terms of if you choose to take this thing to trial.

BLITZER: Yes, there was an indication, Roland, you make an excellent point, that the U.S. attorney moved quickly because he was really scared that the governor would make some decision on a new United States senator that could be tainted down the road if he had not moved as quickly as he did, the legal ramifications clearly enormous right now. Let's get to some of the political fallout that's been going on as well, including Barack Obama. Here's what he said in part on Thursday in responding to all of this. Listen to this.


OBAMA: I have never spoken to the governor on this subject. I'm confident that no representatives of mine would have any part of any deals related to this seat.

OBAMA: I think the materials released by the U.S. attorney reflect that fact.


BLITZER: All right, Jill Zuckman of the "Chicago Tribute," we're still waiting for that complete catalog of any contacts. He's promised that they would be made public. But we still don't have that yet.

ZUCKMAN: Right, but what we do know is that his incoming chief of staff at the White House, Rahm Emanuel, did have several conversations with Governor Blagojevich.

BLITZER: About the Senate seat.

ZUCKMAN: About the Senate seat.

BLITZER: There's nothing wrong with that.

ZUCKMAN: No, and that's totally natural. I would be shocked frankly if that conversation didn't take place. Of course Barack Obama has an interest in who replaces him, who he would be working with in the future on behalf of the state of Illinois. So those conversations did take place and we don't know the nature of them because right now, Rahm Emanuel and the Obama campaign are remaining fairly mum.

BLITZER: We do know, Drew, that in that 76-page criminal complaint that the U.S. attorney released, it was clear that Blagojevich suspected he wasn't going to get anything of substance from the incoming Obama team. The words that were used in that documents, appreciation. Here is the question though, to you. If Rahm Emanuel said, and we don't know any of this to be the case, but we do hear from reports out there, that a lot of these conversations have been recorded by the U.S. attorney and the FBI. If he said to the governor, you know what, we're not making any deals with you and you can do whatever you want, but we're out of this. And he didn't then go ahead and notify the U.S. attorney that the governor was apparently, or reportedly, allegedly seeking some sort of bribe or whatever, some sort of quid pro quo, would that in and of itself be a legal problem for Rahm Emanuel and the incoming Obama team if he didn't notify the U.S. attorney on the part, any alleged effort on the part of Blagojevich to seek some sort of reward?

GRIFFIN: Well, Wolf, I'm not a lawyer, I'm not a legal expert on the law, so I would only tell you that politically, that would be very messy. Somebody must have tipped off the U.S. attorney that the governor was trying to make some kind of deal with the U.S. Senate seat, which is why they went for the wiretaps, which is why they moved so quickly on this. And it's going to be very interesting to know whom.

And it's also no secret that Rahm Emanuel -- I mean, keep in mind, the connections here. Rahm Emanuel, sitting in the fifth district congressional seat that he inherited from Rod Blagojevich and he's now the go-between between the President-elect Barack Obama who is wondering who is going to replace him in the U.S. Senate. So there's all these political ties here in Chicago that are certainly going to be messy if nothing else. Whether or not there's any criminal taint on Rahm Emanuel, we've already heard Jessica Yellin say that her sources say no, he's not a target.

BLITZER: We have definitely heard that. Go ahead quickly, Roland.

MARTIN: Yes, this is open secrets. Page Sander Quami Raoul (ph) was quoted in the "New York Times" a couple of days ago saying that he had conversations. He was aware that the governor try was trying to say hey, if I'm going to appoint somebody, that look, I'm going to have folks fundraising for me. So any number of people in Springfield knew this. And so I don't necessarily think you had to have one person who would say hey, Fitzgerald, here's what's going on. Because again, it seemed to be a number of folks knew. It simply wasn't out in the open and public like it is now.

BLITZER: All right, Jill, do you want to wrap it up?

ZUCKMAN: You know, I think that most people expect that Rahm Emanuel is going to be in the clear eventually. I think what we will see, though is a transcript that shows a lot of colorful language going back and forth between the two men.

BLITZER: That's for sure because you know Rahm Emanuel and obviously Blagojevich. All right guys, thanks very much. We're going to have a lot more on this story coming up. James Carville and company, they're standing by as well.

But just ahead, two key economists are standing by to weigh in on their proposed auto rescue plan. Would a $14 billion bailout of the big three automakers save the struggling car industry here in the United States? LATE EDITION continues right after the break.



OBAMA: At this moment of great challenge for our economy, we cannot simply stand by and watch this industry collapse. Doing so would lead to a devastating ripple effect throughout our economy.

(END VIDEO CLIP) BLITZER: The struggle of U.S. automakers to stay alive is putting more and more pressure on an already stressed U.S. economy. Wall Street remains unsteady and there was word this week that several companies are issuing pink slips. Here to discuss all of it, two economic experts. Gene Sperling is a former Clinton White House economic adviser and Stephen Moore is a member of the "Wall Street Journal" editorial board. Guys, thanks very much for coming in.

What do you say to Barack Obama who say you know what, if these companies, who specifically G.M. and Chrysler -- Ford seems to be in a little bit better shape -- go down, it would be devastating for the entire U.S. economy. MOORE: Well, I certainly don't want to see these companies go down and I don't want to see Americans lose their jobs. And we are talking about a million or two workers who could be affected by these companies going out of business. But I don't think the bail out is the right way to go. We're talking --

BLITZER: You disagree with President Bush on this?

MOORE: President Bush and President-elect Obama. I think that the best way to go is to put these companies, well at least General Motors and Chrysler, which are in worse shape than Ford, put them into a bankruptcy, let them totally restructure.

BLITZER: Who would buy a car from a bankrupt company?

MOORE: Well, who would -- the problem is nobody is buying their cars right now. Literally, things are so bad for these companies right now, Wolf, if you go to some of the new car show rooms, they are literally, you buy one, you get a second one for free. So almost two for one because the cars just aren't moving off the show room. The reason I think the bankruptcy option makes a lot of sense, it allows them to totally restructure themselves. The problem with the bailout is nobody has any sense of assurance that if we give them $25 billion, $30 billion out, they're not going to come out in three months.

BLITZER: They're talking $14 billion right now, but how do you respond to Steve's arguments?

SPERLING: Listen, we are in the middle of a very bad global recession and a global auto recession. So there's no question that you've got some specific problems with these auto companies. But I think President-elect Obama has it just right which is that, you don't want to give a blank check even in the short term. But if you look at what House Democrats and the Bush administration negotiated, it's essentially a plan to get a bridge loan with tough conditions, to ensure that in the middle of this devastating economic period -- and Wolf, people are projecting 5 percent negative growth in the fourth quarter, that you do not have a devastating bankruptcy that could affect as many as 3 million jobs.

BLITZER: Let me interrupt you for a moment because the point has been made repeatedly, Steve, that if the federal government can provide billions and billions of dollars to the financial sector with limited strings attached, $30 billion or whatever for Bear Stearns, they can't provide $14 billion to help the big three get through this enormous hump?

MOORE: Right. Well, first of all, I'm not a big fan of the bailouts for the banks and the financial sector, either.

And the evidence isn't very good, Wolf, that these have worked very well. I mean, the stock market has crashed, we still see one bank after another in dire financial shape.

But at least you could make the case that the banking sector is a, sort of, special sector, that the entire financial sector relies on banks.

BLITZER: And the Big Three automakers are not...

MOORE: They're not as -- as important.

BLITZER: Three million jobs, potentially?

MOORE: Well, but, look, we have allowed steel companies to go out of business. We've allowed textile companies to go out of business. People from South Carolina -- you know, congressmen are saying, why wasn't there aid for the textile companies when they went out of business?

What about the steel companies in Pennsylvania?

This is the natural evolution of things. And gee, you know, if I actually thought that giving these companies, say, $25 billion or $30 billion, that they would then be on their way to profitability, I might be for that.

But they're talking about creating a car czar. They're going to create, basically, congressional oversight over these companies. That's not the way to profitability.

SPERLING: But let's understand, first of all, I think the car industry is very special, in terms of the manufacturing base, in terms of security, in terms of our technology future.

But beyond that...

BLITZER: Gene Sperling, by the way, we should point out, is from Michigan.

SPERLING: Yes, I am.


SPERLING: I am probably -- I am probably from Michigan.

But what I want to make clear is what the structure is. Nobody is suggesting -- not Barack Obama, not George Bush, not the House majority -- is suggesting that they get long-term relief without very tough restructuring.

That's true in Senator Corker's proposal. That's true in the House Democrat proposal.

So all we're talking about is, with tough conditions, giving relief that makes sure we don't have this rapid deceleration that will hurt our economy worse.

And, you know, I really feel that -- that what was being discussed, in a very bipartisan way, should have gone through. And I think it really was a mistake to point the finger at the UAW.

And I just want to get... (LAUGHTER)

BLITZER: Because we're going to be speaking with Ron Gettelfinger, the president of the UAW. But the argument was that Corker said, if they would have just agreed to a date certain to bring wages of the Big Three U.S. automakers in line with the so-called transplants, the foreign car makers in the United States, like Toyota or Nissan, and bring those wages in line by 2009, as opposed to waiting until 2011 when their contract is up, they would have had 90 senators who would have supported...


SPERLING: Well, I think that's just being incredibly unfair to the UAW, and I think Gettelfinger's been quite responsible.

First of all, let's just look at the facts. In 2006, labor unit costs, the amount of labor per car, went down 8 percent, more than any industry. That was 2006.

In 2007, the UAW made significant wage and health concessions. It took a lot of debt off GM's books.

Now, in 2008, in the middle of this devastating global auto recession, Gettelfinger and the UAW are saying they are willing to move their wages in parity with foreign transplants.

But it does not make sense economically to ask for brutal wage cuts, right in 2009, to older workers.


SPERLING: And it's not a fair way to glide -- to do that in the glide path. That's all they're trying to do. MOORE: I'm probably the only one at this table who actually drives an American car.


SPERLING: I drive an American car, too, Steve.

MOORE: And so, look, I believe in the American auto industry. But here's the reality of the situation. Either these -- the UAW is going to accept no jobs at $60 an hour or they're going to be brought down to the wage levels that are being paid by Honda and Toyota in the United States and, in states like Texas and South Carolina at, say, $30.

They're still paying these workers, when you include the benefits, twice what the auto workers are making and other manufacturers are making in other industries.

SPERLING: Steve, Gettelfinger and the UAW are saying that they are on line and they are willing...

(CROSSTALK) SPERLING: ... to be part of the deal...

MOORE: But, Gene, that's only for new hires. They're not hiring any new workers. The problem is the workers that they're already paying.

SPERLING: Why in the middle of a recession -- why, in the middle of a recession, would you want to demand, in 2009, these type of brutal wage cuts?

It's not fair. It's not economically smart.

MOORE: Because they're not -- because they can't make profitable cars with this kind of wage structure. That's...


SPERLING: What's important, for the long-term economic viability, is to get the debt structure, particularly of GM, down, and to get wages, long term, on parity with the foreign transplants.

To insist that you have to do it right in 2009 is to put a double standard on auto workers and workers in the Midwest that no one else is being asked to do.


MOORE: That's the problem. They don't have any cash.

BLITZER: The argument...

(CROSSTALK) BLITZER: The argument is, what's better -- and this is an awful choice -- to take a significant pay cut for these UAW workers right now, and at least get a pay check, as opposed to having no paycheck if these companies go away?

SPERLING: Hold it. You know, let's just remember. The deal that was on the table was bipartisan. You think there's no bipartisanship?

You had President Bush and the President-elect Obama and House majority all agreeing on this.


SPERLING: And nobody disagreed, including the UAW, that they've got to make significant wage cuts. It's just, are you going to push it so hard that it has to be a brutal cut in '09?

I think that all of this -- every package we're talking about assumes that, in March of next year, there's going to be a restructuring. And that restructuring is going to ask everybody, management, bond-holders, and the UAW to come to the table.

They've acknowledged this. Let's not point the blame at one party that's made the most concessions. BLITZER: I want to read to you what Carlos Gutierrez, the commerce secretary, wrote in The Washington Post on Thursday. And he's speaking for the president of the United States, who's a Republican, who happens to agree with a lot of the Democrats on this.

"If Congress fails to act now," Gutierrez wrote, "U.S. real gross domestic product could decline by more than 1 percent and the country would be likely to lose more than a million jobs."

In the middle of a recession like this, can the country afford, if Chrysler or GM goes down in the next few weeks, to lose another million jobs?

MOORE: You know, Wolf, this is what we've been hearing for the last six months, with every bailout that's taken place.

BLITZER: So they're just crying wolf? Is that what you're saying?

MOORE: Well, what I'm saying is that we have adopted an economic strategy, over the last six months -- the Bush administration and Congress -- that basically has said, bail out every ailing industry.

And look where it's gotten us. You're exactly right. We're going to see a 4 percent or 5 percent decline in GDP. We're taking money from healthy companies and giving them to unhealthy companies. That is not an economic growth platform.

SPERLING: We're talking about, again, just giving a bridge loan. remember. Let's just remember -- look, there's no question the Big Three deserve a lot of blame over the last couple of decades.

But let's not push it too far. A lot of analysts believe Ford was on its way back. GM has a horrible debt structure. It's nonviable, no question. But it's not the case that all of their cars have not shown improvement.

The Chevy Malibu gets over 30 miles per gallon. They've got 12 hybrids coming on line. So when Barack Obama says reform is at the beginning, I think there's truth to that.

So what we're not talking about is a long-term bailout. This global recession is not the UAW or the Big Three's call. Let's at least give them the bridge, and then have the tough restructuring...


SPERLING: ... that is needed for long-term viability.

MOORE: How are they going to be able to get back in the black, to be a profitable company if you have Congress telling them what kind of cars to build?

I mean, this is a Congress that, for the last 40 years -- and only two of the last 40 years has been able to balance its own budget. I mean, we don't -- what are they going to be putting out, the Obama car, the Pelosi car, in the next couple years?

I mean, this idea of Washington telling car companies what type of cars companies to build...

SPERLING: Look, I've been critical of Senator Corker for pointing blame at UAW, but the basic strategy of saying that, before you get a long-term deal, the bond-holder's got to come back and cut GM's debt by half or two-thirds -- and everybody's got to be in this together is the first major step.

We just shouldn't ask workers to bear a much harder burden in 2009, in the middle of a recession year, than we're asking anybody else in this economy.

BLITZER: All right. We'll leave it on that. But we're going to continue this conversation. We've got Ron Gettelfinger, president of the UAW. He'll be joining us, live, here on "Late Edition," in the next hour.

Thanks very much.

Up next, President Bush arrived in Baghdad, surprisingly, early this morning, to meet with Iraq's leaders. We're going to give you the latest on his trip. We're going to Baghdad, live. Michael Ware is standing by. Stay with us.


BLITZER: As we told you at the top of the hour, President Bush right now on a surprise visit to Iraq. It's his fourth and final trip to the country as president of the United States. Let's go to Baghdad. CNN's Michael Ware is standing by. It caught all of us by surprise. Michael, what has happened, what's going on?

MICHAEL WARE, CNN CORRESPONDENT: Well, Wolf, President Bush arrived a few hours ago, sort of late in the afternoon local time. He was greeted on the tarmac by his war commander, General Ray Odierno and by U.S. Ambassador Ryan Crocker. He was then greeted by the Iraqi President Jalal Talabani and the country's two vice president after having flown from international airport to the presidential palace. We understand he's now moved to the prime minister's residence where we're awaiting a ceremony to mark the signing of the SOFA, or strategic framework agreement, and the status of forces agreements, which effectively marks the beginning of the end of the American phase of the war in Iraq. Wolf?

BLITZER: And do we have any idea how long he's staying there? Is he spending the night? Is he coming right back to Washington, going any place else?

WARE: I think he'll have to ask the White House press pack about that because they're the only ones who are allowed to any of the events that are taking place here in Baghdad. Certainly we had rumors that President Bush was coming yesterday. We heard about it. Today he indeed arrived. I suspect it will be a brief visit, as they have been in the past. Yet, this is the first time that President Bush has actually set foot off a U.S. military base here in Iraq. Now he was at the heavily-protected presidential palace and is now indeed in the Green Zone. So it's not as though he were, say, the Iranian President Mahmoud Ahmadinejad, who visited earlier this year who rather than taking a Blackhawk, drove from the airport, didn't go into the Green Zone, walked the streets of Baghdad, and went and prayed at a shrine.

Nonetheless, the president is marking this as a farewell tour as he put answer end note on his presidency and his involvement as commander-in-chief in this war and he's heralding the agreements as a way forward for Iraq to a free society. Wolf?

BLITZER: Michael Ware will stay on top of this story for us. Michael, stand by, thank you. Up next, James Carville, Ed Rollins and David Gergen, they're live with their take on whether the Blagojevich scandal, allegedly wanting to sell Barack Obama's Senate seat, is actually damaging the president-elect himself. Stay with us. LATE EDITION continues after this.



OBAMA: What I'm absolutely concerned about is our office had no involvement in any deal making around my Senate seat. That I'm absolutely certain of.


BLITZER: The corruption probe involving the Illinois governor is definitely an unwanted distraction for Barack Obama. But will the scandal do any serious damage to the president-elect and his team?

Joining us now from New Orleans, the Democratic strategist James Carville. In New York, the Republican strategist Ed Rollins. And in Boston, our CNN senior political analyst and former presidential adviser, David Gergen. They're all part of the best political team on television.

James, I want to read to you what Ed Rendell, the governor of Pennsylvania said on Friday. He said, "The rule of thumb is whatever you did, say it and get it over with and make it a one-day story as a posed to a three-day story. Politicians are always misjudging the intelligence of the American people." Is Barack Obama too slow in responding to all of this?

CARVILLE: You know, there's another party in this and that's the United States attorney in Chicago. And I suspect that we'll be hearing something before long, but before anybody says anything, I suspect all of this has to be cleared with Mr. Fitzgerald. I mean, there's an ongoing, very serious criminal investigation involving the sitting governor of Illinois.

And I think at the end of this process, we're going to be satisfied with all the answers that will be forthcoming. And we've been very good -- Rahm Emanuel is in no legal jeopardy at all. The only thing he's accused of is being a politician that's involved in politics, as best I can determine.

BLITZER: What about that, Ed? Because there's no doubt if you take a look at this situation right now that Barack Obama when he said the other day he's going to make a catalog, a full record of all contacts with Blagojevich and his staff available to the press in the next few days, there's no doubt they have to be precise. Because what you don't want to do is release a catalog and then a few days later, have to release amendments to that catalog.

ROLLINS: Well, first of all, this is a very experienced team in the most disciplined campaign I've ever seen. So obviously they're going to get their story right. They're going to put it out and they're going to tell the truth. My sense is exactly as James said, Rahm represented the same congressional district as the governor did. They're long-term colleagues. They may not be friends but they're colleagues. He made a very legitimate effort to tell who the president-elect thought would be acceptable.

There was no deals, at least not on any tapes and I think there's another shoe to drop. Obviously how did the U.S. attorney get in here and obviously this was a governor was out with a vacuum cleaner trying to rake as much money from lobbyists and what have you and make all the deals he could before the end of the year. I think you can say a lot about Rahm Emanuel. First and foremost, he's very smart and he's very political. So I know -- at least I believe that he would not make any mistakes here.

BLITZER: Did he have an obligation, David Gergen, Rahm Emanuel, if, in fact, the governor, Blagojevich, was seeking sort of reward, in effect seeking to do something illegal, did Rahm Emanuel have an obligation to go to the U.S. attorney and notify him of that?

GERGEN: I think this goes, it may be one of the toughest questions we're going to face in all of this. An awful lot would depend on whether Blagojevich was saying something that would indicate corruption as opposed to saying something, you know, I'm going to want your help down the road on fundraising or some day I'm going to look maybe, be looking for a job, Rahm.

GERGEN: I need your help down the road. But didn't do it in connection with -- that happens in politics all the time. That's not corrupt, unless it's a straight out deal.

And so it's -- a lot depends if there's something on these tapes that -- in which Blagojevich is hinting at something and Rahm just brushes him aside, I don't think that's a problem for Rahm. I think a lot depends on the context. But to back up, Wolf, it does seem to me for starters, there's absolutely no indications, no evidence that anybody around -- including Barack Obama and including Barack Obama and including Rahm Emanuel has done anything wrong here. There's nothing with that.

And it's also true that in terms of the politics this transition, that Barack Obama now has a huge reservoir of good will going into his presidency. Over 70 percent of Americans in various polls have said they approve of the way he's handling this transition. I do think this is a distraction and in fact, we're now into the fifth day without a report on exactly who said what to whom in terms of the connections with the governor's office and the transition team.

The suggests there is some sort of snag, and it may well be what James Carville is saying that Mr. Fitzgerald does not want them to go or there's some question about what's on these tapes and they have to go through the U.S. attorney's office.

I think that may well be the case, but into day five now into the stories creeping into the mainstream press, I do think it's a distraction. I think they need to move or at least provide a reason why they're not putting something out.

BLITZER: The Republicans, James, are certainly trying to take advantage of this. A spokesman for the RNC, the Republican National Committee saying on Friday, "Considering Barack Obama's promises of transparency and new politics, so far his less than forthcoming handling of the scandal in Illinois is disappointing. Obama has failed to answer many basic questions about the Blagojevich scandal."

And then they went ahead and released a three-minute video with a sort of ominous music underneath to paint a picture of the incoming president as less than, shall we say, excellent.

CARVILLE: I think this is exactly what the country hates. And by the way, I bet they didn't play what Blagojevich said about Obama. Everybody knows that Blagojevich and Obama were not politically close in any sense whatsoever. And just to go back, I know -- you know, can vouch for Rahm personally, I don't have any doubt in my mind that he didn't do anything wrong. And if the governor said anything in private to hi, I think Rahm would have snapped back vehemently to put it mildly.

But David is right, to the extent that it is a distraction, but I think when all of this comes out, I don't think you can go out and release things without having clearance with the United States attorney. I know I would never do that and I doubt if the counselor, lawyers or the president-elect, who's a fine lawyer, he taught law at the University of Chicago. I think they're very on top of this and I think in the end, they will be quite satisfied with the answers.

And by the way, no one needs to be cleared legally. No one in this, as the United States attorney says, is in legal jeopardy whatsoever.

BLITZER: I think those are all excellent points. All right, I'm going to pick up with Ed in a moment. We have a lot more to talk about, including the politics of the auto bailout. Stay with us. We'll be right back.


BLITZER: We're talking with three of the best political team on television, Democratic strategist James Carville, Republican strategist Ed Rollins and our senior political analyst David Gergen. Politically speaking, Ed, how much trouble do Republicans face if, in fact, the auto industry, Chrysler and GM specifically go down in the next few weeks?

ROLLINS: I think obviously they made a very nonpolitical decision. I mean, I think a lot of Republicans feel that the bailout is not the proper way to go. There's no question, there's consequences, though. And the consequences are that if it does somehow fail and you're laying off blue collar workers when you've been bailing out Wall Street types, there's a backlash on that. But I think the senators on the Republican side made a very deliberate effort and I think at the end of the day, they didn't think this was a new deal. Three weeks from now, new Senate comes in, new president, Democrat control, they can do whatever they want.

BLITZER: It sounds, David, like the president of the United States, Henry Paulson and others, they like to punt. They would like to see the GM and Chrysler workers survive at least in the short term. Ford seems to be in a little bit better shape right now. And let the incoming Obama team and the new Congress take charge.

GERGEN: Absolutely. It's Dick Cheney who has been quoted as saying if the Republicans don't get behind this, some sort of bailout to the automobile industry, they're going to be remembered as the party of Herbert Hoover forever. And the White House gets both the politics and the substance of this in ways that Republican senators did not and it's been very strange in that regard.

And in addition to that, I think the White House understands that this could leave the Republican Party looking like it's very anti- union. And that is not -- I mean, there's always been a tension between the Republican Party and the union, but the whole idea of Reagan Democrats was to bring, as Ed Rollins can tell you, was to bring a lot of union and blue collar folks over to the Republican Party and build a majority.

So this whole -- the way the Republican Party has handled this has not been a shining hour and I think it's left them with -- left the president backed into his own corner. And he's got to help. Other wise -- I think the White House says look, from a substantive point of view, is there a risk that if we give the automobile companies more money, they'll just go down? Yeah. But the bigger risk is if you don't do it, if you don't build a bridge to the new Obama administration, if they go down, you send the country spiraling down to deep unemployment.

And it's the Republicans, it's the Bush White House that gets the blame and I think that's why they're trying to, as you say, build a bridge to the new Obama administration, get a bridge loan in there as fast as they can.

BLITZER: James, as you know, it's a very delicate moment right now. There's an incoming president, an outgoing president, Barack Obama is walking a thin line. On this entire overall economic crisis the country faces right now, do you think he's doing too much, not enough, just right? How do you assess his handling of this? CARVILLE: Well, he's going to get criticized either way, and there is one president and it's a difficult time, as I recall. Franklin Roosevelt just completely stayed away from it until he took office.

But the auto companies are going to be there. The problem is going to exist on January 20. If I take what the -- in the Republican Party now, almost half of its Senate seats and House seats in the south and these are -- even Republicans with very much, believe in low wages. They weren't philosophically opposed to this.

CARVILLE: According to them, the thing that broke the deal is that they wouldn't take further wage cuts after they'd given up enormous wage cuts before. So the philosophical difference, I think here is, that the Republicans are coming across as a party of low wages. And I don't think that's a good position for them to be in. They said they were ready for do the deal, they just wanted more wage cuts. And that was a pretty tough pill to swallow for the UAW, which has made significant concessions here in the last three or four years.

BLITZER: Ed Rollins, we heard this week from Colin Powell, the former secretary of state. He spoke with our own Fareed Zakaria. And he said this about the Republicans. I'll play the clip for you. Listen to this.


COLIN POWELL, FORMER SECRETARY OF STATE: The Republican Party has to now start listening to the African-American community and the Hispanic and Asian and other minority communities and see what's in their hearts and minds and not just try to influence them by Republican principles and dogma. And, so I think the party has to stop shouting at the world and at the country. I think the party has to take a hard look at itself.


BLITZER: He's a Republican, even though he endorsed Barack Obama. What do you think?

ROLLINS: Well, I think he's absolutely right. I think -- you know, we know why we need to reach out to African-Americans and why we need to reach out to young people and why we need to reach out to Hispanics. The critical question here is how. I think his words are words of wisdom and I think to a certain extent, if we're ever going to get back into this game, especially those younger voters, those Hispanic voters, we have to go reach out and we have to talk to them. We have to find out what it is that's concerning them and find where we can basically take our principles and measure up against their desires.

BLITZER: It's really a terrific interview that Fareed did with Colin Powell. It will air, by the way, after LATE EDITION at 1:00 p.m. Eastern, a little bit more than an hour from now. I recommend it to our viewers. You know, it's a difficult situation for Colin Powell right now. In terms of staying outside of the incoming Barack Obama administration, David, or actually taking some sort of formal position. He seems to be making it clear, he doesn't want a formal job and he's more than happy to help in an informal capacity. What are your thoughts?

GERGEN: I think he's made clear he doesn't want to be secretary of education, which many thought would be a perfect job for him. But my expectation is, Wolf, he'll be much like Paul Volcker is on the economic side. Volcker, older, coming in as an economic adviser, probably head up some sort of informal outside advisory group.

I think Colin Powell would either be a chair of or be a member of some sort of foreign policy advisory group that could lend the president advice from time to time. You could reach out and get both Democrats like Lee Hamilton and Republicans like Jim Baker. That would be a formidable group and from time to time they might actually go on a mission for you. So I bet he plays an informal role but not a formal one.

BLITZER: You know, it's interesting James, he also said in that interview with Fareed Zakaria, he thinks it's time to take another look at the don't ask, don't tell policy that prevents homosexuals from serving openly in the U.S. military. This from the man who came up with that don't ask, don't tell policy during the first year of the Clinton administration when he was then chairman of the Joint Chiefs of Staff.

CARVILLE: It really goes to show you how much of American politics has changed. I mean, that was a very sort of controversial thing in his government. I remember going through that in the early days of the Clinton administration. And now -- and I think much to the credit of the country and much to the credit of the armed forces, you know, we're sort of beyond that. If we get a good Arabic-speaking interpreter, I mean, who cares? And I think that's a really -- a thing that we can all be proud of that the country has really moved way beyond this.

BLITZER: We're going to leave it right there, guys. Thanks very much, James Carville, Ed Rollins, David Gergen. Good discussion as usual here on LATE EDITION.

And just ahead, we're going to hear from Senator John McCain. He was out speaking on one of the other Sunday morning talk shows today. We're going to show you a little bit of what he's saying right now. Stay with us. (COMMERCIAL BREAK)

BLITZER: In the campaign, John McCain suggested that Barack Obama was not ready to be president. And today on ABC, he was asked if he still feels that way. Listen to his response.


SEN. JOHN MCCAIN, R-ARIZ.: It's not a matter of whether he's ready. He has been selected by the American people. We honor that decision. I want to work with him. These challenges are great. It's time for us all to join behind him and help however we can.


BLITZER: We'll have more of that interview later in the next hour of LATE EDITION. Also standing by, two U.S. senators. We'll talk about what's going on with the auto bailout and a lot more. We'll be right back.


BLITZER: This is LATE EDITION, the last word in Sunday talk.


OBAMA: We cannot simply stand by and watch this industry collapse.

BLITZER: The Senate refuses to rescue U.S. automakers. We'll discuss why and what's next for the big three with Democratic Senator Bob Casey and Republican Senator John Ensign.

What's at stake for the industry's frontline workers? United Auto Workers President Ron Gettelfinger joins us for an interview.

PATRICK FITZGERALD, U.S. ATTORNEY: Governor Blagojevich has been arrested in the middle of what we can only describe as a political corruption crime spree.

BLITZER: Illinois's governor accused of putting Barack Obama's Senate seat up for sale. Will the scandal tarnish the president-elect and his close allies? Insight from three of the best political team on television. LATE EDITION's second hour begins right now.


BLITZER: The Bush administration appears to be the sole life line right now for the big U.S. automakers with a plan to try to rescue Detroit. That plan fell apart in the U.S. Senate late in the week. But what is happening right now? Where do we go from here?

Here to talk about what went wrong, what's next, two key members in the United States Senate. Joining us from New York, the Pennsylvania Democratic Senator Bob Casey. He supported the automakers' loan bill. And joining us in Las Vegas, Nevada, the Republican Senator John Ensign. He opposed the measure. Senators, thanks very much for coming in.

Senator Ensign, let me start with you. Were you at that luncheon where the vice president, Dick Cheney, came up, met with Republican senators and appealed to them to vote for this rescue plan and warn that if you don't it would be, quote, "Herbert Hoover time again?" Were you there?

ENSIGN: I was there. And actually, Josh Bolten, the president's chief of staff, is the one who made the presentation. And frankly, the more that they seemed to talk, the less support there was for the bailout bill. At the end of day, I think that a lot of us were very, very concerned about the jobs in the United States and the economy in the United States.

We just had a different way of helping the auto companies. I believe strongly that the auto companies need to be helped in a way where they'll come out stronger on the other end, more vibrant and be able to compete with the Japanese and the German auto manufacturers in the United States. And the bill that was before the Congress, I do not believe that that bill would have made sure that the auto companies came out stronger on the other end.

BLITZER: Josh Bolten may have made that presentation, but did the vice president use that phrase "Herbert Hoover time" based on your recollection, Senator Ensign?

ENSIGN: I don't remember exactly what the vice president said. He comes to our lunches every Tuesday. Very rarely ever speaks. But this last Tuesday, he did speak, and it -- you know, he was appealing for the plan that the president and the Democrats had put together.

But it was frankly just -- it wasn't something that most of us believed would help the automakers come out successful on the other end. And that's really the bottom line, is how are we going to help the U.S. auto manufacturers come out and be more competitive when they come out of this economic crisis that we're in today?

BLITZER: And we did hear from Senator Bob Corker, Senator Casey. He's a Republican from Tennessee. He was negotiating, trying to come up with some sort of compromise. He said this on Friday at a press conference, explaining why it collapsed in the end. Listen to this.


CORKER: My prediction is that, had we agreed on a date, any date that's reasonable, I think last night it would have passed the Senate by 90 votes.


BLITZER: He's referring to a date certain when the UAW, the United Auto Workers, should have agreed to bring their wages in line with the so-called foreign transplants -- Toyota, Nissan, Honda -- that have plants in the United States, mostly in the south.

Because they refused to do that, to move up their concessions from 2011, the deal collapsed. You want to respond to that, Senator Casey?

CASEY: Well, Wolf, I think to a large extent there's been a lot of scapegoating here. In other words, the line from the other side has been that, because -- because we didn't get 60 votes from the Senate, that was the fault of working men and women. That's ridiculous. They've provided all kinds of concessions the last couple of years, cut their retiree health care costs by 50 percent in the last few years, made concessions on wages, and were ready to do more. The problem here was, in my judgment, was the other side was determined to stop this for whatever reason and it's really a question of whether or not we're going to continue an industry in America which is the backbone of manufacturing and keep the jobs.

In Pennsylvania, for example, we have 120,000 jobs in dealerships and in suppliers. This is a major hit to our economy if the Treasury Department doesn't take the right steps, take executive action for December and January, get us to the end of January, and then we can begin to implement a long-term strategy.

And remember, the statute that we would have passed focused on efficiency, focused on competitiveness, and also focused on providing opportunities to keep this industry viable to protect jobs especially at a time when we've just lost over 500,000 jobs in November.

BLITZER: Would you have supported it, Senator Ensign, if it would have had a date certain to bring the wages for UAW workers in line with the non-union workers?

ENSIGN: I'm not sure that I would have supported that simply because I don't think there were experts in the U.S. Senate to determine what wages should be paid.

I don't think that we're experts to determine what the level of debt that the companies should have. I actually had a plan, Richard Shelby and I drafted a plan that would have provided what's called debtor-in-possession financing, this financing for chapter 11 reorganization, because I believe that if the auto companies, for instance, General Motors, if it would have gone into chapter 11 to reorganize, it could have come out in a much stronger way.

And in chapter 11 bankruptcy, you have the experts to know what kind of wage concessions should be made by labor, what kind of concessions should be made by the people who hold the debt, whether it's the bondholders or the bank debt or where ever the other creditors are.

It could have brought everybody to the table outside of politics. The whole process of bringing it into politics I think is very, very dangerous. It sets dangerous precedents for other industries. And now that the president is going to open up what's called the TARP funds, I think that's another dangerous precedent because we're going to have every other industry in America lining up and saying, hey, we need a bailout. You bailed out the auto industry. Why don't you bail us out?

BLITZER: Let's talk about that. Senator Casey, I want you to respond, but I want to explain to our viewers what the TARP funds are. Those are the $700 billion that Congress approved to help the financial sector, the ailing banks and the investment houses get through -- the first $350 billion is about to be used. There may be $15 billion left without additional congressional authorization. It's now up to the White House to go ahead and make that money available. What do you think the president of the United States is going to do? CASEY: Well, I'm confident, Wolf, that the administration will come forward with support here. And, look, I was in favor of using the troubled asset relief program, so-called TARP funds, directly. I think it makes an awful lot of sense. The statute is very broad in terms of institutions being helped.

And one of the reasons we passed that legislation against all kinds of public opposition was to make sure that in certain circumstances like this when you have an industry like the auto industry, which is the backbone of our economy, this isn't like the airlines where people -- where they can go into bankruptcy and people will still buy a ticket.

This is the second largest purchase most people will make. Ninety percent of Americans get credit -- have to obtain credit when they go to buy a car. There's no way in my judgment that you could keep this industry viable and competitive if you went into a bankruptcy situation.

But just to respond also to what John said, I think we have a basic disagreement on what the statute would have resulted in. The statute had the president appointing a person, a designee, who could have access to all kinds of expertise within and outside of the federal government.

It could have worked. That designee had a lot of power to say to the auto companies if you don't have a plan in place by March 31st, you're not getting any more help, even if you're not implementing the changes you wouldn't get more help. So it had a lot of accountability, a lot of taxpayer protection. And if we had passed this and given help for December and January, we could get back to some other fundamental problems like foreclosures, which are a big problem in Pennsylvania as well as in John's home state of Nevada.

BLITZER: Huge problem. But what about the argument that if the U.S. Treasury can spend billions, hundreds of billions of dollars bailing out whether it's Citigroup or Bear Stearns or Fannie Mae and Freddie Mac, AIG, the huge insurance company, why not spend $14 billion or $15 billion right now to bail out at least two of the big three automakers?

CASEY: I agree. Wolf, I agree with that.

BLITZER: No, I want to ask Senator Ensign.


ENSIGN: Well the TARP funds, that $700 billion, was for the financial industry of the United States because everybody uses the financial industries, whether you're doing auto loans, whether you're doing student loans, home loans or whatever. It is the responsibility of the federal government to make sure that we basically have a stable financial system, a money supply, because the money is the medium of exchange that we do commerce in the United States.

ENSIGN: So that's a constitutional responsibility that we have.

BLITZER: All right, but listen to this, Senator. ENSIGN: But when we start getting...

Senator Ensign -- Senator Ensign, listen to what Carlos Gutierrez -- he's the Republican commerce secretary; he works for President Bush -- this is what he told me, on Wednesday, when he was in "The Situation Room."

Listen to Carlos Gutierrez.


SECRETARY OF COMMERCE CARLOS GUTIERREZ: If they run out of money, it becomes a collapse. It becomes a total disaster, hundreds of thousands of jobs.

That's very different than saying, let's go through March 31st, give them time; if we're not pleased with their restructuring plan, then they can do a planned Chapter 11. This is not a planned Chapter 11. This would be a disaster.


BLITZER: All right. He's warning of a disaster if you don't come up with some sort of short-term bridge loan, as they call it, to help Chrysler and GM.

ENSIGN: Listen...

BLITZER: Those are strong words.

ENSIGN: Yes, I actually -- I actually agree that the federal government could do that bridge loan, but that bridge loan could be done in Chapter 11 reorganization. That's the difference.

And in Chapter 11 reorganizations, you have the experts; you can make sure that it's taken outside of politics. We could guarantee the warranties, which the auto industry has said, nobody will buy our cars if we're in Chapter 11.

The federal government could guarantee the warranties to make sure that people felt secure, if they bought a car, that the warranties would be backed up. That's where you would take it outside of politics. To keep it -- to have some kind of auto czar, it's still going to be a puppet of the president. There are still going to be influences on politics.

And we need to take these types of things out of politics, outside of Republican needs or Democrat needs or Democrat wants -- whatever it is, we need to take it outside of politics and get back to the fundamentals of business in the United States.

BLITZER: Let me let Senator Casey respond. Go ahead.

CASEY: Well, Wolf, look, I believe we needed to take action here, and I think the Senate missed an opportunity. And I hope that the administration -- and I'm confident they will -- but I think they must come through now and provide help from here to there, meaning get GM, especially GM, through December and January.

And then, with the new administration, we can put in a longer strategic approach to this. But the problem, right now, is that, if GM bails this month, there's no way to untangle that; there's no way to recover from that.

So I think we -- the Treasury Department should take action, invest a little bit now, to save an industry and to save jobs. Because our economy, right now, is in a tailspin. We can't afford to lose hundreds of thousands of jobs in the next several weeks, which is what would happen if one of these goes down.

BLITZER: Senator Casey, Senator Ensign, we've got to leave it right there. Senators, thanks very much for coming in.

ENSIGN: Thank you.

CASEY: Thank you, Wolf.

BLITZER: And up next, we'll get the response from organized labor. The United Auto Workers president, Ron Gettelfinger -- he's standing by, live.

He'll respond to Republican charges that his union is to blame for much of the auto industry's problems. Ron Gettelfinger, from Detroit, right after this.


BLITZER: And welcome back to "Late Edition." I'm Wolf Blitzer in Washington.

While very disappointed by the Senate's actions, or lack thereof, workers at the Big Three automakers are holding out hope that their companies will still get the help they need.

Joining us now from Detroit is the man at the center of all of this, the president of the United Auto Workers, Ron Gettelfinger.

Mr. Gettelfinger, thanks very much for coming back to "Late Edition."

GETTELFINGER: Good afternoon, Wolf, and thank you for having the UAW on.

BLITZER: Are you in direct contact with officials in the Bush administration, right now?

I know you're hoping they come up with a solution, over the next day or two or three, that would help GM and Chrysler, specifically, get through this immediate crisis.

GETTELFINGER: Well, obviously, we have our people in Washington. However, we've not entered into any discussions with the administration, at this point.

BLITZER: Because I'm -- I wonder if they're asking the UAW, as Senator Corker, a Republican of Tennessee, asked, last week, in the Senate, for specific new concessions from the UAW that would help them approve some sort of temporary bailout.

GETTELFINGER: No, we have not received any word from Washington in that regard, at this point, Wolf.

BLITZER: And if they do ask you for the kinds of concessions that Senator Corker and other Republicans were seeking -- for example, a date certain when you would bring your workers in line, in terms of pay, with the Toyota workers in the South, or Nissan or Honda or whatever, what would you say to them?

GETTELFINGER: Well, first of all, Wolf, we have been through a lot more scrutiny than the financial institutions, and we accept that. And we'll continue to work in that regard.

However, I think last week's failure by Senator Corker and the Republican Caucus proves that we should keep the Congress of the United States away from the bargaining table.

The bargaining issue should be handled between the companies and the union. We understand what the ground rules are, and we'll move forward in that regard.

BLITZER: Here's what Senator Corker said, earlier today, on Fox. I want you to listen to Senator Corker.


CORKER: Had the UAW just agreed to be competitive by the year 2009, as certified by an Obama secretary of labor, this bill would have passed with 90 votes.

QUESTION: I understand...

CORKER: And the reason that it didn't pass was -- and Gettelfinger told me this -- he knew the White House...

QUESTION: Head of the UAW. CORKER: ... he knew the White House would bail them out.


BLITZER: Is that true?

GETTELFINGER: Well, I think Senator Corker is stretching the truth there, Wolf.

The facts are this. We had a tentative agreement with Senator Corker, and he himself acknowledged that the debt restructuring and the VEBA -- or the other post-employee benefits being placed in a VEBA -- if we addressed those issues, that that would take care of it. He told our people in Washington that the wage issue was to satisfy his caucus. But he also went back to his caucus with a tentative agreement that he reached. And he did not have the clout within the Republican Caucus to bring this about.

Look, we're very clear what happened here. Senator McConnell had people talking to the media before the Republican Caucus even voted, blaming the UAW for this.

Look, we're beyond that. We should never have entered into discussions with Senator Corker, but we did because of the importance of what was going on here.

And it failed. And it's not because we didn't have a tentative agreement. It's because he could not deliver at the end of the day.

BLITZER: Well, let me just press you on that point. I just want you to be specific, because he makes a direct charge that you told him that you knew the White House would bail out the automakers if it failed in the Senate.

Did you tell him that?

GETTELFINGER: No, sir, I did not tell him that.

GETTELFINGER: I do not know where he's come up with that unless maybe he has discussions with somebody else within our organization. I did not say that to him. Why would we run the risk of taking a chance of knocking this down in the Senate if the urgency is what it is?

We need this money, this low bridge -- or this low-interest bridge loan to get us through an emergency situation here, an economic downturn. Look, we're not in the business of playing Harry Caray with this. We wanted to get this money out of the Senate. And you know, here's the other thing I don't understand, Wolf. The House passed this. This was worked out with the congressional leadership and with the White House. Why did the Republicans go against their own president who worked this out?

This legislation should have passed. No matter what would have happened in Washington, I am convinced as I'm sitting in this chair talking to you right now that the Republicans would have found a reason to knock it down.

BLITZER: But the president of the United States seems determined to find a way to make sure that GM and Chrysler get through this immediate crisis right now. He's a Republican, as you well know.

GETTELFINGER: Yes. And he understands the importance of it, Wolf. He stood firm on TARP initially. Speaker Pelosi then stepped forward and said, look, we'll use section 136 money. The Obama administration can replace that money. And that was a big, major compromise for her and on her part. And the congressional leadership, the Democratic leadership in the House and the Senate, sat down with the White House and worked out this compromise legislation. It should have sailed through both the House and the Senate. But it didn't. The Republican caucus and the Senate was doomed or wanted to doom this legislation, make it fail. And the president recognizes this importance of the industry. And quite frankly, the White House has kept their word throughout this entire process, and we're very pleased with the release that they put out on Friday saying that they would consider all options including the use of TARP funds.

BLITZER: But you have no idea when the president -- he's in Baghdad right now -- might announce some sort of temporary relief, do you?

GETTELFINGER: Absolutely not, Wolf. We've not been given any indication of that at all. BLITZER: One final question. I just want to give you a chance to respond to some of the criticisms that have been leveled at the UAW over the years, specifically the issue of absenteeism, because they say UAW workers are absent much more so than workers at non-union plants.

There was a study that came out in 2004. I'm sure you're familiar with it. It was reported in the "Detroit News." It said this, among other things. "Absenteeism among hourly workers in the automotive industry runs about 10 percent annually, about three times higher than in other industries, according to a study published this year by the Automotive Supplier Action Committee, a trade group. At some Big Three plants, absenteeism runs as high as 20 percent."

What can you tell us about this? Because it sounds like one of the big problems could be absenteeism.

GETTELFINGER: Well, I think the definition of absenteeism, I don't know. Do you include jury duty in that? Do you include bereavement pay in that or vacation?

Wolf, we have worked very hard with these companies to make them competitive -- '03, '05, '07, negotiations. Look at the language in the '07 negotiations with General Motors and how it addressed absenteeism. We don't support people not coming to work. And, look, if somebody wants to attack us, they can do that. If they want to take one page out of our agreement and say look how horrible this is, they can do that. Our agreement is public information. It's out there.

And certainly I don't hear people talking about our safety records. I don't hear them talking about our quality, our productivity, our dependability and the vehicles that we manufacture. You know, all of this is a lot of rhetoric. We're prepared as a union, as we have in the past, to address the issues between the parties. And that's where it should be done, between us and the companies. We have made concessions in the past.

We have said we're ready to come forward with all of the other stakeholders. And that means everybody from the board to the management to suppliers, the dealers, the bond holders, the creditors, the whole works. Let's get everybody in a room. Let's work it out. And I think again, Wolf, the UAW has been very responsible here, and I think that's what's irritated a lot of the Republicans. They thought they were going to be able to come out and paint us as the bad people. Well, the more they expose us, the more people see how responsible organized labor really is, and they also know that workers have a voice by having a union.

If it wasn't far union there, we wouldn't even be in these discussions. Workers wouldn't have been able to sit down with Senator Corker and try to work out something without a union.

BLITZER: Ron Gettelfinger is in the hot seat. He's the president of UAW. And it's good to have you here on LATE EDITION. Ron Gettelfinger, good luck to all the men and women of the UAW as well.

GETTELFINGER: Thank you very much, Wolf, and good luck to you.

BLITZER: Thank you.

My colleague Campbell Brown had some strong opinions about the cloud over the governor of Illinois and President-elect Obama's old Senate seat. You're going to want to hear what she has to say, when LATE EDITION continues.


BLITZER: And welcome back to LATE EDITION. I'm Wolf Blitzer reporting from Washington. Joining us now from New York is Campbell Brown, she's the host of CNN's "CAMPBELL BROWN: NO BIAS, NO BULL."

Campbell, you certainly had a lot to say this week about the Governor Rod Blagojevich scandal. Including the fact he still controls, hard as it to believe, what happens to the president-elect Senate seat. Here's what you said on Thursday. Listen to this.


CAMPBELL BROWN, CNN ANCHOR: It is preposterous, outrageous, really, given the charges against him that Rod Blagojevich is still in a position to name Barack Obama's successor as junior senator from Illinois. I mean, when police officers are facing serious charges, they are routinely suspended from active duty pending resolution of the charges against them. They are innocent until proven guilty, sure, but common sense dictates that no dangerous chances be taken while the jury is out. Shouldn't that be the case here too? How can it happen that a man accused of trying to sell a seat in the United States Senate still has the right if not to sell the seat to legally give it away?


BLITZER: All right, Campbell. So, how should the Senate seat be selected? There are several options out there. What do you think?

BROWN: Well, I think the people of Illinois should be able to decide. I don't think either option is necessarily better than the other, which is special election, something that the state legislature is talking about, or that -- the other being that Blagojevich steps down, he resigns or is impeached, lieutenant governor takes over and he would make the appointment.

BROWN: I think what's most important is the fact that neither of these could take place given that he still holds the job, Wolf. And I think even if he is innocent as a public servant, he ought to recognize that it's in the best interests of the people of Illinois that recuse himself here, that he step down, that he resign and let either one of those processes go forward. To let the legislature move forward with a special election or let the lieutenant governor pick someone. But as long as he remains in the job, it's entirely self- serving and it's not fair to the people of that state.

BLITZER: I know it's very early in this scandal, Campbell, only a few days, but has it at least initially tarnished Barack Obama's image of change?

BROWN: Well, I don't think so, Wolf, as long as the president- elect stands by what he promised during his campaign, which is openness, directness, transparency with the American people. His initial statements about this when it happened were fairly limited, and I recognize that there is an ongoing investigation and that because of that, because he wouldn't want to do anything to jeopardize the investigation, some of what he may be able to say or people on his staff may be able to say will be somewhat limited.

But at the same time, to the extent that they can be as transparent as possible with the information about contacts he may have had with the governor's office or anyone on his staff may have had, on the transition staff of the governor's office, I think that will maintain that sense that people have of him that, you know, he stands by what he promised during the campaign, which is, again, a promise to be a different kind of president who would put all his cards on the table, Wolf.

BLITZER: All right, Campbell. Thanks very much. And to our viewers. Remember, Campbell is the host of CNN's "CAMPBELL BROWN: NO BIAS, NO BULL." It airs every weeknight at 8:00 p.m. Eastern. Campbell, thanks for coming in.

Straight ahead, three of the best political team on television. They are standing by to break down the week in politics. You're watching LATE EDITION, the last word in Sunday talk.


BLITZER: A lot going on this week -- the auto bailout, the political scandal in Illinois. That certainly interrupted the President-elect Barack Obama's transition to power. Let's talk about it all and more with CNN's chief national correspondent, John King, our senior congressional correspondent, Dana Bash, and senior political analyst Bill Schneider. How much of a distraction is this Illinois scandal for Barack Obama right now, John?

KING: I think externally it was a political distraction, and now internally it is at least a short-term political distraction as they're trying to get about filling all these jobs in government.

Now, they have to go back. And you see the caution of Barack Obama. We will within a few days get you all of the contacts. Remember at first, he said it's a sad day for Illinois, didn't comment on the governor.

Then his press secretary needs to clean it up and say he wants the governor to resign. Now they have to answer and they better get it right, Wolf. How many contacts were there? We know Rahm Emanuel had a phone call or two. Who else close, if anybody, in the transition, in the political action committees, close to Barack Obama, made a phone call to the governor or anybody there, and what specifically did they say? No, absolutely no evidence of anything wrong, but when they put this out, they better get it right.

BLITZER: And when they put it out, it's better to wait a day or two and get the whole thing throughout instead of having to say a few days later, well, we want to add this or that.

BASH: Exactly. And that's not, I don't think, just the caution of Barack Obama, the Harvard lawyer, it's also the caution of the people he has around him, the people you covered and you covered during the Clinton years, during the whole impeachment issue, which is they learned, I think, Rahm Emmanuel, John Podesta, all the former Clinton people around him learned the worse thing you can do is get something out immediately that is wrong because that will become the story, why did they put out false information?

I think that is part of the reason why they're taking so long, but it has been a long time, nearly a week at this point, that we don't have all the information.

BLITZER: In terms of the perspective right now, give us a little perspective on how big of a deal or lit offensively a deal this Illinois scandal could be?

SCHNEIDER: Well, it's certainly a big deal in Illinois. In terms of national politics, Dana mentioned, the worst thing you can do is get wrong information out. The next worst thing is not get the worst information out first.

If people think you are hiding something, if something that comes out that's damaging a week from now, then it will be far more explosive. So that's a rule of damage control. If there's any damaging information, you better let it out now. There's no indication there is, but they seem to be hiding something.

BLITZER: If you read the 76-page criminal filing or whatever they're calling it that document that the U.S. attorney put out, John, there's a reference in there to emissaries or somebody from the transition team, the suspicion Rahm Emanuel had some specific conversations that were recorded. But if you read that document, it makes it clear that Blagojevich hated what Obama was standing for because he was only willing to give him quote, appreciation as opposed to cash. KING: Much like the star report in the impeachment saga Dana just mentioned. In this criminal complaint there are some non-family friendly language that we won't repeat on a Sunday morning, but that is Barack Obama's best defense at the moment, if you will, that the prosecutor who is known as a straight shooter and tough prosecutor has put forward a document saying there was tension between these guys, there was actually enmity between Blagojevich and Obama and the two camps.

That still does not reduce the threshold and the burden of getting out all of the information. If the phone call was Rahm Emanuel saying I think you should appoint Wolf Blitzer, not Dana Bash, because Wolf Blitzer can be elected statewide, she's strong in the city, but not in the rural areas, there's absolutely nothing wrong with that. That's politics 101.

The question is was there any horse-trading involved and again, the complaint lays out zero horse trading from the Obama campaign. But a guy who ran saying he'd be the most transparent president in history, a guy who has the good will of most of the people who voted against him right now saying let's give guy this chance, needs to get off to a good start. So they just need to talk to everybody, put it all out there, and hopefully for them, then chapter over.

BLITZER: Dana, you've covered Congressman Jesse Jackson Jr. of Chicago in the U.S. Congress. His name surfaced as one of the potential candidates to succeed Barack Obama in the U.S. senate. I'm going to play a little clip of how he responded on Wednesday.


REP. JESSE JACKSON JR. (D), ILLINOIS: I reject and denounce pay- to-play politics and have no involvement whatsoever in any wrongdoing. I never sent a message or an emissary to the governor to make an offer, to plead my case or to propose a deal about a U.S. Senate seat, period.


BLITZER: And he later told our own Don Lemon that right now he feels like he's fighting not only for his reputation and his family's reputation, but for his life right now.

BASH: And unfortunately for him, there was a report I believe out over the past couple of days that his brother actually was in a meeting with somebody -- with a fundraiser who was perhaps having an alleged discussion about some kind of money, whether it's a campaign contribution or what have you, to get to Rod Blagojevich.

So, unfortunately for him, it's not necessarily over in terms of that. However, I think politically what was interesting over the past 24 hours that we saw the list of names that Rahm Emanuel gave to Rod Blagojevich as potential candidates that they would accept, I think this is in the "Chicago Tribune." Jesse Jackson Jr.'s name wasn't even in there. BLITZER: That was pretty amazing when you think about it because he had made no secret, Jesse Jackson Jr., of the desire to become the next senator from Illinois.

SCHNEIDER: You know, you talk to Governor Blagojevich and Blagojevich said on those tapes that someone offered to raise $500,000, a million, and he did connect him with candidate five. Candidate five...

BLITZER: Who is Jesse Jackson Jr.

SCHNEIDER: Jesse Jackson Jr., so, there's a lot of explaining that needs to be done, things we really don't know, including what happened in that meeting between Jesse Jackson Jr. and Rod Blagojevich. It could turn out to be Blagojevich's word against Jackson's word, and Blagojevich's word isn't worth much right now.

BLITZER: No, Blagojevich's word is not worth a whole lot. All right guys, stand by. We're going to continue this conversation. The Illinois governor scandal certainly was a hot topic on the other Sunday morning talk shows, as well. We're going to bring you some highlights in our very popular "In Case You Missed It" segment right after this. (COMMERCIAL BREAK)

BLITZER: Much more of our political panel coming up. But first, "In Case You Missed It," let's check some of the other highlights from the Sunday morning talk shows in the United States. On NBC, the Illinois Attorney General Lisa Madigan explained why she thinks the corruption scandal involving the governor, Rod Blagojevich, has made him incapable of serving the state.


MADIGAN: In addition to the fact that he was allegedly attempting to sell a U.S. Senate seat, gain campaign contributions for signing laws, refusing to provide Medicaid reimbursement to a significant children's hospital in Chicago, get an editorial writer at "The Trib" fired, there is also this serious concern that absolutely everything he does from here on out is going to be tainted.


BLITZER: On CBS, Democratic Senator Carl Levin of Michigan argued that the auto industry crisis isn't limited to the United States.


SEN. CARL LEVIN, D-MICH.: No other country, no other country that produces automobiles, is allowing its industry to collapse. They all have the same problem. They're all providing loans to those industries. This is not unique to the United States.


BLITZER: And on FOX, Republican Senator Bob Corker of Tennessee and Democratic Senator Debbie Stabenow of Michigan debated whether the big three automakers would continue to ask Congress for money even if they get a short-term loan.


SEN. DEBBIE STABENOW, D-MICH.: We're in a situation where a short-term bridge loan makes sense. And then it's not about just continuing to give additional loans. It's about giving them time to be able to restructure. Everyone -- workers, the CEOs, the suppliers, the bondholders, everybody.

CORKER: If we do this under the terms that Deb Stabenow is asking, this is the beginning of probably hundreds of billions of dollars, because we're piling on taxpayer money on top of a $62 billion liability that they cannot pay back.


BLITZER: Highlights from some of the other Sunday morning talk shows here on LATE EDITION, the last word in Sunday talk. Up next, our political panel will be back. LATE EDITION continues, right after this.


BLITZER: Welcome back. We're talking politics with CNN's John King, Bill Schneider and Dana Bash.

Caroline Kennedy, Dana, a lot of buzz in New York state that she might be asked by the governor, David Paterson, to succeed Hillary Clinton in the U.S. Senate. What are you hearing about that? BASH: It seems to be in a little bit of a holding pattern. You would think, considering the fact that she is such a high-profile name and such a powerful force, that we would have seen this move a little bit forward. But because it hasn't, it's clear that there is some internal division, I think, among New York Democrats about it.

I've got to tell you, from the very beginning when her name was floated up on Capitol Hill, I talked to some senior Democratic aides who know sort of the way things are in New York, the way things are in the Senate, that said I just don't see it. Having said that, it's pretty clear that her uncle, Ted Kennedy, very much wants this to happen.

BASH: There was a report in the New York Times which Ted Kennedy actually denied, that he was making phone calls to make clear that he wants this to happen.

But, again, because it hasn't gotten out there and time is ticking, you know, it makes you think that perhaps there are some big issues.

BLITZER: And, Ted Kennedy, you know, who's been in the Senate for a long, long time -- at least, what, four decades or whatever -- who's ailing right now, if he makes a phone call -- I don't know if he has or he hasn't -- to Governor Paterson, and says, you know what, you might want to pick Caroline Kennedy, that could have an impact.

KING: It absolutely could. One of the questions, here, is can this person raise the money to run twice, to run in two years and then to run when Hillary Clinton's term would have been up.

And that is one of the things I do know, from talking to friends who are close to the Kennedys, that they have had those conversations, that operatives close to Ted Kennedy have had phone calls, and that Caroline Kennedy has reached out to them, saying, do you think I could raise the money; do you think I could put an organization together?

And the answer, emphatically, has been "Absolutely." And that is a strength that she has that some of the other candidates might not have, that she can say, there's no question I can raise the money.

At the same time, her last name is Kennedy, so whoever is running against her might be able to raise some money, just because of that, as well.

BLITZER: And it, sort of, goes against her instincts, too. Because, all these years -- she's the daughter of the late president John F. Kennedy, and, you know, she was behind the scenes. She was not out there campaigning.

Hillary Clinton, when she moved to New York state and went on a listening tour, she, sort of, fell into it. And she obviously did very, very well. But this is, sort of -- would be a very different kind of situation for Caroline Kennedy.

SCHNEIDER: No, this would be an appointment, but then she'd have to gear up to run very quickly.

As John said, the money is a crucial consideration. She could raise money. Republicans could raise money against her. But the other consideration, for the governor and New York Democrats, is they want to keep this seat Democratic.

Now, would you like to be a Republican running against a Kennedy in New York state, and this was her uncle, Robert Kennedy's seat? That would be very tough.

It's a good way to try to keep this seat in the Democratic column. She obviously developed a taste for politics, although she has no particular political experience, but she participated in the Obama campaign. And my guess is, seeing Obama become president and having participated -- she wants to be a part of that.

BLITZER: And she was part of that vetting process for the vice presidential running mate.

John, you were up at Harvard University this week with a lot of campaign strategists, the Democrats, the Republicans, I assessing what happened, didn't happen, over the long, long primary process and presidential campaign.

Senator McCain was on ABC this morning, and he was asked to assess whether or not he could have won that race. And I want to play the little clip of what he said.


SEN. JOHN MCCAIN, R-ARIZ.: You know, I'd like to leave that to others to make that kind of judgment. I do know that, when the Dow went down 700 points there's no doubt; you can track that in the -- in our polling data.

But in a way, that would sound like I'm detracting from President-elect Obama's campaign. I don't want to do that. There's no -- nobody likes a sore loser.


BLITZER: He was very gracious, I must say, in that interview, to President-elect Obama, today. But what did you learn, John, from the seminar at Harvard, that you want to share with our viewers?

KING: I need to be careful, Wolf, because most of the sessions were done off the record, and they publish a book. And only when the book comes out are we supposed to talk about what we learned in the private sessions.

But there was one open session. But I think, without breaking the rules, I can characterize, based on what Senator McCain just said, there was a fascinating discussion. You have the Obama camp on one side, the McCain camp on the other side of the table.

And I moderated the session on the general election. We just essentially let them talk to each other: what were you hearing; what were you seeing? And that period, right there, September 15th, Lehman Brothers collapses; the AIG bailout is already in the system; the stock market goes down. McCain, soon thereafter, agrees to come back to Washington to try to get a handle on the bailout plan.

That 10-day period, essentially, from September 15th through the 25th, or maybe through the end of month -- it was a fascinating discussion, where McCain was starting to come back, a little bit. His convention had been successful. They had closed the gap.

That is when, when you see the details of the discussion, you'll see both campaigns realized, at that point, that, unless Obama made a dramatic mistake, it was over.

BLITZER: And you've covered that McCain campaign.

BASH: Yes.

BLITZER: There was a moment they thought they -- they could win.

BASH: There was. But I can tell you, in covering the McCain campaign, covering it real-time, it was pretty clear, at that time, that they knew that everything was going downhill from there.

BLITZER: When the economy, sort of, collapsed. BASH: Right. But, in terms of the interview this morning, wolf, It was really interesting not just to see how gracious McCain was about the past but about how positive he was about Barack Obama's agenda and the people around him, in terms of his future.

And there's one word that Joe Lieberman, Senator Joe Lieberman, introduced on the McCain campaign, and a Yiddish word. It's "schpilkus (ph)."


And everybody used it. They said John McCain has "schpilkus." He can't sit still. And you heard him say, this morning, the reason why I can't look back is because I've got to keep moving, and I can't stop; I'm looking forward.

And that is the way he is, and it was very, very clear in the way he was looking forward to dealing with Barack Obama on a host of issues, that he's still got "schpilkus."


BLITZER: Very -- you've got "schpilkus," looking forward to January 18th, John King.


That's the day that I'm handing over to you this excellent Sunday morning opportunity. KING: I do have some "schpilkus", in the sense that, there's a great opportunity in the country. It's a great opportunity for me to, once again -- I was, you know, the junior White House correspondent and Wolf Blitzer moved on to become an anchor and I became the senior White House correspondent.

I'm very much looking forward to build on the legacy of this remarkable program, and at an amazing time in the country. We will swear in, two days after we launch the revised program, the first African-American president of the United States.

You had the president of the United Auto Workers on here. Our economy is in this huge challenge, a transformation. There are so many question marks, not only here in Washington but out in the country.

And that's the opportunity we hope to seize on: focus on the new administration, hold it accountable, watch what its opposition and its critics do, but also get out in America and watch what's happening through the eyes of everyday people.

BLITZER: And in the coming weeks, we're going to be unveiling details of what you have in mind. It's going to be exciting for all of us.

All right, guys. Thanks very much for coming in.

Up next, President Bush makes a surprise visit to Iraq. CNN's Michael Ware is standing by, live. We'll get the latest, right after this.


BLITZER: Welcome back. President Bush made a surprise visit to Iraq this morning, the fourth and final trip of his presidency. Let's go to Michael Ware. He's our man in Baghdad, right now.

Michael, what do we know?

WARE: Well, Bush -- well, Wolf...


... the most extraordinary thing. You may or may not believe this. We're getting reports from the press pool that flew in with President Bush, and apparently, just a short, time ago, at a press conference with Prime Minister Maliki, an Iraqi man stood up in the press conference and threw a shoe at President Bush.

By the reports we're getting, it just sailed past his head. And while the man was dragged out of the room, President Bush is said to have remarked that, this was a size 10 shoe he threw at me, you may want to know, even as the man was heard screaming in the hallway.

So this is all during President Bush's farewell trip, as it's billed, to Iraq, where he's celebrating the SOFA agreement struck between Baghdad and Washington to see the U.S. troops to go home. Wolf?

BLITZER: Wow. That's -- that's -- that's good. I'm sure that the videotape -- we'll get that pretty soon. Any idea when we'll get that video?

WARE: No. We're all waiting with baited breath. Now, we haven't seen many pictures coming out of the trip, but, given this was at a press conference, keep your fingers crossed. Let's hope we see something very soon, Wolf.

BLITZER: I'm sure we will. And we'll bring it to our viewers, Michael, as soon as we get it. Michael Ware is our man in Baghdad. He's going to continue to cover President Bush's surprise visit to Iraq today.

That's your "Late Edition" for this Sunday, December 14th. Please be sure to join us again next Sunday and every Sunday at 11 a.m. Eastern for the last word in Sunday talk. Remember, I'm in "The Situation Room," Monday through Friday from 4:00 p.m. to 7:00 p.m. Eastern. Until then, thanks for watching. I'm Wolf Blitzer in Washington.