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Obama Asks For Bailout Billions; Blagojevich Pick Will Replace Obama in Senate

Aired January 12, 2009 - 18:00   ET


WOLF BLITZER, CNN ANCHOR: To our viewers, you're in THE SITUATION ROOM. Happening now: President-elect Barack Obama steals the president of the United States's thunder, George Bush's thunder, on the economy -- this hour, a big shift in White House power, billions of dollars at stake. We have new information for you.
And a bold move against Iran's nuclear program by one of America's closest allies -- a rare instance where the Bush administration says no to Israel.

And an openly gay bishop is included in the Obama inauguration. Will that ease the outrage over president-elect Obama's choice to lead the opening prayer? All that coming up and the best political team on television.

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Barack Obama takes a big step towards seizing the reins of a ravaged economy, the president-elect moving in on two fronts today to tap into that last $350 billion in federal bailout money. He asks President Bush to formally request the funds from Congress on his behalf, so they will be able to use the -- the money as soon as possible.

The Obama team also is spelling out its priorities for the bailout money and plans for strict oversight, in hopes of reassuring wary members of Congress.


BARACK OBAMA (D-IL), PRESIDENT-ELECT: I called President Bush to trigger the second half of what's known as the TARP program, that's related to financial rescue. I did so because, in consultation with the business community and my top economic advisers, it is clear that the financial system, although improved from where it was in September, is still fragile.

And I felt that it would be irresponsible for me, with the first $350 billion already spent, to enter into the administration without any potential ammunition, should there be some sort of emergency or weakening of the financial systems.


BLITZER: Let's bring in our chief national correspondent, John King.

The president-elect, he's moving forward. Clearly, he's taking charge on this issue. That was very evident today. But is he going to be held to a different standard on this second $350 billion, part of the bailout, than the Bush administration was held?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Without a doubt, and by his own Democrats in Congress, Wolf.

The bailout law gives most of the power to the executive branch. And the Democrats have not been happy with the way the Republican White House, George W. Bush's White House, has spent some of that money. They think it has gone, too much of it, to the big institutions, gone to Wall Street, gone to big banks, not reaching Main Street.

And, so, what they want is more money for community banks, more direct loan home aid to homeowners, and money to smaller financial institutions, as well, small businesses, homeowners, community banks. Now, the Obama team has said, don't worry. And they have actually given a letter to members of Congress saying that's what we're going to do.

When the other $350 billion is spent, we will make sure it reaches the little guy out there. But, in the House, Barney Frank, who is chairman of the committee over there, he says he doesn't want a letter. He wants to pass legislation. So, we will see if the Obama campaign can talk them out of the legislation. At the moment, the House says it is going forward.

But without a doubt, the Democrats in Congress are saying, good. We want this money in the system. We want to help people, but we want to make sure it gets out to Main Street, is how they put it, not Wall Street.

BLITZER: And give us some context. What does it mean when we hear from the Obama transition team today that, upon taking office, he will sign an executive order shutting down that detention facility at the U.S. Naval base at Guantanamo Bay in Cuba?

KING: Remember, he promised that throughout the campaign. He said he thought the Bush-Cheney administration, as he like to put it in the campaign, went too far with its interrogation tactics. And he thought Gitmo, as it is called, was an embarrassment to the United States around the world.

So, why do you have to say that you're going to issue an executive order in your first week, most likely, we are told, in office to close it down? Well, because he said in a weekend television interview on ABC News that people don't understand, these things take time. That alarmed people on the left.

He also said -- and you talked to Vice President Cheney about this -- Vice President Cheney has urged the president-elect, please don't be beholden to your campaign rhetoric. Look at our interrogation policies. Look at what we are doing to fight the war on terrorism, and decide now that you're getting classified briefings whether you want to keep some or overturn all of them, as Obama has suggested he might do. Don't be beholden to the campaign rhetoric.

And president-elect Obama has said, that's pretty good advice. He wants to look again before he makes those decisions. So, on the left, there's a sense of jitters that he might backtrack on Gitmo, backtrack on some of his other promises. So, they are letting it be known that he will sign that executive order in his early days to calm down a little bit of nerves on the left.

BLITZER: And once he signs the order, we will see how long it takes to implement it and actually shut down the facility. But that's a subject for another day, John.

KING: Right.

BLITZER: Thanks very much, John.

More evidence today that President Bush is actively ceding the spotlight to president-elect Obama.

Let's bring in our senior White House correspondent Ed Henry.

Ed, an unusually reflective President Bush today.


We have heard for months that this president doesn't like navel- gazing, doesn't like to talk about legacy, but, today, he was a bit looser with just about one more week in office, was very direct and frank in trying to defend his legacy, but also trying to make clear that he is sincere about trying to make sure his successor succeeds.



HENRY (voice-over): The 45th and final press conference was classic George W. Bush, defiant to the end.

BUSH: And in terms of the decisions that I had made to protect the homeland, I wouldn't worry about popularity. What I would worry about is the Constitution of the United States and putting plans in place that makes it easier to find out what the enemy is thinking, Because all these debates will matter naught if there's another attack on the homeland.

HENRY: But on the way out the door, the president also showed more passion and introspection than usual.

BUSH: I believe the phrase "burdens of the office" is overstated. You know, it's, kind of, like, "Why me?"


BUSH: "Oh, the burdens," you know."Why did the financial collapse have to happen on my watch?"

It's just pathetic, isn't it, self-pity?

HENRY: That newfound freedom to express what is on his mind was evident in blunt comments about the financial crisis.

BUSH: I readily concede I chucked aside some of my free market principles when I was told by chief economic advisers that the situation we were facing could be worse than the Great Depression.

The actions we have taken, I believe, have helped thaw the credit markets, which is the first step toward recovery.

HENRY: He was also reflective about his mistakes, without really giving much ground.

BUSH: You stand by your decisions and you do your best to explain why you made the decisions you made.

There have been disappointments.

Abu Ghraib, obviously, was a huge disappointment, during the presidency.

Not having weapons of mass destruction was a significant disappointment.

HENRY: And there was some advice for his successor about the inevitable low moments.

BUSH: Sometimes the biggest disappointments will come from your so-called friends.

And there will be disappointments, I promise you. He will be disappointed. On the other hand, the job is so exciting and so profound that the -- the disappointments will be clearly, you know, a minor irritant.


HENRY: And we are now learning the president plans to speak out again on Thursday evening here at the White House in the East Room. He's going to deliver a farewell address, something, a tradition dating back to George Washington.

They're requesting that the networks give them time in the 8:00 Eastern hour, once again, the president trying to give one final message to the American people, but also burnish that legacy a bit -- Wolf.

BLITZER: His farewell address in prime time. All right, thanks very much.

Ed Henry is over at the White House.

By the way, we have an important programming note for you. The president and Mrs. Bush will sit down with our own Larry King tomorrow night, 9:00 p.m. Eastern, the Bushes on "LARRY KING LIVE."

Jack Cafferty right now here in THE SITUATION ROOM with "The Cafferty File."

CAFFERTY: I may have missed this, but did the networks say they were going to clear this time...


BLITZER: I don't know the answer to that yet. I suspect they will.

CAFFERTY: I mean, what if they just said no?

BLITZER: They might do that, but it would be unusual.

CAFFERTY: No. No, that would be terrible.

There are now more obese Americans than those who are simply overweight. A new federal report, 34 percent of Americans are obese. That's more than one-third, compared to the 32 percent who are simply overweight.

More than one-third of all Americans, 72 million of us, are obese. That's shameful. Among the objectives set forth by the Department of Health and Human Services for the year 2010 is to reduce obesity to less than 15 percent of the adult population. Well, to say they have got their work cut out for them, it's a gross understatement. It's 2009, and the numbers are going in the wrong direction.

The rising rates of obesity aren't anything new. As a nation, we have been getting fatter and fatter and lazier for years. Health officials have warned us that obesity increases the risk of heart disease, diabetes, cancer, and other illnesses.

The message is clear. Eat healthy. Exercise. But we don't listen. And rather than shedding the pounds, people just continue to pack it on.

So, here's the question. What does it mean that more than one- third of all Americans are obese?

Go to Post a comment on my blog -- Wolf.

BLITZER: It means they're eating way too much food and not exercising enough.

CAFFERTY: And not the right kinds of food, too much junk food, too much saturated fat, all that stuff. But it just seems that, nationally, our consciousness is not -- this idea that we're getting too fat too fast doesn't seem to resonate. And people just continue to do what they do. It's not good.

BLITZER: Not good at all.

CAFFERTY: It's not.

BLITZER: All right, Jack, thank you.

Amid Middle East tensions, Israel reportedly wanted to attack Iran, and President Bush told the Israelis no.

And the secretary of state, is she red-faced? Find out why Israel's prime minister -- Condoleezza Rice was publicly embarrassed.

And is Barack Obama trying to appease gays who are angry at him? His new move following the Rick Warren controversy.

Stay with us. You're in THE SITUATION ROOM.


BLITZER: Gene Robinson, the first openly gay bishop of the Episcopal Church, has been very critical of the decision to have evangelical Pastor Rick Warren pray at the Obama inauguration. Now Robinson himself is also being asked to take part.

Our White House correspondent Dan Lothian is joining us now with more on this story.

Dan, what do we know?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, as you pointed out, Wolf, he is the first openly gay Episcopal bishop. He has been a Barack Obama supporter and a vocal gay rights advocate. Now Bishop Gene Robinson from New Hampshire has been selected to offer a prayer at the Lincoln Memorial on Sunday. He's taking part in one of president-elect Barack Obama's first inaugural events.

Robinson and some gay rights groups, as you mentioned, have been critical of Rick Warren, who's the evangelical pastor who will be giving the invocation on Inauguration Day. Warren has supported California's Proposition 8, which bans same-sex marriage. Robinson has said that Obama's choice of the evangelical minister was like a slap in the face.


BISHOP GENE ROBINSON, EPISCOPAL CHURCH: I thought this was a very unfortunate and troublesome choice on his part, given the rather unspeakable things that Pastor Warren has said about gay and lesbian people, and our relationships, comparing them to incest and child abuse. And, so, it was very troubling. And I said so.


LOTHIAN: Now, the question is, did the Obama inauguration committee bend to the pressure from gay rights groups?

A spokeswoman with the committee says that's simply not the case, that Bishop Robinson was a longtime supporter of the president-elect, and they both share a commitment to faith and diversity -- Wolf. BLITZER: Dan Lothian, our new White House correspondent -- Dan, welcome to Washington. Good to have you on the White House beat. We will be taking advantage of you here in THE SITUATION ROOM.

LOTHIAN: Good to be here.

BLITZER: All right, Dan Lothian coming to Washington. Good for him.

It appears a political cliffhanger is nearing a surprise ending. The controversy over president-elect Barack Obama' old Senate seat has apparently been resolved.

Our senior congressional correspondent, Dana Bash, broke the story earlier.

Dana, what is the latest? I guess a lot of people are happy that this is over with, apparently.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Right. The person who is most happy, obviously, is Roland Burris, who just wrapped up a press conference in Chicago.

And it was abundantly clear he was very excited that he will be coming back to Washington. But it certainly is a dizzying turnaround inside the Democratic leadership, because they wanted to get past what has been a political mess for them. In fact, one senior Democratic senator said, when you're dealt a losing hand, the senator told me, you skip to the end.


BASH (voice-over): All smiles for Roland Burris' lawyers as they left the Capitol, where Democratic leaders had just done a total 180, informing them Burris will now be allowed to take Barack Obama's place in the Senate and be sworn in later this week.

The Senate's top two Democrats said, "We congratulate senator- designee Burris on his appointment and we look forward to working with him in the 111th Congress" -- a stunning reversal for Democratic leaders on a political problem that started with this vow last month.

SEN. RICHARD DURBIN (D), ILLINOIS: No appointment by this governor under these circumstances could produce a credible replacement.

REP: Governor Blagojevich called their bluff and appointed Burris. Yet, Democratic leaders still insisted they would not seat him, saying Senate rules require the Illinois secretary of state's signature on Burris' certificate of appointment. But he refused.

JESSE WHITE, ILLINOIS SECRETARY OF STATE: I could not and would not in good conscience sign my name to any appointment made by Governor Rod Blagojevich to fill the Senate vacancy.

BASH: But all the hype, images of a rain-soaked fellow Democrat turned away from the Senate were such a problematic distraction, Democratic leaders frantically searched for a way out. How did they do it? Orchestrating a process to bend their own rules.

Blagojevich scrapped the original appointment certificate that had a blank slot for Illinois Secretary of State Jesse White and sent a new one without it. Then White signed a second letter acknowledging he got the document to seat Burris.

And, with predetermined theater, Burris' lawyers hand-delivered both papers to Senate officials Monday, and they accepted Burris' bid to be sworn in.


BASH: Now, to make this process go even quicker, Democratic leaders have also dropped an earlier demand that this be taken up with the Senate Rules Committee, that they investigate, and that there be a full Senate vote.

In fact, we are told that, at the request of Roland Burris, this will be a swearing-in with all the pomp and circumstance afforded to other senators. The vice president, Vice President Cheney, will likely swear in Roland Burris Wednesday or Thursday of this week.

BLITZER: Yes, he is one happy, happy man.

All right, thanks. Congratulations to Roland Burris. Thanks very much, Dana, for that.

New cars, new pitch -- the cash-strapped big three automakers want to show you their cars and drive themselves out of the financial ditch.

Also, when Barack Obama becomes president, could some of his biggest obstacles come from Democrats?

And get this. I had a secret talk with Ellen DeGeneres. It was on television today. Wait until you see what happened when she tries to get me to say a secret word. And we're not talking about dancing.

Stay with us. You're in THE SITUATION ROOM.



BLITZER: And with U.S. carmakers fighting for survival right now, the Detroit car show has been subdued. It's been a subdued event this year. There's no doubt about that. But the industry did manage to create some buzz by shifting gears.

Here's CNN's Colleen McEdwards.


COLLEEN MCEDWARDS, CNN CORRESPONDENT (voice-over): The cars come in like rock stars, but this year, the whole production is on a budget. It's a leaner North American International Auto Show in a desperate time for U.S. carmakers.

UNIDENTIFIED MALE: For us, this year, Detroit is a very important motor show. The American market, even in crisis, is the most important automotive market in the world.

MCEDWARDS: And that market is going green. The industry is counting on hybrids and plug-ins to steer it out of the ditch. General Motors has a plug-in on the way, Ford a whole collection. Toyota unveiled a new Prius, Honda the Insight. And Chrysler is going electric, too.

UNIDENTIFIED MALE: We're doing it for a couple of reasons, first of all, responding to consumer, consumer demand for energy-efficient, environmentally-friendly vehicles. And we think that the electric vehicle will be probably the most highest response to that request. Why? Because it has the least disruptive technology out there.

MCEDWARDS (on camera): Seven hundred thousand people from 60 different countries are expected to come here and figure out what they like. Funky displays like this one actually let you see the safety features of this new Ford Taurus. Impressive, isn't it? But what happens if people come, they see, they touch, they say, wow, but they ultimately don't buy?

(voice-over): But even if the buyers buy in, the industry needs to be more efficient. On the sidelines of the show, the powerful Auto Workers Union rallying against any more concessions. Many workers say they have been made scapegoats.

UNIDENTIFIED FEMALE: It's been devastating for us. That is, every time we have given a concession which we have done for the last 20 years, then they come back and they want more.

MCEDWARDS: General Motors and Chrysler are receiving billions of dollars in loans. In a couple of months, they have to prove to U.S. lawmakers they are viable. General Motors, which was on the verge of bankruptcy last year, says there has been progress.

UNIDENTIFIED MALE: And I think it's fair to say that a lot of the heavy work on where can we make changes to improve our competitiveness will be going on actually as we get started on that this week.

MCEDWARDS (on camera): The auto show this year is about survival, with the industry showcasing the very best it has to offer in the worst of economic times -- Wolf, back to you.


BLITZER: Thank you, Colleen.

Top Democrats send a message to Barack Obama: Show us the oversight, before we show you the money.


REP. BARNEY FRANK (D), MASSACHUSETTS: We intend to trust, but verify. And we are going to verify in advance.


BLITZER: The president-elect taking heat right now over the multibillion-dollar bailout. We will explain what's going on.

And why Condoleezza Rice may be a little bit embarrassed, questions about diplomacy in these, the final days of the Bush administration.

And Israel's bold move against Iran's nuclear program, new information emerging about what was wanted and what went wrong.

Stay with us. You're in THE SITUATION ROOM.


BLITZER: To our viewers, you're in THE SITUATION ROOM.

Happening now: With little more than a week away from the new job, why is president-elect Barack Obama getting a rather chilly reception, at least from some Democrats on Capitol Hill?

And word today that Israel requested U.S. arms to launch targeted strikes on Iran. How did the Bush White House respond?

Also, Israel's prime minister says a diplomatic incident leaves Secretary of State Condoleezza Rice embarrassed -- all of that coming up, plus the best political team on television.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

But, first, there's word now of more fighting, intense fighting, happening in Gaza. Take a look at these pictures that have just come into THE SITUATION ROOM, sounds of death and war. There, you can hear some of the artillery fire that's being launched.

We have these pictures coming in, as Israel and Hamas continue their battle, no evidence that a cease-fire or a truce is on the horizon. We will follow this part of the story for you.

Meanwhile, we're also following reports of another war in the Middle East that could have erupted.

Brian Todd is here in THE SITUATION ROOM working this story -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, the Israelis have clearly been growing more and more alarmed over Iran's nuclear program, and they reportedly came up last year with an extraordinary plan to fly over Iraq and hit Iran's nuclear facilities. The Israelis were rebuffed on that plan, but this has got many worried over what still may unfold. (BEGIN VIDEOTAPE)

TODD (voice-over): New information on a bold push by one of America's closest allies to attack Iran's nuclear facilities."The New York Times" reports of an appeal to the White House last year by Israel for bunker-penetrating bombs to strike underground at Iran's major nuclear complex at Natanz.

Former U.N. weapons inspector David Albright knows exactly what they would have hit.

DAVID ALBRIGHT, FORMER U.N. WEAPONS INSPECTOR: What are called the cascade halls, where all the centrifuges are, is underground. And it's -- it's not just dirt. There's cement -- layers of cement and layers of concrete between the surface and the building underground. And so you need special armaments to get through it all.

TODD: According to "The Times," President Bush didn't say yes or no to Israel's request for those sophisticated bombs and for refueling equipment. But "The Times" reports when the Israelis asked the White House for permission to fly over Iraq on their way to Iran, they were rejected outright.

DAVID SANGER, "NEW YORK TIMES": They feared that if it appeared that the United States had helped Israel strike Iran using Iraqi airspace, that the result in Iraq could be the expulsion of American troops.

TODD: Although the Israelis didn't get the equipment or permission they wanted, according to "The Times," Mr. Bush did share more intelligence with them on secret U.S. efforts to undermine Iran's nuclear program through industrial espionage. "The Times" says U.S. officials asked the paper to leave out details of the espionage plan, which "The Times" says it agreed to do.

Contacted by CNN, neither the White House nor the CIA would comment on "The Times" report. Israeli and Iranian officials we contacted also wouldn't comment. Iran has always maintained that its nuclear program is for energy and not weapons.

Albright says if Iran's facilities were ever hit...

ALBRIGHT: It's not going to take a strike lightly and will seek retaliation. In the worst case, you could see Iran supporting the use of terrorists to strike back, through Hezbollah, through Hamas.


TODD: Or, Albright says, Iran could speed up its nuclear program -- as he says, take on their own Manhattan Project and quickly get even closer to having a nuclear weapon than they are right now.

Wolf, he estimates they are less than a year away from having the capability of producing one nuclear bomb.

BLITZER: The clock clearly ticking now. TODD: Right.

BLITZER: We'll see what happens in the first year of the Obama administration.

Brian, thank you.

Word today, also, from Israel's prime minister. He says the secretary of State, Condoleezza Rice, suffered a major embarrassment.

Zain Verjee is working that part of the story for us -- Zain, what's going on?

VERJEE: Wolf, Israel's prime minister, Ehud Olmert, says Condoleezza Rice was left quite embarrassed because, he says, she couldn't vote for a U.N. Resolution calling for a Gaza cease-fire that she had prepared and organized, he said.

Mr. Olmert says when it became clear that the U.N. Would suddenly vote on the resolution, he picked up the phone and he called President Bush. And because of Mr. Olmert's close relationship, he says President Bush told Rice not to vote for the resolution.

The U.S. as you know, ended up abstaining from the vote. Rice says today in an interview that the U.S. abstained because Washington felt the resolution was premature and that the Egyptian mediation effort needed more time. She also said that the U.S. does want a cease-fire, one that will hold -- Wolf.

BLITZER: What's the situation, Zain, for those Americans who are in Gaza right now?

VERJEE: Well, the State Department says that it's preparing to evacuate 150 people. That is -- now, that number includes American citizens and their immediate family. The dates and destinations of those evacuees are still being organized. But a State Department spokesman wasn't specific on just how many members of the group are U.S. citizens.

Earlier, as you know, the State Department had helped 16 Americans and 11 members of their families leave Gaza. And they had gone to Amman in Jordan -- Wolf.

BLITZER: Thanks very much, Zain Verjee, for that.

And this important note to our viewers. Tomorrow, right here in THE SITUATION ROOM, we'll be speaking with the former British prime minister, Tony Blair. He's just back from the Middle East, where he's been trying to work his diplomatic skills to come up with a cease- fire. Tony Blair will join us in THE SITUATION ROOM tomorrow. That's coming up.

And with only about a week left in office, President Bush shows us a side of him we rarely see.

And also something else -- the secret word that Ellen DeGeneres kept from me, how I guessed it and why the audience then went wild.

Stay with us.

We'll explain.


BLITZER: Sheets?



DEGENERES: What's sexy, like when you and your wife, like what's...



BLITZER: Some are suggesting the president-elect may not necessarily get as warm a welcome from some members of his own party when he takes office.

Our national political correspondent, Jessica Yellin, is working the story for us -- Jessica, what's going on?

JESSICA YELLIN, CNN Capitol Hill CORRESPONDENT: Well, Wolf, it wasn't long ago that there was talk of so much party unity the Democrats would pass a fiscal stimulus before Obama even takes office. But that's not happening. President-Elect Obama is getting resistance not from Republicans, but from people in his own party.


OBAMA: How are you?

YELLIN (voice-over): Democrats promised to move quickly on President-Elect Obama's agenda.

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: Tomorrow, we will swear in the new Congress. And we will be -- hit the ground running on the initiatives that you -- some of which you've described.

YELLIN: But so far, it's been anything but a smooth ride.

When Team Obama made it clear they'd like Congress to release the rest of the funds from the Wall Street bailout, Democrats immediately bristled.

REP. BARNEY FRANK (D-MA), FINANCIAL SERVICES COMMITTEE: We intend to trust, but verify. And we're going to verify in advance.

YELLIN: When they learned the details of Obama's stimulus plan, leading senators started tearing it apart. SEN. MAX BAUCUS (D), MONTANA: But I must say that there will be many, many discussions with the administration and among senators so we get a better sense of how to improve upon this package.

YELLIN: All that after Team Obama selected a new CIA chief but forgot to tell the head of the Senate Intelligence Committee. And, of course, there is the bizarre distraction Democrats created by first refusing to seat Roland Burris, then changing their mind.

So what's behind it all?

Senate Majority Leader Harry Reid told reporters: "I do not work for Barack Obama, I work with him."

On CNN'S "LATE EDITION," House Speaker Nancy Pelosi explained to Wolf Blitzer she's not going to rubber stamp Obama's decisions.

PELOSI: And I don't think the Obama White House wants that, either.

YELLIN: And in a conversation with CNN, one of the more outspoken democratic critics of Obama's stimulus package explains his colleagues are cautious after years of Bush fiscal policy and what Democrats perceive as broken promises. He says the Obama team has inherited a very skeptical group of us because we have been burned.


YELLIN: And, Wolf, I've been in touch with a top Obama official, who says, effectively, any sort of rebellion is over. And this official has been calling around on Capitol Hill and reminding folks there that they are all on the same team.

So it sounds like a little bit of tough love from Team Obama -- Wolf.

BLITZER: We'll see what happens among the Democrats.

All right, thanks very much.

Joining us now, our CNN senior political analyst, Gloria Borger; our CNN political contributor, Stephen Hayes of "The Weekly Standard;" and Terry Bacon of "The Washington Post."

You know, the president of the United States had some advice for Barack Obama. And he said that he also was really worried about a possible additional terror attack right here in the U.S. homeland.

GLORIA BORGER, SENIOR POLITICAL ANALYST: Yes, I mean, you know, the president was very blunt today, Wolf. And it was -- it was remarkable to me, because I think he kind of really was speaking candidly, which we very rarely hear from a president. And he was welcoming to Barack Obama, but he said, you know, we need to be worried about another terror attack in this country.

BLITZER: It was a side of the president that we haven't often seen, wasn't it, Steve?

STEPHEN HAYES, SENIOR WRITER AT "THE WEEKLY STANDARD": No, it was. And I think Gloria is right. And that -- that, in and of itself, is revealing...


HAYES: ...that he was talking about (INAUDIBLE). In some senses, it tells us everything we need to know about how he's thought of his presidency and how he's run his presidency.

But you're right. And I know you've been to some of these off the record sessions with the president. This was the off the record George W. Bush.

BORGER: Um-hmm.

HAYES: This is how he talks when he's comfortable and he's worried about what's going to happen in a week or two weeks.

BLITZER: It was almost as if, Perry, you know, he was saying I get these secret, very, very startling, chilling briefings from the intelligence community and they say these terrorists who hate America right now, they're plotting and they're working and they're going to try and do everything they can to repeat a 9/11 or even worse.

PERRY BACON, "WASHINGTON POST": And he was very defiant about defending his record on terrorism. And also, striking when he was asked about the reputation around the world -- if the U.S. is popular around the world. He was very strong in saying I've made the right decisions. And, that at least in Europe, they may not like them, but the people in Africa and India and places like that appreciate what I've done, which was very interesting and something he hadn't said before.

BORGER: You know, it's almost as if we're -- we're starting to see what the book is going to be like.

BLITZER: The George W. Bush...

BORGER: The George W. Bush memoirs.


BORGER: Because he was talking about Hurricane Katrina and what more could he have done, for example. He was talking about terror -- there have been no more terror attacks on this soil. He still worried about that. Talking about his mistakes -- shouldn't have had the "mission accomplished" banner.

I think this is all kind of a preview of the book.

BACON: What's interesting is he sort of defended -- he was almost sort of defending his compassion vision, too, and talking about how the Republican Party is becoming too anti-immigrant, which is -- I'm sorry they're eager to hear advice from... BORGER: Oh, yes.


BACON: Right now. I'm surprised he keeps doing that, but he's been doing that in the last two days.

HAYES: Well, there's been a lot of emphasis on the part of the Bush legacy that's not related to the war. And it's funny when you compare Dick Cheney's exit interviews and George W. Bush's exit interviews over the past month.


HAYES: George W. Bush wants to emphasize this compassionate side. And Dick Cheney is very comfortable being sort of the war guy -- you know, we kept the country safe.

BLITZER: He's going to have another exit interview -- George W. Bush and Mrs. Bush, tomorrow night on "LARRY KING LIVE." We'll see how that goes.

Let's talk about something else that's going to happen tomorrow -- the confirmation hearings of Senator Hillary Clinton to become the nation's next secretary of State.

Any fireworks?

BORGER: She's in.

BLITZER: What do you think?

BORGER: She's in.

BLITZER: Yes. She'll be confirmed...

BORGER: She's going to be confirmed.

BLITZER: But go ahead and tell us if there will be any lively exchanges, shall we say.

BORGER: Yes. There will be exchanges. And they're going to be sort of predictable. There are going to be questions, largely, about Bill Clinton and his foundation and how they're going to be able to keep a wall between the work she does as secretary of State and the wall that his foundation does.

Also, questions will be raised about how often Bill Clinton needs to report the money he raises for the foundation, because people want to look to see if there are those conflicts. But, in the end...

BLITZER: She'll be confirmed.

BORGER:'s smooth sailing.

BLITZER: But, you know what, if I were one of those senators, wouldn't you want to sort of get her on the record on the most sensitive diplomatic issues that are out there?

What do you think about the Palestinians and the Israelis?

What about North Korea, Iraq, Afghanistan?

And see what she has to say -- Iran, for example.

HAYES: Yes, I think there will be some discussion of the Clinton foundation problems -- potential problems. But I think they'll move quickly to these issues, as you say, and work to get her on the record. It provides a good blueprint, basically, for people who want to go back in a year or two and say, look, this is not, in fact, what she's , in fact, done after promising to do it.

BORGER: And particularly since she and Obama disagreed on a bunch of stuff during the election.


BLITZER: Eric Holder, who is going to be the -- who's the nominee to become the next attorney general -- he has his confirmation hearings before the Senate Judiciary Committee on Thursday.

Perry, he could have a little bit more tension, shall we say.

BACON: That is the one the Republicans are liked focused on as they get (INAUDIBLE). They're going to ask him about his record with President Clinton. And they'll also ask him about his work as a private attorney with some controversial things there, as well.

They really focus on him as the one they're going to make a challenge on.

BLITZER: Although Orrin Hatch, who's one of the top Republicans, if not the ranking Republican on the Senate Judiciary Committee, he and three other Republicans...

BORGER: Right.

BLITZER: ...former deputy attorneys general in the Bush administration, they've just signed a letter saying you know what, Eric Holder is a good man.

BORGER: Yes. And I think, in the end, that's why Eric Holder is going to get confirmed. But there's always one nominee that draws the most fire. And I think that will be Eric Holder.


HAYES: Well, I think the...

BLITZER: Do you think he'll be confirmed?

HAYES: I think the numbers suggest that he's likely to be confirmed. But I think this will be a real fight. BORGER: But on Hillary Clinton, just one more thing. You know, Barack Obama has been saying that there's only one president at a time. So if you want to get a hint about what Obama is going to do about Gaza, what he's going to do about Iran, listen to Hillary Clinton.

BLITZER: We'll be listening.

Guys, thanks very much.

The end of an era...


QUESTION: Do you think, in retrospect, that you have made any mistakes?

And if so, what is the single biggest mistake that you may have made?

BUSH: Got you.


BLITZER: President Bush's final news conference over at the White House. Jeanne Moos -- CNN's Jeanne Moos takes a Moost Unusual look. You're going to enjoy.

And my search for the secret word on "The Ellen DeGeneres Show." You're going to watch the audience go wild.

Stay with us.


BLITZER: Lou Dobbs is getting ready for his show that begins right at the top of the hour -- Lou, what are you working on?

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Wolf, thank you very much.

Coming up at the top of the hour, President Bush and President- Elect Obama joining forces today, trying to convince Congress to spend another $350 billion of your money to bail out Wall Street and perhaps homeowners.

How much is enough?

Will anyone bailout those homeowners?

We'll see. I'll be talking with Professor Elizabeth Warren. She leads the panel overseeing the bailout. She's among our guests.

And some of the financial institutions receiving that government bailout money are ripping you off -- charging outrageous interest rates and fees on credit cards. We'll have that special report that you will only see here. And a rising number of Californians have had a belly full of living in California -- its worsening budget crisis, its soaring unemployment. Many of them are simply moving out. We'll have that story.

And among my guests tonight, three of the best political analysts in the country. We've got a lot to talk about.

Please join us at the top of the hour for all of that, all the day's news -- Wolf, back to you.

BLITZER: See you then, Lou.

Thank you.

Sometimes even a serious newsman can get a little personal -- at least that's what Ellen DeGeneres was hoping when I appeared on her show today. The problem is, I didn't know the secret word she wanted me to say was satin.


ELLEN DEGENERES, HOST: Now, when you traveled a lot, you probably went to a lot of hotels and slept in a lot of different beds.

Is there a type of sheet that you -- like your favorite thing to sleep in?

BLITZER: A sheet?


Any type of a...


DEGENERES: What's sexy?

Like when you and your wife, like what -- if you have a romantic night?


DEGENERES: You know, like you're being romantic.


DEGENERES: Like, you know, you've been married for -- is it 30 years?

BLITZER: Thirty-five.

DEGENERES: Thirty-five.

BLITZER: Yes. DEGENERES: And it would be romantic to change the sheets up once in a while...


DEGENERES: ...and put some kind of a...

BLITZER: Nice sheets.

DEGENERES: Yes, what kind?

BLITZER: You mean like silk sheets?


BLITZER: Satin sheets.




BLITZER: If I said the word, everyone in that studio audience would get a $100 gift -- a $100 gift certificate to Target. And they got it, Jack. I said the -- the magic word. I sort of felt like -- remember the old Groucho Marx show, name the secret...

CAFFERTY: Yes, the duck would come down, right...



CAFFERTY: ...and fly out of ceiling with the little -- it was interesting, though. I mean the minute she started talking about sheets, you went right to silk and satin. You're obviously used to living well.


BLITZER: I guess.


No, that's cute stuff. At first, though, I noticed you were busy going over the loot. She had given you a bunch of things.

What were those?

BLITZER: She gave me earmuffs, you know, because...

CAFFERTY: Oh, for the inauguration.

BLITZER: For the inauguration.


BLITZER: And a scarf. She gave me some gloves. She also gave me some other stuff in a little gift bag that I brought back. I'll tell you about that tomorrow.


The question this hour is what does it mean that more than a third of Americans are obese?

It doesn't mean anything good. J.R. in Norfolk, Virginia: "It means the U.S. is a very wealthy country with a population, although lacking in self-discipline, that has the freedom to eat too much and get fat. Don't over think everything, Jack."

Erin in Healdsburg, California: "It's not just poor food choices, it's the desk jobs that we all have these days. Life for many didn't used to be like that, but now we're all chained to our computers."

Beth writes from Waco, Texas: "No one seems to touch on the fact that the food which directly contributes to obesity is the cheapest to buy and the most filling. All food is expensive at the supermarket. But potato chips, pasta, bread, corn, fatty cuts of meat cheaper than the lean meat, fresh vegetables and fruit. It costs a lot more to live and eat healthy than it does to eat processed carbs. And when money has to stretch so far in today's economy, then healthy eating takes a back seat."

Sharon writes: "Our new president is going to have a lot of work to do, no doubt, and we're going to have to help him trim the fat. He works out six days a week. What is wrong with the rest of us? The Bushies trimmed all the fat out of our wallets. I just saw my 401k. It's hard to eat without money. But we now all have the chance to start over, get healthy, save more money, cook more often and live longer. Just say no to obesity. Happy New Year."

Caroline writes: "If there are stiff taxes on alcohol and liquor to deter over consumption, why not a junk food tax? We could use the money to fund physical education and proper health education in the schools."

Don in Fort Gratiot, Michigan: "We just don't get off our butts enough anymore. We use our vehicles to drive everywhere. We don't even get out of the car to get our takeout. We wait in the drive-thru because it's easier. In a few years, the 34 percent obesity number will be 50 percent."

And Tom in Illinois writes: "It means there are too many of us sitting on our fat behinds watching you."

Never too many doing that.

If you didn't see your e-mail here, you can go to my blog at and look for your e-mail there, among hundreds of others -- Wolf.

BLITZER: Maybe they should watch us on a treadmill or an elliptical and then...

CAFFERTY: You watch -- you're on the treadmill every morning.

BLITZER: I watch...

CAFFERTY: Do you watch television?

BLITZER: ...CNN on a treadmill all the time. I love it.

CAFFERTY: Do you watch -- what do you watch, "AMERICAN MORNING?"



BLITZER: Every morning I watch it for at least an hour on the treadmill, working out.

CAFFERTY: Good for you.

BLITZER: Thanks, Jack.

See you tomorrow.

President Bush's final White House news conference today did not go unnoticed by CNN's Jeanne Moos. In fact, it got her reminiscing about some Moost Unusual Bushisms of days gone by.


JEANNE MOOS, CNN CORRESPONDENT (voice-over): Stretch your neck -- you know it's going to be a long goodbye when they bring out two glasses of water to keep the president hydrated.


MOOS: The babble rose as reporters simultaneously went live.


MOOS: And then for the last time, all rise.


MOOS: There was finger pointing.

BUSH: ...or face serious consequences.

MOOS: And there was chop, chop.

BUSH: Don't tell me the federal response was slow.

MOOS: The president even mimicked self-pity.

BUSH: Why did the financial collapse have to happen on my watch?

MOOS: Soon the press won't have President Bush around to misunderestimate.

BUSH: Sometimes you -- you misunderestimated me.

MOOS: It was just over eight years ago that W. the candidate first uttered that Bushism.

BUSH: But they under -- they misunderestimated what our campaign is about.

MOOS: A few months later, he caught himself saying it again.

BUSH: You misunderestimate -- or, excuse me -- underestimate. Just making sure you were paying attention.

MOOS: Everyone was paying attention back in 2004, when President Bush was asked...

QUESTION: What would your biggest mistake be?

BUSH: Uh, uh -- you know, I just -- I'm sure something will pop into my head here in the midst of this press conference with all the pressure of trying to come up with an answer, but it hasn't yet.

MOOS: Finally, it did -- more than four years later at his farewell press conference.

BUSH: Clearly, putting a "mission accomplished" on an aircraft carrier was a mistake. Obviously, some of my rhetoric has been a mistake.

MOOS: From his last press conference to his first...

BUSH: Oh, you don't want to see me once a week. You'll run out of questions -- oh, twice. I'll be running out of ties.

MOOS: The comedians never ran out of material.




MOOS: Top 10 favorite George Bush moments.

BUSH: The left hand now knows what the right hand is doing.

MOOS: When his ancient nemesis, Helen Thomas, raised her hand, the president skipped her at his goodbye presser.

But he joked with those he did call on.

BUSH: Suzanne?

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: In 2000... BUSH: I finally got your name right after...


BUSH: many years?

MALVEAUX: Six years.

BUSH: Six years?

MALVEAUX: Eight years.

BUSH: Eight years.


BUSH: You used to be known as Suzanne. Now you're Suzanne.

MALVEAUX: Suzanne.

Thank you.

MOOS: Which makes his first name...

BUSH: I'm George.


MOOS (on camera): Some of us can't even begin to estimate how much we're going to miss all that misunderestimating.

BUSH: They under -- they misunder -- they misunderestimate. Misunderestimate.


MOOS: I miss it already.

Jeanne Moos, CNN, New York.


BLITZER: And the man who stood with President Bush on the war in Iraq, the former British prime minister, Tony Blair -- he's now moved on. He's in a new and critical position. And he's sitting down to talk with me about it tomorrow, right here on THE SITUATION ROOM -- just back from the Middle East.

And burning money to protest an economic stimulus plan -- the explanation coming up in our Hot Shots.

We'll be right back.


BLITZER: Here are some of our Hot Shots. In Washington, an invitation to the inauguration of Barack Obama is unveiled on Capitol Hill.

In Berlin, demonstrators burn fake money to protest the new economic stimulus plan.

In India, Hindu devotees look on after taking a bath in the Ganges River. It's part of a month long religious affair.

And back in Washington, a man unpacks boxes of inauguration tickets. Two hundred and forty thousand color-coded tickets are being handed out this week.

Some of this hour's Hot Shots.

That's it for me.

See you back here tomorrow.

Let's go to Lou in New York -- Lou.

DOBBS: Thanks, Wolf.

Tonight, President Bush and President-Elect Obama joining forces to convince Congress to spend even more of your money on bailing out Wall Street and a few other folks. The head of the panel overseeing the bailout is among our guests here tonight.

And tonight, some of the financial institutions receiving that bailout money are ripping off consumers -- charging outrageous interest rates and fees on credit cards.