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Democrats Move to Block Illinois Governor's Show of Defiance; Israel Weighs Gaza Truce; Interview With Congresswoman Jan Schakowsky

Aired December 30, 2008 - 16:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


SUZANNE MALVEAUX, CNN ANCHOR: Happening now, breaking news. Democrats move to block the embattled Illinois governor's show of defiance. He just named his choice to fill Barack Obama's former Senate seat. It is the same seat that he's accused of trying to sell to the highest bidder.
Plus, a possible break in the Israeli air assault on Palestinian militants. This hour, new information on the fighting and a truce proposal on the table.

And the Republican Party prepares to throw a political bombshell at President Bush. At issue, multibillion-dollar bailouts and whether they smack of socialism.

Wolf Blitzer is off today. I'm Suzanne Malveaux.

And you're in THE SITUATION ROOM.

The Illinois governor says that the corruption allegations against him should not taint his new appointee for the U.S. Senate. You heard it live here on CNN just a short while ago. Governor Rod Blagojevich named former state attorney general Roland Burris to fill President- elect Barack Obama's former seat, but Senate Democratic leaders say that the appointment is indeed tainted by scandal.

Our CNN Congressional Correspondent Brianna Keilar is standing by with reaction from Capitol Hill.

But first, let's go to CNN's Ed Lavandera.

Ed, the governor contends that he was required to fill the Senate seat now. How does he explain this?

ED LAVANDERA, CNN CORRESPONDENT: Well, that's his explanation, that as the governor, he has to make this appointment. But this is also the same person who has been telling lawmakers in Illinois for the last few weeks that given the scandal and all of the allegations against him, that he wouldn't make this appointment because of all of that. So this is clearly a 180-degree turn, and the reaction from across Illinois, the political circles of Chicago, have been buzzing since the news of this press conference was announced earlier this morning. And people, even the most ardent critics of the governor and the most intense watchers of Illinois politics, say they are shocked and dismayed by what the governor has done.

(BEGIN VIDEO CLIP) GOV. ROD BLAGOJEVICH (D), ILLINOIS: Please don't allow the allegations against me to taint this good and honest man. To not fill the vacancy would be to deprive the people of Illinois of two United States senators, to deprive the people of Illinois of their appropriate voice and votes in the United States Senate.

(END VIDEO CLIP)

LAVANDERA: And Suzanne, Republicans of Illinois are reiterating their push today that this appointment should not go through and there is a need in that state for a special election.

MALVEAUX: And Ed, what is the reaction among Illinois' Republican senators?

LAVANDERA: Well, you know, it's actually been rather comical. I mean, there are people who are essentially wondering, how confused is this governor? And they are wondering about just how essentially sane he might be by doing all of this. In the words of one person who's been watching Illinois politics for a while, saying, this is just the governor thumbing his nose at the rest of the world.

MALVEAUX: It's indeed quite a story that is unfolding there. Obviously a lot of elements to it. Some would even say kind of a circus-like atmosphere.

It is worth noting that the Illinois State Board of Elections Web site shows Roland Burris made four political contributions to Rod Blagojevich in his name or with his wife. One thousand dollars in 2004, another $1,000 in 2005, $1,500 in 2007, and $1,000 in 2008. Now, Burris has not been linked to the allegations that Blagojevich tried to peddle the president-elect's Senate seat to the highest bidder.

Well, now to the Capitol Hill, where Democrats wanted him, of course -- the governor -- to go away. But instead, he defied them by announcing this U.S. Senate appointment.

Well, here's our Congressional Correspondent Brianna Keilar.

Brianna, obviously, Senate Democrats digging in their heels now. What happens next?

BRIANNA KEILAR, CNN CORRESPONDENT: They sure are, Suzanne.

Senate Democrats saying they plan to block this appointment of Roland Burris, something they threatened to do earlier this month when Senate Majority Leader Harry Reid sent a letter to Governor Blagojevich signed by every Democrat in the Senate urging him to step aside and to allow his successor to fill Barack Obama's Senate seat.

Now, today, even before Blagojevich made this appointment Burris official, leaders, Democratic leaders in the Senate, came out with this statement saying, "It is truly regrettable that despite requests from all 50 Democratic senators and public officials throughout Illinois, Governor Blagojevich would take the imprudent step of appointing someone to the United States Senate who would serve under a shadow and be plagued by questions of impropriety. Under these circumstances, anyone appointed by Governor Blagojevich cannot be an effective representative of the people of Illinois and, as we have said, will not be seeded by the Democratic Caucus."

So this statement also saying something, I should add, Suzanne, that this is not a judgment of Roland Burris, of his public service and his ability. But basically what you see here is the Democratic leadership saying they do believe they have the power to stop him from joining the Senate.

MALVEAUX: So, Brianna, do the Senate Republicans see an opportunity, an opening here?

KEILAR: They sure do. This has become a tug of war between Democrats and Republicans in the Senate. What Republicans want to see is a special election that would give basically a Republican a chance at running and possibly winning this seat.

Now, Senator John Cornyn, he is the incoming chairman of the committee that's basically in charge of increasing the number of Republicans in the Senate. He issued a statement saying, "Senator Reid and the Democratic leadership in Washington and Springfield decided to play politics with the Senate seat and unfortunately, the people of Illinois are now paying the price. There is no other appropriate way for this process to move forward without the stench of corruption or political gamesmanship attached to it."

And of course, Suzanne, Democrats don't want a special election. What they would like to see, of course, is for Blagojevich to step aside, his Democratic successor to appoint someone who would be a Democrat. And that would make sure that Democrats hold on to this Senate seat.

There are 57 Senate seats for Democrats at this point. There's another one at stake in Minnesota. This would be another one as well. If they can get all of those, it's 59, and the closer they get to that 60-seat filibuster-proof majority, the more strategically placed they are.

MALVEAUX: Obviously high stakes for that Illinois seat.

Thank you very much, Brianna.

Now to the breaking news from the Middle East. The Israeli defense minister is said to be considering a truce proposal to allow humanitarian aid into Gaza. This on the fourth day of what Israel is calling an all-out war against the Palestinian militants who rule Gaza.

CNN's Paula Hancocks is in that conflict zone -- Paula.

PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: Suzanne, the Israeli military does not appear to have dented Hamas' ability to fire rockets into Israel. Longer-range missiles are now hitting further than ever before.

(BEGIN VIDEOTAPE)

HANCOCKS (voice-over): If this is only stage one, as Israel's prime minister promises, what's next? Israeli airstrikes pounding Gaza for a fourth day, targeting Hamas buildings and Hamas military leaders.

In between the airstrikes, Gazans rush to bury their dead. The U.N. says civilians are still being killed in attacks that Israel insists are not targeted at them. But this funeral of two young girls killed in northern Gaza Tuesday, yet further proof that airstrikes into one of the most densely populated areas on earth will kill the innocent.

This woman talks about how hard life is. She says she could die at home and she could also die right where she is.

Israeli officials blaming the civilian casualties on Hamas.

BENJAMIN NETANYAHU, FMR. ISRAELI PRIME MINISTER: They are planting their rocket launchers and their rocket caches inside people's homes, in schools and universities, precisely in order to use them as human shields.

HANCOCKS: Leading to the question, will the airstrikes be enough to achieve Israel's purpose, a Gaza without rockets, or will Israel put boots on the ground, as the defense minister has threatened to do?

(on camera): The physical preparations for a possible ground offensive into Gaza are clear to see. We're on the Israeli/Gaza border and you can see tanks, armored personnel carriers and also bulldozers all lined up, pointing in the direction of Gaza. Now, the soldiers here at this point are cleaning their equipment and waiting for an order.

(voice-over): An order which Israel says it's not afraid to give. And up until now, its objectives have not been met. Not only has it failed to stop the rocket attacks from Gaza, but Hamas is hitting further from the border than ever before, 30 kilometers, or over 20 miles, into Israel near the southern Beersheba and Kiryat Malachi, halfway between Gaza and Jerusalem.

UNIDENTIFIED MALE (through translator): To the people of Israel, we want to tell you that your leaders are playing with your blood so they can win more votes in the election boxes. And they are giving you that illusion that they will stop our rockets if you support what your army is committing in Gaza.

HANCOCKS: Inflaming the conflict is easy. Calming it is not.

(END VIDEOTAPE)

HANCOCKS: So another sleepless night for 1.5 million residents in Gaza and three-quarters of a million residents in Israel, who are now within rocket range -- Suzanne.

MALVEAUX: Thank you, Paula.

Gaza's history has been shaped by both Israel and the nation on its other border, Egypt. Egypt occupied Gaza during the 1948 War and held it into Israel captured the territory in 1967.

Israel occupied Gaza until 2005, when the Palestinian Authority took over. The Palestinian Authority shared control with Egypt of the only crossing along the Egypt/Gaza border. But when Hamas took over Gaza in 2007, Egypt joined forces with Israel, helping it seal off Gaza's border.

But Palestinians blew open the border barrier in January, and thousands poured into Egypt. Egypt briefly opened the crossing this week but reclosed it after a deadly clash. Egypt says it will not reopen the crossing until the Palestinian Authority, now essentially exiled to the West Bank, regains control.

Jack Cafferty is off today.

Right now, the Illinois governor's harshest critics have even more reasons to be outraged. I'll ask an Illinois congresswoman if Roland Burris would be right for the Senate post, despite the scandal surrounding the man who appointed him.

Plus, new misery for the housing market. The biggest annual drop in prices ever recorded. We'll tell you what it means for you and your home.

And a former congresswoman and presidential candidate lands herself, well, smack dab in another controversy. This time she is in the middle of the conflict in Gaza.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

MALVEAUX: There is fresh evidence today that the economic downturn is far from over. New numbers show the biggest annual dip in home prices on record, and the slide shows no signs of slowing.

Our CNN Chief Business Correspondent Ali Velshi joins us to explain what is going on.

Ali, is there any hope here on the horizon? What do we see?

ALI VELSHI, CNN SR. BUSINESS CORRESPONDENT: Well, there might be. And part of that is that these numbers we are looking at, they are put out by S&P and Case-Shiller. There's a two-month lag on these, so these are October's numbers.

And you'll remember, Suzanne, as bad as it looks, October was right in the middle of the credit crisis. And probably nobody who was buying a house.

Now, Case-Shiller looks at 20 major cities around the United States. The yellow houses are where the drop is between zero and 10 percent. The orange houses are where they're between 10 percent and 20 percent. And the red ones are where the drop in home prices is more than 20 percent. Now, average in October, compared to a year earlier, homes were down 18 percent. But take a look at the major centers: San Francisco, Los Angeles, San Diego, Las Vegas, Phoenix, Miami, and Detroit. Those are places where the drops were all greater than 20 percent. In some cases, 31, 32, 33 percent.

Part of the thing here, Suzanne, is that many of these places faced foreclosures, and foreclosures and short sales, which is where you give your house back to the bank and you settle up your mortgage, even if the house is worth less. They tend to exaggerate the numbers. So there's some sense that once we get through that, you may not see these dips.

But this is the 27th straight month of decline. Home prices in these 20 cities are now at March 2004 levels -- Suzanne.

MALVEAUX: So, Ali, what about the government's efforts here to shore up confidence among consumers and investors? Is any of that working?

VELSHI: Well, we've got new numbers on consumer confidence and they're more current. These are not October. These are November numbers. And boy, that number is way down.

Thirty-eight. It's a scale of 1 to 100. We were expecting it to come in at 459, which is pretty low anyway. Thirty-eight is where the number came in.

Take a look back to last December. The number was at 90.6 out of 100. That's when the recession started.

We still thought -- the consumer still thought there was a future in this, and it's declined every single month. There was a little bit of a blip there in August, and then, of course, the financial crisis hit in September. You can see that.

And now we're at 38. That doesn't bode well, because this is what consumers think not just of what the economy is doing right now, but a few of the questions on the survey that gives us these numbers indicate what consumers think is going to happen in the next few months. It talks about the economy and it talks about jobs.

Consumers in America are not very optimistic right now. We'll see if that changes under a new administration, if there's a stimulus package that comes in that makes people feel more hopeful. But right now we are going into a new year with American consumers not very optimistic at all -- Suzanne.

MALVEAUX: OK. Thank you, Ali Velshi, for those numbers.

We want to go directly to Jim Acosta, who has got some breaking news out of unrest in Iran.

Jim, what are you watching?

JIM ACOSTA, CNN CORRESPONDENT: Well, Suzanne, it's a situation that's unfolding in Iran right now, in Tehran, the capital there. According to reports that we have now confirmed here at CNN, a group of students stormed inside the British Embassy compound in Tehran, according to the state-run news agency there.

According to the agency, the students there hoisted a Palestinian flag inside the embassy "in protest to the policies of the British government regarding the savage crimes" -- this is a quote from that state-run news agency "of the Zionist regime in Gaza." And students had been protesting in front of the British compound since Sunday, and apparently this situation has come to a head and they have managed to find their way inside the compound.

We want to stress at this point that we don't have any information, Suzanne, that suggests that this is a takeover of any kind, but these 40 students -- we are hearing now 40 students who have made their way inside the embassy compound, the British Embassy compound in Tehran -- were able to pull off some sort of a political demonstration there -- Suzanne.

MALVEAUX: Jim, thanks so much. We are seeing reaction, global reaction to those Gaza and Israeli strikes.

Thanks again, Jim.

Big bailouts and no guarantees. How Congress spends the nation's money is getting a lot of attention from Republicans. Some take issue with Democratic plans under new leadership. Others are at odds with their own rank.

And along with the economy, President-elect Obama has renewed Middle East hostilities to cope with when he takes office. How will his relationship with Israel differ from his predecessors?

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

MALVEAUX: Illinois's secretary of state says he will not certify it, and Senate Democrats say they will block it. Still, embattled Illinois Governor Blagojevich has gone ahead to name former state attorney general Roland Burris to the Senate.

Democratic Representative Jan Schakowsky of Illinois is one of the Illinois governor's more vocal critics. She joins us now from CNN's Chicago bureau.

Full disclosure, your name was one of the names of the candidates considered for possibly being appointed to that position.

The Illinois governor said today he's doing it for the people of Illinois, don't let his problems taint this good, fine candidate, Mr. Burris.

Did he make the right decision?

REP. JAN SCHAKOWSKY (D), ILLINOIS: Well, actually, the communication from all 50 Democratic senators to the governor was that it's unfair to Illinois, it's unfair to Roland Burris, and that this appointment will not stand. Let's remember what the whole problem that the governor is facing.

This is about trying to sell the Senate seat. And the feeling is that -- with no reflection on Roland Burris at all -- he certainly has served our state well -- that this would punt a taint on anyone who is appointed by this governor. It is about the governor.

MALVEAUX: Obviously, there are impeachment hearings that are going on. There's possible -- the complaints against the governor. But Burris today, he makes the point here. He says, "I was the former attorney general of this state," that he has a lot of experience. He's an African-American.

Why not support his candidacy?

SCHAKOWSKY: Well, yes, of course, there's a lot to be said for that. The problem though is the appointer, and not the appointee.

And while we're going through impeachment proceedings in the Illinois legislature, while the U.S. attorney is prosecuting the governor, while the Senate of the United States says they don't want to seat the appointee, the governor, I think, in this act of defiance, is actually doing more harm even for himself than good.

MALVEAUX: We heard from Representative Bobby Rush of Illinois as well making really an impassioned plea for Burris. And obviously he makes a point because he says he would really only be the only African- American senator.

I want you to listen very closely to what he said.

(BEGIN VIDEO CLIP)

REP. BOBBY RUSH (D), ILLINOIS: Tremendous national importance. National importance. We need not just one African-American in the U.S. Senate, we need to have many African-Americans in the U.S. Senate. So I applaud the governor for his decision, and I would ask you to not hang or lynch the appointee as you try to castigate the appointer.

(END VIDEO CLIP)

MALVEAUX: Congressman Rush says that he will take this to the Congressional Black Caucus and he will beg anybody who will listen to him. Does he have a point? Can he base this partly on merit, saying, look, you know, Barack Obama was in the Senate, African-American, that this is a viable candidate? For the sake of that diversity within that critical body, let this go forward?

SCHAKOWSKY: Well, I think the use of "lynch" was really unfortunate, because certainly it adds an unfortunate, I think, racial tone to this, because it is not about lynching Roland Burris at all. And actually, it's not about race at all. And I think that in some ways it was a shrewd, if not cynical, move by the governor to make this appointment, even though he knows and he knew that the situation swirling around him made anything that he did in regard to the Senate very questionable.

Of course Bobby Rush makes a point, but let's remember that the secretary of state now, who says that he will not certify this because of the tainted process, is also an African-American, Jesse White. So I think race is -- in terms of this process, is really not an issue.

MALVEAUX: Congresswoman Schakowsky, thank you so much for joining us here in THE SITUATION ROOM.

SCHAKOWSKY: Thank you.

MALVEAUX: The president-elect isn't saying much about Israel's new bombing campaign against Palestinian militants, but his past comments offer clues about his position and what he may do once he becomes commander in chief.

And she wants got into hot water for allegedly slapping a U.S. Capitol Police officer. Now a former congresswoman is raising eyebrows again on a mission in the Middle East.

(COMMERCIAL BREAK)

MALVEAUX: You're in THE SITUATION ROOM.

Happening now, an outspoken former member of Congress is now involved in an international crisis. We'll have details of Cynthia McKinney's humanitarian mission to Gaza.

A damning assessment of the Bush administration. White House insiders describe how Hurricane Katrina became what one called a political nail in the coffin.

And a civil rights case in Jena, Louisiana, is now in the hospital. His gunshot wound follows Christmas Eve shoplifting charges.

Wolf Blitzer is off today. I'm Suzanne Malveaux.

And you're in THE SITUATION ROOM.

Back to our breaking news this hour. A fourth day of Israeli airstrikes brings the Palestinian death toll in Gaza up to 375. And the Israeli defense minister is said to be considering a truce to allow delivery of humanitarian aid.

Here in the U.S., Bush administration officials are privately keeping the Obama transition team up to speed on the new Middle East crisis.

Let's bring in our own CNN's Brian Todd.

Brian, what do we know about Obama's views regarding the latest developments, what has happened today in this truce?

BRIAN TODD, CNN CORRESPONDENT: Well, Suzanne, the Obama team is keeping fairly quiet for the moment, but they have to be thinking about how to attack this in three weeks. During his campaign, Barack Obama pledged to both support Israel and also play the honest broker. Similar goals to the Bush administration, but perhaps with a different style.

(BEGIN VIDEOTAPE)

TODD (voice-over): During the campaign, he emphasized his commitment to America's longtime ally.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: America must always stand up for Israel's right to defend itself against those who threaten its people.

TODD: He also vowed no talks with the militant organization Hamas, which is now under fire from Israel.

OBAMA: We must isolate Hamas unless and until they renounce terrorism, recognize Israel's right to exist, and abide by past agreements.

TODD: Will Barack Obama's policy toward the Middle East be different than President Bush's?

OBAMA: The support of Israel will see a strong pro-Israel presiden. But it seems to me that supporters of -- of the Palestinian side are going to see a president that is more receptive to Palestinian perspectives, a -- a president who is innately concerned in bridging differences.

TODD: Mr. Obama's freedom to play the honest broker could be boxed in by his campaign pledges. But, if past precedents are any guide:

LARRY SABATO, DIRECTOR, UNIVERSITY OF VIRGINIA CENTER FOR POLITICS: Once they get in office, though, they tend to take a more even-handed approach to the Middle East. That was certainly true for Jimmy Carter. It was true for Bill Clinton. I wouldn't be surprised if it were true for Barack Obama.

TODD: Key players for Obama, secretary of state nominee Hillary Clinton, a strong supporter of Israel herself, and national security adviser designate James Jones, a retired marine general who has hands- on experience in the region.

ALTERMAN: One of the advantages of bringing in somebody like General Jones, who is committed to the idea of building up a viable Palestinian military force to take action against Palestinian militants, that, I think, provides an avenue for future U.S. action, very different from what we have seen up to now.

(END VIDEOTAPE)

TODD: But several analysts remind us, the biggest factor is going to be what the Israelis and the Palestinians themselves are willing to do about their conflict. Everything on the ground is really going to be crucial here, Suzanne, especially in the next couple of weeks. MALVEAUX: And, Brian, the next couple of weeks, tell us about the timing of this, obviously, three weeks before Barack Obama becomes president. Is there any sense here that this was coordinated with -- with that event, that perhaps they are even testing Barack Obama?

TODD: Well, that's been talked about a lot in recent days, that it could be to test Obama, that it could be that they want to do -- they wanted to do this when Bush was still in office, because he's such a reliable ally.

Most observers will tell you, though, that what drove this, the timing of this, was the -- number one, the Hamas escalation after that cease- fire expired. And, also, the upcoming Israeli elections on -- on Israel's part, that's playing a key factor here as well.

MALVEAUX: OK. Thank you, Brian.

A controversial political figure here in the U.S. is rocking the boat again in connection with the crisis in Gaza now. Many people remember former Congresswoman Cynthia McKinney in a dustup in which she allegedly slapped a Capitol Hill police officer.

But McKinney's public career has been packed with attention-grabbing moments, including this new one.

Our CNN's Brooke Baldwin is following the story.

And this had to do with McKinney's role in a shipment of humanitarian aid to Gaza. What do we know about that?

BROOKE BALDWIN, CNN CORRESPONDENT: We are learning a few new details, Suzanne, first, the fact that Cynthia McKinney secured a seat on that ship, the SS Dignity, because someone else backed out. In fact, she sent this e-mail to her friends just yesterday, alerting them of her mission, or, as she referred to it, as a humanitarian undertaking.

(BEGIN VIDEOTAPE)

BALDWIN (voice-over): Cynthia McKinney taking center stage, this time on a humanitarian mission.

CYNTHIA MCKINNEY (D), FORMER U.S. CONGRESSWOMAN: Our mission was a peaceful mission to deliver medical supplies. And our mission was thwarted by the Israelis, the aggressiveness of the Israeli military.

BALDWIN: McKinney was on board the ship, the SS Dignity, owned by the Free Gaza Movement, a Palestinian-rights organization based in Northern California. It had set sail Monday from Cyprus to deliver three tons of medical supplies to war-torn Gaza.

The group's co-founder, Paul Laurdee, said he invited McKinney on the mission after some of the original passengers had canceled. Laurdee says McKinney was a supporter of the group for years and wanted to take the trip a year ago, but couldn't.

Most remember her infamous incident at the U.S. Capitol two years ago, when a police officer accused her of slapping him. Weeks later, the former six-term controversial congresswoman from Georgia sparred with CNN's Soledad O'Brien.

(BEGIN VIDEO CLIP)

SOLEDAD O'BRIEN, CNN SPECIAL CORRESPONDENT: Forgive me for interrupting you, but I believe we...

(CROSSTALK)

MCKINNEY: No, but you shouldn't interrupt me, Soledad.

O'BRIEN: Well...

(CROSSTALK)

(END VIDEO CLIP)

BALDWIN: Two years later, McKinney ran for U.S. president on the Green Party ticket. While that was always a long shot, McKinney may have better luck drawing attention to the current crisis in Gaza.

MCKINNEY: I would like to ask president-elect Obama to say something, please, about the humanitarian crisis that is being experienced right now by the people of Gaza.

(END VIDEOTAPE)

BALDWIN: Now, McKinney's parents declined to speak to CNN today, saying that their daughter, Suzanne, should be speaking for herself.. McKinney might be bound for Gaza in another two days, as the group plans to attempt their mission in a new ship once again.

MALVEAUX: OK, we will see how that works.

Thank you so much, Brooke.

Some Republicans are seething over big government bailouts, and they met vent their anger at President Bush by accusing him of peddling socialism.

Plus, top Democrats are planning to block the Illinois governor's new Senate appointee. Could that move work against them?

Stand by for our "Strategy Session."

And CNN's Jeanne Moos wonders if Caroline Kennedy can talk the talk of a U.S. senator.

(BEGIN VIDEO CLIP)

CAROLINE KENNEDY, DAUGHTER OF PRESIDENT JOHN F. KENNEDY: You know...

You know...

You know... JEANNE MOOS, CNN CORRESPONDENT: Saying you know a lot does not mean she doesn't know, or she's dumb.

JEFFREY DAVIS, OWNER, SPEAK CLEAR COMMUNICATIONS: No, it doesn't. No, not at all.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

MALVEAUX: Out of power but, not out of the picture. Capitol Hill Republicans are flexing what muscle that they have left in the hope of influencing Democratic spending plans.

CNN congressional correspondent Brianna Keilar joining us now.

And, Brianna, what is the GOP leadership saying about this?

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Well, Suzanne, they say Democrats plan to inject a huge amount of money into the U.S. economy right after Barack Obama takes power. It could be a huge throwaway of taxpayer dollars.

(BEGIN VIDEOTAPE)

KEILAR (voice-over): A Democratic leadership aide tells CNN, a vote on a new economic stimulus package in the House now is likely as soon as the second week of January. We're told Democratic leaders are still talking about a package focused on infrastructure spending, with a price tag ranging from $500 billion to $600 billion, but spending as much as $775 billion, a number being mentioned by the Obama team, is very possible.

The biggest hurdle, though, is the Senate. And the Republicans leaders there moving too fast is a guarantee that money will be wasted. GOP Leader Mitch McConnell says, a stimulus package with bipartisan support will "require the consideration of alternative ideas, public congressional hearings, and transparency, not a rushed partisan take-it-or-leave-it approach."

To get enough Republicans on board, Democrats and the Obama camp are reaching out to moderate Republicans, such as Maine's Olympia Snowe, trying to persuade them that those hundreds of billions will be well spent.

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: If we're building a road, it better not be a road to nowhere. If we are building a bridge, it better be because an engineer identified a bridge that has a structural weakness and that has to be dealt with. That's going to be the care with which we embark on this necessary process.

(END VIDEOTAPE)

KEILAR: Republicans aren't threatening at this point to block this economic stimulus package. They say Democrats and members of the Obama team that are hammering out this plan haven't asked them for input yet.

But Republicans are asking for hearings, a chance to offer changes to the legislation, and a week-long waiting period between writing this bill and voting on it, so there's enough time to go over it with a fine-tooth comb -- Suzanne.

MALVEAUX: OK. Thank you, Brianna.

Massive bailouts for Wall Street and Detroit are not sitting well with many leaders within the Republican Party either. And they are saying enough is enough to the economic policies of President Bush and some GOP members of Congress.

Well, CNN's Samantha Hayes joins me now.

And, Sam, obviously, there are some frustrated Republicans, many different issues on the table, this just being one of them.

SAMANTHA HAYES, CNN CORRESPONDENT: Absolutely just one of them.

You know, some members of the Republican National Committee have strong words for the way the GOP has handled the economic crisis.

(BEGIN VIDEOTAPE)

HAYES (voice-over): Out of the White House and in the minority on Capitol Hill, Republicans have a lot of work to do, and some leaders are starting with criticism within.

A proposed resolution that has been circulating among members of the Republican National Committee says the recent bank bailout under President Bush and adopted by some GOP members of Congress amounts to nationalizing the nation's banking system and is another dangerous step closer towards socialism.

The proposed resolution to be voted on at the RNC winter meeting in January was drafted by Republican National Committee vice chairman James Bopp Jr., who hopes the RNC will use it to steer members of Congress in a more conservative direction.

JAMES BOPP JR., VICE CHAIRMAN, REPUBLICAN NATIONAL COMMITTEE: Well, we lost our way with the economic policies over the last few years. We didn't fight government spending. We didn't fight earmarks. And then we participated -- at least some of the leadership participated in these bailouts. You know, these bailouts were opposed by the American people.

HAYES: If accepted, Bopp says the resolution would be a more aggressive role for the RNC, which is also preparing to elect a chairman next month. One of the candidates for that position, Chip Saltsman, recently caused a conflict within the ranks after mailing members a C.D. of racially tinged songs, one of them about the next president.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE (singing): Barack, the magic Negro...

(END AUDIO CLIP)

HAYES: The incident turned into bad P.R. for a party trying to move forward.

RON BONJEAN, REPUBLICAN STRATEGIST: We are somewhat wandering in the wilderness right now. And there are lots of opportunities for Republicans to take advantage of, to point, to say, oh, let's go in this direction or let's go in that direction. They are trying to find themselves.

(END VIDEOTAPE)

HAYES: Now, that proposed resolution would also call for Republicans in Congress to stand against president-elect Barack Obama's proposed public works program, which, you know, billions more dollars.

MALVEAUX: So, Sam, what about the conservative Republicans who are against the bailout plan? Do they have any response to this?

HAYES: Well, right. The -- the RNC, they are the elected officials -- I mean, they are not elected officials. So, the point here being, what do elected members of Congress think about this?

I talked to Tom Price today, congressman from Georgia, against the bailouts that have been going on. He said, you know, this just really shows the frustration, not only among conservatives, but a lot of people, for all this money going toward companies.

MALVEAUX: OK, thank you, Sam.

In the "Strategy Session": Illinois Governor Blagojevich is defiant once again.

(BEGIN VIDEO CLIP)

GOV. ROD BLAGOJEVICH (D), ILLINOIS: Please, don't allow the allegations against me to taint this good and honest man.

(END VIDEO CLIP)

MALVEAUX: Is he looking for a fight with the Senate majority leader, Harry Reid?

And should Secretary of State Condoleezza Rice be headed to the Middle East to broker a cease-fire between Israel and Hamas? And would it work?

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ROLAND BURRIS, FORMER ILLINOIS ATTORNEY GENERAL: I ask the people of Illinois to place the same faith and trust in me that they have in the past when they elected me three times as their state controller, and one term as their attorney general.

I am humbled to have the opportunity, and promise the citizens that I will dedicate my utmost effort as their United States senator, and I will uphold the integrity of the office.

(END VIDEO CLIP)

MALVEAUX: It's a plea and a promise from former Illinois Attorney General Roland Burris after being selected by Governor Rod Blagojevich to replace Barack Obama in the Senate.

Well, will there be a backlash against Democrats for fighting this appointment?

Joining me in today's "Strategy Session" to talk about that is Democratic strategist Jamal Simmons and Republican strategist Rich Galen.

Obviously, this guy is qualified. A lot of people look at this and say, he's qualified for the position here. He's a former attorney general of the state, a lot of experience, a lot of contact, even ran against Blagojevich.

Why should he not have that seat?

RICH GALEN, REPUBLICAN STRATEGIST: Well, obviously -- I mean, I think it's obvious to everybody that the reason that the U.S. attorney brought the charges when he did was because he wanted to stop this exact process. Fitzgerald wanted to stop this process.

Now, Jamal and I have a little difference of opinion. Article 1, Section 5 of the Constitution says, each house, House and Senate, shall be the judge of the elections, returns and qualifications of its own members. That's on the one side, that Harry Reid said this will not stand.

The other side is, in the earlier block, you were talking about -- about the need for -- for 60 votes probably to proceed on -- on a stimulus package. They may need that seat to get to 60 votes.

MALVEAUX: Jamal, do you agree?

JAMAL SIMMONS, ADVISER, DEMOCRATIC NATIONAL COMMITTEE: Well, I think that's going to be up for a lot of court challenge, what happens with Reid in the Senate, Senator Reid in the Senate.

But you have got to reflect Rod Blagojevich's game. I mean, this guy...

(LAUGHTER)

SIMMONS: ... what we saw today was old-school politics being practiced in a phenomenal way.

He went out there, and he picked the one person who really is kind of above reproach. I mean, most people in Illinois who you talk to -- I talked to several people today. They have known Burris for a long time, Roland Burris for a long time.

They say, he's a good guy, a solid guy, not someone suspected of doing any wrongdoing, a former attorney general. They get that on one hand. He's from Centralia, which is the southern part of Illinois, so he's got appeal to people across the state, as well as having come out of the Chicago political machine.

So, he's got some broad appeal. The issue -- and so now what -- what Blagojevich has done is, he now puts this in Harry Reid's lap. He gets credit from the African-American community in Illinois for preserving the seat in African-American hands. He puts this in Harry Reid's lap.

And Harry Reid is the person who gets to say whether or not he gets to be seated, not Rod Blagojevich. So, whether he wins or loses, Roland Burris goes to the Senate or not, it's all to Rod Blagojevich's favor.

MALVEAUX: Well, let's talk about it, then, because...

(CROSSTALK)

MALVEAUX: ... I mean, obviously, though, Harry Reid, he must be in a tough position here.

Is he overplaying his hand? And does he risk having a backlash against Harry Reid and the Democrats in the Senate for essentially what looks like blocking this appointment?

GALEN: Well, if he can. And it's not exactly clear whether he can.

But, sure, that's exactly what Jamal was saying. That's the -- that's the bind in which Harry Reid now finds himself. He needs to have that seat filled. They hate the way it got filled. They hate the guy -- they don't -- they may not mind the guy who -- who was appointed to fill it, but they hate the guy who made the appointment. So, it's -- it's really complicated. And, for Republicans, it's just grand fun.

MALVEAUX: And -- and...

SIMMONS: Well, here's the one thing I also have heard today. I talked to some friends in the House, who said that, you know, the Congressional Black Caucus doesn't expect a lot of members to stick their necks out here. They realize this is really an Illinois problem and a Senate problem...

GALEN: And a Senate problem.

SIMMONS: ... not a House problem.

GALEN: Right.

SIMMONS: So, don't expect there to be a lot of people going out and doing what Bobby Rush did today.

MALVEAUX: Is this an Obama problem? If you're advising Obama, how do -- how do you suggest that he plays this? SIMMONS: Again, it's a problem for the governor and a problem for the Senate.

MALVEAUX: Ignore it?

SIMMONS: He's had a -- a pretty good standpoint so far of staying out of this, in terms of public relations. I would say stay out of it some war.

GALEN: And because...

MALVEAUX: Do you agree, Rich?

GALEN: Yes, that's exactly right, because it is a Senate problem. And there's nothing that gets senators more upset than when the White House, Republican or Democrat, tries to tell senators what to do or not to do.

MALVEAUX: We are now seeing, obviously, an escalation in the Middle East, these airstrikes and these rockets coming from Hamas and then Israel in retaliation here.

Secretary of State Condoleezza Rice, you know, the Bush administration has invested a lot of political capital in this, and the -- the question being, you know, really, what does she have to lose or gain by going?

She says -- here in "The New York Times" editorial, it says: "Ms. Rice once hoped to make a Middle East peace her legacy. It's too late for that. But she should do her job. That means getting on a plane for Cairo and Riyadh now to enlist their help in brokering a new cease- fire."

Is she effective anymore?

GALEN: Oh, sure, because she still is the -- I mean, this is still the United States. She is still the sitting secretary of state. And I think everybody understands that.

We may -- we understand that it's coming to an end, but she is the person that gets to make these decisions.

SIMMONS: If she can stop the shooting and the bombing going on right now in Gaza, I think people will regard that as a success. And if she can do that, she should -- she will go ahead and try.

GALEN: Sure.

MALVEAUX: Jamal, Rich, thank you so much for joining us on THE SITUATION ROOM.

GALEN: Thanks. Happy new year.

SIMMONS: Thank you.

MALVEAUX: Happy new year. Well, where will you be on New Year's Eve? We know where a certain former president and a soon-to-be secretary of state will be.

Once a political bombshell, now a blessed event -- Alaska's governor becomes grandma Palin.

And another sign of the times: bank robbers on the rise. CNN's Deborah Feyerick will crunch those numbers.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

MALVEAUX: Here's a look at the "Hot Shots" coming in from our friends at the Associated Press, pictures likely to be in your newspaper today.

In Thailand, war unrest takes hold, as an anti-government protester stares through a gate.

In Belarus, Grandfather Frost, also known as Santa Claus, works the crowd.

In Kentucky, an Amish buggy makes a stop at the grocery store.

And, in Germany, piglets take a walk in the Berlin Zoo.

That's this hour's "Hot Shots," pictures worth 1,000 words.

And, on our "Political Ticker," Democrat Al Franken's lead has grown slightly in the Minnesota Senate recount. At last report, he is now 50 votes ahead of incumbent Republican Norm Coleman. Coleman's hopes now are riding on more than 1,000 uncounted absentee ballots that will be open next week.

Even if election officials declare a winner next week in the last undecided U.S. Senate race, the losing party is expected to challenge the outcome in court.

Hillary and Bill Clinton plan to ring in the new year in a big way. The secretary of state nominee and the former president will push the ceremonial button that lowers the New Year's Eve ball in Times Square. They will join New York Mayor Michael Bloomberg in the festivities tomorrow night.

And, remember, for the latest political news any time, check out CNNPolitics.com. That's where you can also download our political screen saver.

Well, let's face it, we all have our quirks. But, when you come from a famous family, and you're considered for a high-profile Senate seat, if you're like Caroline Kennedy, those quirks can draw the most unusual attention.

Here's CNN's Jeanne Moos.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN NATIONAL NEWS CORRESPONDENT (voice-over): You know how you know when you're under the media microscope?

KENNEDY: Well, you know -- you know, I really ought to give it some thought, you know, again.

MOOS: When we start counting "you knows."

KENNEDY: You know, people know who I am.

MOOS: She is the all grown-up now, Caroline Kennedy.

KENNEDY: You know, in our family, you know, we always think about, you know --

MOOS: First, she was criticized for not talking to the press while trying to get appointed to fill Hillary Clinton's Senate seat.

KENNEDY: You know, Hillary Clinton, you know, is a big loss for our state.

MOOS: And now that she is talking, we're on her back about excessive "you knows," as many as four per sentence.

KENNEDY: You know, I can tell you that in, you know, in our family, in my family, in particular, I think, you know, there was a sense that, you know, we have to work twice as hard.

MOOS: A blog called "Perfunction" noted them with a buzzer.

KENNEDY: You know, I think that, you know, I bring, you know, my life experience.

MOOS: In a two-and-a-half-minute clip.

KENNEDY: You know, I was really tried to encourage --

MOOS: They buzzed Kennedy 30 times, leaving voice coach Jeffrey Davis to say --

JEFFREY DAVIS, OWNER, SPEAK CLEAR COMMUNICATIONS: Wow, that's a lot of, "you knows."

MOOS: You know it. Saying "you know" a lot does not mean she doesn't know, that she's dumb.

DAVIS: No. It doesn't know, not at all. It's a verbal ticks. Basically what happen is you haven't clarified your thought yet, and you start speaking anyways.

MOOS: So you're stalling?

DAVIS: You're stalling.

MOOS: Davis calls it the little phrase that saves us between thoughts thought most of us don't need saving a 142 times. That's how often the Web site Politico counted Kennedy saying, "you know" in a transcript of "New York Times" interview. Of course, we all have ticks.

DAVIS: You just said (INAUDIBLE)

MOOS: President-elect Obama is known for his "uh"s.

BARACK OBAMA (D), PRESIDENT-ELECT: You know, the, uh -- I think, uh, they're still working it through. Uh.

MOOS: Though, lately, he seems to have broken that habit. Sarah Palin had her winking tick.

GOV. SARAH PALIN (R), ALASKA: How long have I been at this? Like, five weeks.

MOOS: And we all know President Bush had his linguistic barriers and terrorist.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES OF AMERICA: Terrorists and barriers everywhere.

MOOS: One solution to saying, too many "you knows" is to be told every time you say it. And the Web is helping Caroline Kennedy with that.

KENNEDY: You know, you know, you know, you know, you know --

MOOS: The speech coach recommends allowing silence between thoughts.

DAVIS: Silence has more eloquence than words, and it's powerful.

MOOS: At least Kennedy knows what she doesn't know.

KENNEDY: I have, you know, quite a bit to learn.

MOOS: Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

MALVEAUX: You're in THE SITUATION ROOM.

Happening now, breaking news: Israel considers a brief halt to its punishing air assault on Gaza, but goes ahead with planning for a possible ground offensive. As the airstrikes continue, Palestinian rockets fall deeper inside of Israel. Is there a way out? Joining us live, a top Hamas representative in exile and Israel's ambassador to the United States.

And he was accused of trying to sell Barack Obama's Senate seat. Now the Illinois governor defies the U.S. Senate by appointing a replacement. Will the Senate block that move?

And a sharp increase in bank robberies across the country -- well, is it just that time of year, or is it the latest sign that the economy is in big trouble?

Wolf Blitzer's off today. I'm Suzanne Malveaux, and you're in THE SITUATION ROOM.

Breaking news: no letup yet in the air assault on Gaza or the rain of rockets falling on Israel.

Here are the latest developments. Israel's officials say that the government is weighing a 48-hour halt to the air campaign to see if Palestinian militants stop their rocket attacks. But officials also say that Israel is going ahead with preparations for a possible ground offensive.