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Russia Rings in New Year; Obama's Jump-Start in 2009; Choice for Obama Seat Rejected

Aired December 31, 2008 - 16:00   ET


SUZANNE MALVEAUX, CNN ANCHOR: I'm Suzanne Malveaux in THE SITUATION ROOM, along with CNN's Jim Acosta.
Jim, we're looking at those live pictures now. They're about to celebrate the new year coming in. I guess they're about eight hours ahead of us at this time. And we're seeing the announcer there. Obviously, it's going to be a lot of fireworks and fanfare.

JIM ACOSTA, CNN CORRESPONDENT: That's right. We're going to party like it's almost 2009. Is that it?

MALVEAUX: Yes, the president of Russia and many other people waiting for that very moment to happen.

ACOSTA: That's right.

MALVEAUX: Obviously, he's talking about the countdown and everything that's going to unfold there.

ACOSTA: That's right. Yes.

MALVEAUX: Going to be watching a lot of this throughout the hours, various places that will be ringing in the new year.

ACOSTA: That's right. And in Russia right now, they're celebrating the new year across 11 time zones. It is a tradition and you're hearing the clock strike now in Moscow. Here it is.


MALVEAUX: We're waiting for live fireworks in Red Square. Just about to happen here, just seconds away.

ACOSTA: It's a beautiful sight.


ACOSTA: We're waiting to see fireworks in Moscow. You're looking at pictures of Red Square right now, and you're hearing the Russian National Anthem. And at any moment we will see those fireworks in Moscow.

We were saying just before the clock struck midnight there that the Russia celebration is happening across 11 time zones. It's starting from the east and then moving west. And you saw the president there of Russia, Dmitry Medvedev. His presidential address is a tradition every New Year's Eve, which happens to be the biggest holiday, most important holiday of the year for the Russians. Families sit down around the table as the president's address begins, and his speech ends as the clock strikes midnight.

So you're watching the tradition of the Russian people unfold as we speak in Moscow, those stunning pictures of Red Square as we await the fireworks, which should start any minute.

MALVEAUX: And when those fireworks happen, we will bring them right to you.

Happening now, Barack Obama gets a jump-start on his life in Washington and on fixing the economy. New information about the president-elect's plans heading into the new year of huge challenges.

Plus, the man tapped to fill Obama's former Senate seat faces rejection. I'll talk to Roland Burris about efforts to block him from taking office. And did race play a role in the appointment by the embattled Illinois governor?

Also this hour, breaking news. Israel refuses to call a truce in its all-out war against Palestinian militants. The Jewish state says it will not accept a strip of terror on its border.

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


Want to take you now live to fireworks happening in Moscow.

On this final day of the year that the U.S. economy plunged deeper into recession, there are some new glimmers of hope. The number of newly laid-off workers filing for unemployment benefits fell sharply last week below the half-million mark, but the number of Americans continuing to get jobless benefits climbed to the highest level since 1982. In the troubled housing market, rates on 30-year mortgages fell to a record low for the third straight week, sending applications for new home loans soaring.

Will 2009 bring renewed prosperity or pain? Well, the answer may lie in the next president's plan to jump-start the economy.

CNN's Stephanie Elam is standing by at the New York Stock Exchange.

But first, we want to bring our Senior White House Correspondent Ed Henry to the picture. He's with President-elect Obama in Hawaii.

Ed, what are you hearing about kind of the size, the speed of the new stimulus package that we're expecting next year?

ED HENRY, CNN SR. WHITE HOUSE CORRESPONDENT: Well, Suzanne, we're hearing the speed is going to be very rapid. In fact, CNN has learned that the president-elect may send his stimulus plan up to Capitol Hill as early as tomorrow, January 1st, to kick the year off, really get this going.

And you'll remember we've just learned the last 24 hours that the incoming first family is going to be moving to Washington earlier than many of their predecessors this coming weekend. We're told there's two reasons for that.

First of all, they want to get their daughters set up in a new school in Washington. But secondly, the president-elect wants to get going, get to work on fixing the economy, the very issue that helped get him elected dealing with this financial crisis.

Specifically, we're told that the price tag is still in the neighborhood of about $775 billion for this economic recovery package, trying to get the economy moving again. Again, that it would go up as early as Thursday because a lot of lawmakers, particularly Democratic leaders, are telling transition officials they need this as quickly as possible in order to deal with all kinds of changes that might be made to it, to deal with the congressional process, because I'm also told that the goal right now is to get this moving so quickly in January, that it could be signed into law as early as inaugural week.

The idea being that Barack Obama would then get an early victory and the economy would also get a quick shot in the arm. But the potential problem for the president-elect is that some Republican leaders are making noise about potentially slowing this whole process down, really getting into the nitty-gritty. They feel there's sort of bailout fatigue there and that another $775 billion in stimulus money on top of all these government bailouts may just be too much for taxpayers to swallow.

So what the president-elect is planning to do, we're learning from transition officials, is maybe even hit the road after the inaugural. The "LA Times" reported today that he might go barnstorming across the country to sell his economic plan.

Transition officials are downplaying that, saying he's not really going to barnstorm. But he may leave the option open to do at least some travel very early in the new administration to try to sell this plan all across the country -- Suzanne.

MALVEAUX: And Ed, you mentioned the first family is moving to Washington, D.C. this weekend. Do we will know where they're actually going to be staying?

HENRY: We do. CNN has confirmed they're going to be staying at the historic Hay-Adams Hotel. You know that well, that it's right across from Lafayette Park, from the White House.

And then, of course, on January 15th, as we reported last night...

MALVEAUX: We're looking at a picture of that hotel right now, to our viewers. HENRY: ... they're going to move over to the Blair House. Yes, and they're going to be moving over to the Blair House on January 15th, another historic residence, the official guest residence for the White House where a lot of visiting dignitaries, president-elects stay.

So then, finally, of course, on January 20th they make it to the White House. So it's almost like a little march around Lafayette Park, from the Hay-Adams Hotel over to the Blair House, and finally on to the White House -- Suzanne.

MALVEAUX: It's all very convenient in the same little square there.

OK. Thank you so much, Ed. We'll all be in Washington together.

Thanks again, Ed.


MALVEAUX: Well, now to the controversy surrounding Barack Obama's former Senate seat. The Illinois secretary of state today officially refused to certify the embattled governor's choice for the job. That is Roland Burris. Many Democrats say that the governor, Blagojevich, had no business naming anyone to the Senate seat he is accused of trying to sell to the highest bidder.

Well, let's bring in our congressional correspondent, to Brianna Keilar.

This fight now moves to the U.S. Senate. What is the next step here?

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Well, Senate Democrats trying to get in the way of this, Suzanne.

What's interesting, many constitutional experts say exactly what Roland Burris says, that his appointment is legal and he should be seated in the Senate. But it may not be that simple. Senate Democrats could still keep Burris out.


KEILAR (voice-over): If Roland Burris comes to Washington for the opening day of Congress Tuesday, Senate Democrats who oppose his appointment will give him the cold shoulder. There will be no office waiting for him. He won't be allowed on the Senate floor. But many experts say Democrats aren't abiding by the Constitution if they carry out their threat not to seat Burris.

ABNER GREENE: The fact that there's this background taint involving what we've all read about in terms of the phone taps, maybe that's a reason to convict Blagojevich, maybe it's a reason to impeach him. But it wouldn't necessarily be a reason to kick Burris out.

KEILAR: Senate Democrats citing internal rules that say the Senate shall keep a record of appointments signed by a state secretary plan to hold up Burris' appointment if the Illinois secretary of state, as expected, refuses to sign the appointment document. If that fails, Democrats will refer Burris' appointment to the Senate Rules Committee to keep him out of the Senate pending an investigation, which could take weeks, even months.

If Burris sues, Democrats are betting the courts will decide to stay out of this sticky political situation. It's a gamble that could pay off.

GREENE: I think if the Senate refuses to seat Burris and if he brings a lawsuit, it makes its way up to the Supreme Court, I would guess, I'd say, 51 percent that they will not get involved.


KEILAR: And many other constitutional experts say it would be more than 51 percent.

Now, the plan, according to a Democratic leadership aide and another aide familiar with these discussions of Burris' appointment, is to drag out the process long enough for the Illinois legislature to impeach Blagojevich and for his successor to appoint a Democrat that Senate Democratic leaders would quickly seat -- Suzanne.

MALVEAUX: OK. Thank you, Brianna.

Jack Cafferty is off today.

But right now, former Illinois attorney general Roland Burris is standing by to join us. And I'll ask him if he's going to come to Washington when Congress convenes and really fight for a seat in the Senate.

Also ahead, a tough test of the president-elect. When it comes to strength and decisiveness, Americans apparently think that Barack Obama is practically in a league of his own.

And later, why so many D.C.-area residents who had hoped to profit off the Obama inauguration are being let down.



MALVEAUX: The man who would be senator, Roland Burris, may not be a household name, but he is no stranger to politics. And having accepted the Senate appointment by embattled Illinois Governor Rod Blagojevich, Burris is not afraid to list his accomplishments. In fact, he has had them carved in stone.

Our CNN's Brian Todd is following the story.

And Brian, what are you learning?

BRIAN TODD, CNN CORRESPONDENT: Well, he's a very interesting man, Suzanne, with some very large shoes to fill. The previous senator, Barack Obama, has gone on to some achievements that you might have heard of. But Roland Burris, for his part, not a shy man, and is out to make the case for the seat that he first ran for 24 years ago.


TODD (voice-over): Finally, a chance for higher office that had until now eluded him.

ROLAND BURRIS, BLAGOJEVICH'S SENATE PICK: I have faith in the record that I have forged over the past four decades, and I am proud of my accomplishments as a public servant.

TODD: But Roland Burris hasn't been a public servant for 13 years, hasn't even run for office since losing to Rod Blagojevich in a primary six years ago. Now he accepts the appointment to Barack Obama's Senate seat despite the controversy around the governor who names him.

UNIDENTIFIED MALE: Well, after Rod Blagojevich gets arrested on December 9th on corruption charges, and everyone who was looking to be appointed by Blagojevich stands away from this governor, there's Roland Burris as the only one waving his hand in the air and saying, pick me, pick me.

TODD: He served as state comptroller and attorney general in the 1980s and '90s, but his campaigns for Senate, for Chicago mayor and for governor were unsuccessful. Burris' public career is carved into a mausoleum which he commissioned on Chicago's south side. He hails himself as the first African-American elected to statewide office in Illinois.

LYNN SWEET, "CHICAGO SUN-TIMES": He's never been shy about his accomplishments. Sometimes he speaks of himself in the third person, but he has big jobs that he has had in the state.

TODD: Since that 2002 loss to Blagojevich, Burris, his wife and his consulting firm have given the governor about $15,000. But he's distanced himself from the governor's alleged conduct, earlier this month calling it "reprehensible." And friends point out, despite the rough and tumble of Chicago politics...

UNIDENTIFIED MALE: He's kind of the only person around in statewide Illinois Democratic politics who has absolutely no taint whatsoever who could step up.

TODD: But the fact that he was nominated by a governor accused of trying to sell that seat to the highest bidder could complicate Burris' chances.

UNIDENTIFIED MALE: The issue is going to be, how can the public be sure that nothing was traded for this appointment? And that's very hard to prove in the negative that nothing was.

(END VIDEOTAPE) TODD: Now, in addition to those moves to block his appointment in the U.S. Senate that my colleague Brianna Keilar reported on earlier, Roland Burris is also going to have to navigate some other procedural hurdles. Today, the Illinois secretary of state declined to sign his appointment. A lot of taint in Illinois around this appointment.

MALVEAUX: So Burris has his own problems. Where about the Illinois governor? Where does the case stand against him now?

TODD: We're told that the special prosecutor, Patrick Fitzgerald, has asked for more time to file his indictment, 90 days now instead of the usual 30 days. So it could be several weeks now before we know if the governor is going to be formally charged.

MALVEAUX: OK. Thank you very much, Brian.

The Burris appointment is meeting with firm opposition from Senate Democrats, and that is sparking strong words in response.

I want to you listen to CNN political analyst Roland Martin appearing on "ANDERSON COOPER 360."


ROLAND MARTIN, CNN POLITICAL ANALYST: Democrats do not want to keep an African-American out of the U.S. Senate. Trust me. They do not want to go down that path.


MALVEAUX: Our Roland Martin joining us now live from Chicago.

You never mince your words, Roland. You know, we always know what you're thinking here.

MARTIN: Oh, I choose not to be shy.

MALVEAUX: Oh, no. Not at all.

But tell me, why do you say that? Why do you believe that? A lot of people who look at the election of Barack Obama say this is a post-racial period that we're in, that perhaps people are not so worried about that.

MARTIN: Folks probably should be slapped back into reality. But the bottom line is, when you heard Congressman Bobby Rush lay out those inflammatory remarks in terms of "don't lynch this man," I mean, look, people are recognizing reality, that there are no African- American in the United States Senate.

The other piece is here -- you look at the qualifications of Roland Burris. This is not somebody who was plucked out of a seat who does not know anything about politics.

And so, what Blagojevich has done, he has forced a perfect storm. He has a candidate who is imminently qualified for the U.S. Senate. He has a possible constitutional fight brewing here. And so, Senate Democrats are going to have a serious problem.

But one of the issues, Suzanne, that we are ignoring is that the fact of the matter is, that Democrats, they put themselves in this position. They did not take the power out of the governor's hand. They played around with fire and they're getting burned by it right now.

This falls on Democrats. They are at fault because they did not take the power out of Rod's (ph) hands.

MALVEAUX: Are there Democrats that you're talking to, Roland, who are expressing concern, who are worried that if they don't support Burris, that it's going to be seen as if somehow they're not supporting having an African-American in the Senate?

MARTIN: Well, guess what's interesting? The constitutional issue that comes up emanates from a case involving Harlem Congressman Adam Clayton Powell.

They alleged that he had financial impropriety in his office. He said the issue was race then. The Supreme Court said you cannot deny his seat.

It's interesting. Here we are, almost 40 years later, dealing with a possible situation where another African-American may be -- may take the Senate to court as a result of refusing to be seated.

So sure, I am hearing people say look, we don't want this to happen. They are trying to keep the focus on Blagojevich. But the problem again is, you are denying Burris the seat because you don't like the guy who appointed him. And so this raises all kinds of questions.

People cannot get around this. Sure, nobody wants the race issue to be on the table, but Blagojevich put the race issue on the table. He knew exactly what he was doing.

And trust me, this is going to cause a major problem, denying Burris, eminently qualified, for a seat because you don't like Blagojevich. That's a problem there.

Not only that; don't be surprised if the state's writers (ph) jump in this whole deal because this is the Senate telling a state governor, even though people don't like him, what he can and cannot do.

MALVEAUX: Well, let's take a listen to what Obama said about all of this. He said that "Roland Burris is a good man and a fine public servant, but the Senate Democrats made it clear weeks ago they cannot accept an appointment made by a governor who is accused of selling this very Senate seat."

Were you surprised that Barack Obama came out so strongly in backing the other Senate Democrats? MARTIN: No.

MALVEAUX: Why not?

MARTIN: Well, first of all, I'm not surprised by it because he called for Blagojevich to resign. He also called for him not to appoint the seat.

But I want Obama to say, you know what? Maybe House speaker Mike Madigan shouldn't have screwed up and taken the bill off the table.

They had the opportunity right after he was arrested to vote on a special election. They pulled it off the table. Why? Because they were greedy. They didn't want a Republican to possibly win a special election.

Now look where we are. Apparently, they have put the bill back on the table. And so if the general assembly in Illinois reconvenes, they could very well vote on a special election. But they are at fault here.

Look, I understand the anger at Blagojevich and I agree with it. But you have to take the power out of his hands. They failed to do so. Now all of a sudden, they're scrambling because they screwed up.

MALVEAUX: OK. Roland Martin, we'll have to leave it there.

Have a Happy New Year, Roland.

MARTIN: All right. Take care.

MALVEAUX: So with all the scandal surrounding the Roland Burris appointment, is he planning to show up to work in the U.S. Senate? Don't miss his answer when is he joins us live.

Plus, homeowners in Washington saw a way to cash in on the upcoming inauguration. But ahead, the concessions they didn't expect to make when renting out their homes.




Happening now, the bombs keep falling. Israel and Hamas are locked in a violent battle. Now a message for Israel from the United States -- find a way to make it stop.

An awful year for Americans may get worse if you believe a Russian professor. Why he predicts that America is going to disintegrate by 2010.

Plus, blocked by Democrats, opposed by the president-elect. Is the man appointed to replace Barack Obama in the Senate going to show up for work? Well, we'll ask that question live. Wolf Blitzer is off today. I'm Suzanne Malveaux, and you're in THE SITUATION ROOM.

Breaking news from Israel, a new declaration that it will not let up on its air strikes in Gaza and not accept what it calls a "strip of terror" next door. Hopes for a truce evaporated on day five of Israel's offensive against the Palestinian militants who rule Gaza. Palestinian medical sources report that more than 390 Palestinians have been killed.

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

PAULA HANCOCKS, CNN CORRESPONDENT: Suzanne, an Israeli ground operation into Gaza now looking more likely than ever. The Israeli prime minister said that the air strikes are only stage one. It turns out that a ceasefire, according to Israel, is not stage two. So what are the other options? Is a ground offensive really the only way that they can go?

We still see the tanks lined up on the horizon, all pointing in the direction of Gaza. The soldiers are standing by for an order. Here in Ashkelon, in southern is, just about seven miles north of Gaza, reservists who have been called up for duty have been arriving all day.

But it could actually be the weather that dictates the rest of this Israeli operation. For the past 24 hours, we have seen a lot of rain here, torrential rain at times, and that is not ideal conditions for these Israeli tanks rolling into Gaza.

So it is ideal conditions, as we've seen, for Hamas. They are firing rockets into Israel, further into Israel, and certainly doing it easily and undetected with low cloud cover. It's very hard for the Israeli drones to be able to spot these rocket launchers when it is conditions like this.

So no ceasefire at this point, which means another sleepless night for 1.5 million Palestinians and also possibly for three quarters of a million of Israelis who are now within rocket range -- Suzanne.

MALVEAUX: Thank you, Paula.

The new explosion of violence in the Middle East is yet another reminder that President-elect Obama -- he has his work cut out for him. Less than three weeks away before he takes office, President- elect Obama is getting some high marks for his leadership skills.

Our senior political analyst, Bill Schneider, is here with those new poll numbers. And Bill, what quality do Americans most admire about Barack Obama?

WILLIAM SCHNEIDER, CNN POLITICAL ANALYST: Well, this may come as a surprise, Suzanne -- his toughness.

(BEGIN VIDEOTAPE) SCHNEIDER (voice-over): Barack Obama's the "three Cs" -- casual, cool, connected. But is he a tough guy?

SEN. JOSEPH BIDEN (D-DE), VICE PRESIDENT-ELECT: Mark my words, it will not be six months before the world tests Barack Obama like they did John Kennedy.

SCHNEIDER: The American public is confident Obama will pass that test. Three quarters believe the president-elect is a strong and decisive leader. That's much higher than the number who thought George W. Bush was strong and decisive when he first took office, higher than Bill Clinton at the beginning of his presidency. In fact, on strength and decisiveness, Obama is seen as about the same as Ronald Reagan was in 1981. That's pretty tough.

Obama gets his highest marks on measures of strength -- inspires confidence, tough enough for the job, strong and decisive. In fact, Obama scores higher than President Bush did in the months following 9/11, when Bush's image as a leader was soaring.

What convinced Americans Obama's such a strong leader? He beat two very tough opponents -- John McCain, a war hero.

SEN. JOHN MCCAIN (R), ARIZONA: Fight for what's right for our country!

SCHNEIDER: ... and Hillary Clinton, who proved to be a tough, relentless fighter. She never gave up, and neither did Obama, even after he lost the New Hampshire primary.

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: Yes, we can. Yes, we can!

SCHNEIDER: Yes, he did.

SEN. HILLARY CLINTON (D-NY), SEC. OF STATE NOMINEE: Let's declare together in one voice right here, right now, that Barack Obama is our candidate and he will be our president!

SCHNEIDER: And now, she's on President Obama's team.


SCHNEIDER: For decades, Democrats have been looking for a tough liberal like JFK, the hero of the Cuban missile crisis, or Harry Truman, who fired General Douglas McArthur, or LBJ, who was a force to be reckoned with. Well, right now, Obama seems to have that kind of a tough image. But he's going to face some more tests soon -- Suzanne.

MALVEAUX: Less than three weeks away. Thank you, Bill.

Some D.C.-area residents with great expectations for the Obama inauguration -- well, they're being let down. Ahead, why hopes for a rental boom are going bust.

And later: young boys recruited as suicide bombers, the deadly nightmare happening in Afghanistan right now.

And snowed under. Panic sets in as avalanches threaten skiers and snowmobilers from Canada to California.


UNIDENTIFIED MALE: We made the decision that it was unsafe to go in there, and that's when we had to make the gut-wrenching decision to leave our eight friends and start walking off the mountain.



MALVEAUX: Home owners that are hoping to cash in on the inauguration -- well, they're finding their wallets empty. Many had hoped to rent out their homes to people who were traveling to Washington for Obama's swearing-in, but it seems some of them miscalculated.

Our CNN's Samantha Hayes is following the story. Samantha, what are you finding?

SAMANTHA HAYES, CNN CORRESPONDENT: Well, Suzanne, this is a conversation we've all heard a lot in Washington, D.C., right now: Are you renting your house? Hey, how much do you think you're going to be able to get for it? But with just a few weeks to go before the inauguration, it seems the initial demand has dropped, and many local residents who saw big dollar signs are readjusting their expectations.


(voice-over): An historic inauguration, plus unprecedented crowds predicted by the mayor of D.C. himself...

MAYOR ADRIAN FENTY (D), WASHINGTON, D.C.: We should be prepared as a city for, you know, in the range of three million to five million.

HAYES: ... equalled a golden opportunity for those living in and around the nation's capital.

KARA SNESKO, RENTING HOME FOR INAUGURATION: Initially, we thought we could get $1,500 a night, based on all the other people on Capitol Hill and what they were asking and how many bedrooms.

HAYES (on camera): And?

SNESKO: And no takers.


SNESKO: No takers.

HAYES (voice-over): So to finally seal the deal, she worked through, a Web site started by Andre Butters (ph) to bring owners and renters together.

UNIDENTIFIED MALE: I think a lot of people will be disappointed unless they price their property appropriately. We're seeing things as high as $5,000 to $6,000 a night. I don't believe that there's a market for that.

HAYES: Real estate agent Hill Slowinski has seen even higher than that, $65,000 a week. But most of the homes he has listed, 165 total, are going for much less, and they aren't being rented.

HILL SLOWINSKI, REAL ESTATE AGENT: We have one completed transaction. And by completed transaction, it's not just a contract. We require payment up front in full. I think people are waiting to see what happens after the holidays, when activity at home is dying down, whether or not they're really interested in doing something. And also, we have to prepare our owners for things that they may not have foreseen when they go into a transaction like this.

HAYES: And if they can make a deal, some property owners are happy to start off the new year with a little extra cash, even if it's less than expected. Kara Snesko settled for $600 a night.

SNESKO: Yes, I feel good about it. You know, I hope that they enjoy our house as much as we do.


HAYES: You know, I checked with the D.C. tourism office today and they said that there are still hotel rooms available, about 500 in the city, for an average of $800 a night, which, Suzanne, may be one reason why we're seeing, you know, the price come down on these home rentals. If you can get a hotel room for less, why would you buy somebody's home?

MALVEAUX: Right. I know a lot of my friends are going to be disappointed by this story. But if you look at Denver -- you were mentioning Denver right before the Democratic convention, there may be some news for optimism?

HAYES: Well, sure. One of the reasons there may not be quite as much traffic flow right now on these Web sites is because it's the holidays. People are busy, you know, over Christmas and New Year's. And so some of the people doing this think, Hey, you know, right before the inauguration, we may see more demand pop up again. That's what happened in Denver before the convention.

MALVEAUX: OK. We'll be keeping our eye on it. Thanks so much, Sam.

As we mentioned, the president-elect will be in Washington well before his January 20 inauguration. The Obamas are set to arrive this weekend to get their daughters situated for school, and that's quite a bit earlier than past presidents. Jimmy Carter arrived the day before his swearing in. Ronald Reagan came to Washington six days before his ceremony. And the Clintons got to D.C. three days before. Their arrival was a day-long event. They retraced the route that Thomas Jefferson took from his home just outside Charlottesville, Virginia.

Our new poll shows Americans are expecting Barack Obama to be tough, strong and decisive. Is that asking a lot from a future president who's taking office in a time of economic crisis? Stand by for our "Strategy Session." And the most memorable political stories of 2008 -- for better and for worse.


MALVEAUX: Well, we told you about the new poll numbers that show Americans feel confident in Barack Obama as a leader. But with the president-elect facing so many problems, like the crumbling economy, can he live up to such high expectations?

Well, joining me now for today's "Strategy Session" are DNC communications director Karen Finney and conservative commentator Terry Jeffrey, editor-in-chief of the Cybercast News Service. Thanks for joining us in THE SITUATION ROOM. Happy holidays.

I want to start off by some of these poll numbers that you may find a little bit surprising here, the CNN/Opinion Research Corporation poll. First numbers here, strong and decisive leader, Obama now 76 percent compared to President Bush after 9/11, 75 percent.

Terry, how do you explain that? You had President Bush, who went through this huge test. Barack Obama has not been tested.

TERRY JEFFREY, CNSNEWS.COM: Well, he hasn't. I mean, clearly, there's a honeymoon period for Barack Obama. I suspect it may end very quickly. Earlier in this program, you were talking about this stimulus package he wants to put through, and it may go up over $800 billion. Republicans are going to try and stop that. You're going to have huge public policy issues that are going to divide the country. There's going to be serious debate.

The real test for President Obama is not whether he makes decisions. He's going to have to. The question is how persuasive he is in bringing a large majority of the country with him on the decisions he makes. That's where Ronald Reagan was great, by the way, is persuading the country to come with him.

MALVEAUX: And Karen, how dangerous is this, that his numbers are so high? He has not made a decision yet.

KAREN FINNEY, DNC COMMUNICATIONS DIRECTOR: Yes. You know, I think, though, what these numbers reflect is the way he both conducted himself during the campaign and certainly in this transition period where, you know, he has been a strong, decisive leader. And I think he's actually kind of started to restore confidence in the American people. He's basically done what he said he was going to do. I think after Katrina, where we saw kind of a collapse in confidence in President Bush and our government, I think people are hopeful that Barack Obama is going to be able to deliver on the promises. And so far, he's actually done a very good job of that. MALVEAUX: Now, the flip side of that is, obviously, the risk of letting people down. Is that a problem? Is that potentially a problem for him going into especially the first 100 days?

FINNEY: Well, sure. And I think part of what you've seen over the course of the transition is trying to manage some of those expectations. I mean, certainly, we're trying to get the stimulus package done pretty quickly, but there are a lot of things that are going to take some time. And I think he's been pretty straightforward with the American people about the realities that we face and that it's not going to all happen overnight. He said it, you know, on election night, as a matter of fact.

MALVEAUX: How does he manage those expectations, though? Do you think that -- if you're advising him, how do -- what do you say to him?

JEFFREY: Well, he's got to do what he thinks is right. That's the first thing. He shouldn't be political. He's just got to look at these things. And ultimately, what he's going to be weighed by is the wisdom of his decisions. There's no doubt this guy's going to have to make decisions.

I think, again, the reason Ronald Reagan was a successful president and history is going to look at him well is his decisions were fundamentally sound. They were wise, and they resulted in consequences that were good for the American people. He makes bad decisions, people are going to turn against him. He makes good decisions where people see they're working, they're leading the country in the right direction, people will go with him.

MALVEAUX: Let's take a look at the other poll here. Obviously, he talked about change. It was the centerpiece of his candidacy. Can Obama bring needed change? Seventy-five percent say yes. Twenty-four percent say no. How realistic is it, Karen, that he's going to be able to do what he needs to do? Obviously, we talked about that huge number, this economic stimulus package. He's working hard to get the Democrats to support it. It is very unclear whether or not the Republicans are going to go along.

FINNEY: I think they're going to have to go along. I mean, if you look at the state of the economy, I think they're just going to have to because I think the pressure from their folks at home is going to be, again, Stop fighting, get together and get something done. And I think the situation is so dire for so many Americans, particularly look at what's happened over the holidays, I think the mandate from the American people is, Let's get something done.

JEFFREY: I think we're going to have bigger public policy battles in President Obama's term than we've had in decades, really. For the last 20 or 30 years, the most divisive issues in America have been social and cultural issues. Those are still going to divide us, but now we're hitting an economic crisis, we're going to have fundamental questions about how much the government is going to intervene in the U.S. economy, how much control it's going to have over certain industries. I can tell you, conservatives are going to be on the other side from President Obama and there's going to be major questions about...


FINNEY: ... going to see is a stylistic difference because, unfortunately, President Bush was very divisive and he led that way. I think President-elect Obama has really tried to set a new tone. He's brought together diverse people in his cabinet. I think he's trying to set a new tone in reaching out to the Republicans. So I think the tone of how he makes those decisions and leads is as important as those decisions.

MALVEAUX: How important is the tone here? Because obviously, the next poll showing, will Obama unite the country -- 77 percent are confident that he will, as opposed to 21 percent who believe that he won't. Terry, does that speak about what Karen is talking about, this sense of tone and style that -- despite the fact that the Republicans may be on this side, particularly when it comes to spending, that he's still going to be able to bring people together?

JEFFREY: Well, look, I think President-elect Obama obviously is an outstanding politician. I will give him credit. In the time since his election, he's handled himself very well. I think he's got a number of things that show he wants to reach out to people, he wants to have an inclusive presidency and all that.

But when the rubber hits the road, we are really talking about fundamental issues. And the political leaders on the other side, quite frankly, the activists and the grass roots around the country on the other side, are going to fight very hard against things he wants to do because they disagree with him on fundamental issues of principle. This country has been divided between these red and blue states. It's not just some sort of surface cosmetic phenomenon in this country. We have very serious issues where this country is divided.

MALVEAUX: And Karen, last point here. Obviously, Barack Obama has laid out specifics when it comes to the economy. He's been mum when it comes to the Israel-Gaza conflict and other foreign affairs. Is that a wise strategy here, to kind of cherry pick which issues that he's going to put himself out on the line here?

FINNEY: Absolutely because there's a real difference between talking about the American economy here at home and a very fragile situation that we have in the Gaza strip, where it's very important that only one person is speaking for the United States of America. We're talking about potential loss of life and we're talking about dire consequences potentially outside of the Gaza strip if there are mixed signals coming from the United States of America. Very different than talking about the economy right here at home.

MALVEAUX: Got to leave it there. Happy holidays to both of you guys. Thanks so much.

It was a year that brought us deeper into a painful recession, an historic presidential election, politics as you've never seen it and may never see it again. Plus: From governor to presidential candidate to Democratic Party chairman. Now some cold comfort for Howard Dean.

And Roland Burris is standing by to talk about his controversial appointment to fill Barack Obama's Senate seat. Is he taking a dangerous gamble by hitching his wagon to a scandal-plagued Illinois governor?


MALVEAUX: Here's a look at this year's most memorable "Hot Shots" coming in from our friends at the Associated Press. In November, conditions in Congo worsened as rebels fought for power often at the expense of innocent lives. On September 29, a somber trader took a break as the Dow-Jones plunged 777 points after Congress voted down a bail-out package. In August, U.S. Olympic swimmer Michael Phelps swam to victory again and again in Beijing to win a record eight gold medals, not to mention becoming a household name.

And in late August, Senator John McCain surprised just about everyone when he picked Alaska Governor Sarah Palin as his running mate, making her the first female to appear on a Republican presidential ticket. That's this hour's "Hot Shots," pictures worth a thousand words.

And on our "Political Ticker," even on New Year's Eve, the Minnesota Senate recount drags on. Election officials now are wrangling over which absentee ballots should or should not be included in the final count. The secretary of state's office says Democrat Al Franken currently leads incumbent Republican Norm Coleman by just 49 votes, but any final determination of a winner still is days or even weeks away.

A new honor for Howard Dean, even as he prepares to call it quits as Democratic Party chairman. Some question whether Dean has gotten appropriate credit for the Democrats' sweep of the White House and Congress this year. But people in Dean's home state -- well, they're applauding the former governor and presidential candidate. Dean has been named "Vermonter of the Year," beating out about 100 other nominees.

Political scandal, the economy in crisis, a race for a president like we have never seen before. Well, 2008 delivered quite a year to remember, our CNN's Jim Acosta giving us a live look back at those unforgettable events surely to shape history. A lot you that could see here, Jim, working (ph) on (ph). Amazing year.

ACOSTA: Suzanne, exactly. What a year it was.

MALVEAUX: All right.

ACOSTA: Most Americans felt both hopeful as they elected their first African-American president and helpless as they watched the nation plunge into recession, just two of the biggest political stories of 2008.


ACOSTA (voice-over): Try to top this, the most powerful nation in the world making the son of a Kenyan father president, by far the greatest political moment of the year.

OBAMA: This is your victory!

ACOSTA: To get there, he had to beat her, starting in Iowa.

OBAMA: And our time for change has come!

ACOSTA: But Hillary Clinton didn't go quietly.

CLINTON: I just don't want to see us fall backwards.

ACOSTA: Their fight to the finish was epic.

CLINTON: Shame on you, Barack Obama!

ACOSTA: Then came a turning point.


ACOSTA: The Reverend Jeremiah Wright, a pastor disaster averted.

OBAMA: What we have seen is that America can change.

ACOSTA: The senator from Illinois survived and Democrats united behind a history-making nominee. The next day, Republican John McCain tried to shoot for the moon and hit Alaska. Then an unknown governor, Sarah Palin, revved up the party base at the GOP convention.

GOV. SARAH PALIN (R), ARIZONA: The difference between a hockey mom and a pit bull? Lipstick.

ACOSTA: Then she crashed.

PALIN: As Putin rears his head and comes into the airspace of the United States of America, where do they go? It's Alaska. It's just right over the border.

ACOSTA: Cue Tina Fey.

TINA FEY, "SATURDAY NIGHT LIVE": And I can see Russia from my house!

OBAMA: Spread the wealth around. It's good for everybody.

ACOSTA: In the end, it all came down to an economy in freefall. McCain had another running mate in Joe the plumber, even if he didn't always show up as scheduled.

MCCAIN: Joe's with us today. Joe, where are you? Where is Joe? Is Joe here with us today?

ACOSTA: But there were bigger misses. Just ask John Edwards, Eliot Spitzer.


UNIDENTIFIED MALE: Governor Blagojevich has taken us to a truly new low.

ACOSTA: For Rod Blagojovich, it wasn't sex for sale. Prosecutors say it was a Senate seat. But there was one more shoe to drop.


ACOSTA: And make that two shoes, Suzanne. That is the way it was. We all aged more than one year in 2008, I think. And 2009, you've got a tough act to follow -- Suzanne.

MALVEAUX: Absolutely. And obviously, we are looking at some live pictures from cities around the world as we welcome in the new year. Jim, what are we looking at at this moment?

ACOSTA: This is Taksim Square in Turkey. It is the center of Istanbul -- the capital -- not the capital but the cultural capital of Turkey. And what we have seen across the Arab and Muslim world today is that festivities have been canceled around that part of the world. And that is also the case in Turkey.

Let's switch over to Athens and say kalispera -- that means good evening -- to our friends in Greece, where there are celebrations this evening. Fireworks going off there in Greece over the Acropolis -- a stunning sight for anybody who ever has the pleasure of seeing it.

So, Suzanne as we are moving through the hours of THE SITUATION ROOM, we are watching the world say goodbye to 2008. And I think we can all agree that it is good to say goodbye to 2008 -- Suzanne.

MALVEAUX: I can't imagine topping this year. But we'll see what happens next year.

OK, thanks again, Jim.

ACOSTA: OK. You bet.