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Major Companies Make Staggering Job Cuts; Middle East Mission Has New Envoy; Blagojevich's Impeachment Trail Begins

Aired January 26, 2009 - 16:00   ET


WOLF BLITZER, CNN ANCHOR: Happening now, huge job cuts at America's biggest and best known companies at the same time, President Obama is putting new pressure on one hard hit industry saying the economy and the planet are at stake.

Also this hour, the launch of a Middle East peace mission. President Obama, secretary of state Hillary Clinton and their new point man for the Middle East, George Mitchell, they're meeting at the White House before he heads off to the region. Stand by, we're going there.

And the Illinois governor, with the news media behind boycotted his own impeachment trial. Rod Blagojevich is finding new ways and new places to say he's not guilty. I'm Wolf Blitzer, you're in THE SITUATION ROOM.

It's a one-day bloodbath for American workers, almost 40,000 jobs slashed from five big name corporations alone, more than half of them Caterpillar, the world's largest maker of mining and construction equipment. President Obama says he recognizes the economic loss and the personal devastation.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: These are not just numbers on a page. As with the millions of jobs lost in 2008, these are working men and women whose families have been disrupted and whose dreams have been put on hold. We owe it to each of them and to every single American to act with a sense of urgency and common purpose. We can't afford distractions and we cannot afford delays.


BLITZER: At the same time, Mr. Obama's taking new action that could make matters even worse for the hard-hit auto industry at least in the short-term. But he says he has a long-term goal, making the United States more energy independent and to do so as quickly as possible. Let's go to the White House. Our correspondent Dan Lothian is standing by with more. Dan, another important day, in this still the first week of his presidency.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That's right, with those dark numbers on the economy and the job losses, the president really was stepping out on two fronts today, continuing to push that economic stimulus plan which he sees as an economic lifeline and pushing his green plan as well, which some think will be devastating for the auto industry. But Mr. Obama believes will be good long-term.


LOTHIAN (voice-over): President Obama is leaning on the cash strapped auto industry to help clean up the environment.

OBAMA: Our goal is not to further burden an already struggling industry, it is to help America's automakers prepare for the future.

LOTHIAN: And preparing for that future begins with a second look at states like California which wants to create its own tougher auto emissions standards. A request the Bush administration denied. Mr. Obama also wants to speed up the process of getting higher fuel efficiency cars on the road. Congress set the new bar at 35 miles per gallon by 2020. The president wants his administration to start making that happen with 2011 models. But one auto industry expert says this is more than the car makers can handle.

LAUREN FIX, AUTOMOTIVE ANALYST: To do this, it's going to cost a lot of money to change the tooling, to push the technology possibly before it's ready and of course we have to meet these emissions standards. So that's going to cost somebody money.

LOTHIAN: And resistance on Capitol Hill too from Ohio Republican Senator George Voinovich who said in a statement that, "I am fearful that today's action will begin the process of setting the American auto industry back even further." But White House spokesman Robert Gibbs defended the president's green policy suggesting it's a work in progress.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: What ultimately we'll come up with something that moves along the twin goals of ensuring a strong manufacturing sector while at the same time ensuring that we take the necessary steps to reduce our dependence on foreign oil.

LOTHIAN: And the president, faced with fresh reports of job losses at companies like Caterpillar and Home Depot, continue to push for the $825 billion stimulus plan, staying it will create millions of green and other jobs.

OBAMA: This is the boost that our economy needs, and the new beginning that our future demands.


LOTHIAN: Some are concerned that the steps the president took today will cost more Americans their jobs. One Republican senator saying that it's unfair for the government to be piling on an industry that's already hurting. Wolf?

BLITZER: There's been a late addition Dan to the president's schedule, he's getting ready to meet with the special envoy for the Middle East, George Mitchell?

LOTHIAN: George Mitchell, along with Mrs. Clinton will be here at the White House around 4:15, meeting with the president. This is a chance for them to sit down and talk before he heads to the Middle East. This evening he'll be heading to the Middle East. Again, we have been talking about this since last week Wolf how this president really wants to try to perhaps reach some kind of a peace deal in that region.

BLITZER: Elusive, all of these years, the Israeli Palestinian conflict. We wish George Mitchell good luck. We're going to bring you the remarks of the president and George Mitchell and Hillary Clinton, we expect those remarks this hour, stand by, we'll go to the White House for that. This is also a critical week for the president's economic rescue plan. Senate committees take up the $825 billion tomorrow. The full house may vote on its version of the plan Wednesday. Our senior political analyst Gloria Borger is here. She's working the story for us. A lot of people think this is going to pass with or without Republican support.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Yes, I think it probably will pass with or without Republican support. That's what's so interesting about the way the Republicans are lining up, you know this is the president who is sitting down with Republicans, he's sitting down with them again tomorrow to try and get their input. In the end, Wolf, not many people expect him to get many Republican votes in the House. But in the Senate, it is really up for grabs and there's a sense that by sitting down with Republicans they actually have more leverage with this president than they have with previous presidents. The question is, what are they going to do with that leverage and in the end, will they vote for the stimulus plan?

BLITZER: There was a poll and I know you're familiar with it, a CNN Opinion Research Corporation poll, we released it the day after the inauguration, we asked if the American public favors this kind of economic stimulus package that the president wants. Seventy-two percent of the Democrats do, 40 percent of the Republicans do, 58 percent of independents do. So how much pressure does that put on the Republicans to support it?

BORGER: Well, if they look at their base, their base is opposed to the stimulus package. But if you look at those independent voters and those are the voters that we saw were so important in this election. They want to get something done, in the end, Wolf, I talked to lots of Republicans today, they understand that it's in their best interests to have this economy start moving again. But they also understand they have got nothing to lose politically if they vote against this. Some of them feel because it's going to get passed as you said at the beginning of this conversation, it's going to get passed with or without them. So if they're looking for political cover, they can vote against it. But in the end, if you're a senator you want to attract independent voters, not just your base, you may decide in the end you want to go with President Barack Obama.

BLITZER: And you've written a column on this on and you entitled it the first date, I want our viewers to go, it's already posted?

BORGER: Right, it is and it is the first date between Republicans and this new president. Sizing each other up. BLITZER:, go there, read Gloria's column. Let's go to Jack Cafferty right now for "The Cafferty File" - Hi, Jack.

JACK CAFFERTY, CNN ANCHOR: If you want proof this recession has legs you need look no farther than a series of announcements this Monday morning. The companies continue to slash jobs left and right. It began with construction giant Caterpillar announcing plans to cut 20,000 jobs. Home Depot said they're cutting 7,000 employees and will close their high end Expo stores. Sprint Nextel said they're cutting 8,000 jobs. There are reports Starbucks is going to cut another 1,000 jobs in addition to their previously announced cuts. There's also an announcement that pharmaceutical giant Pfizer is buying competitor Wyeth, a move that will eventually eliminate 26,000 jobs.

This afternoon General Motors announced plans to cut 2,000 jobs, ING and Phillips electronics both based in the Netherlands but with employees here in the U.S. plan to cut 7,000 and 6,000 jobs respectively. One estimate is that 63,000 jobs were cut today alone. Last week, it was Microsoft, before that Circuit City. These days just about everybody knows someone who has lost a job. The National Association for Business Economics, which is a trade group for private companies says 39 percent of their companies plan to cut their payroll within the next six months.

So here's the question: How secure do you feel about your job? Go to You can post a comment on my blog.

BLITZER: Jack, thank you, we'll come back to you shortly.

We're also standing by to hear from President Obama and Secretary of State Hillary Clinton, we're going to go to the White House once they start speaking. Their Middle East envoy has his bags packed. They're giving him a sendoff. We're going to hear about George Mitchell's first mission getting ready to leave Washington tonight for the region.

Also a provocative theory that the Obama presidency means minority children have no excuse not to succeed. We'll talk about it with the top African-American in the House. In fact, the top African- American in the House the majority whip James Clyburn, he's standing by live.

And later, Rod Blagojevich tries to stir up media attention and fear among his fellow governors as his impeachment trial begins.


GOV. ROD BLAGOJEVICH, (D) ILLINOIS: If they establish a president like that in Illinois then Governor Paterson and Governor Schwarzenegger and governors all around America including Governor Palin would be susceptible to legislatures who want to remove governors without giving them a chance to prove their innocence.



BLITZER: Welcome back. Remember we're standing by to hear from the president of the United States Barack Obama, the Secretary of State Hillary Clinton. They're getting ready to send the special envoy to the Middle East, George Mitchell, off on his first mission to try to do something about the Israeli-Palestinian conflict. We'll go to the White House once we hear from the president. Stand by for that.

But let's hear from the number three Democrats in the House of Representatives right now, the majority whip, the highest ranking African-American in the United States Congress, Representative James Clyburn of South Carolina. Congressman, thanks very much for coming in.

REP. JAMES CLYBURN, (D-SC) HOUSE MAJORITY WHIP: Thank you so much for having me.

BLITZER: The Republicans keep saying that as part of the president's economic stimulus package or recovery plan, he wants to give tax cuts to a lot of people who don't pay federal income tax and they say they shouldn't call this a tax cut, they should call it a gift or welfare or something along those lines. Do people who don't pay federal income tax, can they actually get a tax cut?

CLYBURN: Sure they should. Look, they pay taxes, they pay the FICA tax, that's a tax that everybody pays if you work. So it would seem to me that if you pay taxes, under the FICA provision, you ought to be eligible to get a tax cut. This whole notion that you ought not be eligible unless you're paying federal income taxes is the Republicans' way of trying to say that only the upper income people in our society ought to benefit from tax cuts. That's not the way President Obama wants to do it. He wants to do it in such a way that 95 percent of Americans will in fact get tax cuts irrespective of whether or not you pay any income taxes because if you know enough about how to fill out your form, you may get away without paying any at all.

BLITZER: So they'll benefit from this as well. Now you're going to take it up this week. You think you're going to pass it in the House of representative with considerable modest or virtually no Republican support because you certainly have more than enough Democrats to pass it.

CLYBURN: Yes, we do, but nobody wants to do it that way. That is why President Obama is coming to the Hill on tomorrow to reach out to Republicans. That's why we have now had two bipartisan and bicameral leadership meetings in the last two weeks to try to reach out to Republicans, we have had mock ups in both appropriations committee and the ways and means committee, the Republicans have put up their amendments, they have debated their amendments, we have even accepted many of their amendments. So this whole thing about them not having input is just not quite true. And the fact of the matter is, it would be good, the American people have told us they would like to see us working closely together and putting the partisanship aside for a little while. We'll have plenty of time next year to pick back up with the politics as we go into the general election next year. BLITZER: What did you mean last week, you were quoted as saying that every child has lost every excuse, referring to African-American children, now that there's an African-American president, no more excuses for what?

CLYBURN: That expression has to do with the fact that so many African-American youth, I was one of them that grew up with limited expectations. We are now unlimited in our expectations. We have to admit that it's kind of hard to tell a child that you can do something if it's never been done. Now with the election of Barack Obama as president of the United States, the highest office in this country, in the free world, that unbridles all those limitations and takes away any excuse that anybody might offer.

BLITZER: And one final question, you also said the other day, as far as health care reform is concerned, a big massive reform in one fell swoop is not necessarily the best thing, you would like to see it happen incrementally?

CLYBRN: Well I think that we want to get to a comprehensive access to health care. I do believe that the first step towards doing that is the state children's health insurance program. We're going to cover 11 million children, 4 million new ones under the bill we just passed that's now sitting over in the Senate. I do believe that we ought to quadruple our expenditures on community health care centers. That will take a proven commodity and help build a foundation for universal access. If you look at all the other programs we have in this recovery package, as well as FMAP, Medicaid, all of that is comprehensive, if you put it all together, you would have a comprehensive health care program that is not necessarily one big swoop.

BLITZER: Congressman Clyburn, thanks very much for coming in. Good luck.

CLYBURN: Thank you so much.

BLITZER: Appreciate it. James Clyburn of South Carolina, he's the number three ranking Democrats in the House of Representatives.

Brian Todd has been working a very important story, specifically the role that the new vice president Joe Biden will play in this Obama administration. We're getting nuggets that's going to be sort of different than Dick Cheney's?

BRIAN TODD, CNN CORRESPONDENT: Absolutely Wolf. There are several big adjustments to new jobs being made as we speak at this White House. Joe Biden making one of the biggest and his adjustments are already grabbing attention.


TODD (voice-over): He says it three times in the course of 55 seconds. When President Obama has heard from everyone else, his word carries extra weight. JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: Hopefully I'm the last person in the room with every important decision he makes. The agreement he and I have is that I would be available for every single major decision that he makes in the room. So that's what I view my role to be, a confidant, an adviser, essentially the last guy in the room when he makes these critical decisions.

TODD: Joe Biden says he won't reprise Dick Cheney's role as a policymaker and admits it will be harder to hold his tongue in his new role as backroom confidant to the president. He struggled with it on his first full day on the job.

BIDEN: My memory is not as good as Justice Roberts.

TODD: A joke that left his boss visibly flustered, one of several episodes leading to questions like this from GOP strategist Karen Hanretty. Can you be the last man in the room if you can't keep your mouth shut? An aid to the vice president says he knows the difference between speaking candidly and keeping confidence, a sentiment echoed by a former Biden aid.

NORM KURZ, FORMER BIDEN COMMUNICATIONS DIR.: He has not given away any secrets or any important information that was inappropriate. It's not going to happen.

TODD: A White House official says Biden will start settling into that more prominent but unseen adviser role in the coming weeks, including regular private lunches with the president as he had last Friday. Observers say there's little doubt Biden's 36 years in the Senate, foreign policy experience and Washington savvy bolster his gravitas for the role.

A.B. STODDARD, THE HILL: He's been there so much longer than Barack Obama and he brings a real treasure trove of knowledge and information about the tricks and tips of how to get here and there in the fastest, most solid way.


TODD: Now observers say that's going to be critical in these first few weeks as the president tries to get his stimulus package through. Even though domestic policy is not his strongest hand, Joe Biden will be counted on they say to help negotiate that on the Senate side as chief of staff Rahm Emanuel will on the House side -- Wolf?

BLITZER: Interesting stuff, Brian, thanks very much.

We're awaiting President Barack Obama, he's getting ready to speak at an important meeting involving a critical issue in his new administration. What will the president say about tensions between Israelis and Palestinians? The whole Middle East region? And governors appointed new senators, but it was not easy, so one lawmaker says there is an easier way to avoid any suggestion of scandal. Stick around, you're in THE SITUATION ROOM.

(COMMERCIAL BREAK) BLITZER: Let's check in with Zain Verjee, she's monitoring some other important stories incoming into THE SITUATION ROOM right now. Zain, what's going on?

ZAIN VERJEE, CNN CORRESPONDENT: Wolf, shots fired today near the U.S. embassy in Yemen. The associated press quotes an interior ministry spokesman saying gunmen fired from a car on a police checkpoint hours after the embassy received threats of a possible al Qaeda attack. The official says police at the checkpoints returned fire and then the gunmen fled. No one is said to be hurt. An attack on the embassy last September killed 17 people. Al Qaeda claimed responsibility for that attack.

Charges have been filed today in an alleged extortion plot against John Travolta. A paramedic has been accused of cooking up an alleged scheme to blackmail the actor whose son died at the family's vacation home in the Bahamas. A Bahamian prosecutor says only that the case involves a certain document and $25 million. Travolta's 16- year-old son Jett died after suffering a seizure.

There's fresh upheaval in Iceland, Iceland's coalition government collapsed today as the country's economy foundered badly enough to need an international bailout. I-report video shows the peaceful protests over the weekend in Rayavic(ph), a far cry from previous demonstrations by Icelanders. T hey were really mad by the soaring unemployment, rising prices and failing financial institutions. Iceland's prime minister had hoped that the coalition government would hold up until new elections in May.

And not everyone's feeling the pinch of the global economic crisis, Wolf, McDonald's says that it will invest 2.1 billion to open 1,000 new stores this year around the world. Half of them will be in the U.S., China, Japan, Germany and Russia. The fast food giant says that it will also increase its presence in the Middle East, Africa, Canada and Latin America. The company credits its success to a disciplined approach to financial management. I love McDonald's, Wolf. Do you eat junk?

BLITZER: Not too much. Not that I don't love it. But I just don't eat a whole lot of junk. Thanks Zain, I appreciate it.

You may not know them, but you certainly use their help all the time. People who help design your computer. And help service your cell phone. Thousands of them right now, they're losing their jobs. So how does President Obama feel about that? He's about to tell us in his own words. And speaking of job loss, the governor of Illinois predicts he'll soon be ousted from his.


BLAGOJEVICH: I know the fix is in and I'll soon join unfortunately the legions of others who are losing their jobs in our country. But they should know that this is a very scary precedent that they're setting in Illinois.


BLITZER: To our viewers here in THE SITUATION ROOM, happening now, a reprieve for President Obama's aunt. Once marked for deportation, she now gets another chance at asylum.

On the brink and bailed out by the government, now Citigroup has a $45 million corporate jet on order. CNN's Mary Snow investigates.

And it may be troubled times for the auto industry, but that hasn't stopped big ticket appearances by two former presidents at a national convention. I'm Wolf Blitzer, you're in THE SITUATION ROOM.


BLAGOJEVICH: If we establish a precedent like that in Illinois then Governor Paterson and Governor Schwarzenegger and governors all around America including Governor Palin could become susceptible to legislatures who wan to remove governors without giving them a chance to prove their innocence.


BLITZER: The governor of Illinois Rod Blagojevich, his impeachment trial beginning today. Let's go to the capital Springfield, Illinois. Susan Roesgen is standing by. What's going on in Springfield, Susie?

SUSAN ROESGEN, CNN CORRESPONDENT: Well, Wolf, they're starting the process now to actually kick him out of office. The state Senate here would love to hear from him, but he's not talking to them, he's just talking to everybody else, wherever there's a microphone, Wolf?


ROESGEN (voice-over): Illinois Governor Rod Blagojevich may be skipping his impeachment trial, but he seems to be talking just about everywhere else. NBC's "Today Show," ABC's "Good Morning America," even "The View," where one of the hosts couldn't resist messing up the governor's famously full hair. But on every show his point is the same.

BLAGOJEVICH: I'm here in New York because I can't get a fair hearing in Illinois. In the state Senate in Illinois. They've decided with rules that are fixed. They don't allow me as the governor -- the right to be able to bring witnesses in to prove that I have done nothing wrong.

UNIDENTIFIED MALE: The record will reflect that the governor has chosen not to be present.

ROESGEN: Actually, the governor could call witnesses, just not anybody who might be a witness in the federal criminal case that is being prepared against him. But he has decided to give his testimony, apparently, on television, not in the state capital. BLAGOJEVICH: I know the fix is in, and I will soon George join, unfortunately, the legions of others who are losing their jobs in our country.


ROESGEN: And, on that point, Wolf, most people do agree. It does seem almost a done deal that the state Senate here will kick the governor out of office, possibly as early as the end of this week. They need 40 votes out of 59. And most people think they will get it -- Wolf.

BLITZER: I suspect they will.

All right, Susie, thanks very much.

By the way, we're going to be hearing more from the governor of Illinois, Rod Blagojevich, in his own words. That's coming up in THE SITUATION ROOM. Stand by for that.

Meanwhile, the Wisconsin senator Russ Feingold says there is a way to avoid a situation like we're seeing in Illinois and in other states.

Our senior political analyst, Bill Schneider, is working this story for us.

So, what is Senator Feingold proposing, Bill?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, he's proposing a fix for a problem that's become kind of embarrassing.


SCHNEIDER (voice-over): Should governors be allowed to appoint senators? Look at the mess in Illinois and in New York. Senator Russians Feingold of Wisconsin is offering a fix.


SEN. RUSS FEINGOLD (D), WISCONSIN: It seems to me that there's no reason not to do what we have always done in Wisconsin, which is to have special elections for the Senate, just as is -- is required for all House races here in America.


SCHNEIDER: The 17th Amendment to the Constitution allows states to let their governors appoint a temporary senator until the next election. Forty-six states do that. Just four require a special election with no appointment.

This week, Senator Feingold will submit a constitutional amendment that would require states to hold special elections. Let the people decide. What's wrong with that? UNIDENTIFIED MALE: Special elections are difficult. They tend not to be particularly competitive. It -- oftentimes, they don't really allow a lengthy process of -- for the parties to run primaries and then to have a general election.

SCHNEIDER: Senator Feingold doesn't buy it.


FEINGOLD: It works with the House races, so this argument that, somehow, it doesn't work in a Senate race doesn't hold water with me.


SCHNEIDER: Since the 17th Amendment was ratified in 1913, 183 senators have been appointed to fill vacancies. About a third of them were placeholders who did not later run for election.

About a third ran and lost. About a third ran and won, including some, like Walter Mondale and George Mitchell, who went on to distinguished careers.

But most appointed senators never actually went on to get elected.


SCHNEIDER: No one has ever served in the House of Representatives without being elected. The House is proud of that. They call it the people's house. In New York, for instance, the governor appointed Kirsten Gillibrand to the Senate. But there will be a special election to replace her in the House -- Wolf.

BLITZER: We will watch that story, as well.

Bill Schneider, thank you.

By the way, Governor Blagojevich will be Larry King's special guest tonight on "LARRY KING LIVE," 7:00 p.m. Eastern. Stand by for that -- Blagojevich on "LARRY KING LIVE."

President Obama says America won't be held hostage. He's talking at length about his new moves towards freeing the nation from its addiction to foreign oil. Stand by to hear the president of the United States in his own words.

And in our "Strategy Session": a new line of attack on Michelle Obama and her fashion choices. Is she getting tougher scrutiny as the first African-American first lady?

And new fuel for outrage about corporate greed -- a financial giant that took billions of dollars in bailout money reportedly buying a costly luxury jet.

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


BLITZER: The president of the United States is now meeting with his secretary of state and the new Middle East special envoy, the former Senate majority leader George Mitchell.

The press pool has gone in there. We're going to get the tape of what President Obama, Secretary Clinton and George Mitchell are going to be saying. We're going to bring you that extensively. Stand by for that.

Meanwhile, as we await the remarks from the president, President Obama and Secretary Clinton are also confronting the issue of global warming. It's certainly an international hot spot.

Let's go to our foreign affairs correspondent, Jill Dougherty. She is over at the State Department, working the story for us.

Jill, what is going on, on this front?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Well, on the first front, on the Mideast, this is very high-profile, Wolf, because, actually, this week, the first international foray by a representative of the Obama administration -- and, specifically, it's George Mitchell, as you said, the Mideast special envoy -- he is heading off to that region, representing the United States, and really trying to get some soundings from the ground on where they can move on looking for peace.

But, more immediately, there are some really tough questions on Gaza. Let's look at his schedule. He's going to be going off to a number of countries in the region, beginning with Cairo, Egypt, then to Israel, then to the West Bank, then to Jordan, and finally Saudi Arabia.

And there is concern among some, certainly in Israel, can he be an honest broker? Can he be fair or balanced with Israel? And he has been involved in this for quite some time in the Middle East and also, as we, know in bringing peace to Northern Ireland.

Some of the things specifically that he will be doing immediately, dealing with Gaza, pushing for peace, opening the border, the border crossing, jump-starting aid to Gaza, and also trying to stop the arms incursions coming into Gaza and re-arming Hamas.

Now, Wolf, on the other issue on global warming, climate change, today, there was an announcement here by Hillary Clinton at the State Department that Todd Stern -- he's a lawyer here in D.C. and also was a chief negotiator back in the Bill Clinton presidency on climate issues at Kyoto -- he will be the new envoy on climate change.

Why climate change? Well, the Obama administration argues that that is actually a national security issue, global warming, population shifts, food supplies drying up, et cetera, that all of that has economic and national security implications -- Wolf.

BLITZER: Jill Dougherty at the State Department. I want to remind our viewers we're waiting to hear from the president of the United States. He is meeting right now in the West Wing of the White House with Secretary of State Hillary Clinton and the new special envoy for the Middle East, George Mitchell.

As soon as we get that tape of what the president is saying, we're going to bring it to you. We expect momentarily to be getting that tape. Stand by for that.

Some of you may be wondering if he's doing it to make sense or doing it to make news, President Obama overturning several Bush administration policies in his first week in office. We're going to talk about that in our "Strategy Session."

And is the honeymoon, at least for some, with the first lady, Michelle Obama? Some people are criticizing her, it seems, at every turn. Is that fair, unfair? How should she respond? Should she respond?

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


BLITZER: President Obama is meeting right now with his new special Middle East envoy, George Mitchell, the former Senate majority leader, and the secretary of state, Hillary Clinton -- Mitchell getting ready in the next few hours to leave Washington.

We just heard from Jill Dougherty he's heading off to the region. He's wasting no time trying to get some sort of Israeli-Palestinian peace process back on track.

We're about to hear from the president of the United States. At the top of the meeting, he spoke to reporters. We're just getting the videotape in. We will go there in a moment.

And I want to discuss it with our two analysts. Donna Brazile, the Democratic strategist is joining us, and Ed Rollins, the Republican strategist. They're both CNN contributors.

Once we get that tape, Donna, I want to -- I want to go to it.

But it -- it seems that Mitchell, he has got his marching orders. He's jumping right into that Middle East fire, if you will.

DONNA BRAZILE, CNN POLITICAL ANALYST: Well, you know, George Mitchell is a very experienced negotiator. President-elect -- I mean, President Obama has great confidence in him.

BLITZER: Hold -- hold on one second. Hold on. Donna, hold on one second, because that tape is coming in.

So, let's listen.


OBAMA: Well, compared to steroids, this is going be a breeze.


OBAMA: So, I'm pleased to have a chance to confer with Senator Mitchell, as well as Secretary Clinton, on this initiative around the Arab-Israeli peace process. And we're fortunate to have such a talented and dedicated public servant who's willing to take on what I think everybody understands is going to be a very tough job.

The cause of peace in the Middle East is important to the United States and our national interests. It's important to me personally. It is important to Arabs and Jews. It is important to Christians, and Muslims, and Jews all around the world.

And the charge that Senator Mitchell has is to engage vigorously and consistently in order for us to achieve genuine progress. And when I say progress, not just photo-ops, but progress that is concretely felt by people on the ground, so that people feel more secure in their lives, so that they feel that the hopes and dreams and aspirations of their children can be met; that is going to be our task.

It is not something that we're going to be able to do overnight, but I am absolutely confident that, if the United States is engaged in a consistent way and an early -- in -- in early fashion, that we can make genuine progress.

Now, understand that Senator Mitchell is going to be fully empowered by me and fully empowered by Secretary Clinton. So when he speaks, he will be speaking for us.

And I'm hopeful that, during this initial trip, one of the earliest initiatives that we have taken diplomatically, that not only is he able to communicate effectively how urgent we consider the issue, but that we're also going to be able to listen, and to learn, and to find out what various players in the region are thinking.

And, more immediately, we hope that Senator Mitchell will be able to give us some ideas in terms of how we can solidify the cease-fire, ensure Israel's security, also ensure that Palestinians in Gaza are able to get the basic necessities they need and that they can see a pathway towards long-term development that will be so critical in order for us to achieve a lasting peace.

So I'm very grateful to Senator Mitchell for doing this. I'm grateful to Secretary Clinton for her leadership in making sure this happened early. And what we're now going to do is to discuss some of the details of the trip, so, unfortunately, I'm going to be kicking you out.


OBAMA: All right?

(END VIDEO CLIP) BLITZER: And he did. He kicked the cameras out, the president of the United States making it clear this is a high, high priority for his administration, trying to jump-start, or at least get started, some sort of Israeli-Palestinian peace process.

We were talking with Donna Brazile and Ed Rollins.

I interrupted you when we got the tape from the president, Donna.

The implied criticism is that the Bush administration wasted a lot of years early on, didn't try to get that much involved in the Israeli-Palestinian conflict. And it's not even the end of week one. He's already sending a special envoy to the region.

BRAZILE: This is a very critical moment, Wolf.

With that -- with the cease-fire now, Senator Mitchell will be able to go and talk to our allies in the region, as well as listen to, of course, the Israelis and the Palestinians, so that we can come up with a two-state solution. This is crucial for the -- the new president to -- to get this -- this situation under control, so that he can go about lasting changes in the Middle East.

BLITZER: Ed, what do you think about this priority?

ED ROLLINS, CNN SENIOR POLITICAL CONTRIBUTOR: I think it's a very important priority.

I'm not sure you're ever going to be able to get anything moving quickly here, though. I think -- I think what you're going to find -- and particularly Senator Mitchell is going to find -- and he's a good listener -- that there's a lot of raw ends -- nerve endings there, and, you know, you -- there's no short-term solution here. It's a long-term problem.

But I think having someone of his caliber, someone who's been a negotiator, someone who's respected, he will at least get to hear both sides. And there are two sides.

We obviously have been very pro-Israel, but there is another side there. And I think, in order to move forward, it allows the president and secretary of state to be a court of last resort. He can bring back the information. And he can say, "Is this realistic?" until we make steps to move it forward.

The backdrop, obviously, is, you have an Israeli national election in the next few -- two weeks here. And, so, there's a lot -- a lot of pressure points there.

BLITZER: Yes. And Palestinians are set to have an election in February, as well.

BRAZILE: That's correct.

BLITZER: Look at the -- what he's done so far in his first week, Donna. On Guantanamo Bay, the prison, he wants that closed within a year. He wants U.S. combat forces out of Iraq within 16 months.

Today, he announced these tougher emissions standards. He's willing to eliminate that so-called gag order to fund those who -- internationally who want to council on abortion rights. And he's banned these enhanced interrogation techniques, at least for now.

He's wasting no time, as we say, in -- in reversing several important Bush administration policies. The question is, is he really engaged in policy changes, or is this largely show-and-tell?

BRAZILE: No, this is the -- no, this is President Obama's way of saying that there's a -- there's a new team in town, and executive orders are the -- the quickest, most effective ways to get your policy mandates in place.

So, I think he's doing a great job. And, hopefully, he will reverse the -- the ban on stem cells and many other issues in the weeks and months to come.


ROLLINS: It's a basic rules in politics: promises made, promises kept. These are commitments he had made to his constituents in the course of the campaign.

And even he's reaching out to Republicans on the situation and what have you, these are things that he promised. He is trying to implement them. They're going to be implement than he thinks, but, at the end of the day, he's certainly taken the first steps, and they're important steps.

BLITZER: Yes, not even the end of week one.


BLITZER: I don't know if you noticed, Donna, that Michelle Obama, the first lady, she was criticized by one group, African- American group, for suggesting that she wasn't wearing clothes that were designed by African-American designers.

Is this sort of nitpicking the first lady, going after her? Is she being held to some sort of extraordinary standard here?

BRAZILE: Look, Michelle Obama, our first lady, is one of the most inclusive individuals that I know. And she clearly picked a design and a designer that she was comfortable with.

But, look, she has many more engagements to come, many more state dinners and many more opportunities to showcase all of American -- America's designers. So, I would hope that the designers who are criticizing her this week would chill out just for a moment and give Michelle Obama some time to -- to really put in place some of the substantive issues that she hopes to accomplish as first lady of the United States of America.

BLITZER: Yes, I think that is well said. There's no doubt she has started off, Ed -- and I assume you will agree -- with a really high note.

ROLLINS: Well, she will end up with a high note.

I'm -- I'm -- I have difficulty talking about fashion...


ROLLINS: ... as a guy who was picked by "Washingtonian" magazine as the worst-dressed guy in the Reagan administration.

But, at the same time, first ladies always get pushed around a little bit. I promise you this first lady's got tremendous talent and -- and a wonderful mother and a wonderful spouse. By the end of this year, she will be on every best-dressed fashion list. She will also be on the most admired woman list, at the top of it, by the end of the year.

So, it's just all part -- Nancy Reagan went through it. Barbara Bush went through it. Mrs. Clinton went through it. It's part a little testing process that starts at the beginning of an administration.


BLITZER: I know she's also -- she's also not very happy that some businesses out there are going to try to exploit her two little daughters.

And we're going to have a special report on that coming up in the next hour here in THE SITUATION ROOM.


BLITZER: Our Alina Cho is working that story.

Guys, thanks very much, Donna and Ed.

ROLLINS: Thank you.

BRAZILE: Thank you.

BLITZER: A good discussion.


BLITZER: The "Who will replace Hillary Clinton?" drama is clearly over, but New Yorkers apparently are holding a grudge against Caroline Kennedy.

When you put the Illinois governor in front of a camera, you never know what he's going to be saying. Stand by. You're going to be hearing from Rod Blagojevich. He's out there on a media campaign in the midst of his impeachment trial in Illinois.

And new information about whether President Obama's aunt from Kenya is in the United States legally or illegally.

Stick around. You're THE SITUATION ROOM.


BLITZER: On our "Political Ticker": A new poll finds nearly half of New Yorkers blame Caroline Kennedy and her advisers for the less-than-smooth way Hillary Clinton's Senate successor was appointed.

That's compared to 15 percent, who blame New York's Governor David Paterson, who tapped Congresswoman Kirsten Gillibrand for the seat last week. The Quinnipiac survey found 12 percent of New Yorkers aren't happy with Paterson or with Kennedy, who promoted herself for the Senate seat and then pulled herself out of the running.

In the Virginia governor's race, former Hillary Clinton campaign chairman Terry McAuliffe is out with his first campaign ad. The 30- second TV spot focuses in on job creation and the economy. McAuliffe is in a three-way race for the Democratic nomination this year, hoping to replace Tim Kaine, who is filling McAuliffe's old job as the Democratic Party chairman.

Remember, for the latest political news any time, you can check out

Let's go back to Jack. He's got "The Cafferty File" -- Jack.

CAFFERTY: The question this hour is: How secure do you feel about your job?

An estimated 68,000 jobs were announced cut by various companies around the country today.

Steve in Vernon Hills, Illinois: "Let me find one first. Then I will tell you."

Shayla in Tennessee: "I work in health care. Until last week, I felt pretty secure about my job. My company is trying to find new ways to cut the budget, though, and it's not looking good for many of my co-workers and me. I am already looking for a new job. The problem is, so are thousands of other Tennesseans."

Doug in Dallas: "My secure job went bye-bye 11 months ago. So the only job I have now is finding a new one. But, being over 60, it's not easy in today's economy. With so many people looking, recruiters pass over the experienced workers for the younger talent. My guess is, it will stay that way for the next couple of years."

Dan writes: "So far, I feel my job is secure. I own a coffee house in Denver. So far, coffee is still one of life's necessary pleasures. Maybe it makes looking for work easier."

And Donna in Wisconsin says: "I don't think anybody is secure about their job, unless they work for the federal or state government. But what is really scary is, where are all these people going to go when unemployment runs out, their house is foreclosed because they can't sell it or pay for it without a job, and they have no food, or health care? That's a lot of people on the streets."

And Tim says "The bad news is, my job exists to specifically to cover recently expanded hours. So, it's iffy. The good news is, I'm a bartender, so, if I get laid off, consolation is available right on the other side of the counter. You and Wolf ought to join me for a drink sometime. And bring Lou. We will do a study of the liquid economy. Hell, do the show from the bar. We have CNN on all day anyway."

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

BLITZER: Makes an attractive offer, that guy.

All right, thanks very much, Jack. We will be back.

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

Happening now: It's Obama vs. McCain all over again, the new president pitted against his old rival and other congressional Republicans for the first time, as lawmakers take up his $825 billion economic stimulus plan.

Also, Citigroup reportedly buys a luxury corporate -- corporate jet just weeks after taking billions of dollars in government bailout money. Watchdog groups are outraged, and now the company is responding. Stand by.

And the first lady, Michelle Obama, cries foul. She says new dolls that may be modeled after her daughters are -- quote -- "inappropriate." Did a toymaker cross the line?

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