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THE SITUATION ROOM

Hillary Clinton Takes Charge; Defending the Defense Lobbyist; President Obama: Day 3; Caroline Kennedy Pulls Out of Senate Race

Aired January 22, 2009 - 17:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


WOLF BLITZER, HOST: Secretary Hillary Clinton today took charge over at the State Department and got a rousing reception when she walked into that building. She also got an immediate boost from President Obama, who showed up, along with the vice president, Joe Biden, as the new administration signals it's ready for some tough diplomacy.
(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: And the inheritance of our young century demands a new era of American leadership. We must recognize that America's strength comes not just from the might of our arms or the scale of our whether, but from our enduring values. And for the sake of our national security and the common aspirations of people around the globe, this era has to begin now.

(END VIDEO CLIP)

BLITZER: Let's go straight to our CNN foreign affairs correspondent, Jill Dougherty.

She's over at the State Department.

It was pretty dramatic, that a rival of the secretary earlier today -- Jill.

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Absolutely, Wolf. And, you know, she got here at 9:00 a.m.. It's now 5:00 p.m. And it's already clear this is not going to be any kind of 9:00 to 5:00 operation.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: We are thrilled to have you here.

DOUGHERTY (voice-over): Rock star excitement hits the buttoned- down State Department as Hillary Clinton starts her first day as secretary -- telling staff, America's new smart power policy needs smart people.

CLINTON: I want you to give me the best advice you can. I want you to understand there is nothing that I welcome more than a good debate and the kind of dialogue that will make us better.

DOUGHERTY: Even President Obama showed up to welcome her. The message unmistakable -- U.S. diplomacy, robust and relentless, is back.

OBAMA: We can no longer afford drift and we can no longer afford delay. Nor can we cede ground to those who seek destruction.

DOUGHERTY: He wasted no time diving into the most volatile issues. And he let his secretary of State announce they're drafting two foreign policy heavyweights -- former Senator George Mitchell as special envoy to the Middle East and Ambassador Richard Holbrooke as special representative to Afghanistan and Pakistan.

(END VIDEO TAPE)

DOUGHERTY: And those two diplomats are planning to travel as soon as possible to those two hot spots -- a signal, Obama says, that America is ready to lead again -- Wolf.

BLITZER: Jill Dougherty is going to be at the State Department for us.

Jill, thank you.

She'll be busy.

In 1964, Hillary Clinton, then Hillary Rodham, got her first taste of politics in the presidential campaign of Republican, Barry Goldwater.

In 1968, she campaigned for the Democrat, Eugene McCarthy.

In 1974, she worked for the special counsel advising the House Judiciary Committee on the possible impeachment of President Nixon.

In 1993, President Clinton named his wife to lead the task force on health care reform.

In November, 2000, Hillary Rodham Clinton easily won a U.S. senate seat from New York.

In January of 2007, she announced an exploratory committee for her presidential run.

And yesterday, the swearing-in as the secretary of State of the United States.

Let's head over to the White House right now.

Our senior White House correspondent, Ed Henry, is standing by -- Ed, new briefing, new press secretary today.

How did it go, do you think, for Robert Gibbs?

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Well, it was interesting. He is somebody who, as you said a moment ago, the press secretary tried not to make news. And on the first day, he was trying to walk that fine line and push back on some of the tough questions we were throwing at him. One of them is about the president's pledge yesterday that he's cracking down on Washington -- that he's trying to stop the revolving door, crack down on the influence of lobbyists.

Specifically, he vowed that he'd have stricter limits than any other previous administration. And he said if you're a lobbyist entering his administration, you cannot work on matters you've lobbied before.

So keeping them honest, I asked Robert Gibbs a question about why the president picked William Lynn to be a top defense official, even though he's most recently been a lobbyist for Raytheon, a major defense contractor.

Robert Gibbs insisted this is not a problem.

Take a listen.

(BEGIN VIDEO CLIP)

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: ...from walking...

HENRY: The secretary to the Defense secretary is a pretty big job. We're at war in two countries right now.

GIBBS: Well...

HENRY: So he's a lobbyist and now he's going to be deputy Defense secretary.

GIBBS: Right. And if he ever leaves this administration, he'll never -- as the president said -- be able to lobby this administration as it relates to the work that it does for the length or entirety of that administration. Again, what the president did yesterday was institute the strongest ethical and transparency guidelines that any administration has lived under in the history of the country.

(END VIDEO CLIP)

HENRY: So you can see right there Robert Gibbs is using a tactic you've known well before, Wolf, that other press secretaries have tried to use, which is to focus on the part of the question they want to, which is that when William Lynn leaves the government -- the way Barack Obama has set up the system -- then he will not be able to lobby this administration anymore.

But that's not really the question. The question was about why he's coming into the administration now, even though he's most recently been a lobbyist.

What's interesting is that Defense -- the Armed Services chairman, Carl Levin, Democrat from Michigan, today was saying today on Capitol Hill that there are a lot more questions now about this nomination. He's not sure can move forward unless the administration explains how exactly this fits into the president's own new standard -- Wolf. BLITZER: Interesting stuff.

Did you get any assurances behind-the-scenes -- Ed, you and your White House press corps colleagues, that this new team would be transparent in terms of letting TV cameras in to record major historical events?

HENRY: Well, Wolf, I'll tell you, I was just in Robert Gibbs' office a few moments ago when you were talking in the Strategy Session about his first day and about transparency. It was interesting to Robert Gibbs react to you saying that TV cameras should be in there specifically, last night, when the chief justice swore the president for a second time.

Obviously, I agree with you. I made that clear to Robert Gibbs. There are going to be things that we're going to differ on. He believes that it was -- it was good enough to have a still photo released by the White House itself. Obviously, a lot of reporters have been pointing out that's not exactly the kind of transparency the president has promised.

And it is going to be a daily push and pull -- a little back and forth. This is traditional with any administration, but especially since this administration is pledging such a new degree -- a new standard on openness and transparency, it's going to be a constant battle -- Wolf.

BLITZER: I agree. And as it should be, because everybody's got their own objectives.

We wish Robert Gibbs, obviously, a lot of success. He's got a tough job ahead of him, no doubt about that. And we're counting on him to do the right thing, as we are all of this new team.

Don Lemon is here with us.

You're going to be heading back to Atlanta, but it's good of you to spend another day with us here.

You've known Barack Obama since your days as a local anchor in Chicago. You've seen his rise.

Are you surprised at all how he's hit the ground running on day one?

DON LEMON, CNN CORRESPONDENT: Well, I think anyone would be surprised. As much as they've tackled today, and at least talked about, it is a surprise.

But, yes, I've -- I've followed Barack Obama for a while -- not just as an anchor, but as reporter, as well, in Chicago. And he is known for getting the job done, especially with his mentor and the kind of people -- Emil Jones is head of the Senate in Illinois. The kind of people who groomed Barack Obama -- groomed him to do things, do it quickly, do it effectively and efficiently -- sort of the same things that he talked about when tackling the war on terror -- we want to be effective, we want to be efficient, but we want to do it properly.

So I'm surprised. I think anyone would be overwhelmed by the amount of things they had to deal with today. But it appears that Barack Obama is using the skills that he learned in Chicago and are stepping up to the plate...

BLITZER: Because he...

LEMON: ...and the stepping up to the plate (INAUDIBLE).

BLITZER: He and his people know that these first several days, they're going to have an impression left on the American public that could be much longer lasting.

LEMON: And that's why he talked about -- and it so important for him to get Hillary Clinton in place as Secretary of State, to get Eric Holder in place and to have his complete administration, at least as much as possible, in place in the early days of the administration. Because he knows the country is in a very unique position now, when it comes to the economy, when it comes to war. So he wanted to make sure that they were in place. So, yes, he's got a lot on his plate. And now, it appears those people are now all in place.

BLITZER: And I was very impressed...

LEMON: Yes...

BLITZER: ...that they announced today, Robert Gibbs -- one of the first things he announced is that there would be a daily economic briefing for the president, just as there is a daily intelligence briefing for the president. Given the horrible state of the U.S. economy right now, this is really critical. I was surprised that it hadn't happened before.

LEMON: Well, he -- Barack Obama requested that. He said, when it comes to the economy, we've never seen the economy like that -- like in the position that it's in now, so we want to make sure -- he wants to make sure that every single day he gets a briefing on that, much like the briefing that we get on national security -- that the president gets on national security.

BLITZER: The presidential daily briefing...

LEMON: Yes.

BLITZER: ...it's called, on intelligence.

LEMON: Yes.

BLITZER: And he's going to get one from Larry Summers, his chief economic adviser. And I'm sure Tim Geithner, the Treasury secretary, will participate in those briefings from time to time.

Don's not going away.

He's got a good piece coming up on the first lady's first few days here with the daughters.

LEMON: Yes.

MOOS: And I'm looking forward to that, Don.

LEMON: Well, I said to you, I'm glad you were -- you know, as you were reeling off Hillary Clinton's accomplishments before she became Secretary of State, it's very important. Because the perception -- sometimes people forget about first ladies -- their accomplishments before they get to the White House and, you know, degrees and what they've done business-wise. So we're going to talk about Michelle Obama and what she's done.

BLITZER: Don is not going away.

Thanks very much.

Let's go back to Jack.

He has The Cafferty File -- Jack.

CAFFERTY: President Obama issued three executive orders today signaling a sharp departure from the Bush administration, one of them banning torture. It ends the CIA practice of so-called enhanced interrogations and requires that the Army Field Manual be followed for terror interrogations.

The Bush administration and intelligence agencies under Bush's command said that the tactics were the only way to get information from these suspects being held captive in the war on terror. The techniques include forceful grabbing, slapping, forced standing for more than 40 hours while shackled and handcuffed, holding naked prisoners in a 50 degree cell and splashing them with cold water, and waterboarding, which simulates drowning.

At one point, the former CIA director and former attorney general both testified to lawmakers about the value of these practices.

Human rights organizations, of course, said the United States is out of line and said that we were violating international law.

It's been the subject of much debate since coming into practice in 2002 and now President Obama has put a stop to it.

Here's the question -- does forbidding so-called enhanced interrogation techniques send an invitation to enemies of the United States?

Go to CNN.com/caffertyfile and you can post a comment on my blog -- Wolf.

BLITZER: Thanks very much, Jack, for that.

Barack Obama sets the priorities for his international agenda. You're going to hear exactly what he said over at the State Department today, in his own words. Also, there's new information from the FBI about threats -- threats against Barack Obama. We're going to give you the details what we know.

And advice to the first daughters from two other girls who grew up in the White House -- the open letter to Malia and Sasha.

All that and a lot more coming up, right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: President Obama wasted no time setting the tone on how his administration will handle the challenges in the Middle East. He's bringing back veteran diplomatic troubleshooter George Mitchell as a special envoy. And he delivered a blunt message to Israel and Hamas.

(BEGIN VIDEO CLIP)

OBAMA: The tragic violence in Gaza and Southern Israel offers a sobering reminder of the challenges at hand and the setbacks that will inevitably come. It must also instill in us, though, a sense of urgency, as history shows us that strong and sustained American engagement can bridge divides and build the capacity that supports progress.

And that is why we will be sending George to the region as soon as possible, to help the parties ensure that the cease-fire that has been achieved is made durable and sustainable.

Let me be clear. America is committed to Israel's security. And we will always support Israel's right to defend itself against legitimate threats.

For years, Hamas has launched thousands of rockets at innocent Israeli citizens. No democracy can tolerate such danger to its people -- nor should the international community. And neither should the Palestinian people themselves, whose interests are only set back by acts of terror.

To be a genuine party to peace, the quartet has made it clear that Hamas must meet clear conditions -- recognize Israel's right to exist, renounce violence and abide by past agreements.

Going forward, the outline for a durable cease-fire is clear. Hamas must end its rocket fire.

Israel will complete the withdrawal of its forces from Gaza. The United States and our partners will support a credible anti-smuggling and interdiction regime so that Hamas cannot rearm.

Yesterday I spoke to President Mubarak and expressed my appreciation for the important role that Egypt played in achieving a cease-fire. And we look forward to Egypt's continued leadership and partnership in laying a foundation for a broader peace through a commitment to end smuggling from within its borders. Now, just as the terror of rocket fire aimed at innocent Israelis is intolerable, so, too, is a future without hope for the Palestinians. I was deeply concerned by the loss of Palestinian and Israeli life in recent days and by the substantial suffering and humanitarian needs in Gaza. Our hearts go out to Palestinian civilians who are in need of immediate food, clean water and basic medical care and who've face suffocating poverty for far too long.

Now we must extend a hand of opportunity to those who seek peace. As part of a lasting cease-fire, Gaza's border crossings should be open to allow the flow of aid and commerce, with an appropriate monitoring regime with the international and Palestinian Authority participating.

Relief efforts must be able to reach innocent Palestinians who depend on them. The United States will fully support an international donors conference to seek short-term humanitarian assistance and long- term reconstruction for the Palestinian economy. This assistance will be provided to and guided by the Palestinian Authority.

Lasting peace requires more than a long cease-fire. And that's why I will sustain an active commitment to seek two states living side by side in peace and security.

Senator Mitchell will carry forward this commitment, as well as the effort to help Israel reach a broader peace with the Arab world that recognizes its rightful place in the community of nations.

I should add that Arab Peace Initiative contains constructive elements that could help advance these efforts. Now -- now is the time for Arab states to act on the initiatives promised by supporting the Palestinian government under President Abbas and Prime Minister Fayyad, taking steps toward normalizing relations with Israel and by standing up to extremism that threatens us all.

Jordan's constructive role in training Palestinian security forces and nurturing its relations with Israel provide a model for these efforts.

And going forward, we must make it clear to all countries in the region that external support for terrorist organizations must stop.

(END VIDEO CLIP)

BLITZER: The president of the United States laying out his position in rather important detail on the Israeli-Palestinian crisis -- what's happening in Gaza right now, as he welcomes George Mitchell, the former Senate majority leader, to be a special envoy to the Middle East.

We're going to stay on top of this story for you.

He also signed, as you know, several documents today on the whole issue of interrogation and what's going to happen to those prisoners at the U.S. naval base at Guantanamo Bay. I spoke earlier today with the outgoing chairman of the Senate Intelligence Committee, Jay Rockefeller of West Virginia. And I asked him if he supports what the president is doing.

No surprise, he does. And he strongly disagrees with the advice that the former vice president, Dick Cheney, gave in his final days to this new president.

Listen to this on the subject of interrogation.

(BEGIN VIDEO CLIP)

SEN. JAY ROCKEFELLER (D), WEST VIRGINIA: The vice president presumably is back in Wyoming and comfortable. My point of view would be very different on that. My point of view would be the more that we did those kind of tactics which the Bush administration used, the more enemies we've made around the world -- not just through having Guantanamo, but what happened in Guantanamo and in the renditioning -- that is sending to other countries prisoners, torturing them and other countries getting the credit for it -- that we've made enemies that have made us less safe.

(END VIDEO CLIP)

BLITZER: He also goes on to say he's leaving open the option of possible criminal investigations for some Bush administration officials. That's what he's leaving open.

By the way, the full interview with Senator Rockefeller will air Saturday, 6:00 p.m. Eastern in THE SITUATION ROOM.

We're going six days a week now. THE SITUATION ROOM, 6:00 p.m. Saturday. You'll want to see that interview with Senator Rockefeller, among other -- other interviews and a lot more coming up. Saturday at 6:00 p.m. Eastern.

Who is replacing Hillary Clinton?

We'll know tomorrow. But in the meantime, new information about the real reason, perhaps, that Caroline Kennedy dropped out of the running.

And, also, just in, extraordinary new video of the moment that airliner ditched into the icy Hudson River. You'll see it and a lot more, right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: And some new pictures just coming into THE SITUATION ROOM on that crash landing of that US Airways flight on the Hudson River last week -- Don, what are we seeing?

What are we hearing?

LEMON: Hey, we watched, Wolf, your amazing coverage of that just one week ago. And if you thought you saw all of the incredible pictures, I want our audience to take a look at this.

We want to show you some stunning new videotape, Wolf, of that miraculous plane landing in New York's Hudson River. That was one week ago today.

And you can see the jet on the icy water. These are new pictures. And the inflatable ramps popping up and out on one side of that Flight 1549. One hundred and fifty-five people were aboard the US Airways jet. And they headed out from stricken aircraft's cabin onto the plane's wings.

Here's what we're hearing now, though. One person jumped into the water, Wolf. And it is still incredible that everyone survived.

And we thought we'd seen the last of those incredible pictures, but apparently, there is one more for you -- Wolf.

BLITZER: All right. Good. We look forward to seeing more, if there are more available.

Don, thanks very much.

All of us know that the president, in his inaugural address and in other major speeches, is calling for greater public service.

Let's go live to Ted Rowlands in Los Angeles because he's -- he's looking into this -- Ted, and you're finding out how people are responding to this call for people to volunteer national service.

TED ROWLANDS, CNN CORRESPONDENT: Yes, Wolf. A president asking people to serve is nothing new. President Bush, after 9/11, galvanized more than a million people through USA Freedom Corps to volunteer.

But early indications show that President Obama's call to service is really striking a chord with a lot of Americans.

(BEGIN VIDEOTAPE)

ROWLANDS (voice-over): In an emotional scene that played out at gatherings around the world, the members of the First AME Church of Los Angeles watched President Obama take the oath of office.

JOHN ROBERTS, CHIEF JUSTICE OF THE SUPREME COURT: So help you god?

OBAMA: So help me god.

ROBERTS: Congratulations, Mr. President.

JAVELIN GUIDRY, LOS ANGELES RESIDENT: This really happened. I mean it really happened.

ROWLANDS: Reflecting on the historic event, Javelin and Kaishauna Guidry say they plan to answer President Obama's call to do something to help the country. Javelin says he'll do more community service. Kaishauna is headed to medical school.

KAISHAUNA GUIDRY, LOS ANGELES RESIDENT: I really want to practice medicine in an underserved community and be a leader and a role model.

ROWLANDS: Tuesday night at an inauguration party in Southern California, Paulette Bradley, who already volunteers, says she hopes Obama will inspire others to join her.

PAULETTE BRADLEY, VOLUNTEER: Bringing something to the table and sharing your experience, your skills -- things that you know how to do. We all have skills. We all have something to share.

ROWLANDS: Across the country and online, there's a push to volunteer. Starbucks is promoting Pledge Five, asking people to perform five hours of community service. There are presidential pledges on MySpace.com, where people are urged to follow the lead of several celebrities who made video promises to help the country.

WILL.I.AM: I pledge.

UNIDENTIFIED FEMALE: To volunteer more of my time to help children battling serious illnesses.

OBAMA: For as much as government can do and must do, it is ultimately the faith and determination of the American people upon which this nation relies.

ROWLANDS: Whether the nation responds remains to be seen.

UNIDENTIFIED MALE: We are to be inspired and not only embrace this moment, but use this as the fuel that we take with us to serve one another and to, you know, restore, you know, the unity in our country.

(END VIDEO TAPE)

ROWLANDS: And there have been some early indications that people are responding. USAService.org, which asked people to serve on MLK Day, a huge success -- 12,000 projects. Compare that to last year -- 5,000 projects.

The Peace Corps ran some numbers on January 20th and 21st of this year, Wolf -- a 200 percent increase in the applications started compared to last year.

If you want to volunteer, USAFreedomCorps.org still up and running. That's the Bush administration's vehicle. It's a great Web site to find out what your talents are and what would be a good match to volunteer.

BLITZER: Good to know. Very encouraging stuff.

Thanks, Ted, for that.

We're getting word, by the way, right now here in THE SITUATION ROOM that there are new threats against President Obama. You're going to find out who the FBI is watching.

Also, there's new information about the New York Senate seat and Caroline Kennedy coming out -- about why Caroline Kennedy suddenly withdrew herself late last night from the running for Hillary Clinton's vacant Senate seat. Stand by for that.

And you heard about the message President Bush left for President Obama. Now the Bush daughters are following suit with a message for the Obama girls. We'll tell you what they said and more, right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

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

Happening now, President Obama says there's no time to lose as the U.S. embarks on a new era. He welcomed newly confirmed Secretary of State Hillary Clinton over at the State Department. We're going to bring you more of what he had to say. Stand by.

President Obama famously promised his BlackBerry would have to be pried out of his hands before he would give it up as president. There may be an easier solution right now.

And protecting the commander-in-chief -- threats to President Obama reportedly are up.

We're going to tell you what the FBI and the Secret Service are saying and doing to make sure he's safe from harm.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

We're just getting word here into THE SITUATION ROOM that tomorrow at noon the New York governor, David Paterson, is planning to announce who he's chosen to fill Hillary Clinton's vacant Senate seat. A lot going on this scene as Mary Snow has been doing excellent reporting.

What's the latest? What do we know? She's dropped out. We suspect we now know why.

MARY SNOW, CNN CORRESPONDENT: Wolf, yeah. The dust still has not settled one day after Caroline Kennedy took her name out of the running for Senator Clinton's vacant senate seat with starkly different accounts of what was behind it. A person close to Governor David Paterson who didn't want to be identified because of the sensitivity of the situation says there were potentially embarrassing tax and nanny issues that turned up during the vetting progress.

In an official statement from the governor's office just released says the governor has not informed any candidate they have not been selected nor has any information gathered during the process generated a necessity for anyone to withdraw. We also asked for a reaction from a Kennedy spokesman who said Caroline Kennedy withdrew her name from consideration for personal reasons. He says any statements to the contrary are false adding this kind of mud slinging demeans that process and all those involved.

An aide to Caroline Kennedy earlier today said the 51-year-old Kennedy withdrew her name after she was made aware of a personal situation on Wednesday. The aide would not elaborate but said the situation could prevent her from fulfilling her role as a senator and did not involve the health of her uncle, Senator Ted Kennedy, who has brain cancer and suffered a seizure while attending the inauguration of President Obama on Tuesday. The aide said there were positive signs coming from the governor's office up until yesterday. A source close to the governor says he had no intention of picking Kennedy, citing lack of foreign policy experience and said she couldn't handle the pressure of the public stage. Wolf, I'm sure we have not heard the last of this.

BLITZER: Right now we know there are front-runners. We don't know who's going to be the next junior senator from New York, do we?

SNOW: We do not. And I can tell you every New York politician I've spoken to in the last couple days will say they will not guess as to what Governor Paterson will do because they cite he can be very unpredictable.

BLITZER: Very independent kind of guy. We'll wait patiently and see who's going to represent my home state of New York. Thanks very much. New York state, the empire state.

Let's turn to the election of Barack Obama. There has been some disturbing trends going on as far as security and threats to him. The FBI has been looking closely at these threats. Especially among some of the white supremacist groups. Jeanne Meserve has more on this story.

Jeanne?

JEANNE MESERVE, CNN CORRESPONDENT: Wolf, since last summer, people have been arrested for threatening President Obama in Colorado, Tennessee and just last week in Wisconsin. The secret service won't comment on the volume of threats, but others will tell you it's way up.

(BEGIN VIDEOTAPE)

MESERVE: During the inauguration, security around President Obama was unprecedented. Expect that to continue.

WILLIAM PICKLE, FORMER U.S. SECRET SERVICE AGENT: The fact that he's an African-American. The fact that we're at war. The fact that the economy is pretty poor. You're right. All of those things come together to create a very, very tense environment for the secret service.

MESERVE: A bulletin issued earlier this month by the FBI and Department of Homeland Security said Mr. Obama has been the focus of voluminous threat-related reporting since announcing his candidacy and the number of threat reports has increased since his election. Websites and chat rooms of white supremacists have seized with hate.

MARK POTOK, SOUTHERN POVERTY LAW CENTER: The idea of a black man in the White House is an utter anathema. They think this represents the sort of stealing of the nation, the nation which they imagine as having been created as a kind of Christian, white entity.

MESERVE: The FBI says it is watching the chatter, looking for threats.

JOSEPH PERSICHINI, FEDERAL BUREAU OF INVESTIGATION: I think we've been very, very aggressive in looking at the potential of any white supremacy or domestic terrorist group to take action.

MESERVE: Dangers to President Obama are not all home grown. In November, al Qaeda's number two, Ayman al-Zawahiri, accused Mr. Obama of standing with the enemies of Islam. In his inaugural speech, President Obama extended a hand to moderates in the Middle East.

OBAMA: To the Muslim world, we seek a new way forward based on mutual interest and mutual respect.

MESERVE: His first phone calls were to leaders in the region. But some analysts believe President Obama's efforts to co-opt extremists may inflame them and provoke them to action against him.

The outpouring of emotion for the Obama presidency may make him a target of another group, the psychologically dangerous. John Hinckley, for instance, who shot President Reagan was mentally ill.

(END VIDEOTAPE)

MESERVE: And people who plot as lone wolves are the most difficult to detect. Often they don't share their plans with anyone. Wolf, back to you.

BLITZER: All right. Jeanne, thank you; very disturbing stuff.

President Obama, as you know, announced today he's going to be holding a daily briefing with his economic team. But the economic crisis is much more serious in another part of the world in Iceland. Let's bring in our Internet reporter, Abbi Tatton.

What's going on here pales to what's' going on over there.

ABBI TATTON, CNN INTERNET REPORTER: Absolutely and what's incredible about these scenes that I'm going to show you from ireport.com is this is a country, Iceland, that just three, four months ago was prosperous, booming even. After an economic collapse of the banking system last fall, you're now seeing scenes like this in its capital, Reykjavik.

These pictures sent in by a man who's been recording the anti- government protests happening all around him. He says they've been regular. Last night they turned violent. Take a look at his video. The scenes outside the parliament building last night. A couple hundred protesters, anti-government protesters pelting police and the building with rocks, paving flaps, fire works, anything they could get their hands on. He said there were a couple thousand protesters there, most of them peaceful. He said they're mad, angry at the government. They want elections. They're angry because unemployment used to be around zero. Now it's soaring. Their bank loans are increasing. And they're trying to get their voices heard by the government.

Wolf, what's amazing is what he told me. To put this in perspective he said last night the police used tear gas against the protesters. He said that was the only time in his lifetime he recalls that happening.

BLITZER: I can imagine. People losing their life savings and they're taking out their anger as they do. Thanks very much Abbi for that.

There were slips. There were stumbles the first time around. But why did the president have to take the oath of office a second time? And why wasn't it done publicly? James Carville and Bay Buchanan, they're standing by live.

Playing house in the White House. Some advice to the Obama daughters from the Bush twins.

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

(COMMERCIAL BREAK)

BLITZER: We're continuing to watch team Obama as we're calling it, as it takes over all the various departments including department of veterans' affairs. Let's go to our pentagon correspondent, Chris Lawrence.

How's that going, Chris?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Wolf, Eric Shinseki is a quiet guy and he's had a pretty quiet start to his new term. He was sworn in around lunchtime yesterday, stopped by the VA for the first time yesterday afternoon. Today was his first really full day. No big public events like Secretary Clinton. In fact, the only mass e-mail he sent was to let the staff know, yeah, he indeed did get confirmed. He was briefed today on emergency preparedness for the VA, all those VA hospitals that play such an integral part but a lot of people believe he has a big job ahead of him. You've got soldiers committing suicide. You've got hundreds of thousands of cases backlogged. A lot of people feel he's got to radically overhaul that system.

BLITZER: Thanks very much. We'll watch it together with you. Chris is over at the Pentagon.

Let's bring in political contributors right now; the democratic strategist James Carville, the republican strategist Bay Buchanan. Also, Don Lemon joins us as well.

James, do you think it was necessary for the president of the United States to do a second swearing in ceremony last night?

JAMES CARVILLE, DEMOCRATIC STRATEGIST: I don't know. His council, obviously, Greg thought it would be. They wanted to remove any doubt that there wouldn't be any possibility of any kind of lawsuit. I talked to a lot of people today in the White House and the press and everything. I have no idea why everybody is so gassed up about this. It was just a procedure thing. They let a pool reporter in. I don't see it as a big deal.

BLITZER: Here's the actual audio. They didn't let any TV cameras in. We did get a sort of grainy audio tape. Not necessarily the highest quality. Listen to this, Bay.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I, Barack Hussein Obama, do solemnly swear.

OBAMA: I, Barack Hussein Obama, do solemnly swear.

UNIDENTIFIED MALE: That I will faithfully execute the office of president of the United States.

OBAMA: That I will fatefully execute the office of president of the United States.

UNIDENTIFIED MALE: And will to the best of my ability.

OBAMA: And will to the best of my ability.

UNIDENTIFIED MALE: Preserve, protect and defend the constitution of the United States.

OBAMA: Preserve, protect and defend the constitution of the United States.

UNIDENTIFIED MALE: So help you god.

OBAMA: So help me god.

(END VIDEO CLIP)

BLITZER: He got it right that time, the chief justice. Might not help, but it certainly can't hurt to have done it just to remove the notion, Bay, from any of the groups out there that are going to file suit, suggesting this president is not really president. It was probably a very good idea that the White House counselor, Greg Craig had?

BAY BUCHANAN, REPUBLICAN STRATEGIST: I couldn't agree more. I think it was very, very smart, cautious. The American people should know without question, all of them, that this president is exactly that. He is our commander in chief and president at this time. No doubt about it. I just think it took a few seconds. Yet, at the same time, it resolved any doubt. Very smart. I think he was wise not to bring all the press in. Just get it done and move on.

BLITZER: You disagree with me on that. Here's Robert Gibbs, the White House press secretary, Don, who explained their justification for not letting TV cameras in to record this historic event for the American people.

(BEGIN VIDEO CLIP)

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: We think it was done in a way that was up front and transparent. We think that it -- we also did it in a way that demonstrated this was done out of an abundance of caution and only that.

(END VIDEO CLIP)

BLITZER: I've been getting a lot of e-mail from viewers out there who love Barack Obama, saying why are you making a big deal that the press wasn't allowed in? Who cares about the press? This isn't, Don, as you and I know, about the press. This is about the American people and the historic record.

DON LEMON, CNN CORRESPONDENT: So much for transparency, right, Wolf? In this age of technology, we could have easily -- the administration could have easily gotten a camera in there. I think the American people would have been even more satisfied to see this on videotape rather than just a still picture. This was just a formality. I think this was more about the people's perception, really, than any legal perception here.

BLITZER: I know, James, you're smiling.

CARVILLE: Because I want to point out that a pool reporter was invited in there.

BLITZER: They were print reporters.

CARVILLE: Print reporter. They didn't try to hide anything. Let's be fair. This is not something they went around -- you know what? Anybody that's ever gotten up and fumbled line or anything like that, Greg Craig is a lawyer. That's all this was. You and I -- we just disagree -- we'll agree to disagree on this one. I just can't -- I've tried to get gassed up about it but I couldn't do it.

LEMON: I don't think anyone's upset about it. Again, this is 2009. This is the White House, the administration of change and the future. And videotape would have been nice instead of a 1950s photograph with a scratchy tape.

CARVILLE: You agree they didn't try to hide it?

BLITZER: No. Nobody is accusing the White House, James, of hiding anything or concealing anything. Four of our print colleagues did go in there. They could take notes and record it if they wanted. As a result of one of those print reporters, we have that grainy audio. I'm just saying in this day and age a video -- we should have been able to have seen it. I want to move on. I don't want to obsess over this. Bay, go ahead.

BUCHANAN: I was just going to say, I think in hindsight they would have brought in the camera. I don't think it's a big deal. They didn't. I don't think it's a big deal.

BLITZER: I'm sure in hindsight Robert Gibbs and Rahm Emanuel and everybody else said, you know what, we probably should have let the camera in. What do we need this kind of aggravation for? It would have been fine.

James, you think -- when I say he's hit the ground running, and he really has, it's been very impressive what he's been doing yesterday his first full day, today his second full day. Is he setting the right tone?

CARVILLE: Look, right, they're hitting the ground running. The event today at the state department with Ambassador Holbrooke and Senator Mitchell was extraordinary. In that the new president went down there, that's a pretty clear signal, yeah, there's some pretty big things that happened here, agree or disagree with them. They certainly are hard at work here. We'll see where it goes from here. In terms of the scale of things, it's really impressive.

BLITZER: He's sending a powerful message, Bay, right from day one.

BUCHANAN: I think he is. Strategically, I think it's very, very smart. He makes a lot of campaign promises out there. And a lot of them are going to take months, if not years to really attempt to fulfill if he is able to do it. So there are some things with an executive order he can do right away. It sends the message, I made some promises. I'm going to start keeping them, day one. The one mistake I'd say he's made is to suspend the prosecution of those terrorists. The master mind of 9/11 to suspend his prosecution. I don't think that sends a smart message. I think it's something that can come back and haunt him. I think after 30 days he'd be wise to move on that.

BLITZER: He says he's suspending because he wants to review all those cases. Is that smart or not so smart James?

CARVILLE: He's a thoughtful guy. In 30 days, a new president comes in and wants to review something, I can't blame anybody in the public would say that's a very reasonable request, after 30 days if he makes a decision, I'm sure people have a different view as to -- as to whether the decision was wise or not. But to ask for 30 days to review something when you take office I think is a pretty reasonable request. Internal revenue service gives you a 60-day extension just on your taxes.

BLITZER: He speaks with some authority on these legal issues. He used to teach constitutional law at the University of Chicago Law School. LEMON: That's why he got the oath right yesterday when there was that flub there. I want to say this to bay. Normally we agree and get along very well. I want to say he's the accused master mind. What Barack Obama was saying today is that in our system, innocent until proven guilty.

BUCHANAN: I think he was saying something else, though. He basically -- the fellow is being prosecuted. Mohammed is being prosecuted. He halted that. I don't know why he would halt it. Is he suggesting he's not being properly prosecuted? This fellow is a first-class terrorist, it appears. I would think he'd send the message to the American people we're going to do full-court press against anyone who attacks us or organizes such an attack.

BLITZER: We'll leave it but continue this conversation.

Advice for the Obama daughters from, perhaps, the only two people in the world who can truly understand what it's like to be in their position.

Candid shots from inside Barack Obama's inner circle just before he was sworn in as president. We're going to take you behind the scenes. Exclusive photos from our sister publication, "Time" magazine. You'll want to see these pictures.

(COMMERCIAL BREAK)

BLITZER: What's it like to grow up inside the White House. The Bush daughters sent an open letter to Sasha and Malia with some advice. Here's CNN's Alina Cho.

(BEGIN VIDEOTAPE)

ALINA CHO: They're arguably the most famous children in the world now living in America's most famous house. A fishbowl few understand. Jenna and Barbara Bush do, and they want to give Sasha and Malia Obama some advice. Surround yourself with loyal friends. Cherish your animals. When your dad throws out the first pitch for the Yankees, go to the game.

ANN SCHRADER, POLITICO.COM: How great is this letter. How nice of Jenna and Barbara.

CHO: The letter titled playing house in the White House and published in the "Wall Street Journal" is a survival guide of sorts, to life inside 1600 Pennsylvania Avenue. After all, the Bush twins' relationship to the highest office in the land goes back 20 years to when their grandfather was elected. Among the tidbits, if you ever need a hug, go find Ramsey. If you want to talk football, look for Buddy. And if you just need a smile, look for Smiley, the White House usher.

SCHRADER: They are the White House butlers. You know, the girls will see every day. That will be people that they probably will grow pretty close to.

CHO: Not since John John and Caroline Kennedy has America been so seemingly fascinated by first children.

DOUG WEAD, PRESIDENTIAL HISTORIAN: The White House is a blur. It's very fast. It's a short part of their life. And it's the best part of their lives.

CHO: Why Jenna and Barbara Bush are advising young Sasha and Malia to go to anything and everything you possibly can. The Bush twins know all the highs and lows of life in the spotlight. They were once known for partying and ditching the secret service.

SCHRADER: When you get caught sort of doing things and the press sort of attacks you for it, they learn. Who better to get advice from people ho have gone through it and realized, maybe we shouldn't do that.

CHO: Which brings Jenna and Barbara Bush to this. "Our dad, like yours, is a man of great integrity and love. Not the sketch in a paper or part of a skit on TV. So here is our most important piece of advice. Remember who your dad really is."

(END VIDEOTAPE)

The Bush twins went on to say many people will think they know him, but they have no idea how they felt the day you were born, the pride they felt on your first day of school or how much you above love being his daughters. Presidential historians say the letter is unprecedented. Could become part of the historical record, and should become a tradition.

Alina Cho, CNN, New York.

(END VIDEOTAPE)

BLITZER: The new White House Press Secretary Robert Gibbs described the first family's experience moving into the White House, it's tough getting used to that space. We're going to tell you some inside stuff.

And he won't have to give up his Blackberry after all. The president gets a new, high-tech highly secure device with a very high price tag. We'll tell you what's going on right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Getting right back to Jack Cafferty for the Cafferty File.

Jack?

JACK CAFFERTY, CNN CORRESPONDENT: The question this hour is, does forbidding so-called enhanced interrogation gags techniques send an invitation to the enemies of the United States?

Sandy writes from Arkansas, "No invitation to our enemies, but it sends a character portrayal to the entire world. Torture, otherwise known as enhanced interrogation techniques, is unacceptable to humanity. My uncle was a prisoner of war in Japan and America should always take the high ground."

Larry in Oregon says, "You have the question backwards, enhanced interrogation invites terrorist extremists. Trying to say we torture as a deterrent is just plain stupid. That's like saying the death penalty is a deterrent to murder. People who commit murder don't think about the possible punishment at the time of the crime. They assume they'll get away with it or they wouldn't commit the crime in the first place."

Jane in Wisconsin writes, "It shows how weak Barack Obama is. I suggest that the guys being held at Gitmo now be parked in Mr. Obama's neighborhood in Chicago, or maybe right next to the White House. Or maybe they could be spread around and placed in the neighborhoods of all the liberal congressmen who want Gitmo closed."

Gigi in Alabama, "Jack, call it like it is. The word is torture, not enhanced interrogation. The Geneva Convention should always be adhered to. Anybody wanting to do harm to us really is not looking toward getting captured. They go into it thinking they're going to die for Allah and be martyred."

Affy in California says, "The only thing it invites is more diplomacy, more peace, more respect from other nations and more progress toward becoming a more civilized nation. I don't know why it took us this long to figure it out."

And Jeff in Oregon writes, "No, Jack, we're inviting friends back to our side."

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

BLITZER: Jack, I want you to take a look at this video coming into THE SITUATION ROOM from the west wing of the White House. That's the president of the United States. He went into the White House briefing room; this for the first time. You can see the reporters there standing by taking some pictures with the president. Let's listen in and hear what we can hear.

OBAMA: I just want to thank everybody for not just completely ripping up Gibbs. We were all watching on TV with the anticipation of some flop sweat. But he handled it. And I'm very proud of him.

UNIDENTIFIED FEMALE: We'll show you how White House reporters really live.

OBAMA: Come on. Let's do it. Great to see you. Good to see you, sir.

UNIDENTIFIED MALE: Thank you.

UNIDENTIFIED MALE: I'm with CBS.

OBAMA: Good to see you. Thank you. Great to see you guys. Hey. How are you? I've got to say, it's smaller than I thought, though.

UNIDENTIFIED FEMALE: The whole White House?

OBAMA: I mean, right, it's --

UNIDENTIFIED FEMALE: You really didn't take a peek your first night here?

(END VIDEO CLIP)

BLITZER: (inaudible) you definitely see that White House briefing room, it looks a lot smaller in person than it does on television.

Dan Lothian was there, we're going to go to him shortly and get his inside story.