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Rescuing the Rescue Plan; More U.S. Troops to Afghanistan

Aired February 2, 2009 - 18:00   ET


WOLF BLITZER, CNN ANCHOR: And, to our viewers, you're in THE SITUATION ROOM.

Happening now: President Obama in talks to try to rescue his economic recovery plan. He's downplaying his differences with his Senate critics but are they farther apart than he thinks?

New warnings of a long slog for U.S. troops in Afghanistan. President Obama meets with his Pentagon chief. And CNN obtains new information about just how bad things have gotten in that Afghan war zone.

And a new crackdown on Obama merchandise -- why the White House doesn't think so many people should be profiting off this president -- all that and the best political team on television.

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

This hour, President Obama has been huddling with congressional Democrats over in the West Wing of the White House at a critical point for his economic rescue plan. We are standing by to hear from those Democratic leaders. Once they leave the White House, we will go there live. Stand by for that.

The recovery package is now before the U.S. Senate and it's being sliced and diced in a lot of different ways.

Let's go to our White House correspondent, Dan Lothian. He's working this story for us -- Dan.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That's right, Wolf. It's a closed-door meeting between the president and the congressional leadership here at the White House.

You know, it's no breaking news that there are differences between Republicans and Democrats over the stimulus bill. In fact, some Democrats as well aren't signing on to this bill. But there's also disagreement over how much opposition there is to this bill.


LOTHIAN (voice-over): President Obama says the stimulus plan requires swift action, and he characterizes the hurdles it faces in the Senate as modest.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: What we can't do is let very modest differences get in the way of the overall package moving forward swiftly.

LOTHIAN: But through the eyes of some lawmakers on Capitol Hill, the hurdles appear to be anything but modest.

SEN. MITCH MCCONNELL (R-KY), SENATE MINORITY LEADER: I think there is a bipartisan feeling that this is not the way to get the economy moving.

LOTHIAN: Critics argue the nearly trillion-dollar stimulus plan is too expensive and doesn't have enough tax cuts. Can they find a compromise? The president is lining up Republican allies like Vermont Governor Jim Douglas. The vice chair of the National Governors Association who met with Mr. Obama in the Oval Office is lobbying senators in his own Republican Party to support the plan, even though he doesn't like everything in it.

GOV. JIM DOUGLAS (R), VERMONT: It's not perfect. I think if I were designing it all on my own, it would be different. But we have to find some common ground.

LOTHIAN: But does he have the clout to sway Republicans in the Senate? In the House, Republican lawmakers dug in their heels and refused to come on board. With more grim news that personal spending fell for the sixth straight month, the president said the stimulus plan is the best option for relief.

OBAMA: Do we want to put the investments in place that are going to ensure long-term economic growth?

LOTHIAN: And the clock is ticking.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: Delay in this town may not mean much, but delay in America means that the help that the American people need right now won't get to them as quickly as they need it to.


LOTHIAN: Wolf, some of the Democrats in that meeting expected to come out to the microphones and tell us exactly what happened. It will be interesting to find out if this was the president really coming down hard on Democrats to try to come up with something, put things in or take things out of the bill that Republicans can embrace.

The way the White House is putting it out there is that this is simply more of the president reaching out, as he did up on Capitol Hill, reaching out to Republicans, a chance for him to reach out to Democrats, so they can come up with bipartisan support for this bill -- Wolf.

BLITZER: We will keep our camera on that door over at the West Wing of the White House, see if Nancy Pelosi, Harry Reid and company come out and decide they want to talk to reporters.

All right, Dan, thanks very much. Over on Capitol Hill, the president's choice to oversee health care is fighting for his job. Health and Human services secretary nominee Tom Daschle appearing before a Senate panel and saying he regrets mistakes in his tax returns.

Let's go to Capitol Hill. Our senior congressional correspondent, Dana Bash, is there.

Is Tom Daschle, Dana, still behind closed doors?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: He sure is. In fact, he's been behind closed doors now for nearly an hour, Wolf.

In fact, I will show you exactly what's going on. You see we are in the Dirksen Senate Office Building. You see all the reports and actually members of the Senate Finance Committee staff waiting.

And what's going on behind this door is, the 20-plus members of this committee, they are really meeting for the first time to look over all of the investigating that their staff has been doing for about a month, a month. And that is about how long Tom Daschle's nomination to be secretary of health and human services has been held up.

Of course, the reason we know now, since last Friday, we have known, is because of the fact primarily that he did not pay nearly $140,000 in taxes and interest on, for the most part, taxes for a chauffeur and a car that he had for three-plus years after he was defeated as senator.

So, that's going on right here. We're waiting to hear from former Senator Daschle. It is going to be very interesting, because we haven't heard from him at all since this controversy began. And I will just take you right over here. This, Wolf, is where we expect Senator -- former Senator Daschle to come out and talk to us, and also members of the Finance Committee, who, again, are really grappling with this issue, because he is a former member of their club, but somebody who has done something that many say for others would have been a disqualifier -- Wolf.

BLITZER: Let us know, Dana, when he shows up to that microphone and we will go there live.

BASH: Sure will.

BLITZER: Thanks very much. We're staying on top of this story.

Take a look at this picture. It's a live picture from the floor of the United States Senate right now. There's Arlen Specter. He's speaking, the ranking member of the Senate Judiciary Committee. He supports Eric Holder's confirmation as the next attorney general of the United States.

The roll call about to begin. If confirmed -- and we do expect Eric Holder will be confirmed in this vote -- he will become the first African-American to serve as the attorney general of the United States, that roll call about to begin, history about to be made on the floor of the U.S. Senate.

Meanwhile, there's new evidence right now that President Obama is inheriting some serious problems with the war in Afghanistan, problems that may not be easily solved by sending in simply more U.S. troops. The president met over at the White House today with his defense secretary, Robert Gates.

Let's go to our Pentagon correspondent, Barbara Starr, who's working this story for us.

It's a huge story with enormous ramifications for thousands and thousands of U.S. troops who are about to be deployed to Afghanistan.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Absolutely right, Wolf. By all accounts, attacks are up across the board in Afghanistan. And now the Pentagon is taking its decisions to the president for him to give the thumbs up that will send more troops to the front lines.


STARR (voice-over): A car bombing in Kabul Monday, just another indicator of why President Obama and the Pentagon are under pressure to fix the war in Afghanistan.

In a White House meeting Monday, Defense Secretary Robert Gates was discussing with the new president plans to send an additional 15,000 combat troops to Afghanistan, but Gates is also lowering expectations.

ROBERT GATES, U.S. SECRETARY OF DEFENSE: That this is a -- going to be a long slog, and, frankly, my view is that we need to be very careful about the nature of our -- of the goals we set for ourselves in Afghanistan.

STARR: There's good reason to worry.

CNN has obtained the latest NATO statistics showing just how bad things have become: from January to November last year, a 30 percent increase in overall attacks. IED attacks alone are now the single largest cause of casualties. There's also been a nearly 50 percent rise in kidnappings and assassinations.

Seventy percent of all attacks happen along the border with Pakistan and in the south, where most of the additional U.S. troops are headed. One of the most delicate issues is the increase in the number of Afghan civilians being killed, a 60 percent increase last year. NATO says most were due to insurgent attacks.

But Gates warn, ordinary Afghans may not see it that way.

GATES: My worry is that the Afghans come to see us as part of their problem, rather than part of their solution. And then we are lost.

(END VIDEOTAPE) STARR: Two weeks into the Obama administration, already there is talk around Washington, is Afghanistan a quagmire; is Afghanistan Barack Obama's Vietnam? -- Wolf.

BLITZER: Thanks very much, Barbara, for that. We will stay on top of this story as well.

If Wall Street is bailed out with your taxpayer dollars, should you have a say in their paychecks? There's a growing debate.

Also, Republicans want you to know they're against the economic plan that's currently under consideration, but not against helping you. What specifically are the Republicans proposing?

And they might have better luck winning the lottery than landing a job -- 1,200 people desperate for 35 job openings. Wait until you see how long they have waited.


JOHN ZARRELLA, CNN MIAMI BUREAU CHIEF: Did you get any sleep the last couple nights?

ANDREW LOPEZ, JOB APPLICANT: Last night, I slept a little bit. It rained on us. It's horrible.


BLITZER: You're looking at live pictures. The microphone is right there in the Senate. Tom Daschle, who has been nominated to become the secretary of health and human services, he has been meeting behind closed doors for some time now with members of the Senate Finance Committee, trying to explain why he screwed up as far as his taxes are concerned.

We expect him to walk out momentarily and explain what's going on. Once he does, we will have live coverage -- Tom Daschle, the former Senate majority leader, right here in THE SITUATION ROOM.

In the meantime, let's take a look at another development that's happening in the Senate right now, lots of wrangling going on over what should be, what should not be in the economic recovery package. Many Republicans' concerns hinge on the enormous price tag, after the House approved an $819 billion economic stimulus plan.


MCCONNELL: Making the measure bigger is not likely to make it more bipartisan.

In other words, I think most of my members, while fully understanding that we need to spend a significant amount of money here compared to anything we have done in the past, because of the emergency nature of the economic situation, I don't think you make it more appealing to Republicans by making it more and more expensive.


BLITZER: Let's bring in our national political correspondent, Jessica Yellin.

Jessica, the Republicans themselves, they don't have an agreement among themselves, although they do have some broad outlines.


And I have talked to a number of people today who tell me that they object to how bloated they view this bill as being, but they don't want to be the party of no. So they are coming up with some alternate proposals of their own. And I will give you some examples.

One of the proposals Republicans are considering is some housing help for homeowners. They think we got into this financial crisis because of housing troubles. Let's get out of it by helping folks facing a crisis in their own mortgage situation.

Smarter spending. They don't like all the spending on infrastructure -- they like the spending -- I'm sorry -- on infrastructure, but they don't like the excessive spending, what they see on what they call Democratic social projects. So, they would like to flip that balance. And, of course, they would like more tax cuts in this package. Some Republicans, Wolf, would be happy if the entire stimulus was all tax cuts.

BLITZER: Just tax cuts and nothing else, they think...

YELLIN: Not going to happen.

BLITZER: ... that would stimulate the economy.

All right, let's talk a little bit about their themes and how they believe it would stimulate the economy.

YELLIN: Right.

Let's go back to the board. First, on housing help, what they would like to do is consider a proposal to double the tax credit for anyone buying a house to $15,000. So, that would in theory encourage people to buy. That's stimulus.

Now, on the other category, they want to cut a list of projects that they consider Democratic pork. And there's a proposal, for example, to put 91...

BLITZER: Hold on. Hold on. Hold on, Jessica.

No, go ahead. Sorry I interrupted you.


YELLIN: Daschle's coming?

BLITZER: Yes. No, no, go ahead.

YELLIN: OK. There's a proposal to put $91 billion into infrastructure spending and other spending that they consider stimulus.

And then on that tax cut measure I mentioned earlier, originally, House Republicans proposed lowering the overall tax rate on payroll taxes in the lowest two brackets by 5 percent. Some Senate Republicans are for that. As you know, the Democrats object to this. They want to see, the Democrats, tax cuts go to the poorest Americans, even those that don't pay income taxes.

Republicans don't want that kind of reform. They think it's entitlement.

BLITZER: So, are the Democrats likely to sign off on some of these Republican proposals?

YELLIN: Well, the folks I'm talking to say not on the tax cuts that we talked about. They are willing. Already, they have cut some of the perceived pork. For example, the funding for no smoking and for HIV prevention, that is out of the bill. So, they have made some concessions to Republicans, but they're not going to go all the way. And, of course, they're meeting with Obama right now, Democrats are.

BLITZER: And we will see what happens, because we're waiting for them to walk out from the West Wing of the White House. We will see what they have to say.

Thanks, Jessica, very much.

Let's go to John Zarrella. He's down in Florida right now, where it seems that a lot of people are waiting in line for a few jobs. It's pretty amazing, this story.

John, tell our viewers what's going on.

ZARRELLA: Yes, Wolf, it really was stunning to see.

You know, they stood in line not for hours, but for days. And this wasn't for concert tickets. This was for a handful of coveted jobs to fight fires.


ZARRELLA (voice-over): The line started forming on Friday. Robert Wells (ph) and Andrew Lopez got here Saturday night.

(on camera): Did you get any sleep the last couple nights?

ANDREW LOPEZ, JOB APPLICANT: Last night, I slept a little bit. It rained on us. It's horrible.

ZARRELLA (voice-over): Their place in line, numbers 170 and 171.

UNIDENTIFIED MALE: You got to come out early. And you got to come out prepared.

ZARRELLA: Wells and Lopez are among the lucky ones. They were close to the front of the line. By the time Jerry Barthelemy and Juan Cruz (ph) got here, City of Miami officials had stopped handing out numbers. Police estimate at least 1,200 people, all ages, were waiting when the doors opened and Miami began taking applications for 35 fire department positions. That's it, just 35.

HECTOR MIRABILE, CITY OF MIAMI DIRECTOR OF EMPLOYEE RELATIONS: We got 18, 20s, all the way up to 35, 40. In fact, I saw a man, I don't know if he was holding a spot for somebody or not, but 60 years of age.

ZARRELLA: City officials say they never expected the turnout. It is, they say, clearly a sign of the economic times.

UNIDENTIFIED FEMALE: I have tried to get other jobs, like at (INAUDIBLE) sales. Nobody's hiring.

ZARRELLA: In the past, a couple of hundred people might apply, but nothing ever approaching this number. With benefits and a salary starting at nearly $47,000, these jobs are coveted.

JERRY BARTHELEMY, JOB APPLICANT: I don't want a job. I want a career. That's the whole point. I don't want a job. I want a career.

UNIDENTIFIED MALE: If you get lucky, you get in the fire department, you have a great career, a great retirement, good benefits.

ZARRELLA: Angela Bolivar stood in line for her brother-in-law.

ANGELA BOLIVAR, JOB APPLICANT: Good benefits, stable. And in this day's economy, it's hard to find something that you know you can trust.

ZARRELLA: Most all the applicants have some prior education or experience as firefighters or paramedics. And now they're getting a lesson in patience.

UNIDENTIFIED MALE: They're moving us again.

ZARRELLA (on camera): Oh, yes?

UNIDENTIFIED MALE: This is all day long, back and forth.


ZARRELLA: Now, city officials say they will keep the doors open until they have 700 applicants who meet the initial qualifications. Those are city residency. They have to be tobacco-free and have a high school diploma. As for everybody else, well, Wolf, they are just simply out of luck.

BLITZER: Thanks very much, John Zarrella, for that pretty amazing story.

Up on Capitol Hill right now, specifically in the U.S. Senate, we're waiting to hear from Tom Daschle, the secretary of health and human services designee, nominee. You see John Kerry speaking. He's been in a closed-door meeting for some time now.

Once we see Tom Daschle, we will go there, find out what's going on. Stand by. Dana Bash is up there on the Hill as well.

Also, Hillary Clinton, she has been formally sworn in today as the new secretary of state. There was a ceremony over at the State Department. She reserved some special words for her husband and more. Stay with us, the best political team on television standing by.

Also, the president has inspired a surging industry of Obama souvenirs -- why the White House wants to put a stop to that.

And your tax dollars going toward huge paychecks for Wall Street executives, the president wants to crack down, but would some big earners be punished unfairly?

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


BLITZER: There's Tom Daschle. He's standing out there in the hall over at the Senate. Other senators are meeting. They have been meeting -- are speaking -- they have been meeting for the past couple hours on his tax issues. He wants to be confirmed as the secretary of health and human services.

Once he goes to the microphone, we are going to hear what he has to say. He is going to make his case before the public. He made his case before the Senate Finance Committee. We will see what he says. Stand by. We will go there live as soon as we see and hear from him.


BLITZER: All right, Zain, thanks very much.

Let's go to Capitol Hill -- Tom Daschle now speaking.


TOM DASCHLE, HEALTH AND HUMAN SERVICES SECRETARY NOMINEE: The Obama administration has put a very high standard on public service.

The American people have high expectations for those of us who serve the public good. That's especially true when it comes to taxes. They pay their fair share. And they expect all of us to do the same. And that's as it should be.

All of my life, I have assiduously tried to pay my taxes in full and on time. My failure to recognize that the use of a car was income and not a gift from a good friend was a mistake. When I realized the mistake, I notified officials, and I paid the tax in full. It was completely inadvertent. But that's no excuse. And I deeply apologize to President Obama, to my colleagues, and to the American people.

I would hope that my mistake could be viewed in the context of 30 years of public service.

And if I'm fortunate enough to be confirmed as the secretary for health and human services, I look forward to working with my colleagues, Republican and Democrat, to continue to build on the president's commitment to ensure that all Americans have lower-cost, high-value insurance some time soon.

Thank you all very much.

QUESTION: Senator, did you ever consider withdrawing your name?

QUESTION: Senator, are you undercutting that pledge by the administration?

BLITZER: All right, so there it is, Tom Daschle -- he wants to be the secretary of health and human services -- making his case. He made it in much greater detail behind closed doors over at the Senate Finance Committee. Now you just heard him make his case before all of us. He wants to be confirmed.

As I say, it's going to be up to the Senate to go ahead and confirm or reject his nomination as the next secretary of health and human services. We will stay on top of this story, check in with Dana Bash and get some more on what's going on.

And, remember, they are also getting ready to vote on Eric Holder to become the next attorney general of the United States, the full Senate floor getting ready to vote on that. We will have live coverage. He would become the first African-American to become the nation's attorney general. Stand by.

The outrage keeps growing over those Wall Street bonuses that President Obama has called shameful.


UNIDENTIFIED FEMALE: The minute the taxpayers are not funding their institutions, they should go back to making as much as their boards will let them make.


BLITZER: There's plenty of anger out there, but lawmakers aren't sure if regulating bonuses is their business.

Plus, a new effort to protect the president from profiteers -- a crackdown in the works aimed at those unapproved Obama merchandise campaigns.

And President Obama unfiltered, talking about his economic rescue plan's chances in the U.S. Senate.


OBAMA: What we can't do is let very modest differences get in the way of the overall package moving forward swiftly.



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

Happening now: the first worldwide warning from the Obama administration, the State Department cautioning Americans that al Qaeda continues to plan terror attacks and that the global economic crisis is triggering social unrest.

President Obama says it's time to set limits on companies taking government bailout money. But is a pay cap for executives a good idea? Why critics call that approach too narrow.

And protecting the Obama brand -- the White House gearing up as the president's image seems to be everywhere.

All of this plus the best political team on television.

I'm Wolf Blitzer.


Some Republicans are clearly not happy with the massive plan to try to fix the economy. So President Obama counts on some high-powered political guns to help win them over. They're Republicans breaking with those Congressional Republicans to support the president's economic plan.

Today, as we showed you, it was the Vermont governor, Jim Douglas, vice chairman of the National Governors Association.


OBAMA: I want to thank Governor Douglas for being here.

We met early on during the transition period, with all of the governors from across the country. And with very few exceptions, I -- I heard from Republicans and Democrats the need for action -- and swift action. And that's what we've been trying to do in moving this package forward.

And nobody understands this better than governors and mayors and county officials who are seeing the devastating effects on the ground of this contraction in the economy. People are being laid off. And that means that governors like Jim are having to not only deal with declining revenue, but increased social services to provide support for people who are unemployed as they're seeking work. And the recovery package that we are moving forward is designed to provide states relief, to make sure that people who are laid off from their jobs are still able to get unemployment insurance, are still able to get health care and that we are putting in place the infrastructure -- rebuilding roads, bridges, waterways, other projects, at the state levels -- that allow us to put people back to work.

And we want to create or save three million jobs. And we want to put the investments in place that are going to ensure long-term economic growth so as Jim indicated, there are still some differences between Democrats and Republicans on the Hill, between the White House and some of the product that's been discussed on the Hill.

But what we can't do is let very modest differences get in the way of the overall package moving forward swiftly.

And so I'm very gratified that Governor Douglas, along with many governors from across the country, are going to be weighing in in these critical next few days. And we hope to be able to get a bill to you in the next couple of weeks so we can put America back to work and start digging ourselves out of this deep hole that we're in.

So thank you so much for taking the time to be here.


BLITZER: The president speaking earlier in the Oval Office.

You're looking at a live picture of the White House. He's meeting inside the White House right now with top Congressional Democratic leadership. They're talking about strategy -- what to do with his economic recovery plan. Once Nancy Pelosi, Harry Reid and the others come out to the microphones, we'll go there live to get their take on the next step in this process that has enormous implications for everyone out there.

Tax dollars certainly helping to fund the huge paychecks of some of those Wall Street executives.

Let's go to New York.

CNN's Mary Snow is looking at this story for us -- as you know, Mary, there's a lot of outrage over these huge bonuses. Some of those banks and those other financial institutions receiving billions in U.S. taxpayer bailout. And now there's talk that there should be a cap on their salaries.

What's going on?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, yes, along with that outrage is some debate. With so much scrutiny over bankers and big bonuses, expect to see more strings attached to the billions in bailout money when it comes to executive pay.

(BEGIN VIDEOTAPE) SNOW (voice-over): Days after calling Wall Street's $18 billion worth of bonuses shameful, President Obama is moving to crack down on executive pay for firms getting federal help.

In an interview with NBC's "Today" show, he says it's time to set limits.


OBAMA: That's what I've asked my Treasury secretary to do -- to put together a clear set of guidelines. If a bank or a financial institution is getting relief, then they've got to abide by certain commissions.


SNOW: Despite evidence of growing public outrage over Wall Street paychecks as financial firms take billions in taxpayer money to survive, there's a divide on whether the government should wade into the paycheck debate.

Senate Republican leader Mitch McConnell says some abuses are appalling. But...

MCCONNELL: I don't want the government to start taking over these businesses and start telling them everything about what they can do. Then you truly have nationalized the business.

SNOW: But that business, says Democratic Senator Claire McCaskill, is being funded by taxpayer money right now.

SEN. CLAIRE MCCASKILL (D), MISSOURI: They're on the hoof to us. The minute the taxpayers are not funding their institutions, they should go back to making as much as their boards will let them make.

SNOW: McCaskill wants a pay cap -- executives at a firm receiving federal money should not be paid more than the president's salary of $400,000 until the government bailout money is paid back.

Not a good idea, says attorney John Singer, who handles compensation for Wall Street clients. He says not everyone should be penalized for problems caused by top executives and complains of the vitriol against Wall Street.

JOHN SINGER, DEUTSCH LLP: It really is a very superficial view. It doesn't take into account, really, the rank and file folks that were good producers. It's just too narrow of an approach that we've seen from Main Street.


SNOW: And, Wolf, the sentiment is reminiscent of a famous story dating back to 1930. That was the year baseball legend Babe Ruth made a salary of $80,000.

When told he had made more than then President Hoover, Ruth reportedly said: "Why not, I had a better year?" -- Wolf.

BLITZER: He had a better year than Herbert Hoover is to be true (ph).

All right, Mary. Thanks very much.

The economy certainly in meltdown right now. The stakes incredibly high -- so high that President Obama has issued a statement saying something along the lines that he has a lot politically at stake in this battle right now. We'll explain what's going on.

Plus, she had the whole room laughing -- what Hillary Clinton said about her husband at her swearing-in ceremony.


ANNOUNCER: This is CNN breaking news.

BLITZER: The United States now is about to get a new attorney general. Eric Holder has just been confirmed on the floor of the U.S. Senate. The final roll call, 75 in favor, 21 opposed. Eric Holder will now become the nation's first African-American attorney general. He was a former deputy attorney general during the Clinton administration.

Let's talk about this and more.

Joining us now, our senior political analyst, Gloria Borger; Steve Hayes of the "Weekly Standard;" and David Gergen, our senior political analyst. They're all part of the best political team on television.

First, of all, Eric Holder -- you know, he did better in that roll call than Timothy Geithner did.


BLITZER: But he may do better than -- we'll see -- Tom Daschle. He's got a problem as well, as we know.

BORGER: The -- you know, Tom Daschle's vote could turn out to be a very partisan vote. I think Holder did well because he did well in his confirmation hearings. And the Republican chairman of the Judiciary Committee, Arlen Specter, came out for him.

BLITZER: The ranking member.

BORGER: Um-hmm.

BLITZER: The ranking -- Arlen Specter supported him. He can thank Arlen Specter, I'm sure, at least in part, for his confirmation.

STEPHEN HAYES, SENIOR WRITER AT "THE WEEKLY STANDARD": Yes, after some very tough questions from Arlen Specter.

I wonder, though, if there's not a relationship between the Daschle controversy we've seen bloom over the weekend and this Eric Holder vote. I mean, if people are really going to be talking -- if Republicans are talking about really challenging and making a big deal out of Tom Daschle and his taxes, they may have thought it wise to pull back a little bit.

BLITZER: Do you think they will do that, David?

Tom Daschle, how much trouble is he in?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST, FORMER PRESIDENTIAL ADVISER: I don't think we know yet. Let's see what happened in that meeting. He clearly was contrite tonight. He's apologetic. He wants the job. I think that -- I believe -- I think Gloria believes he's going to get the job, he's going to be confirmed.

One cannot underestimate how widely admired Tom Daschle is in Washington for his integrity, for his public service. And many, many Democrats look to him as one of the favorite people. He's got a lot of support in this White House, starting with the president.

Even so, I think Republicans see an opening here. And because we've had a president now who's been essentially moralizing about the new standards about lobbying. He's made exceptions. He's made -- moralized about standards he's going to set on ethics. Tom Daschle is clearly embarrassed by this.

And Republicans see this as a chance to make a large political point that will resonate, perhaps, well beyond this nomination.

But I do think he's going to be confirmed. The general view in Washington has always been extremely positive toward Tom Daschle.

BLITZER: All right, Gloria, listen to this exchange that the president had with Matt Lauer on "The Today Show" earlier today.


OBAMA: Look, I'm at the start of my administration. One nice thing about the situation I find myself in is that I will be held accountable. You know, I've got four years and...

MATT LAUER, NBC ANCHOR: You're going to know quickly how people feel about what's happened.

OBAMA: That's exactly right. And, you know, a year from now, I think people are going to see that we're starting to make some progress. But there's still going to be some pain out there. If I don't have this done in three years, then this is going to be a one- term proposition.


BLITZER: So he's basically suggesting...

BORGER: He's right.

BLITZER: He's basically suggesting he's laying his entire political fortune on this economic stimulus package right now.

BORGER: Right. Because elections are very often about the economy. I think he's absolutely right in his political analysis.

And I think, you know, we're, right now we're heading toward a big moment for Barack Obama. He's got a big promissory note out there -- not only on the economy, but also on promising bipartisanship.

He's going to have to play whatever comes out in the Senate, which will have much less spending in it, I believe, than the House. And he's going to have to take a side. He's going to have to decide.

BLITZER: Will the Republicans, Steve, filibuster -- meaning it would need 60 votes in order to get this thing through?

HAYES: Well, they're certainly keeping their options open. I wouldn't -- it wouldn't shock me if Republicans...

BORGER: It would shock me.

HAYES: ...ultimately decided to filibuster.

It would shock you?

BORGER: Yes, it would shock me.

HAYES: It wouldn't shock me if -- if they don't cut dramatically on the spending side. I think Republicans right now feel like they have political momentum because you've seen in polls taken over the past few days the numbers -- the support for the stimulus package generally dropping. And I think they have good arguments by picking out these things that seem to be outrageous.

BLITZER: All right, quickly, David, will they filibuster?

GERGEN: I don't think so. But I think President Obama has to be very tough now on this spending question.

BORGER: Right.

GERGEN: He cannot just load this up with more goodies. There's a perception he's got way too many already.

BLITZER: All right. Listen to this. This is what Hillary Clinton said today over at the State Department. It caused a lot of laughter in the audience there when she had her official swearing-in ceremony.


HILLARY RODHAM CLINTON, U.S. SECRETARY OF STATE: I am so grateful to him for a lifetime of all kinds of experiences...


CLINTON: ...which have given me a...


CLINTON: ...which have given me an extraordinary richness that I am absolutely beholden to and grateful for.


BORGER: Was he blushing?

BLITZER: It was an awkward moment over there when she spoke of her -- her husband, Gloria.

BORGER: Was he blushing?

Did you see?

I was trying to...


BORGER: I was trying to see.

BLITZER: It was a little uncomfortable, I should say that.

BORGER: I must say, Hillary Clinton -- I mean even during her campaign at one point, she was talking about, you know, and I know bad men. And she kind of joked about it. She's able to joke about her life right now in a way that I -- that I think is terrific.


HAYES: And these are moments when Republicans love her most.


HAYES: I mean she can make fun of herself. She's sort of endearing.

BLITZER: You worked for...

BORGER: And him.


BLITZER: You worked for Bill Clinton, David, in the Clinton White House.

What did you think when you heard her make that joke?

GERGEN: We've come a long way.


GERGEN: No, I think this humanized her.

BLITZER: I think you're probably right.

BORGER: David, when you were in the White House, she wasn't joking about this stuff...



GERGEN: Ha, ha, ha.

BORGER: I recall.

GERGEN: Oh, I think -- I think the hatchet has been put away. Thank you.


BLITZER: Guys, thanks very much.

Let's check in with Lou to see what's coming up right at the top of the hour -- what are you working on -- Lou?

LOU DOBBS, CNN ANCHOR: Thank you, Wolf.

Tonight, much more on the political showdown over that $1 trillion borrowing and spending plan masquerading as a stimulus plan.

Will the president win the support of any Senate Republicans for this huge so-called economic stimulus package?

We'll have complete coverage for you. And Pulitzer Prize-winning journalist and best-selling author, David Kay Johnson, among our guests tonight.

Also, lawmakers demanding hundreds of millions of dollars in additional spending on our national parks.

This is stimulus?

Many people say no. We'll find out.

And our special coverage, "Lou's Line Item Veto" -- what should go, what should stay.

And tonight, fear mongering -- outright lies by opponents of a buy American provision in the economic stimulus plan -- a provision to make certain taxpayer dollars are spent on American products made by American workers.

Guess who is the chief opponent of that?

Well, it's the U.S. Chamber of Commerce, naturally.

We'll have that report.

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

BLITZER: Thanks very much, Lou. See you in a few moments.

He's not just a leader. President Obama is also one of the world's most popular brands. And now the White House is taking steps to protect it.

And you see them on TV all the time, but one man is collecting the images you were never meant to see. CNN's Jeanne Moos takes a "Moost Unusual" look.

Stand by.



BLITZER: All right. The meeting over at the White House is now over. The Congressional Democratic leadership -- Nancy Pelosi, the speaker; Harry Reid, the Senate majority leader. That meeting has wrapped up. They decided not to go to the microphones and speak to reporters, instead heading back up to Capitol Hill.

We'll see if they're going to make a statement, release any information about what happened inside. We'll see if the White House releases a statement, as well.

In the meantime, silence coming from Capitol Hill, as well as from the White House. We'll let you know what's going on as soon as we know.

Meanwhile, the new president has been doing his part to try to stimulate the economy by inspiring a cottage industry of sorts of Obama souvenirs. But now the White House says it wants to crack down.

Let's go to CNN's Brian Todd to explain what exactly is going on -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, at this moment, you'd be hard-pressed to find anyone more popular than the president. But those looking to cash in on that popularity might have to look over their shoulders.


TODD (voice-over): Sweatshirts, t-shirts, buttons for sale, get your Obama cuff links here. People are making a buck off the president's image all over the place. And while the sellers of these items might be safe, others might find themselves legal targets of the White House.

In a statement, a White House spokeswoman says: "Our lawyers are working on developing a policy that will protect the presidential image while being careful not to squelch the overwhelming enthusiasm that the public has for the president."

White House officials wouldn't tell us what specifically triggered this, what legal strategy they're taking or who they're going after.

Intellectual property lawyer, Jonathan Band, has an idea.

JONATHAN BAND, INTELLECTUAL PROPERTY ATTORNEY: But I would imagine they would be most aggressive when we're talking about uses of the children. And I think their likelihood of success is greater there because there will be very little First Amendment basis for using the children's images in a commercial context.

TODD: White House lawyers wouldn't likely win a case if a person or a group argued they were using the image of the president in some kind of free speech political discourse, like this ad by the Clean Coal lobbying group.


OBAMA: You can't tell me we can't learn how to burn coal that we mine right here in the United States of America and make it work.


TODD: Experts say people selling t-shirts and mugs can argue they're simply showing support for the president and they likely wouldn't be targeted. Nor would businesses using humor, like Ben & Jerry's take-off of Mr. Obama's "Yes, we can!" slogan.

BAND: And in that example, it could be that the political factors would sort of be paramount to say well, gee, doesn't the White House have a sense of humor?

And, you know, Ben & Jerry's is very popular and then how can this really hurt his image?


TODD: But the image of the administration could be hurt if it pursues some of this too aggressively, according to former White House attorneys who we spoke with. One gave us an example of a letter from the White House in 2002 warning one Web site to stop using Lynn Cheney's image. And that Web site was devoted to spoofing the president. And, of course, that letter was posted, making the White House look a little bullying -- Wolf.

BLITZER: All right. Thanks very much, Brian, for that.

It's also getting white in London right now. Look at these pictures.

Abbi Tatton is here -- snow in London, the most serious snow in, what, almost two decades?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, it shut the place down.

You're from Buffalo, New York.

How much snow does it take to shut down Buffalo?

BLITZER: A hundred inches.

TATTON: Well, it was eight inches today, this morning, in London. The place is at an absolute standstill. is where these pictures are coming in from London. And people are just saying the city didn't know how to cope. iReporter Monica Majimdas (ph), a New Yorker living in London, she said: "It's as if the country is dealing with an unforeseen catastrophe." She said she watched London bankers and businessmen take the day off to throw snowballs at each other.

Another iReporter, Hamish Cross, explained that: "No one can get to work anyway because of transportation problems."

The tube, the London underground, packed at the stations. People waiting for trains that just didn't come. London city buses all halted. Not one of them ran today.

And to put that into context, Wolf, in World War II, when London was being bombed by Nazi Germany, the buses still ran. So a few inches of snow today, not so much.

BLITZER: But it's very pretty.

TATTON: Lovely looking, yes.

BLITZER: All right. Thanks very much, Abbi, for that.

And a heads-up to news makers -- careful what you say before going on the air.


JEANNE MOOS, CNN CORRESPONDENT: When I'm at CNN and I see feeds coming in and I see this stuff, I love to watch it. It's like eavesdropping. I mean it's really spying.


BLITZER: You never know when Jeanne Moos might be watching. You're going to want to see this, right here in THE SITUATION ROOM.


BLITZER: All right, let's have some fun. Anyone who appears on television is most certainly doing something before and after. And take it from me, being off air does not mean someone isn't watching.

CNN's Jeanne Moos takes a "Moost Unusual" look at talking heads unplugged.


MOOS (voice-over): They sit down and get miked up. They get ready for their close up. But something seems off.


UNIDENTIFIED FEMALE: I've just never seen him in such repose. He looks almost meditative.

MOOS: Carville quiet?

An oxymoron.

(on camera): You know all those talking heads on TV going blah, blah, blah?

Not here at what's called the silent echo chamber.

(voice-over): There's John McCain, military-bearing, eyes boring into you. And Chris Matthews, who seems to forget to blink.

UNIDENTIFIED FEMALE: He looks like a complete statue.

MOOS: The statue would be Henry Kissinger. Like portraits, they hang on the walls at the Eldridge Contemporary Art Museum in Connecticut.

UNIDENTIFIED MALE: Somehow, you feel that you're seeing into their soul.

MOOS: From Larry King grimacing to Wolf Blitzer sinking his teeth into his script to Joe Biden sinking his teeth into a pastry, washing it down then coming back for more.

UNIDENTIFIED MALE: It could have been like an eclair.

UNIDENTIFIED FEMALE: It looked like an eclair, didn't it?

MOOS: Who collects this stuff?

HARRY SHEARER, COMEDIAN/ACTOR: Well, I call it a hobby or a sickness.

MOOS: Comedian and actor Harry Shearer is mum on the how part.

(on camera): I just assume he's stealing satellite signals.

UNIDENTIFIED MALE: I think -- he won't admit to any -- anything technique.

SHEARER: I'm like Dick Cheney -- sources and methods.

MOOS: Shearer got hooked more than three decades ago when he saw Richard Nixon right before his resignation speech -- before Nixon even sat down.



Why don't you stay here?

All Secret Service -- is there any Secret Service in the room?

UNIDENTIFIED MALE: Just Wayne, Mr. President.

NIXON: Out. I'm just kidding you.


MOOS: It was Shearer who collected this famous John Edwards clip.


MOOS: Someone else put it to music. Other Harry Shearer founded objects include annoyed hosts...


UNIDENTIFIED FEMALE: What are you doing?


MOOS: Ann Coulter joking around about chewing Nicorette...


ANN COULTER, AUTHOR: If you can chop it up so I can snort it.


MOOS: Dan Rather debating how to wear the collar of his trench coat.


DAN RATHER, FORMER CBS ANCHOR: My concern about the whole coat would be a distraction. You see, if you put it down...


MOOS: And Katie Couric mimicking Dan Rather.





MOOS: The Eldridge Museum exhibit doesn't show embarrassing moments, but rather who the person is.

SHEARER: In those moments before they put their TV personality on.

MOOS: For instance, Dr. Phil not giving advice, Sean Hannity sanitizing or moisturizing.

Before our interview with Shearer, we nabbed him making noises.


MOOS: And tucking his shirt into his parents.

At least when a talking head is silent, he doesn't have to eat his words.

SHEARER: No more.

MOOS (on camera): No more.

(voice-over): Jeanne Moos, CNN...


MOOS: ...New York.


BLITZER: Leave it to Jeanne Moos.

Thanks very much for watching.

Remember, check out political podcast. Get the best political team to go. Subscribe at

I'm Wolf Blitzer in THE SITUATION ROOM.

Up next, "LOU DOBBS TONIGHT" -- Lou.