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THE SITUATION ROOM
Obama's Trillion-Dollar Problem; Access Denied to Would-be Obama Replacement
Aired January 6, 2009 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, HOST: The surgeon general of the United States could have renewed visibility if President-elect Barack Obama CNN's chief medical correspondent, Sanjay Gupta to the post. We have been reporting he's been approached. We're also getting some buzz right now that Time Warner's former chairman and CEO, Richard Parsons, could potentially be heading up the commerce department. Lou Dobbs is watching these appointment possibilities for us.
What do you think, Lou?
LOU DOBBS, CNN ANCHOR: First of all, I think great for them. Sanjay Gupta, as you know, Wolf, a terrific colleague and friend. He's also a terrific doctor. I think -- it has a broad range of interest. I actually think, frankly, we probably should fight to try to keep from losing him. But he would be definitely an asset for the Obama administration. Now, Dick Parsons, we've already lost him. He's no longer our CEO, so we can be more supportive of his -- if he -- of his appointment as commerce secretary. Dick is an accomplished executive, former chairman, CEO of dime savings, co-chair of the president's commission on social security. And CEO of Time Warner here. He's a man of immense accomplishment, I think has some of the best judgment I've ever encountered in a business executive, a man I really respect. I think he'd be outstanding as commerce secretary.
BLITZER: I echo everything you just said. Our parent company, Time Warner. Lou, thanks very much. See you in one hour.
DOBBS: You got a deal, Wolf.
BLITZER: And happening now: The president-elect puts lawmakers on notice about something he won't tolerate. This hour, Mr. Obama's $1 trillion headache, as he works to try to jump-start the economy.
Plus, as you just heard, one of CNN's own approached for a possible job in the new administration. New questions about the Obama selection process, though, and what's driving some of his choices. The best political team on television is standing by.
And the deadliest strike yet in the Gaza ground war, schools in the crossfire.
We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.
Right now, president-elect Barack Obama is facing a harsh reality, that his economic recovery package will saddle the nation with a mountain, a mountain of new debt. He met today with his economic team. But exactly two weeks before his inauguration, political and global conflicts are competing for his attention, distractions from the enormous problems he was elected to fix.
Let's go to our chief -- excuse me -- our national political correspondent, Jessica Yellin. She's looking at all of this for us.
Jessica, this is quite a mess out there.
JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: It is a real mess for Barack Obama, Wolf.
And right now, he would like to stay focused on one theme. That is economic recovery. But with so much erupting all around him, that's a lot easier said than done.
BARACK OBAMA (D-IL), PRESIDENT-ELECT: We got everybody?
YELLIN (voice-over): The president-elect's advisers predict a record high $1 trillion deficit this year. And that's before spending $775 billion on their proposed stimulus plan.
OBAMA: What I have said is I'm going to be willing to make some very difficult choices in how we get a handle on this deficit.
YELLIN: So Mr. Obama is promising that stimulus money will go to America's needs, not politicians' pet projects.
OBAMA: What I'm saying is we're not having earmarks in the recovery package, period.
YELLIN: But economic recovery isn't the only issue confronting the incoming president. There are the distractions not of his making -- violence in Gaza.
OBAMA: I am deeply concerned about the conflict that's taking place there.
YELLIN: And those his team created, like failing to inform the head of the Senate Intelligence Committee that he'd selected Leon Panetta to run the CIA before news leaked to the press. Even his vice president tells CNN that was a mistake.
OBAMA: I haven't made a formal announcement about my intelligence team. That may be him calling now.
YELLIN: We know who is not calling -- New Mexico Governor Bill Richardson.
GOV. BILL RICHARDSON (D), NEW MEXICO: It was my idea to withdraw. YELLIN: Obama's vetting team missed or overlooked a few red flags on the one-time commerce nominee.
For now, the president-elect seems to have put some distance between himself and the investigation into Illinois Governor Rod Blagojevich. But there's this: the bizarre spectacle of Obama's would-be Senate replacement rejected by his own party. Today, no comment from the president-elect, who can only hope the problem goes away before he is asked to get involved.
YELLIN: And, these days, Barack Obama is truly intent on steering the conversation back to the economy, no matter what else is in front of him. Part of the transition to power, it seems, would be accepting, Wolf, that, in the White House, diversions are routine.
BLITZER: Yes. I think that's going to be very evident to the president-elect in two weeks, two weeks from today. Thanks very much, Jessica, for that.
The Senate Republican leader, meanwhile, is raising a new red flag today about just how big president-elect Barack Obama's budget requests may be. Senator Mitch McConnell is one of the leading voices warning Democrats to consider carefully all the ramifications of a massive recovery package.
(BEGIN VIDEO CLIP)
SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: We shouldn't be rushed into voting for a bill that, by any estimate, will be bigger than all 50 state budgets combined, especially when many of the jobs it promises won't even materialize for another year.
If we're serious about protecting the taxpayer, these projects will be awarded through a fair and open process and allowed to compete with other priorities in the budget.
(END VIDEO CLIP)
BLITZER: Another new development, as Barack Obama counts down to his inauguration, transition sources saying CNN's own Dr. Sanjay Gupta, our chief medical correspondent, has been approached about the job of becoming the nation's surgeon general.
One source says the Obama team is impressed with Dr. Gupta's communications skills, his work as a neurosurgeon, and his past work as a special adviser to Hillary Clinton. When she was the first lady at the time, he was a White House fellow. CNN has made sure Dr. Gupta, by the way, does not report on anything connected to the new administration since learning he was approached about the post.
We're going to have much more on this story. John King is standing by. That's coming up this hour right here in THE SITUATION ROOM. Meanwhile, blood continues to flow in the Middle East. And it appears a top al Qaeda terrorist is blaming Barack Obama. An audio message just released reportedly from Ayman Al-Zawahri says Israel's actions at Hamas -- and I'm quoting now -- "are a gift from Obama."
The message, posted on an Islamist Web site, even goes further as to tell Muslims in the region that president-elect Obama -- and I'm quoting now -- "is killing your brothers and sisters."
No response from Obama's transition team.
Meanwhile, two United Nations schools in Gaza hit today.
CNN's Paula Hancocks is along the border between Israel and Gaza -- Paula.
PAULA HANCOCKS, CNN CORRESPONDENT: Wolf, dozens of Palestinians have been killed by Israeli artillery shells near a second U.N. school in Gaza. Israel insists it was returning fire, and there were Hamas operatives among the dead.
As the sun sets over Gaza, a thick haze of smoke drifts across the whole strip. Day 11 of Israel's onslaught, ambulance sirens in Gaza have become background noise to the constant explosions. Within hours, two U.N.-run schools, both being used as shelters for hundreds of people, were hit. The U.N. in Gaza says three artillery shells landed near a school in Jabalia, killing dozens.
JOHN GING, DIRECTOR OF OPERATIONS IN GAZA, UNITED NATIONS RELIEF AND WORKS AGENCY: We're demanding full accountability in accordance with international law and the duty of care that the parties to the conflict are obliged to adhere to. We don't care to pass judgment. We have to deal with the consequences.
HANCOCKS: The Israeli military says it returned fire after mortar shells were fired from the school.
Many Palestinians are caught in the middle. This man asks Israel, "How can you let your army destroy everything, the young, the old, men, women, while everyone else is just watching us?"
The Red Cross in Gaza is calling it a full-blown humanitarian crisis. Israel's military believes it killed 130 Hamas militants since the ground operation began Saturday night. It has also lost six soldiers in that time.
As troops advance on the outskirts of Gaza City, militants continue rocket fire into Israel, hitting farther than ever before. The town of Gedera, 36 kilometers, or 23 miles, north of the border, suffered its first hit.
This policeman says: "We knew it would come. We just didn't know when."
E.U. diplomats are meeting and talking and calling for an immediate cease-fire.
MARK REGEV, ISRAELI FOREIGN MINISTRY SPOKESPERSON: Any future arrangement has to prevent Hamas from continuing to re-arm, to get stronger and longer-range rockets. A vital ingredient is a total, total ban on any weapons entering the Gaza Strip.
HANCOCKS (on camera): Talk of a cease-fire has certainly not yet reached Gaza, both sides showing no signs of letting up, even as the civilian death toll increases -- Wolf.
BLITZER: Paula, thank you very much.
And, just a little while ago, the office of the Israeli prime minister, Ehud Olmert, announced that Israel has now agreed to accept to set up a humanitarian corridor that would allow vital supplies to reach the people of Gaza.
Let's go back to Jack Cafferty. He's got "The Cafferty File" -- Jack.
JACK CAFFERTY, CNN ANCHOR: It's very sad. Thanks, Wolf.
Well, go figure this. Gas prices are actually down since President Bush took office eight years ago, true story. According to the Energy Information Administration, the average price per gallon last week was $1.59. And, when adjusted for inflation, that is 9 percent less than when President Bush took office, and considerably less than last summer, when you will recall gas was like $4 a gallon.
Gasoline prices are starting to creep up a few cents now. Oil prices have been rising in response to the fighting in Gaza. And there are predictions that, after declining for five straight months, gasoline could cost around $2 a gallon by springtime.
Meanwhile, consumers are only too happy to spend less at the pump, people now spending $25 a week on gas, instead of $75. And that translates to a savings of about $1 billion a day for American motorists, according to AAA. They say high gas prices contributed to the recession and that lower gas prices can help turn things around by leaving people with more cash in their pockets to spend on something besides fuel.
The downside, of course, is that lower gas prices take the emphasis off developing alternative energy sources and ultimately breaking our dependence on imported oil. So, it's a double-edged sword, if you will.
Here's the question. Are lower gas prices an asset or a liability for the United States? Go to CNN.com/caffertyfile and post a comment on my blog -- Wolf.
BLITZER: Jack, thank you.
Access denied. The man who says he will replace Barack Obama in the Senate is turned away from taking a seat. Is a major battle next or will there be a deal?
Also, might the president-elect be thinking twice about his apparent pick to head the CIA? You're going to find out why Leon Panetta may be giving him some headaches right now.
And president-elect Barack Obama is possibly doing something to please both Democrats and Republicans. But can he really pull it off? We will explain right here in THE SITUATION ROOM.
BLITZER: On a day when Democrats prevented one of their own from being sworn in to the Senate, a powerful party member is now breaking with the pack.
The Senate Rules Committee chairwoman, Dianne Feinstein of California, says she believes Roland Burris should be seated as the junior senator from Illinois. Feinstein says blocking Burris may have ramifications for other governors' appointments.
Burris, of course, was appointed by the Illinois governor, accused of trying to sell that Senate seat to the highest bidder.
Our senior congressional correspondent, Dana Bash, she has got more on this spectacle that unfolded today, where you were, Dana, up on Capitol Hill.
DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: That's right.
It obviously wasn't a surprise that Roland Burris came here and was unsuccessful in his mission, which was to take Barack Obama's seat and get sworn in. But what was a bit of a surprise and certainly an unwelcome one from the Democratic leadership was that spectacle around it.
BASH (voice-over): No, that's not an early inaugural parade. It's the Burris circus coming to town.
UNIDENTIFIED MALE: Keep going. Give him some space.
BASH: Throngs of reporters engulfing Roland Burris as he made his way through the rain towards the Capitol, overwhelmed but jovial.
ROLAND BURRIS (D), ILLINOIS SENATE APPOINTEE: I'm just playing.
BASH: Getting the very attention he was seeking in this act of defiance.
UNIDENTIFIED MALE: Spread out.
BASH: Democratic leaders blocking Burris from becoming a senator tried to calm the chaos by trying to organize his entrance into the building, sending the sergeant at arms, an old friend from Illinois, to greet him. Inside, Burris was guided through the hallway, ignoring our questions as we broadcast the scene.
(on camera): What do you expect to do right now, sir?
(voice-over): He squeezed on to the elevator to see the secretary of the Senate to appeal her refusal to allow him to be sworn in. Twenty minutes later, Burris reemerged, his bid to be seated denied.
Dozens of cameras and reporters followed Burris into the now pouring rain as he tried to cross the street and hold a press conference.
UNIDENTIFIED MALE: Come on, Roland.
BASH: The short trip was not easy. Burris now appeared frightened as uniformed officers and Senate aides tried to navigate. He finally arrived at the cameras and stated the obvious.
BURRIS: I presented by credentials to the secretary of the Senate, and advised that my credentials were not in order and I would not be accepted and I would not be seated.
BASH: Then he turned to leave the Capitol grounds.
UNIDENTIFIED FEMALE: Mr. Burris, did you try to get on the Senate floor, sir?
BASH: Still not answering reporters' questions, still not sure of his next steps, but sure he got noticed.
BASH: Now, Burris' lawyers say they are considering filing a complaint in the U.S. district court. But they say, for the most part, they are hoping that they can find some accommodation with Senate Democratic leaders. And, in fact, Burris is going to meet with the top two Democratic leaders tomorrow.
Now, Democratic sources say they are still, Wolf, trying to figure out some kind of compromise here, while they wait to see if the Illinois State Supreme Court decides -- actually, rules that this should be certified, it should be certified that Burris does become a United States senator. And they're waiting for that. It could happen in the next couple of days.
BLITZER: Yes. And, but, Dana, Dianne Feinstein -- she's the outgoing chair of the Senate Rules Committee -- breaking with her fellow Democrats. That's a pretty major development, I should say.
BASH: It is.
And, you know, she basically made the argument, if you look at her statement, that you hear Roland Burris and his associates making, that she thinks that for the most part, he was appointed by a sitting governor, who hasn't been officially indicted or -- obviously, he's under a cloud, but doesn't have anything officially wrong with him criminally.
And she also made the point that she believes that this could be a bad precedent for other senators trying to get seated where their governors have potential problems. Now, she is the outgoing chairman of the Rules Committee. This is a committee that actually will possibly deliberate on this matter in the next -- in the coming weeks. And she is influential. But at this point, it sounds like she's a lone voice in the Democratic Senate.
BLITZER: And the incoming chair -- chairman is Chuck Schumer of New York.
BLITZER: All right, Dana, thanks very much.
Osama bin Laden may soon want to be afraid of this man. Leon Panetta said to be a tough broker, but his apparent choice as the next director of the CIA is causing some controversy, including from the incoming Senate Intelligence Committee chairwoman, Dianne Feinstein.
She was pretty sour about the pick 24 hours ago. Today, she issued this statement: "I have been contacted by both president-elect Obama and vice president-elect Biden, and they have explained to me the reasons why they believe Leon Panetta is the best candidate for CIA director. I look forward to speaking with Mr. Panetta about the critical issues facing the intelligence community and his plans to address them."
Still, this could cause president-elect Obama some sort of a headache.
Brian Todd has been looking into this story for us.
And what are you picking up, Brian?
BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, this is easily considered one of the most surprising picks of the transition. Within the next few days, we will get the formal unveiling of Leon Panetta's nomination.
But, already, some intelligence veterans are questioning the choice, the timing and the message it sends.
TODD (voice-over): His nomination hasn't even been formally announced yet, but there's instant controversy over President-elect Obama's pick to head the CIA. Leon Panetta, former Clinton White House chief of staff, budget director, longtime congressman, comes into the job with virtually no hands-on intelligence experience, and that's got some in the spy community questioning, is this Washington political player ready for job number one at the agency, tracking down terrorists?
ROBERT GRENIER, KROLL MANAGING DIRECTOR: This is somebody who really doesn't know very much about the game as it's currently being played. And I think that is a particular deficit at this period in time.
TODD: Former CIA counter-terror chief Robert Grenier says Panetta may be a quick study, but he says the agency's efforts in Afghanistan, its cooperation with Pakistan and the war on terror, are complicated, largely unseen operations that will be more challenging for someone from the outside to pick up quickly.
Panetta's prospective boss defends his choice.
OBAMA: As chief of staff, he is somebody who -- to the president, he is somebody who, obviously, was fully versed in international affairs, crisis management, and had to evaluate intelligence consistently on a day-to-day basis.
TODD: But the man who once ran the CIA's unit tracking Osama bin Laden says Panetta has another problem.
MICHAEL SCHEUER, FMR. CIA OFFICER: I think the impression that will be brought in the intelligence community is that the Obama administration means to punish those people who were defending America through the rendition program or through Guantanamo Bay.
TODD: Panetta has publicly criticized coercive interrogation, one of the CIA's most controversial programs during the Bush era. From an op-ed last year, "We cannot and must not use torture under any circumstances. We are better than that."
To Panetta's supporters, that's a positive signal.
SEN. RON WYDEN (D), INTELLIGENCE COMMITTEE: He understands that these policies are of questionable legality and questionable effectiveness, and his record in that area will make a big difference.
TODD: Now, intelligence insiders we spoke to say one crucial component to watch here is whether Panetta retains some key CIA officials still in place. One former deputy director says -- quote -- "It is important that he turn to the professionals in the building and not show up with a coterie of outsiders to turn the place upside down."
Wolf, they will be watching that.
BLITZER: What kind of intelligence was he privy to when he was the White House chief of staff under Bill Clinton?
TODD: We're told that he had access to what is called the president's daily brief. That is a written file of the most sensitive daily intelligence that the president got. He would have also had access to the oral briefings of a similar nature.
Now, this was during the time of the U.S. military invasion of Haiti, during U.S. military operations in Bosnia and during the U.N. monitoring of Saddam Hussein's weapons programs, so a lot going on then that Leon Panetta could have very well seen and had access to.
BLITZER: He was a major consumer, customer of that intelligence.
TODD: That's right. Exactly.
BLITZER: All right, Brian, thank you.
President Bush wins some last-minute cheers from conservationists -- why he's declared vast areas of the Pacific Ocean to be marine protection zones.
And aluminum giant Alcoa is getting a lot smaller, the Pittsburgh-based company slashing thousands of jobs.
And one of our own, Dr. Sanjay Gupta, a surprising prospect for a very high-profile job in the Obama administration. We will tell you what we know right here in THE SITUATION ROOM.
BLITZER: Secretary of State Condoleezza Rice right now addressing an emergency session, the U.N. Security Council, on the situation in Gaza. Let's listen in.
(JOINED IN PROGRESS)
CONDOLEEZZA RICE, U.S. SECRETARY OF STATE: ... that have allowed rearmament of Hamas must be prevented from reopening.
Our goal must be the stabilization and normalization of life in Gaza. This will require a principled resolution of the political challenges in Gaza that reestablishes ultimately the Palestinian Authority's legitimate control and facilitates the normal operation of all crossings.
BLITZER: Unfortunately, we lost that video feed from the United Nations Security Council. But we will continue to monitor what Condoleezza Rice is saying in emergency session right now. Stand by for that.
I want to bring in Abbi Tatton right now, our Internet reporter, because there's an important decision that the outgoing president of the United States has made, and it involves the Pacific Ocean.
ABBI TATTON, CNN INTERNET REPORTER: Wolf, marine conservation zones, right there out there in the Central Pacific, President Bush today designating an area almost bigger than the size of California, if you put it all together, as these underwater national monuments, where commercial fishing, mining now going to be prohibited.
Let's walk you through where these areas are going to be. The first one, the area of the Marianas Islands around here. The Pew Environment Fund telling me today that this is an area that has the biggest underwater canyon in the world. You could drop Mount Everest into it and you would still have room, underwater volcanoes there, some of the oldest life on Earth, also in this area. The second area is an area designating that they're designating as the remote islands, seven different uninhabited islands around there, but teeming with sharks, with sea birds, millions of them around there, and also the tiny Rose Atoll, which belongs to American Samoa, there, if you look at the picture of that pink coral that it's famous for, and 500 species of fish.
Now, all of these designated underwater national monuments, and for this today, Wolf, President Bush is being applauded. Environmentalists not giving President Bush rave reviews in the last eight years, but on this issue of marine conservation, the Pew Environment Fund saying today that this is a positive step, significant and long overdue.
BLITZER: All right, thanks very much. We will watch the Pacific. It's a beautiful place.
Some people are calling it a circus, not the Pacific, something else. Did Democratic leaders do the right thing in their refusal to seat the would-be senator Roland Burris from Illinois? The best political team on television is standing by.
And are Americans buying the president-elect's plan for a $300 billion tax cut?
And will CNN's chief medical correspondent, Dr. Sanjay Gupta, become the next surgeon general of the United States? We're following the unfolding story about Sanjay and a lot more right here in THE SITUATION ROOM.
BLITZER: To our viewers, you're in THE SITUATION ROOM.
Happening now, President-Elect Barack Obama considering one of CNN's own for a very high profile position -- what impressed the transition team about our own Dr. Sanjay Gupta. Stand by.
Plus, she's a key U.S. senator about to head up the Senate Intelligence Committee, so how come Dianne Feinstein was caught off guard by Barack Obama's CIA pick?
The damage control, still ahead.
And one of the final seats in the Senate -- the impact that a former comedian could have on the capital.
All of that coming up, plus the best political team in America.
I'm Wolf Blitzer.
You're in THE SITUATION ROOM.
But let's get to a surprising twist right now in the transition sweepstakes. CNN's chief medical correspondent, Dr. Sanjay Gupta, approached as a possible pick for U.S. surgeon general. Our chief national correspondent, John King, is with us with this story. All right, very intriguing.
What's going on?
JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Well, Wolf, it appears -- we are told by sources that no final decision has been made, that Dr. Gupta has not said yes, he would accept this position. But we are told he is seriously considering it. And I'm told at high levels inside the transition that they believe that Dr. Sanjay Gupta will, in fact, become the next surgeon general.
How did this happen?
President-Elect Barack Obama, now -- former Senator Tom Daschle, who will take over the Department of Health & Human Services and be the lead man on health care policy, thought that he would be the perfect complement to the administration -- someone who worked in the Clinton White House as a fellow, knows health care policy, is a practicing neurosurgeon -- a brain surgeon, is a practicing doctor, knows the medical community quite well and has communication skills he has shown so ably here on CNN.
They figure he would be an excellent communicator to help sell health care policy, but also sell the message that often you see him here on "AMERICAN MORNING" and other programs here on CNN talking about wellness, fitness, how to fight obesity, to get your act together when it comes to health.
So I'm told this is pretty close to being a done deal. And we do know that internally, he has spoken to the management of CNN about possibly getting out of his contract.
So not a done deal yet, but by all signals, quite close.
BLITZER: And if he becomes the surgeon general, we wish him, of course, only -- only the best. We'll miss him here at CNN, but he'll do a fabulous job for the American people, there's no doubt about that.
Let's talk about Barack Obama's economic recovery or stimulus package. It's going to be $700 billion, $800 billion and huge proposed tax cuts. But one thing he made clear -- and he said it several times today -- no earmarks, no pork barrel spending -- none of that anymore -- there's going to be a new sheriff in town.
KING: Well, and that's sort of like asking Congress not to breathe, isn't it?
When a big new spending bill coming through, it's always loaded up with those pork and earmarks.
But listen to the definition Barack Obama said.
How does he define earmark in this case? Something that has not been discussed publicly. So this might not be the best test of whether Barack Obama will be a new sheriff in town, as you put it, when it comes to those secretive pork projects. Because they have said they are going to have hearings. They said they're going to have great transparency online -- posting all the projects. So when the Wolf Blitzer Bridge is built in Buffalo, New York as part of this new stimulus program, it will be publicly disclosed during the process. The Congressional delegation will be happy to have that money.
So I think the definition of earmark might not be quite the same, in this case. It still will be interesting to see if somebody tries to sneak something in. That often happens at the last second.
But when they're going to have so many public works projects put into this bill, the Congressional delegation will be quite happy to have them disclosed publicly, as long as they can go home and say I was a part of it.
So this may not be the best text.
BLITZER: And that bridge would not go to nowhere, I can assure you. That bridge would go to Kenmore or Tonawanda or someplace very, very important in Western New York.
BLITZER: Let's talk a little bit about concerns some Democrats are now quietly expressing their -- they don't want to be, necessarily, an extension of the executive branch of the government, which they say the Republican leadership in Congress often was during the Republican administration of George Bush.
KING: It's very interesting, the last 24 hours. I wouldn't call it tension, but some Democrats clearly laying down a marker. You saw Senator Dianne Feinstein complain yesterday she was not consulted about Leon Panetta. She will be the Intelligence Committee chairman. Leon Panetta, a surprise pick to head the CIA. She was not consulted.
Now, President-Elect Obama and Vice President-Elect Biden talked to her today. So did the Senate Majority Leader, Harry Reid. He's trying to calm the ruffled feathers about this, saying Leon Panetta is a good man, please calm down.
Jay Rockefeller, another Senate Democrat who complained he was not consulted, as well.
What you have here is some senior Democrats very mindful of the early days of the Bush administration, when, in their view, George W. Bush and Karl Rove told Republicans on Capitol Hill to jump and the next question was how high?
What they are trying to say is that we want to work with you. We're not trying to get in the way. But we're equal players in this and we want to be consulted and respected. Now, I just mentioned Harry Reid. Well, he's doing everything he can to help Barack Obama, including making those phone calls today across the capital, saying to Democrats, look, they made a mistake in the Obama transition about this. They acknowledge that. Calm down, please. Don't pick a fight right now.
And yet, when you pick up some newspapers tomorrow morning, you will see this quote from Harry Reid. He had a meeting with reporters today. And he was asked about the early Bush administration days and to draw a comparison. And what he said, I am told, is: "I don't work for Barack Obama, I work with Barack Obama."
So they remember the early days of the Bush administration -- the lack of oversight. They remember how many times Democrats complained, Republicans, then in the majority, did not have oversight about the leading -- the lead-up to the Iraq War, for example.
Democrats are saying we're not trying to get in your way, Mr. President-Elect Obama, but you'd better respect us and you'd better consult us -- not tell us what to do, work with us.
BLITZER: A little tension between the executive and the legislative branches of our government often very, very good.
KING: It can be helpful.
All right, John, thanks very much.
The president-elect, meanwhile, is reaching out to Republicans with major tax cuts in his stimulus plan, even though he really doesn't need their help to get it passed.
Our senior political analyst, Bill Schneider, is standing by live -- Bill, does Barack Obama have a bigger mandate than Bill Clinton had back in 1993?
WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Actually, he does.
You know, Clinton was elected with 43 percent of the vote. Barack Obama won 53 percent. In 1992, Democrats lost seats in Congress. In 2008, Democrats made big gains.
SCHNEIDER (voice-over): Barack Obama got a bigger majority and a bigger mandate than Bill Clinton did when he first took office. But Mr. Obama is not behaving as if he has a partisan mandate.
BARACK OBAMA (D), PRESIDENT-ELECT: We don't have a Republican or a Democratic problem, we've got American problems.
SCHNEIDER: In 1993, President Clinton supported an economic stimulus bill that raised taxes for high income Americans. The bill passed without a single Republican vote.
President-Elect Obama's plan includes $300 billion in tax cuts -- about 40 percent of the total cost. If this is a play for Republican support, it's working.
REP. JOHN BOEHNER (R-OH), MINORITY LEADER: I think we're glad that the president-elect believes that tax cuts are, in fact, stimulative.
SCHNEIDER: Are the tax cuts motivated by politics?
OBAMA: The notion that me wanting to include relief for working families in this plan is somehow a political ploy when this is -- was a centerpiece of my economic plan for the last two years doesn't make too much sense.
SCHNEIDER: Mr. Obama did promise tax relief for middle class Americans. But the stimulus plan also includes more than $100 billion in tax cuts for businesses.
A political move to win over the Chamber of Commerce?
He calls it something else.
OBAMA: The happy convergence between what I had pledged during the campaign and what's required for the economy right now.
SCHNEIDER: But another happy convergence -- it also happens to be good politics.
SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: To the extent that it pass the with a very large vote, it will have more credibility with the American people. And the way it it's likely to pass, with a very large vote, is to have significant Republican participation.
(END VIDEO TAPE)
SCHNEIDER: Democrats tend to prefer public spending which can be targeted at public needs. Republicans prefer tax cuts so taxpayers can spend more of their own money.
Let's do both -- Wolf.
BLITZER: All right. We'll see how he does.
Thank you, Bill.
It's a mixture of race and politics that could prove dangerous for Democrats -- leading African-American lawmakers now weighing in on the decision to block Roland Burris from the U.S. Senate.
Also, a legal challenge in the contested Minnesota Senate race -- the best political team on television is standing by to discuss all of that and more. (COMMERCIAL BREAK)
BLITZER: It was as smooth as silk -- and now that the Obama transition team is hitting some bumps in the road, what's going on?
Joining us now to talk about that and more, our senior political analyst, Gloria Borger; our CNN political contributor, Dana Milbank of "The Washington Post;" and our CNN political contributor, Tara Wall, of "The Washington Times."
It was very smooth and all of a sudden, a bump with Bill Richardson, a little bump with Leon Panetta.
TARA WALL, "WASHINGTON TIMES": A bigger bump.
BLITZER: Yes. There's little bumps over there.
What's going on?
GLORIA BORGER, SENIOR POLITICAL ANALYST: Well, you know, I think that unlike during the campaign, when you can just stay on one message and you're not distracted all the time and there aren't as many leaks, you know, suddenly welcome -- welcome to the world of Washington.
This transition is not foolproof. They have maybe been over hyped, much to their detriment. And they're starting to make some mistakes. They're starting to get some push back.
I mean one sign today, Wolf, which we haven't spoken about yet, is the fact that Arlen Specter, ranking member of the Senate Judiciary Committee, went to the floor of the Senate today and railed against Obama's nomination of Eric Holder as attorney general, comparing him to, of all people, Alberto Gonzales...
DANA MILBANK, CNN CONTRIBUTOR "WASHINGTON POST": Uh-oh.
BORGER: ...saying that he's not going to be independent enough to be attorney general.
So there are going to be some -- a few bumps in the road on that nomination, as well.
BLITZER: So then these confirmation hearings could be lively.
MILBANK: They certainly could be. I mean, you had an original situation where it appeared that Obama could do no wrong. I think that was unrealistic. Now, we may have a tendency to overdo it and see a few little problems here. And none of them really amounts to anything of a headache at all, in the end. But, certainly, the -- there are going to be many interesting confirmations, not the least Hillary Clinton and that fellow she's married to.
BLITZER: Yes. I think his name is Bill Clinton.
MILBANK: I think.
BORGER: And that comes up next week.
BLITZER: That's going to be a fascinating hearing.
WALL: Well, no, there's a little bit of damage control going on. But I think that right now, it's better that some of this comes out and comes out to play now, before Obama is sworn in and has to handle this first thing in office.
But I think it is a sign of what is to come in the way of confirmation hearings, that it's not going to be a piece of cake. And I think that as much as he -- as much of this that he gets out of the way now, the better, because going forward, there's going to be much more to come. He's going to have much more on his plate.
BLITZER: It's looking -- it's not a done deal yet -- that Al Franken, the comedy writer from "Saturday Night Live," could be the next senator from the State of Minnesota.
Has there ever been a comedian in the U.S. Senate?
BORGER: I think there have been many comedians.
MILBANK: There's never not been a comedian in the U.S. Senate.
BORGER: I think there have been many unintentional comedians in the U.S. Senate, shall we say?
BLITZER: But talk a little bit about what he might be like as a U.S. Senator.
BORGER: I want to see him played on "Saturday Night Live." That's all.
MILBANK: He could play himself.
BORGER: He could play himself. Right. I -- you know, I'm not quite sure what kind of a senator he would be. I think, first of all, he's obviously going to be on good behavior, if and when he does get seated. And, again, you know, Norm Coleman is challenging this, although Harry Reid wants to seat him. But we really -- we really don't know. You know, this is a total career change for Al Franken.
WALL: And that's really no laughing matter. I mean, it's ironic that Harry Reid is jumping -- you know, he jumped the gun two days ago, trying to make sure that Al Franken was seated and he's not certified, whereas that was his argument for not certifying Burris is because he didn't have his certification and his proper papers.
So I think Harry Reid has had to, you know, tamp off of that a bit and it does raise the question as to why he's now fighting this Burris pick so feverishly, so harshly. I think, you know, Burris is going to have a real...
BLITZER: Is he going to be the next senator from Illinois, Roland Burris?
MILBANK: It -- it certainly looks increasingly like that. They'll strike a deal, say, look, you're not going to run again in 2010.
BLITZER: But he says he might run.
BLITZER: He told me yesterday he might run.
MILBANK: Right. He's saying that because he wants to have his bargaining position. But that's (INAUDIBLE)...
BLITZER: It would sort of be humiliating for him to say you know what...
BLITZER: ...I'm not going to run for election.
MILBANK: I'm just a caretaker. Well, he's going to have to strike some sort of deal today. Otherwise, it's going to wind up like he did today, walking back and forth in the rain surrounded by a hundred reporters, including Dana Bash and me.
BORGER: Anything is better than that, right?
WALL: Why he would want to subject himself to this type of theater, though, is beyond -- I think it's beyond anybody's comprehension.
BLITZER: I think he's enjoying it, though.
BLITZER: I think he likes it.
WALL: Well, it's obvious he has quite an ego.
BORGER: He looks like...
WALL: But, at the same time, you know, look, I think, you know, some of the Chicago papers pointed out today this is not about race, it's not about Burris, it's about fair play and what is fair play. Yes, it's fair now. He does have every right to be seated because he did get appointed.
But at the same time, you had Danny Davis turned down the position just for the mere fact of the taint -- or at least the appearance of taint around this position.
I think, at the end of the day, it's Illinois -- it's the Illinois residents who are being mis-served...
BORGER: Right. But this is about Blagojevich.
WALL: ...or disserved in all of this.
BORGER: Don't make any mistake about it.
WALL: Well, absolutely.
BORGER: This is about Blagojevich saying to the United States Senate , you think you can control what I'm going to do?
I don't think so.
BLITZER: But it may be about Blagojevich, but there's no doubt that Roland Burris is an honorable man...
BLITZER: ...who served the people of Illinois well.
BORGER: Absolutely. And there's no...
WALL: And he's taking full advantage.
BLITZER: There's no -- nothing, as far as I can see, that has any taint as far as he's concerned.
MILBANK: No, but...
BORGER: And the Constitution may well be on his side. I'm not a Constitutional lawyer. There are lots who say that the Senate does not have the right to say to him you cannot be seated if you were appointed by a governor. Senator Dianne Feinstein now agrees with that argument.
BLITZER: Right. Yes.
MILBANK: The danger is he makes himself into a clownish figure in the process...
MILBANK: ...with stunts like those that occurred today.
WALL: But it raises...
MILBANK: And polls actually...
WALL: It raises the question...
MILBANK: ...show that there is support for Harry Reid's position.
WALL: It does raise the question why the secretary of State will not certify this and why Harry Reid is fighting this so ferociously.
BLITZER: Well, that's Illinois politics.
WALL: There you go.
BLITZER: We'll get more on that later.
Guys, thanks very much.
BLITZER: Let's check in with Lou to see what's coming up at the top of the hour -- Lou, what are you working on?
LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Also known in some quarters, Wolf, as banana republic Third World politics.
Coming up at the top of the hour tonight, we're reporting on this political circus on Capitol Hill. Senate Majority Leader Harry Reid in the minds of many today, again demonstrated as he rejected Roland Burris as the junior senator from Illinois, why Congress has such a low approval rating. We'll have complete coverage for you.
Also, lobbyists, special interests and corporate America all getting together -- trying to grab a share of the president-elect's huge economic stimulus package. Everybody has their hand out. We'll have that report.
And "Homeland Security USA" -- it's a new reality television show about the men and women who try to secure our ports and borders, with little help and very little thanks -- a show that will also tell us about the harsh realities facing network television.
We'll have all of that. Among my guests will be the former comptroller general, David Walker, on the massive budget and trade deficits and unfunded liabilities that some say are not only a problem for the Obama administration, but promise to bankrupt the nation.
We'll also be talking about a demonstration -- a rare demonstration on Capitol Hill of political courage and independence by Senator Dianne Feinstein.
Join us for all of that at the top of the hour and more, from an Independent perspective -- Wolf, back to you.
BLITZER: See you then, Lou.
DOBBS: Thank you.
BLITZER: Our question to you this hour -- are lower gas prices an asset or a liability for the U.S.?
Jack Cafferty standing by with your e-mail.
And Jeb Bush, the former governor of Florida, makes a decision about a possible run for the U.S. Senate -- will he or won't he in 2010?
He has made up his mind.
BLITZER: Let's check in with Jack for the Cafferty File -- Jack.
CAFFERTY: The question this hour is -- are lower gas prices an asset or liability for this country?
I didn't realize this, but adjusted for inflation, gas prices today are lower than they were when President Bush was inaugurated eight years ago.
Tripp writes from Pennsylvania: "The Earth may pay a higher price in ecological terms, but taxpayers are getting a big gas tax break right now. Lower gas prices means lower costs for producing goods, lower costs for transporting goods, and eventually will lead to lower prices for those goods. And it's nice to have a few extra bucks in my pocket at the end of the workweek."
Karly in Oregon says: "Liability. We need to have a gas tax imposed to bring the rates back up or close to where they were in the summer of '08. This encourages other means of transportation and provides funding toward ending our dependency on foreign oil."
Steve in Canada says: "Short-term, it's a bonus. It puts more dollars in everybody's pocket. Long-term, it restarts a bad cycle where exploration and development suffer. We drive more because it's cheaper; thirsty vehicles become the norm; prices go up again. The cycle repeats. Been there, done that."
Jim in Indiana: "Jack, there are no jobs in my town. To get to work, you have to travel out of town. The sad part is after transportation costs, you're making less than the minimum wage. Gas price is an asset to the individual, but a liability to our country."
Chuck in Ohio writes: "The price of gas is only a come-on to keep this country under the thumb of big oil and the Middle East control. The best thing the auto industry could do right now is to build vehicles with flex fuel systems that will use CNG, gasoline and bio- based fuels, which would bridge the gap to fix the energy problems until new systems replace our oil-based fuels." And Will writes: "Gasoline prices are just a warning. The real liability for America -- our short attention span."
If you didn't see your e-mail here, you can go to my blog at CNN.com/caffertyfile. We post hundreds of your letters there each and every hour. Who knows, you might find yours -- or you might not.
BLITZER: You probably will if you -- if you wrote a good one.
All right, Jack, thanks very much.
Even if you wrote a not so good one, they're usually there.
Let's go to Betty Nguyen.
She's monitoring some other important stories incoming into THE SITUATION ROOM right now -- what's going on, Betty?
NGUYEN: Hey, Wolf.
Former Florida governor, Jeb Bush, says he won't run for the U.S. Senate next year. Bush had seriously considered a run to replace retiring Senator Mel Martinez, but ultimately decided now was not the right time to return to elected office. Bush says his decision isn't based on politics, but on what he calls his own personal journey.
And the world's third largest aluminum manufacturer says it's cutting 13 percent of its workforce. Pittsburgh-based Alcoa is slashing 13,500 jobs, cutting spending and reducing output. Alcoa says the cuts are expected to save the company about $450 million a year before taxes -- Wolf.
BLITZER: Betty, thank you.
He was turned away when he tried to walk into the Senate today, but not turned away by the news media. They're swarming over the man picked to fill Barack Obama's seat.
Jeanne Moos finds it all Moost Unusual.
We'll be right back.
BLITZER: Check it out -- reporters scrambling, photographers knocking shoulders and network television going live -- the sideshow on Capitol Hill today.
Jeanne Moos pokes a little fun by pointing out a Moost Unusual start to the new Congress.
JEANNE MOOS, CNN CORRESPONDENT (voice-over): Instead of being sworn in as a senator...
UNIDENTIFIED MALE: Please raise your right hand
MOOS: ...Roland Burris was raising his right hand to hold on for dear life.
UNIDENTIFIED FEMALE: You can see it's just -- it's quite a mess here.
(BEGIN VIDEO CLIP, COURTESY FOX NEWS)
BRIAN WILSON, FOX NEWS CAPITOL HILL CORRESPONDENT: It was chaotic, it was crazy. And, in fact, one cameraman slipped and fell.
(END VIDEO CLIP)
MOOS: His colleagues helped pick him up. Burris himself almost went down at one point. There's a name for what Burris got caught up in.
(BEGIN VIDEO CLIP, COURTESY FOX NEWS)
WILSON: It's another chaotic scrum.
(END VIDEO CLIP)
PAUL COURSON, CNN PRODUCER: It's a scrum, is what we call it inside the media.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP, COURTESY FOX NEWS)
WILSON: Yes, go that way now.
UNIDENTIFIED MALE: Everybody down here, down the stairs.
UNIDENTIFIED MALE: ...pushed him in this direction.
UNIDENTIFIED MALE: Down the stairs.
(END VIDEO CLIP)
MOOS: Named after a rugby scrum, says CNN producer Paul Courson.
COURSON: All the team scrums the ball to try and regain custody of it.
MOOS: Only in this case, Burris was the ball the press wanted custody of.
(BEGIN VIDEO CLIP, COURTESY FOX NEWS)
UNIDENTIFIED MALE: He, frankly, looks a little bit frightened.
UNIDENTIFIED MALE: Well, it is sort of a frightening thing. (END VIDEO CLIP)
MOOS: It began as Burris arrived at the Senate entrance, continued inside on CNN.
UNIDENTIFIED FEMALE: We are showing you these pictures via broadband...
MOOS: The kind of grainy footage usually reserved for war zones. Actually, the thing that showed up best was the ornate Capitol floor.
UNIDENTIFIED FEMALE: We're trying to make out who we're seeing there. We can't quite tell.
MOOS: Visibility wasn't so hot outside, either. Time to wipe that lens.
(on camera): Roland Burris has expressed no doubt whatsoever about his status.
(BEGIN VIDEO CLIP, COURTESY CLTV)
ROLAND BURRIS (D) ILLINOIS, SENATOR-ELECT: I'm a United States senator.
MOOS: A what?
BURRIS: I am now the junior senator from the State of Illinois.
MOOS: Who says?
I am the junior senator according to every law book in the nation.
MOOS: OK, besides the law books.
Does this have anyone else's blessing?
BURRIS: What the lord has ordained...
MOOS: If you say so.
BURRIS: I am the senator.
MOOS: But not even many senators are worthy of this big a scrum.
(BEGIN VIDEO CLIP, COURTESY Fox News)
UNIDENTIFIED MALE: The spectacle, the circus rolling into town...
(END VIDEO CLIP)
MOOS: He finally rolled out in the safety of a van. You know the mausoleum Burris has built himself in a Chicago cemetery -- the one where there's still room left to add more accomplishments?
Well, he may not be able to write senator yet, but he could one day rest in peace having survived a Senate scrum.
Jeanne Moos, CNN, New York.
BLITZER: That's it for me today.
Let's go to Lou and "LOU DOBBS TONIGHT" -- Lou.