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Obama Plans Economic Jump Start; Blago Senate Appointee Defends Appointment; UNSC Meets to Address Israeli Strikes in Gaza

Aired December 31, 2008 - 18:00   ET


SUZANNE MALVEAUX, CNN ANCHOR: You're watching live pictures there, welcoming in the New Year in Berlin.
Happening now, Barack Obama's jump start: The president-elect is set to come to Washington early to work on his economic fix-it plan.

Plus, the colorful and controversial choice to fill his Senate seat. This hour, new moves to stop the embattled Illinois governor's appointee from taking office.

And the president-elect as tough guy. Well, new proof of the public's great expectations, but can he live up to them? The best political team on television is standing by.

Welcome to our viewers in the United States and around the world. Wolf Blitzer is off today. I'm Suzanne Malveaux, and you are in THE SITUATION ROOM.

There are some new glimmers of hope on this last day of a dismal year for the U.S. economy. First time claims for unemployment benefits fell sharply last week, below the half million mark. And applications for new home loans are soaring after rates on 30-year mortgages fell to a record low for the third straight week.

Well, the question is, what will 2009 bring? The answer may lie in the next president's plan to jump start the economy. Our senior White House correspondent Ed Henry, who is with President-elect Barack Obama in Hawaii.

Ed, what are you hearing about how quickly we're going to get the details about the stimulus?

ED HENRY, CNN SR. WHITE HOUSE CORRESPONDENT: Hey, Suzanne. We are hearing it's going to happen very quickly. In fact, CNN has learned that the economic stimulus plan could be going to Capitol Hill as early as tomorrow, January 1st. The point being that the transition team wants to get the ball rolling immediately, and they have to do that because there could be some opposition on the Hill.

Some GOP leaders have been saying they are concerned about the price tag somewhere in the neighborhood of $775 billion, on top of all of these previous government bailouts. They're worried about all of this spending. They want more on the details.

All we really know right now is that the president-elect is talking about some infrastructure money, building, you know, roads and bridges, maybe rebuilding some schools, trying to create some construction jobs, inject some stimulus into the economy.

And we are also told by transition aides that he is hoping that it can get to his desk basically as new president as early as Inaugural week. Give him a quick legislative victory, but also a shot in the arm for the economy very quickly after he is sworn in -- Suzanne.

MALVEAUX: And, Ed, how do we think that Barack Obama is going to sell this plan to members of Congress?

HENRY: Well, as I mentioned, there are a lot -- you know, some Republicans talking about slowing it down. There are Democratic leaders a little nervous that they are getting in a little late in terms of, you know, getting through the congressional process.

And so what we are hearing from transition aides is that they are holding out the possibility of putting the president-elect himself out there shortly after being sworn in to start traveling around the country to sell this plan.

The Los Angeles Times suggested it might be some barnstorming. And transition aides trying to downplay that. And that -- you know, saying, look, they are not going to send the president-elect all around the country for some massive road show, but they do say they might send him at least to a couple of stops, try to promote this plan and put a little pressure on the lawmakers to get this done very quickly -- Suzanne.

MALVEAUX: Right. Obviously, wasting no time. Happy New Year, to you, Ed. We'll see you in Washington.

HENRY: Happy New Year, Suzanne, see you then.

MALVEAUX: Now 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, Roland Burris. Many Democrats say that Governor Rod Blagojevich really had no business naming anyone to the Senate seat that he is accused of trying to sell to the highest bidder. Let's bring in our congressional correspondent Brianna Keilar.

Obviously this fight is now moving to the U.S. Senate. What is the next move?

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Well, right now, Suzanne, Senate Democrats are scrambling, and we are learning about new ways that they are planning to block Burris' appointment. Even so, he said last hour in right here in THE SITUATION ROOM he is planning to show up on Capitol Hill, though he wouldn't say exactly when.


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.

ROLAND BURRIS (D), FMR. ILL. ATTORNEY GENERAL: We are certainly going to make contacts with the leadership of the Senate to let them know that the governor of Illinois has made a legal appointment, and that I am currently the junior senator from the state of Illinois.

KEILAR: Many experts say Democrats are not abiding by the Constitution if they carry out the threat not to seat Burris.

ABNER GREENE, FORDHAM: The fact that there is this background taint involving what we have all read about in terms of the phone taps, maybe that is a reason to convict Blagojevich, maybe it is 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 the rule of appointments signed by a state's secretary, plan shall 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 is a gamble that could pay off.

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


KEILAR: And a lot of constitutional experts feel that way. 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: And, Brianna, thank you so much.

The man who would be senator, Roland Burris, may not a household name, but he is no stranger to politics. And having accepted this Senate appointment by the embattled governor, Rod Blagojevich, Burris is not afraid to list his accomplishments. In fact, he already has them carved out in stone. Our CNN's Brian Todd is following the story.

Brian, what are we learning about him?

BRIAN TODD, CNN CORRESPONDENT: This is a very interesting man, Suzanne, with some large shoes to fill. The previous senator in that seat, Barack Obama, has gone on to some achievements that you might have heard of, but Roland Burris, for his part, is 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.

BURRIS: I have faith in the record that I have forged over the past four decades, and I'm proud of my accomplishments as a public servant.

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

RICK PEARSON, THE CHICAGO TRIBUNE: You have got Roland Burris who has had a long political history in Illinois, but has always been aggressive trying to be politically opportunistic and climb the ladder.

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 has 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 has 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...

MARK SAWYER, FRIEND OF ROLAND BURRIS: He is 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.

DICK SIMPSON, UNIVERSITY OF ILLINOIS: The issue is going to be, how can the public be sure that nothing was traded for this appointment? I suspect nothing was. That is very hard to prove the negative.

(END VIDEOTAPE) TODD: Now despite those obstacles in the U.S. Senate that my colleague Brianna Keilar just reported on, and the fact that the Illinois secretary of state has refused to sign this appointment, Roland Burris for his part just last hour on CNN said that the problems of Illinois and the challenges facing the United States are simply too great right now for you to have a vacancy in that Senate seat. He is pushing hard despite all that -- Suzanne.

MALVEAUX: Yes. I talked to Burris just in the last hour, and he said too that he is going to work with senators. He is going to show up on Tuesday when Congress goes back into session, because he wants this thing to work. He believes it can work. But as for Blagojevich, what is his status now?

TODD: Well, the special prosecutor just today, Patrick Fitzgerald, requested more time to file an indictment, 90 days instead of the usual 30 days, so it may be a month-and-a-half or so before we know if there are going to be any formal charges against the governor.

MALVEAUX: OK. Brian, thank you so much.

The public thinks that Barack Obama is a tough guy. The president-elect drawing high marks as a strong leader, even before he takes office. We will show you how he measures up against some of his predecessors.

And one of Barack Obama's early tests may be the issue of illegal immigration. How will he handle the tough new orders handled by the Bush administration?

Plus, Israel says it is too soon for a cease-fire in its all-out war with Hamas. The United Nations secretary (sic) council holds a private meeting at this hour. Can the diplomats find a way to end the crisis?


MALVEAUX: Well, it is clear that Barack Obama has his work cut out for him, from the violence in the Middle East to the U.S. economic crisis. In less than three weeks before he takes office, the president-elect is getting some high marks for his leadership skills. Our senior political analyst Bill Schneider is here with us with some new poll numbers.

And, Bill, tell us what quality do most Americans see that they most admire about Barack Obama?

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


SCHNEIDER (voice-over): Barack Obama is the three Cs, "casual, cool, connected," but is he a tough guy?

JOE BIDEN, VICE PRESIDENT-ELECT: 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 is 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 is 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 that Obama is such a strong leader? He beat two very tough opponents.

John McCain, a war hero.

SEN. JOHN MCCAIN (R-AZ), FMR. PRESIDENTIAL CANDIDATE: Fight for what is 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.

BARACK OBAMA, PRESIDENT-ELECT: Yes, we can. Yes, we can.

SCHNEIDER: Yes, he did.

SEN. HILLARY CLINTON (D-NY), SECRETARY OF STATE-DESIGNATE: 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, who was the hero of the Cuban Missile Crisis; or Harry Truman, who fired General Douglas MacArthur; or LBJ, who was a force to be contended with. Obama seems to fill that mold very, very well. His toughness, however, is going to be tested and soon -- Suzanne.

MALVEAUX: And, Bill, how does he measure up on some other qualities besides toughness?

SCHNEIDER: Well, some other qualities he does get very high marks, higher than his predecessors. For instance, about over 70 percent of voters say he agrees with them on the issues, he shares their values, he cares about people like themselves. A lot of people thought those would be his highest-rated qualities.

But it turns out toughness is rated even higher than those qualities. MALVEAUX: And I am sure his toughness will be challenged. Thank you so much, Bill. Have a good holiday.

President-elect Barack Obama will face some crucial issues when he takes office, including illegal immigration. That particular issue may test him early in his presidency. CNN's Chris Lawrence joins us live.

And, Chris, what exactly is the president-elect going to be dealing with?

CHRIS LAWRENCE, CNN CORRESPONDENT: Well, right off of the bat, Suzanne, whether to revoke some of President Bush's executive orders or let them stand.


LAWRENCE: When Congress rejected an immigration reform plan, President Bush scaled back and signed several executive orders to curb illegal immigration.

ALI MOORANI, NATIONAL IMMIGRATION FORUM: The Obama administration from day one needs to be reviewing the effectiveness and the efficiency of those actions.

LAWRENCE: Immigrant rights advocates say the "no match" rule is one that hurts workers and businesses. It requires employers to take action when workers' names don't match the information in the Social Security database, and they can't resolve the discrepancy. A court ruling is expected within Obama's first 100 days.

MOORANI: The Obama administration has an opportunity and the authority to look at that rule, and say, you know what, this is not going to help anybody.

LAWRENCE: Another issue, E-Verify, an Internet-based system that allows employers to voluntarily verify their workers' employment eligibility. But one week before Obama takes office, an executive order takes effect, one that requires federal contractors and subcontractors to use the system.

JESSICA VAUGHN, CENTER FOR IMMIGRATION STUDIES: I am hard- pressed to think of any good reason why any federal contractors would be excused from having to use E-Verify.

LAWRENCE: Advocates of immigration enforcement will be pressuring the new administration to keep the Bush executive orders in place, and Homeland Security officials says the orders were necessary when Congress could not pass comprehensive reform. "We have ramped up enforcement at work sites and expanded arrests of fugitives while also giving employers better tools to maintain a legal workforce."


LAWRENCE: And beyond what Obama decides on those individual issues, some advocates for immigrant rights say they will expect him to have a comprehensive immigration reform plan by Thanksgiving -- Suzanne.

MALVEAUX: OK. Thank you, Chris. And happy New Year.

LAWRENCE: You, too.

MALVEAUX: A Manhattan penthouse, luxury yacht, just some of the things that Wall Street money manager Bernard Madoff may have to give up. How ripped-off investors could benefit. Still ahead.

Plus, the raging and deadly battle between Israel and Hamas, ahead, why Israeli air strikes are only stage one.

And his state won't certify him, and Democrats won't accept his appointment, but Roland Burris says that he is the junior senator from Illinois. The best political team in television is picking that one apart.


MALVEAUX: Jim Acosta is monitoring the stories that are incoming to THE SITUATION ROOM right now.

Jim, what are you working on?

JIM ACOSTA, CNN CORRESPONDENT: Suzanne, also happening now, Bernard Madoff is said to be complying with a judge's order to provide a list of his financial assets. Madoff's lawyer says that the financier met today's deadline. Madoff allegedly swindled investors in a $50 billion Ponzi scheme.

His assets have been frozen ever since he was charged with securities fraud earlier this month. A federally-appointed trustee has been named to comb through his assets (INAUDIBLE) for restitution to any investors found to be defrauded.

On this last day of 2008, oil prices are up. Prices for light sweet crude jumped more than $5 today to more than $44 a barrel on the New York Mercantile Exchange, that is an increase of 14 percent, but it's far below the record of more than $147 a barrel set in July. This has been the most turbulent year for crude markets which gave up four years of gains in just five months.

And there is disturbing news about the $700 billion bailout of financial institutions. Government officials overseeing the program say they've had difficulties tracking the money and they've had a hard time assessing the program's effectiveness.

Those revelations are contained in a document released today of a December 10th meeting of the Financial Stability Oversight Board. Fed Chairman Ben Bernanke heads that panel, which includes Treasury Secretary Henry Paulson.

A standoff that threatened unemployment benefits for 177,000 South Carolina residents is now resolved. Governor Mark Sanford said today he will request a $146 million federal loan. Sanford refused to sign the loan request earlier because of a long running dispute with the state agency that handles unemployment. Without the loan, the trust fund that pays the benefits would have run dry by late today. The request allows benefits to continue through March.

And government scientists say they have discovered a previously unknown wintering area for the endangered North Atlantic Right whale. There are thought to be only about 325 left in the world. Survey teams spotted more than 40 of the whales in the Gulf of Maine south of Bar Harbor this month. Scientists say that area may be a breeding ground, so a good news -- good New Year's Eve, I should say, for the Right whale. It is good news for them.

MALVEAUX: Good news for them. Happy New Year to you as well.

ACOSTA: And happy New Year to you.

MALVEAUX: Roland Burris tells me that he is the junior senator from Illinois, whether the Senate leaders want him to be or not. Is this all just an embarrassing distraction for the new Congress and the next president? Well, the best political team on television considers the dilemma created by the scandal-plagued Illinois Governor.

Plus, U.S. pressure on Israel behind the scenes to find a way out of its all-out war in Gaza. And an emergency meeting at the U.N. tonight on that fighting in the Middle East.


MALVEAUX: You are in THE SITUATION ROOM. Happening now, a deadly Israeli assault on Gaza captures the world's attention, while behind the scenes what sources describe as a shift in U.S. position. We have details of intense diplomatic maneuvers.

Also, the controversy over the Illinois governor's Senate appointment. Is it distracting the lawmakers from more pressing issues? The best political team on television weighs in. And appointee Roland Burris defends himself right here in THE SITUATION ROOM.

Plus, what some would see as an unlikely competition now revealed. President Bush and his former top adviser Karl Rove battling to see who could read the most books. Details on what the commander-in-chief is reading.

Wolf Blitzer is off today, I'm Suzanne Malveaux. And you are in THE "SITUATION ROOM.

And this just in, we have a new development in the controversial appointment to fill Barack Obama's Senate seat. Let's go directly to Jim Acosta -- Jim.

ACOSTA: It has just been reported by the Associated Press just a few moments ago that Roland Burris, the former attorney general from the state of Illinois and the Senate appointee of Governor Rod Blagojevich, has asked the Illinois Supreme Court to force certification of his appointment. That move following the move from the secretary of state in Illinois, Jesse White, who is now refusing to certify the appointment of Rod Blagojevich, saying that any such appointment from the governor would be unacceptable. We heard Roland Burris today earlier on THE SITUATION ROOM calling himself the junior senator from Illinois.

Congress goes back into session next week, as you know, Suzanne, and Roland Burris appears to be making plans to come to Washington and this appears to be one of those moves that he is making to make all of that happen. Again, we want to emphasize this is breaking news coming from the Associated Press that the Senate appointee Roland Burris is asking the Illinois Supreme Court to force certification of his appointment -- Suzanne.

MALVEAUX: Thank you, Jim.

Israel's all-out war with Hamas militants in Gaza rages on as Israeli leaders resist growing international pressure for cease-fire. Israeli war planes have continued to pound Hamas targets as the militants keep launching rockets into Israel. CNN's Brian Todd joins us now.

And, Brian, it seems as if it's very clear that neither side is willing to budge.

TODD: It doesn't appear that they are, Suzanne.

Israel's prime minister has vowed that his side is not going to stop its attacks until Hamas does. Now with daily images of carnage and casualties, there is growing concern inside the Bush administration and some intense behind-the-scenes maneuvers.


TODD (voice-over): U.S. officials and Arab diplomats tell CNN American leaders are strongly encouraging the Israelis to find a way out of this. Their biggest worry, according to sources, the longer this goes on, the more likely it will become a mirror image of Israel's war against Hezbollah two years ago, when civilian casualties backfired on the Israelis.

HISHAM MELHEM, AL ARABIYA: Hamas could survive this Israeli onslaught, you'll have more corpses, more bodies, more destruction, and yet Hamas could survive politically, even if it is -- it will be in a weakened position. This will embolden Hamas, Hezbollah, Syria, Iran, and the radicals.

TODD: It will embolden those elements, some observers say, while embarrassing Israel, the United States, and America's moderate Arab allies, like Egypt and Jordan. Arab diplomats tell us they sense a shift in the U.S. position just in the few days since this conflict began.

GORDON JOHNDROE, WHITE HOUSE DEPUTY PRESS SECY.: The United States holds Hamas responsible for breaking the cease-fire. Now the cease-fire should be restored immediately. TODD: That was on Saturday and it meant Hamas should stop its rocket attacks.

Now the talk is of a so-called durable cease-fire that both sides have to agree to and honor.

And given the fierce resistance Israeli forces got from Hezbollah two years ago, there's a lot less confidence in Israel's ability to score a clear victory now.

PROF. REZA ASLAN, UNIVERSITY OF CALIFORNIA RIVERSIDE: It's hard to imagine how the Israeli military can utterly destroy Hamas, as it has set out to do. Hamas, besides being a militant organization, is a social organization. It has a political wing. It is an embedded force, not just in Gaza, but in the larger in the larger Palestinian territories.


TODD: All of that weighing heavily now in the minds of those watching here in Washington. If there's any indication of that that we need, consider that President Bush, when he spoke today with Israel's prime minister, got an assurance that Israeli forces are only targeting Hamas military positions -- Suzanne, the administration very, very concerned about civilian casualties at this point.

MALVEAUX: Thank you, Brian.

And the U.N. Security Council has called for urgent consultations at this hour to discuss the violence in Gaza and Southern Israel.

Let's go straight to CNN's senior United Nations correspondent, Richard Roth -- and, Richard, what are you hearing?

RICHARD ROTH, SENIOR UNITED NATIONS CORRESPONDENT: Well, right now, the U.N. Security Council is going into an open session. There are going to be speeches. But what's more important is that a resolution has been introduced -- led by the Arab nations -- that is going to criticize Israel, call for an immediate cessation of hostilities, call for protection of the Palestinians.

They are trying this diplomatic maneuver to try to put pressure on Israel. The United States, of course, will be waiting with any veto to block any tough language against Israel. So the fighting has now spilled to this diplomatic showdown that will be looming in the next few days. There won't be a vote tonight, but there may be a visiting group of ministers -- high level -- coming from the Middle East to the United Nations -- Suzanne.

MALVEAUX: Richard, thank you very much.

All eyes on the United Nations.

Now to the conflict zone, where Israel says it will not accept what it calls "a strip of terror" next door.

Here's CNN's Paula Hancocks.

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 cease-fire, 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 Israel, 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 cease-fire at this point, which means another sleepless night for one-and-a-half million Palestinians and also possibly for three quarters of a million Israelis, who are now within rocket range -- Suzanne.

MALVEAUX: Thank you.

Paula Hancocks in the conflict zone.

Defending his controversial Senate appointment, Roland Burris says that he is the junior senator from Illinois and he makes his case right here in THE SITUATION ROOM.

Plus, Americans' high hopes for Barack Obama -- can he deliver on the promises in the new year?

The best political team on television weighs in on all of that and more.



ROLAND BURRIS (D), ILLINOIS SENATE-DESIGNATE: The governor of Illinois has made a legal appointment. And that I am currently the junior senator for the State of Illinois. And we are hoping and praying that, you know, they will see the reason in his -- in this appointing me as a very qualified, capable, able and ready to serve individual to carry on the business of the 13 million people of our great state and, of course, the business of the people of the greater United States of America.


MALVEAUX: Former Illinois Attorney General Roland Burris in THE SITUATION ROOM in just the last hour, defending his appointment to the U.S. Senate by embattled Governor Rod Blagojevich.

Well, joining us to talk about of that and much, much more, Clarence Page of the "Chicago Tribune"; Karen Tumulty of our sister publication, "Time" magazine; and CNN political contributor Stephen Hayes of "The Weekly Standard." They are all part of the best political team on television.

Clarence, I'll start off with you. I talked to Burris just in the last hour or so...


MALVEAUX: And, essentially, you know, you've got Barack Obama coming before the Senate saying I need this economic stimulus package. Democrats are going to be pushing for it, Republicans trying to slow this down.

How much of this is simply a distraction to the Senate in the coming year?

PAGE: Well, it's a big distraction right now. They're hoping to put this behind them quickly and that's the big challenge, because you're absolutely right, Democrats need every vote they can get. And the longer this drags on, the more pressure they're going to have the other way, to go ahead to seat him and take advantage of that vote.

MALVEAUX: Karen, is this a spillover problem for Barack Obama, who is trying to push forward this -- the economic stimulus package and also keep focused on his agenda?

KAREN TUMULTY, "TIME" MAGAZINE: You know, I think it's becoming one. I think 24 hours ago, I would have said this is something they're going to ship off to some committee in the Senate. But you've got to look at this guy and whatever you think about the circumstances of how he got the job, you've got to sort of admire his moxie in going out there and making a pretty appealing case for himself.

MALVEAUX: And Steve, I know we've also learned, too, that perhaps he has reached out -- Burris has reached out to the state -- the Illinois Supreme Court -- to force the certification of his appointment.

Is that the right move for him to make, to just keep going and going?


If you're Roland Burris, I mean, what do have you have to lose, as Karen says. The guy's got tremendous moxie. I think he's unlikely -- in a year, are we still going to be talking about Senator Roland Burris?

Unlikely, it seems to me. But while he's got it -- you know, he started his little comment to you by saying I am currently the junior senator from Illinois. If I were him, I'd be saying that as much as I can right now...

MALVEAUX: You don't think he's going to make it?

HAYES: I don't think he's going to last.

MALVEAUX: Let's turn to some of the polls that we're looking at here. The first one, "Can Obama manage his government -- the government effectively?"

Seventy-six percent say yes and 23 percent say no. Americans -- a lot of the Americans seem to be very confident in Barack Obama before he has even done anything.

PAGE: That's right.


What is the risk there in -- that he faces?

Obviously, high, high expectations of this guy.

PAGE: Yes. And politics is about 80 percent expectations, at least. For him, you could see even with his acceptance speech, he was talking down expectations to the degree of talking about sacrifice and we're all going to have to pull together for tough times ahead.

He's going to run into some stumbling blocks, of course. And how -- why do people think he's so effective?

Because he had a very impressive campaign. And they figure, well, you ran that campaign so well, he can run the country and world problems. He does have all the problems in the world on his shoulders, however, and he can't win all of them.

TUMULTY: You know, I think it may be more than that, though, because correct me on my math here, but those numbers would suggest that a third of the people who are expressing this confidence in Barack Obama are people who did not vote for him.


TUMULTY: And I think that, in part, it's because the times are so serious and people want to believe. But I think that the way he has handled this transition -- his self-assurance, he has such confidence in himself that I think it is, at least for now, inspiring confidence among Americans.

MALVEAUX: Stephen, how much of that credit do you give to President Bush, who has obviously also -- very much so -- to make this transition a smooth one?

HAYES: You know, he probably deserves some, but not a ton. I think it has much more to do with what both Karen and Clarence have said. And add to that -- sort of layer on top of that this idea that, you know, for a couple of months, we've basically been celebrating his election. And I say we -- in the media, to a certain extent. We've been telling people, look, this guy ran this fantastic campaign. He's got big ideas. He's promised to do all these things and he's likely to do them.

MALVEAUX: Let's take a look at -- real quick at another poll. "Can Obama get things done?"

Eighty-one percent say, yes, he can get things done. Seventeen percent say no. Running a campaign and a transition -- that's different than governing, Clarence.

Why is it...

PAGE: And he's also got a Democratic Congress -- I mean, you know, both houses are run by his party. People do expect him to get some things done. And he certainly has a lot of plans and a lot of ideas out there. The thing is, he's got a Senate, for example, where you've got 100 people who all think they can be president better than he can. And those kind of things are what he's going to have to run up against.

MALVEAUX: Karen, and I want to ask here, too, I mean, obviously, predictions for the new year -- what is the toughest thing that Barack Obama is going to have to deliver on here and what is most likely the promise that perhaps he'/s not going to be able to fulfill?

TUMULTY: Well, the promise -- the original promise of his campaign, which was really changing the tone in Washington, in some ways, is going to be the hardest to fulfill. But it's the thing he's got to do if he's going to get all of these things done at once.

HAYES: Good luck with that.

PAGE: Yes.

HAYES: Well, see, I'm not confident he's going to be able to do it. But I think the toughest thing will be keeping his promise to have the most transparent administration in history. I mean we -- you know, this is what we are going to do for a living now is harp on him and his team to give us everything. We are going to want to know everything that they do, every meeting that they have. And there are things that they're not going to want to share.

PAGE: That's true.

MALVEAUX: Clarence, is there something that you think he is going to be able to get done rather quickly and in the coming months?

PAGE: Well, I think he will get the kind of stimulus package that he wants -- the public works projects. How effective it will be toward an economic recovery, however, is highly questionable.

I remember, though, Franklin Roosevelt had this same kind of -- kind of an approach, not as early as Obama. But he did push for a New Deal and lots of public works. The economy really didn't improve that much by the end of his first term. But his approval ratings were very high and he was re-elected overwhelmingly. And that's the kind of thing we may see happen with Obama.

MALVEAUX: Clarence, Karen, Stephen, thank you so much for joining us in THE SITUATION ROOM.

Have a great holiday and a new year.

PAGE: You, too.

TUMULTY: Happy New Year.

HAYES: Same to you.

MALVEAUX: Happy New Year.

We want to follow up on another part of my interview with Roland Burris. I asked him if people should be able to ask tough questions about his record and his Senate appointment without being accused of being part of some symbolic lynching. I was referring to a remark by Democratic Congressman Bobby Rush of Illinois, who spoke at the news conference announcing Burris' appointment by Governor Blagojevich.

Roland Burris had a different interpretation of what Congressman Rush said. So right now, we want to take our viewers and let them make their own judgment.


REP. BOBBY RUSH (D), ILLINOIS: And I would ask you to not hang or lynch the appointee as you try to castigate the appointer -- separate, if you will, the appointee from the appointer.


MALVEAUX: And it's a White House read-off revealed -- Karl Rove talking about his literary contest with President Bush.

What kind of books does the president read?

Also, visions of big bucks vanish for Washington area homeowners hoping to cash in over inaugural fever.

Plus, ushering in 2009 around the world -- from the wild to the weird, well, Jeanne Moos takes the Moost Unusual look.

(COMMERCIAL BREAK) MALVEAUX: This just in. It is already New Year's Day in Bangkok, Thailand, where a tragedy is unfolding. A fire broke out in an upscale nightclub about a half hour after people there rang in the new year. There are at least 59 people who are dead and about 130 others injured. Police say foreigners are among the victims, but there is no immediate word on the identities of those killed.

Well, here in Washington, homeowners hoping to cash in on the upcoming inauguration are finding their wallets empty -- many who had hoped to rent out their homes to people traveling to Washington for Obama's swearing in.

CNN's Samantha Hayes is following the story -- and, Sam, it seems as if some homeowners have miscalculated.

SAMANTHA HAYES, CNN CORRESPONDENT: That may be the case, Suzanne.

A lot of folks thought that they would be able to rent their homes quickly and for a lot of money. 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: ... Equaled 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 to bring owners and renters together.

ANDRE BUTTERS, INAUGURALHOMES.COM: 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.

BUTTERS: That includes housekeeping, a personal chef, a chauffeur.

HAYES: 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: 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. I -- you know, I hope that they enjoy our house as much as we do.


HAYES: And, originally, there were reports that all the hotel rooms in D.C. would be booked, too. But I checked with the D.C. Tourism Office today and they said that at last check, there are 500 rooms still available in the city and the average cost is $800 a night -- Suzanne.

MALVEAUX: That's pretty steep.


MALVEAUX: But at least there's -- there's still some room.

HAYES: Go out of town, it's a little cheaper and more availability.

MALVEAUX: OK. Thank you, Sam.

Well, you've heard of Oprah's Book Club. Well, President Bush actually has one, too.

Our CNN's Ed Lavandera has been looking into this -- Ed.

ED LAVANDERA, CNN CORRESPONDENT: Suzanne, an image of President Bush kicking back, devouring a steady stream of books, might come as a surprise to many of the president's critics. But Karl Rove says Bush is actually a highly competitive book reader.


LAVANDERA (voice-over): For eight years, comedians will tell you, President Bush's brain has been the gift that never stopped giving.


JON STEWART, HOST: The State of the Union matches up two bitter rivals -- the president of the United States and words.


LAVANDERA: The president enjoys the joke, too -- playing up the image of a bozo in chief, if you will.



BUSH: I say you, too, can be president of the United States.


LAVANDERA: But the president's political guru, Karl Rove, writes in a "Wall Street Journal" opinion piece that Bush is a voracious reader of novels, biographies and history books. Rove says it's a myth the president doesn't like to read. They started a book reading competition New Year's Day 2006. By Rove's count, the president has read 186 books in the last three years.

Author Robert Draper has talked extensively with Bush about his reading habits. He says the president never felt the need to show off his appetite for reading.

ROBERT DRAPER, BUSH BIOGRAPHER: It doesn't seem to move him that people think he's a dummy. You know, you can make the argument he's even profited off of it, by being, as he would put it, mis- underestimated by his foes.

LAVANDERA: Rove writes that Mr. Bush has read biographies of Abraham Lincoln, Mark Twain and Babe Ruth, among others; historical books like "The Coldest Winter" about the Korean War, "Day of Battle" about World War II, "Tried By War" and "American Lion."

And then there are the novels, like "The Stranger," described as the story of a disaffected and amoral young man and eight Travis McGee mystery novels.

But Draper says the reading list is missing something.

DRAPER: He oftentimes will read -- particularly biographies and history books -- that tend not to challenge his point of view, but rather to validate it. And these books the president tends to read and glean from them characteristics that remind him of his own presidency, that help buttress his thinking.

LAVANDERA: That criticism doesn't bother the president. He doesn't care if you think of him as a cat in the hat kind of book reader.

BUSH: Number seven -- make sure the White House library has lots of books with big print and pictures.



LAVANDERA: As for the reading competition, Rove won all three years. He says the president's excuse was that he was busy being leader of the free world. But as you know, Bush has many critics -- even some who wonder how a president could find so much time to read 186 books -- Suzanne.

MALVEAUX: Thanks, Ed.

Counting down to 2009 -- Jeanne Moss has a Moost Unusual look at celebrations around the world.

And Mother Nature has bitter plans for partiers in Times Square.


MALVEAUX: Here's a look at this year's most memorable Hot Shots.

On January 3rd, then president hopeful Barack Obama pulled off a stunning victory in the Iowa caucuses that propelled him to the presidency.

In October, the Philadelphia Phillies won their first World Series since 1980.

In late November, terrorists hit hard in Mumbai and killed more than 150 people.

And in July, Ingrid Betancourt was reunited with her family after being held hostage for six years in the Colombian jungle.

That's this hours Hot Shots.

Well, fireworks are just one of the ways that people around the world are bringing in the new year. But as CNN's Jeanne Moos shows us, in some places, 2009 has already begun -- in a Moost Unusual way.


JEANNE MOOS, CNN CORRESPONDENT (voice-over): It's the one thing you can count on on New Year's Eve.


MOOS: Countless countdowns -- from Hong Kong to Thailand...


MOOS: Australia. UNIDENTIFIED MALE: Eight, seven, six, five...

UNIDENTIFIED MALE: Happy New Year. Happy New Year.



MOOS: And if you don't speak the language, watch the sign language.


MOOS: It seemed the festivities worldwide were presided over by overexcited hosts worked up over the fireworks.


MOOS: Fireworks were first rate.


MOOS: Australia's Sydney Harbor Bridge. While in Taiwan...


MOOS: The style seemed more towering inferno.


MOOS: In New Zealand, the fireworks were accompanied by horns.


MOOS: Some literally rang in the new year.


MOOS: And some chose not to leave home.

GORDON JOHNDROE, WHITE HOUSE SPOKESMAN: The president will spend a quiet New Year's Eve on the ranch.

MOOS: While others were about as far away as you can get.

UNIDENTIFIED MALE: I would like to wish everyone on beautiful planet Earth a happy new year.

MOOS: Yes, it looks beautiful from out there. But in deference to the bloody situation in Gaza, countries like Egypt and Dubai canceled celebrations.


MOOS: The sounds and sights of fireworks don't seem to work as well when there's real smoke in the air somewhere. Back in the streets of New York, we asked for a one word description of the past year.

(on camera): 2008?





UNIDENTIFIED FEMALE: Extremely difficult. I know that's two words.



UNIDENTIFIED FEMALE: It was good for me.

MOOS (voice-over): From the Kremlin to the Acropolis to the Ukraine...


MOOS (on camera): The most frequently heard word in every language.






UNIDENTIFIED MALE: Happy new year.


MOOS: Jeanne Moos, CNN, New York.


MALVEAUX: Well, now let's get a live update from New Year's Eve central in New York. Of course, that would be Times Square.

And that's where our own CNN's Erica Hill is there and, Erica, I know you're a little cold right now, but tell us what's going on.

How are you doing? ERICA HILL, CNN CORRESPONDENT: A little cold, Suzanne. But I have to tell you, the warmth of this crowd in Times Square every year, it never ceases to amaze me how that can actually warm you up. They're playing a lot of music, too, to get people moving, to keep them warming up.

And we tonight on CNN are going to be airing some incredible music -- an incredible show starting at 11:00 with, of course, Anderson Cooper and Kathy Griffin.

Here's a list of some of the performers we're going to be bringing you -- My Morning Jacket, Lady Gaga, Lil Wayne, Lynyrd Skynryd.

I mean it runs the gamut, which is fantastic. And, of course, if you're not down here at Times Square celebrating with us and trying to keep your neighbors warm as you huddle together to ring in the new year, you can actually be a part of the action at home -- Go there. Send us your iReport of your party.

Happy new year, Suzanne.

MALVEAUX: Happy New Year to you, Erica.

Have fun.

I'm Suzanne Malveaux in THE SITUATION ROOM.

Lou Dobbs begins right now.