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Obama Gives New Orders; Judging Hillary Clinton; Taxing Questions for Treasury Pick

Aired January 21, 2009 - 16:00   ET


WOLF BLITZER, CNN ANCHOR: Happening now, President Obama takes advantage of his new authority. He's signing off on new orders for top members of his administration and he's diving right into America's economic mess.
Also, snapshots of history. We're taking you inside the launch of Mr. Obama's presidency. The remarkable drama unfolding in public and in private.

And judging Hillary Clinton. The Senate only minutes away from voting on her nomination to become the next secretary of state. And a Republican is rushing to her defense.

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

This hour, President Obama's going full throttle on this, his first full day in the White House. He's already checked off some short-term goals, including a swearing-in of key staff members. Right now, he's in the midst of back-to-back closed-door meetings with top advisers.

They're tackling some of the most daunting tasks on his to-do list, the to-do list of this, the new president and his cabinet choices. They include rescuing the economy, withdrawing U.S. troops from Iraq and brokering peace in the Middle East.

Let's begin with our White House Correspondent Dan Lothian, who's joining us from the north lawn of the White House.

A daunting challenge for the new president, Dan.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: It really is. And, you know, aides had said that the president would waste no time tackling his campaign promises. Well, today, he began to deliver.


LOTHIAN (voice-over): In a clear sign the Mideast crisis is high on his agenda, President Barack Obama called key leaders in the region -- Israeli Prime Minister Ehud Olmert; Jordan's King Abdullah; Egyptian President Hosni Mubarak; and Palestinian leader Mahmoud Abbas.

White House Press Secretary Robert Gibbs says the president used his first day in office "... to communicate his commitment to active engagement in pursuit of Arab/Israeli peace from the beginning of his term." Mr. Obama then used his pen to sign weeping executive orders dealing with ethics in the executive branch. BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES: However long we are keepers of the public trust, we should never forget that we are here as public servants, and public service is a privilege.

LOTHIAN: The orders would prevent former lobbyists from working on anything they once lobbied on over the past two years. Once leaving the job, they will not be allowed to lobby the Obama administration as long as he is in office. Gifts from lobbyists are notd allowed. And all executive branch employees are being asked to sign a contract that will limit what they can do for two years after leaving.

Earlier in the day, the first couple, along with Mr. and Mrs. Biden, the Clintons and other government officials, attended the traditional prayer service at the Washington National Cathedral, where, for the first time, a female minister, Reverend Sharon Watkins, delivered the sermon.

REV. SHARON WATKINS, CHRISTIAN CHURCH: We need you, Mr. President, to hold your ground.

We need you, leaders of this nation, to stay centered on the values that have guided us in the past.


LOTHIAN: Wolf, the president also met with his top economic advisers, including Larry Summers, pushing, of course, that $825 billion stimulus package. It's a package that the president believes will help to create jobs and also help the ailing economy.

Later today, he will meet with his top military leaders. The focus, of course, being Iraq and trying to find the best way to start pulling those troops out of there in 16 months -- Wolf.

BLITZER: And that White House meeting with the military brass, Dan, that will take place in the White House Situation Room. Is that right?

LOTHIAN: That's right. That will take place later today in the White House Situation Room.

BLITZER: No coverage there. We're told, though, there will be a still photo released by the White House of that meeting. General David Petraeus, the commander of U.S. forces in the Middle East, among those participating.

Let's discuss what's going on with our senior political analyst, Gloria Borger, and CNN's Don Lemon. They're both here in THE SITUATION ROOM.

Gloria, he's working hard on this day.


BLITZER: He's signing documents, he's issuing orders. He's having the most important meetings to set the stage for what could be a tumultuous first term.

BORGER: You know, executive orders are a very clear and sometimes a simple way to sort of set out what your administration is about. So it's really no surprise that the first executive order is really about ethics and lobbying reform, because he's talked about a different way of doing business in Washington, he's talked about the special interests owning Washington.

And it's now very difficult for anybody who is going to sign on into the Obama administration, cannot lobby that administration. So if they leave and he's reelected -- I know, he's just a day old in the presidency, but if he's reelected, that means for eight years, they're saying, you can't go into the lobbying business. And that's a big change in the way Washington does business.

BLITZER: Don, before coming to CNN, you were an anchor in Chicago. So you really covered Barack Obama and his rise to national/international prominence.

Is this first full day in the White House something that's expected, the way he's operating, given the history that he's had?

DON LEMON, CNN ANCHOR: It is. Barack Obama has always been very open about his policies, open about his stances on issues. And I think what was important to hear him say today, especially to the American people, is that this is the people's house now, and we will be as transparent as we can without giving away national secrets. And I think the American people will be open to that.

So I think it's the way that he usually operates, but I think even more so than that, it sends a message to the country now about an open administration, about people having an active role in the administration. Everyday people, as he mentioned in that speech.

BLITZER: We're showing our viewers, Gloria, some pictures that the White House released of Barack Obama, Rahm Emanuel, his White House chief of staff. He's in the Oval Office. He's behind that desk.

I can only imagine what's going through his mind. But these guys are very, very busy. And they're moving, as promised, on the economy and on Iraq on day one.

BORGER: Yes. And I look at that picture of Rahm Emanuel because, of course, Rahm Emanuel served in the White House with Bill Clinton. He knows how Bill Clinton kind of got caught at the outset making some mistakes at the beginning of his administration that tended to define him.

Rahm's a little grayer now, but I think he understands that Obama needs to set out an agenda very clearly. And it's clear they're going to be very ambitious. Now, their problem, quite honestly, is that expectations are so high, that if they don't achieve everything they say they're going to achieve, it could be a real problem.

BLITZER: Well, these first 100 days are going to be critical for setting the tone. BORGER: Yes.

BLITZER: Guys, don't leave. We're going to continue this conversation.

Let's check in with Jack Cafferty though, right now. He has "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: My friend, CNN contributor Donna Brazile, said the inauguration of the first African-American president is a day to rejoice. On, she wrote that President Obama succeeded where others before him have failed for a couple of reasons.

Only four years ago, Barack Obama became the junior senator from Illinois. He's a virtual unknown. Brazile, a Democratic strategist, thinks the key to President Obama's success was that he didn't run as a black candidate, unlike people like Jesse Jackson and Al Sharpton. He ran as a progressive Democrat.

Donna Brazile points out that most people thought it would simply make the campaign trail interesting when Obama decided to run. Nobody expected yesterday's events to be the culmination of that decision.

But on a cold winter night in Iowa, Barack Obama knocked off Hillary Clinton in arguably the whitest place in America. And it was game on after that.

He won primary after primary, including Georgia, Virginia, the former confederacy. And in the general election, he simply mopped the floor with John McCain.

The American people didn't see a black man when they looked at Barack Obama. They saw someone who held out hope for a better future for them and their families. It's all pretty amazing stuff.

Here's the question then. What surprises you most about Barack Obama's climb to the presidency?

Go to and you can post a comment on my blog.

I'm fighting a cold here, Wolf. I apologize.

BLITZER: Don't worry. Have some hot tea with honey. That's always a good idea.

I want to point out to our viewers, Jack, throughout the primary process and throughout the entire election, you were spot-on in your political analysis of Barack Obama, how he would do, how he would against Hillary Clinton, how he would do against John McCain. Just want to point that out.

All right. Stand by.

I want to go to the floor of the U.S. Senate right now. They're getting ready to vote on the confirmation of Hillary Clinton as the next secretary of state. Harry Reid, the Senate majority leader, speaking right now. Let's listen in very briefly.


SEN. HARRY REID (D-NV), MAJORITY LEADER: ... had become a favorite target of the right wing, could forge the relationships necessary to be an effective senator for the people of New York State.

She answered that loud and she answered it very clear. Some questioned whether a person of such national and international claim would put in the time to get to know the inner workings of the Senate and the nitty-gritty of the legislative process. She answered that big-time.

It took no time for Senator Clinton to make believers from those doubters. She became an instant favorite of Democrat and Republicans alike, a forceful advocate for both smart foreign policy and domestic policies, and a remarkable effective student of bipartisanship.

In her time as first lady of our country, serving as an American emissary to the world, then in the United States Senate as a member of the Armed Services Committee, Hillary Clinton built the Democratic skills and breadth of knowledge one needs to be our next secretary of state. She has the full package.

All but one member of the Senate Foreign Relations Committee voted to approve this outstanding nominee. Democrats and Republicans alike stand in support of our friend and colleague, Senator Clinton.

I want spread on the record my appreciation for John McCain coming to the floor and saying, let's just approve her now. He tried to do that this morning.

BLITZER: All right. Harry Reid setting the stage for the roll call in the U.S. Senate. She was confirmed by the Senate Foreign Relations Committee on a 15-1 vote. Only David Vitter, the Republican senator from Louisiana, voting against her. We expect the full Senate momentarily to confirm Hillary Clinton as the next secretary of state.

Stand by for that.

Also, how Barack Obama's inaugural address compares to those that came before.

And "The Beast" on parade. The rollout of the president's tank-like limo. We'll take you inside and outside, right here in THE SITUATION ROOM.


BLITZER: All right. Harry Reid has wrapped up his final speech. The full Senate now voting on Hillary Clinton's nomination to become the next secretary of state.

Let's go to our foreign affairs correspondent, Jill Dougherty. She's over at the State Department.

She hopes it will be confirmed in the next few minutes. We'll have it live here, Jill. And then she'll be working where you are right now, over at the State Department.

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Right. She's got a full plate, there's no question about that, Wolf. And we're also hearing from diplomats and sources close to the administration that President Obama will name a new Mideast envoy.


DOUGHERTY (voice-over): The incoming secretary of state has a whole world, and its challenges in her hands, too. But Hillary Clinton, at the national prayer service, couldn't start tackling them today because her Senate confirmation vote was delayed.

The person who held things up, Republican Senator John Cornyn, said he'd vote for her, but wants more answers on how Clinton will keep a firewall between her work as secretary of state and her husband's foundation, which accepts foreign donations.

SEN. JOHN CORNYN (R), TEXAS: I remain concerned that Senator and soon to be Secretary of State Clinton's diplomatic work will be encumbered by the global activities of the Clinton Foundation.

DOUGHERTY: But Republican John McCain says it's time to get to work.

SEN. JOHN MCCAIN (R), ARIZONA: I think we ought to let Senator Clinton, who is obviously qualified and obviously will serve, get to work immediately.

DOUGHERTY: Clinton's State Department in-box already is crammed with issues, starting with the conflict in Gaza. President Obama is expected to quickly name former senator George Mitchell, who helped Clinton's husband broker peace in northern Ireland, as special Mideast enjoy. Clinton says she'll also fight for more resources for the State Department, taking back work that's fallen to the Pentagon.


DOUGHERTY: And she's got another very big challenge, and that is exerting influence and power into a group, a team of strong-willed and experienced foreign policy officials. You've got, of course, Secretary Gates over at the Pentagon, James Jones over at the NSC, and then also Vice President Joe Biden -- Wolf.

BLITZER: All heavyweights, indeed. And George Mitchell, Jill, a very interesting choice to be the Middle East envoy. He did wonderful work in northern Ireland, as a lot of our viewers remember, the former Senate majority leader. And in the Middle East, he's highly respected by the Israelis and the Arabs. George Mitchell, himself, of Lebanese ancestry, so I assume he's going to do an excellent job.

Let's wish him a lot of success. It's going to be a tough job for George Mitchell. Jill, thanks very much for that report.

President Obama's choice for treasury secretary has been getting an earful from senators today. At issue, the $34,000 tax mistake that cost him a lot politically.

Our Senior Congressional Correspondent Dana Bash is up on the Hill covering this confirmation process.

It's getting complicated. What's the latest, Dana?

DANA BASH, CNN SR. CONGRESSIONAL CORRESPONDENT: The latest is that this was really the only chance for senators to publicly grill Timothy Geithner on the question that they say their constituents want to know, how they can approve somebody as treasury secretary, in charge of the IRS, who did not pay his own taxes.


BASH (voice-over): Timothy Geithner came in with a simple strategy for answering questions on why he didn't pay $34,000 in taxes -- apologize.


BASH: ... over...

GEITHNER: I should have been much more careful.

BASH: ... and over...

GEITHNER: This was an avoidable mistake.

BASH: ... and over...

GEITHNER: I absolutely should have read it more carefully.

BASH: ... again.

GEITHNER: I regret not having done that sooner.

BASH: But contrition did not save Geithner from a grilling about his errors.

SEN. PAT ROBERTS (R), KANSAS: My phones line lit up, and they're now also lighting up in my offices in Kansas and here, why we are considering a nominee for treasury secretary who had not paid the taxes that he owed.

BASH: An issue, Geithner's failure to pay his payroll taxes from 2001 to 2004 while working for the International Monetary Fund.

GEITHNER: I did not prepare my returns in a way that caught that mistake initially.

SEN. CHARLES GRASSLEY (R), IOWA: Did you use software to prepare your 2001 and 2002 tax returns?


GRASSLEY: You did not?


GRASSLEY: Oh, you did. OK. Which brand did you use?

GEITHNER: I'll answer that question, sir, but I want to say, these are my responsibilities, not the tax software responsibility. But I used Turbo Tax to prepare my returns.

BASH: Chuckles there, but no levity in Republican Jon Kyl's relentless pursuit of Geithner's repeated errors.

SEN. JON KYL (R), ARIZONA: On the reverse side of the application, there are three lines right in a row -- federal tax, state tax, SE, meaning self-employment tax. What explanation do you have for writing the check for federal and writing the check for state and somehow totally ignoring the very next line?

GEITHNER: Again, you're absolutely right.

BASH: Geithner also got several questions about whether in his previous role at the Federal Reserve, he could have done more to prevent the Lehman Brothers failure that triggered the financial crisis. And he got an earful from skeptical Democrats about hundreds of billions of dollars in bailout funds he would control as treasury secretary.

SEN. BLANCHE LINCOLN (D), ARKANSAS: It is extremely hard to answer to our constituency if we don't have more details, if it's just, you know, mostly rhetoric.


BASH: Now, Geithner's failure to pay his taxes has certainly made his confirmation process bumpy and embarrassing for the new president, but it looks like there may be enough senators to forgive his mistakes. In fact, Wolf, one of his toughest Republican critics said to him point-blank, "You will be confirmed."


BLITZER: Just stay on top of the story, as I know you will, Dana. Thank you.

The slow federal response in the aftermath of Hurricane Katrina left some Americans to conclude that when disaster strikes, they can't count on Washington for help. Can President Obama help change that attitude?

We'll be joined live by the mayor of New Orleans, Ray Nagin. He's here in Washington. Stand by. And divers in the Hudson River are reporting a major discovery that could help explain what happened to US Airways Flight 1549. We'll have a live update.

Stick around. Lots of news happening today, right here in THE SITUATION ROOM.



BLITZER: The full Senate voting now on Hillary Clinton, her nomination to become the secretary of state. They're on the floor, the tally is going forward.

Stand by for the breaking news. Once that roll call is complete, we'll share it with you.

Also happening now, President Barack Obama zeroing in on the war in Iraq as he holds his first meeting with top U.S. military commanders. Will the new president push ahead with his timetable to bring U.S. troops home?

A live report coming up. Stand by.

And the presidential inauguration you didn't see, photos and video from people on the ground, what they captured that no one else did. We'll show you some fascinating sights and sounds.

And a golden moment at the inauguration. Michelle Obama's dress, it's getting rave reviews, but took some people by surprise, including the designer who made it.

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

Barack Obama's inaugural speech was one of the most anticipated in recent memory. It was similar to some we've heard.

Our Senior Political Analyst Bill Schneider is joining us now live with more.

How did this speech, Bill, compare with some other addresses at inaugurations for earlier presidents?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, President Obama's speech was cool and reassuring, which may have made it the right speech for the times.


SCHNEIDER (voice-over): Some inaugural addresses are known for their soaring, inspirational language.


JOHN F. KENNEDY, PRESIDENT OF THE UNITED STATES: Ask not what your country can do for you. Ask what you can do for your country.


SCHNEIDER: Barack Obama's address was less stirring, perhaps, but more measured and candid.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Starting today, we must pick ourselves up, dust ourselves off, and begin again the work of remaking America.

SCHNEIDER: At a time of crisis, a president needs to be reassuring, like Franklin Roosevelt, who said at his first inaugural, "The only thing we have to fear is fear itself," or Bill Clinton in 1993.


BILL CLINTON, PRESIDENT OF THE UNITED STATES: There is nothing wrong with America that cannot be cured by what is right with America.


SCHNEIDER: Obama, too, offered reassurance.

OBAMA: We gather because we have chosen hope over fear, unity of purpose over conflict and discord.

SCHNEIDER: Some presidents have used their inaugural address to set out a bold agenda.


RONALD REAGAN, PRESIDENT OF THE UNITED STATES: Government is not the solution to the problem. Government is the problem.



GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The survival of liberty in our land increasingly depends on the success of liberty in other lands.


SCHNEIDER: President Obama did talk about big plans, but they have to be practical.

OBAMA: The question we ask today is not whether our government is too big or too small, but whether it works.

SCHNEIDER: Obama knows how to be stirring, and he was when he talked about his new approach to diplomacy.

OBAMA: To those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history, but that we will extend a hand if you are willing to unclench your fist.


SCHNEIDER: President Obama also proclaimed an end to what he called -- quote -- "the petty grievances and false promises, the recriminations and worn-out dogmas that for far too long have strangled our politics."

Well, that message was loud and clear: The Bush era is so over -- Wolf.

BLITZER: Bill Schneider, thanks very much.

President Obama also meeting now with his top economic advisers. GOP lawmakers, though, up on Capitol Hill already taking some shots at his proposed $825 billion economic recovery plan.

Our congressional correspondent, Brianna Keilar, is covering the story for us.

Is it too early to say it's back to business as usual between Republicans and Democrats, Brianna?

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Wolf, House Republicans certainly are making it clear to President Obama that, if he wants their support, as he says he does, he will have to bend to get it. They actually sent a letter to him today, asking for a meeting with him tomorrow.


OBAMA: Democrats or Republicans, we welcome good ideas.

KEILAR (voice-over): President Obama issued that invite on Capitol Hill two weeks ago. Now House Republicans, capitalizing on Americans' outrage over bailouts, are taking him up on it.

REP. JOHN BOEHNER (R-OH), HOUSE MINORITY LEADER: We want to sit down with the president and talk about our ideas, because it's clear that trying to get money back into the economy quickly to preserve jobs and to create jobs has to be the goal. And fast-acting tax relief, we believe, this is the best -- best way to do that.

KEILAR: The economic rescue plan backed by President Obama is one- third tax cuts, two-thirds government spending. House Republicans are pushing for more business tax cuts and less spending, sounding the pork alert on a plan Mr. Obama promised would be free of pet projects.

REP. MIKE PENCE (R), INDIANA: Fifty million dollars for the National Endowment of the Arts, $200 million for National Mall repairs, and $600 million to -- quote -- "prepare our country for universal health care." And this is stimulus? The Republicans think not.

KEILAR: House GOP leaders have seized upon a new report by the nonpartisan Congressional Budget office that shows many of the Democrats' so-called shovel ready infrastructure projects won't get started until 2011.

For example, only $4 billion of the proposed $30 billion for highways will get spent before then.

Another weapon in their arsenal, comments Mr. Obama's newly confirmed budget director, Peter Orszag, made a year ago, explaining the slowness of infrastructure spending.

PETER ORSZAG, DIRECTOR OF OFFICE OF MANAGEMENT AND BUDGET DESIGNATE: But the problem is that the projects typically involve such long lags that, in aggregate, they are not effective stimulus because of the low spend-out rates in the short run.


KEILAR: Democrats insist their bill will boost the economy in the short term, but they also say it's about the long term. And some of these provisions, these spending provisions, you hear Republicans complaining about, like health care, they say those are about the long term -- Wolf.

BLITZER: Brianna is on the Hill watching this. Thanks very much.

We're also watching what's happening on the Senate floor right now. These are live pictures you're seeing, the senators, 100 senators, at least 99 in the Senate right now -- Minnesota is still up in the air. They're getting ready. They're voting actually right now on Hillary Clinton as the next secretary of state. She's widely expected to be confirmed. We will tell you what the roll call is, what is under way.

Stand by, breaking news happening in the Senate -- Hillary Clinton about to become the nation's secretary of state.

Also, President Obama says he will keep promises broken by the Bush administration in New Orleans. I will ask the mayor of New Orleans, Ray Nagin, what Mr. Obama needs to do to finish rebuilding his city and whether he has the resources to do it.

Also, President Obama's new marching orders on ethics -- will anything, though, really change here in Washington? Our "Strategy Session" getting ready.

And, later, a live report on President Obama's first meeting with top U.S. military commanders. How fast can they get U.S. combat troops out of Iraq?

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


ANNOUNCER: This is CNN breaking news.

BLITZER: By a lopsided 92 -- excuse me -- 94-2 vote, Hillary Clinton has just been confirmed as the United States secretary of state, overwhelming vote.

Jill Dougherty is watching this.

Jill, you cover the State Department. You're about to get, once she's sworn in, a new secretary of state.


And the issue that was holding this up really was not concerning Hillary Clinton, per se, but it was her husband and the Clinton Foundation, and the issues of whether what he does in accepting money from international donors to the foundation could create the possibility that it would be a perception of undo influence perhaps by groups or other countries on the work of the secretary of state.

Now, Mrs. Clinton, during that confirmation hearing last week, said over and over again, in fact, a lot of times to Senator Vitter, who was one of the two Republicans who did not vote for her, she said there is a deal that was worked out by the Obama administration and the Clinton Foundation that would make it possible not to have these appearances of conflict of interests.

However, you did have some other senators, like Senator Lugar, who were saying, give it up; don't take any new donations whatsoever.

Senator Clinton, in that hearing, said that she will keep her eye on it. But you can bet, Wolf, that that's something that could come back over the course of her being here at the State Department.

BLITZER: Jill, do you know who the other senator, the other Republican, besides David Vitter of Louisiana, who voted against her confirmation?

DOUGHERTY: Yes, Senator DeMint.

BLITZER: Senator DeMint, OK, of South Carolina.

Thanks very much for that.

Let's talk about this and more.

We have a special guest here in THE SITUATION ROOM right now, the mayor of New Orleans.

And Don Lemon is still here with us as well. You have covered a lot of stories down in New Orleans in Louisiana and the Gulf Coast .

First of all, your reaction, overwhelming support for Hillary Clinton on the floor. Your senator, though, David Vitter of Louisiana, one of two voting against her.

RAY NAGIN (D), MAYOR OF NEW ORLEANS: I'm not surprised.

You know, Senator Clinton is an incredible human being. And I think she's going to do a wonderful job. As far as David Vitter is concerned, the senator from Louisiana, he's a Republican. He's trying to stake out, in my opinion, the right side as it relates to politics in Louisiana, because he's up for reelection. So, that's not surprising either.

BLITZER: You think that's going to help him in Louisiana, voting against Hillary Clinton?

NAGIN: Well, you know, Louisiana, as it relates to Barack Obama in the presidential election, besides New Orleans, Louisiana went hard red. So, he's playing to that right now.

BLITZER: Let's talk a little bit about what's going on in -- in your city, New Orleans. I was there at the NBA All-Star Game last year. And we had a great time. It's coming back, slowly, but surely.


BLITZER: Pretty impressive.

On the new White House Web site, now under President Obama's control, there's a line in there already on this, the first full day of the new administration. "President Obama will keep the broken promises made by President Bush to rebuild New Orleans and the Gulf Coast."

What else do you want the federal government to do for your city that the federal government didn't do during the Bush administration?

NAGIN: Well, there's still bureaucracy problems as it relates to the amount of resources that are reaching New Orleans and the Gulf Coast.

For example, right now, we're at about 40 cents on a dollar as it relates to the amount of money that is required by the Stafford Act to rebuild certain public infrastructure facilities. So, that is a ripe area that the Obama administration can fix real quickly.

BLITZER: But you know there's not a whole lot of money to distribute right now. It seems pretty tough times, as you know.

NAGIN: Well, I don't know about that. We seem to be printing money as we need it. So, this is very low-hanging fruit. It's not a significant amount of money. Right now, it's $700 million under design, and that could easily be done.

DON LEMON, CNN ANCHOR: Yes, but all cities are struggling, at least many of them. I live in one now that's having to cut essential services.

And you, because you're having to rebuild your entire city, can possibly offer the new president a unique perspective on what cities need in order to get back in the black, if that is possible. What would you say to him if you...


NAGIN: Well, one advantage New Orleans has is that, unfortunately, we have gone through three years of planning in trying to deal with Katrina.

We are ready with projects that we could do tomorrow, if you will, if the money was available. And that's one ripe area in FEMA, as well as the stimulus package, that we could really move some significant projects.

BLITZER: Have you personally talked about any of this recently with the new president?

NAGIN: The last time I spoke with him was after right Hurricane Gustav. He called. He's been to New Orleans a number of times. And he promised, just like he said in his press release today, to give us the resources we need to fulfill the promise of President Bush.


LEMON: Will you be able -- here's an interesting -- an interesting thing.

I know that you're having major, major budget problems. Sanitation, you're cutting services in the French Quarter, which is one of the cornerstones of why people go to New Orleans, the tourism. Schools, you're facing a huge challenge with that.


LEMON: Do you think that even -- there are some positives about New Orleans, but, if you -- if it continues, and the economy in this vein, do you think New Orleans will be able to survive this, at least budgetarily?

NAGIN: Well, New -- I think we will. New Orleans has been voted one of the top cities in America to ride out the recession, because of the construction-related activities. That is just starting to take off. So, we're well-positioned, but we're going to have our struggles, just like any other city.

BLITZER: Like any other city. But let me remind our viewers you guys did a great job hosting the NBA All-Star weekend last year. I was totally impressed. New Orleans is coming back.

NAGIN: Well, we got a little something coming up soon. February 24 is Mardi Gras.

LEMON: And everyone is writing about that extreme closeup of you at the inauguration. I have seen it in all the papers.

NAGIN: You know, I have heard about that. I have gotten e-mails on it. I'm going to have to get a DVD of it, so I can see it for myself.


BLITZER: Mayor Nagin, come back. Good luck to everybody, not only in New Orleans, but all along the Gulf Coast. Lots of work still needs to be done.

NAGIN: Exciting times.

BLITZER: Thanks very much. NAGIN: Thank you.

BLITZER: As Barack Obama was stepping into his new role as president of the United States yesterday, something else was making its debut, a new and improved presidential limousine.

Our homeland security correspondent, Jeanne Meserve, has been looking into this story.

Jeanne, the Secret Service isn't releasing a whole lot of information, but we do know this is a one-of-a-kind car.


One expert says the new presidential limo would look more at home on a battlefield than a city street. And that makes sense, since it was built for protection.


MESERVE (voice-over): The president's limousine, unveiled at the inauguration, lives up to its Secret Service name, the Beast.

KEN LUCCI, PRESIDENT, AMBASSADOR LIMO: It's a rolling tank with windows.

MESERVE: At the turn of the last century, when President McKinley was inaugurated, he relied on an entirely different kind of horsepower. President Harding's inaugural parade in 1920 was the first to use a car.

President Franklin Roosevelt used the first bulletproof ride, one seized from mobster Al Capone. President Johnson's limo was armored and enclosed, a byproduct of the Kennedy assassination.

Ken Lucci owns a limousine used by Presidents Ford and Carter and another that carried President Reagan.

LUCCI: This is a 1975...

MESERVE: Though its doors and undercarriage are armored, it seems quaint next to the high-tech limousine of President Obama.

(on camera): I like this. No campaign. No election. Instant president. Great.

(voice-over): The new limo's windows are smaller. Lucci says it's to make the car less vulnerable. He also says the big tires are likely reinforced with steel to make shooting them out all but impossible.

In spy photos taken while the car was being tested, some of the body appears to be built of a different material. Lucci speculates it's a tougher composite. And he guesses the holes in the door are for a mechanism to lock it like a bank vault.

LUCCI: That door probably weighs as much as a 757's aircraft door. And the inside of that cab is as sealed as a jet plane.

MESERVE: And that may surprise President Obama, says Joe Funk, a former Secret Service agent who drove President Clinton's limo.

JOE FUNK, FORMER SECRET SERVICE AGENT: It's a cocoon. And the everyday noises will be -- will be gone. And he will be totally isolated in this protective envelope.


MESERVE: Now, of course, protecting the president has its limits, especially when he gets out of the car. The Secret Service refuses to say anything about the limo and its capabilities, but they do a second one is now in production -- Wolf, back to you.

BLITZER: They call it, as you say, the Beast.

All right, thanks very much, Jeanne.

A packed schedule for President Obama's first full day in office, including meetings with the top U.S. military commanders. They're about to take place in the White House Situation Room -- also, the mission, to formulate an exit strategy for Iraq.

Also, this morning, in his desk over in the Oval Office, President Obama found a note from former President George Bush. What did it say? We will talk about that and more in our "Strategy Session." That's coming up.


BLITZER: An overwhelming vote of confidence in Hillary Clinton to become the secretary of state.

The breaking news, only moments ago, Hillary Clinton confirmed by the full U.S. Senate 94-2, only two Republican senators voting against her.

Let's discuss this and more in our "Strategy Session."

Joining us, the Democratic Jamal Simmons, and Bay Buchanan, a good Republican strategist.

Now, Bay, are you surprised that Hillary Clinton will now become the secretary of state, only two senators, David Vitter of Louisiana, Jim DeMint of South Carolina, voting against her?

BAY BUCHANAN, CNN POLITICAL CONTRIBUTOR: No, I'm not surprised in the least.

First of all, she's a senator. She's one of their colleagues. Secondly, she's extremely qualified. And, thirdly, she's Obama's choice. So, why wouldn't you vote for her? There was no reason to vote against her, I don't think.

BLITZER: This was a pretty strong vote of confidence in her. JAMAL SIMMONS, ADVISER, DEMOCRATIC NATIONAL COMMITTEE: Yes, she's a member of the club. And, so, as a member of the club, it's very difficult for senators to vote against one of their own. There are some pretty high-profile times where it didn't happen, like John Tower and some others, but for the most part, senators get confirmed.

On the other side of this is Eric Holder's now facing a tougher nomination fight. And as members of national security team, the secretary of state, the attorney general, you can't have all these people sitting outside the government while Barack Obama is...


BLITZER: And, when she was a senator, she worked closely with a lot of these Republicans. She used to reach out even to some who voted out to impeach -- to convict her husband, like Lindsey Graham, for example. She went on trips with them. So, there is that camaraderie that you point out

But now the governor of New York state, David Paterson, he can't wait much longer, because she's about to sworn in as secretary of state, could happen within a few hours, could happen tomorrow. He's got to make a decision, Caroline Kennedy or not Caroline Kennedy, someone else, perhaps Andrew Cuomo, the attorney general of New York.

BUCHANAN: And he really has to do it quickly, because what has happened to Caroline Kennedy, I don't think she should be the one. I don't think she's qualified.

But these three to four or five weeks now has been brutal to her. And I don't think it's fair to keep that going any longer. Let's make the call and let her move on or let her be the senator...


BLITZER: What do you think he's going to do, the governor of New York?

SIMMONS: Well, I'm biased on this. And I have been helping Caroline Kennedy out a little bit.

So, what I will say is, I think that she's been doing everything right for the last couple of weeks. She has been talking to all the right people, staying under the radar. And I think the governor makes his decision, he will make it in the case of what's best for the people of New York.

BLITZER: You know, it was interesting. The president today spent about 10 minutes alone in the Oval Office reading that note that the former President George Bush left for him. We don't know what that note said. We only know that he was there reading it at his desk.

And I'm sure that -- I assume -- let me put it that way -- I assume that President Bush gave him some advice going forward. What do you think?

BUCHANAN: It is a tradition, or somewhat of a tradition. A lot of these -- the presidents do that. It's a wonderful tradition.

I think it's a very personal note. I would suspect there's no policy suggested in it, no issues talked about it, but something -- a personal -- maybe -- maybe a verse or words of a founding father that really helped him in a dark moment, that type of thing, and to make certain he wished him the best and let him know that he's there if he ever wants a private conversation.

BLITZER: A pretty unique club when you think about that fraternity of presidents.

SIMMONS: Absolutely.

And I have got to tell you, who knows what's in the note. It could be directions to the White House cookie list, you know, which ones do you want.


SIMMONS: But I will tell you, the other night, I was at -- last night, I guess -- it seems like it was two days ago already -- I was at the Illinois Home State Ball for Barack Obama. And you're standing there, and Barack Obama walks out onto the stage. And you hear "Ruffles and Flourishes" and "Hail to the Chief," and chills run up the spine. And when you see Barack Obama come out of that curtain, it's pretty amazing.


BLITZER: You were one of his early supporters, Jamal.

Thanks, guys, very much for coming in.

SIMMONS: Thank you.

BLITZER: And we're getting some new information right now into THE SITUATION ROOM on what President Obama will be doing tomorrow, his second full day in office. Stand by for that.

And the president's uphill battles on Capitol Hill when it comes to the economy, the pushback he's getting from lawmakers of both parties on this, the first full day of his presidency.

And the Obama inauguration was a magnet for America's biggest stars, and it's probably -- get this -- only just beginning. Get ready, Washington. They're coming.

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


BLITZER: What a night it was last night.

Let's show you some of the sights and sounds from those inaugural balls.



OBAMA: How good-looking is my wife?





SEN. JOSEPH BIDEN (D-DE), VICE PRESIDENT-ELECT: I guess I'm not elect anymore. I'm actually the vice president.



OBAMA: That's what's called old-school.


OBAMA: Have a great night, guys. Love you.



BLITZER: Could watch those kind of video -- that kind of stuff all night long, but we have got to go to Jack Cafferty right now.

Jack, it's pretty -- almost like a wedding, don't you think, either the parents of a bride or the bride and groom themselves?

JACK CAFFERTY, CNN ANCHOR: I think it was a marriage between the new first couple of the United States and the American people. What a delightful couple they are.

I mean, the president getting his groove on there, doing a little bumping and everything, I mean, that's -- that's good stuff. Can you picture George Bush doing that?

BLITZER: No, but...

CAFFERTY: Either of the Bushes doing that?

BLITZER: ... I saw him dance several times during the eight years, but not as well.

CAFFERTY: Yes. No, probably not even close.

The question this hour: What surprises you most about Barack Obama's climb to the presidency? Gary writes from California: "What surprised me is how he took down the Clinton machine during the primaries. A person of lesser talent would not have been able to do that. He was the right person, in the right place, at the right time, with the right set of skills. It was the perfect storm."

Karen in Tennessee: "What surprised me most wasn't Barack Obama or anything to do with his fast ascension to the presidency. Rather, it was the pair the Republicans offered us as a choice. How could Obama not win?"


Janie in Massachusetts writes: "How differently each black candidate ran for office. Obama ran as an intelligent, educated, dignified, objective thinker who weighed both sides of an issue before speaking, spoke of race relations as a solvable problem. Jesse Jackson and Al Sharpton ran as angry black men who acted entitled to respect, but they didn't really know how to earn it, and always took the side of any African-American who complained anything -- think Tawana Brawley -- without any thinking about whether their complaints had merit."

Eric writes: "What surprised me most was the people that elected this unqualified, inexperienced person to office in this very troubled time. The liberal media ridiculously biased, and the people decided to vote on the info they got from the news media, rather than researching Mr. Obama's record. I hope I am wrong, but I feel this president is going to keep us going in the wrong direction."

Sandi in Arizona says: "What a great surprise that Obama was so good at reading the needs of this country. After many disappointments in the Bush administration, most importantly Katrina, Americans wanted to do something to change the environment of government. He clearly saw this, and, after losing New Hampshire, made what I think is the speech of a lifetime when he proclaimed -- quote -- 'We are the ones that we have been waiting for' -- unquote. It rocked my world, made me cry, and made me want to participate in politics for the first time in my life."

And Marcus says, "He could not have got there without the biased media."

I think he probably could have.

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

They are a delightful couple.

BLITZER: They certainly are. Thanks very much, Jack, for that.