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THE SITUATION ROOM

Obama White House Taking Shape; Republicans in Transition; Interview With Congressman Jesse Jackson Jr.

Aired November 6, 2008 - 16:00   ET

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


WOLF BLITZER, CNN ANCHOR: Happening now, there's breaking news we're following. Barack Obama makes one of his first big decisions as president-elect. He's tapped the person who will be the ultimate Obama White House insider. This hour, there are new details emerging. They're coming in on the transition to power, possible cabinet picks, and what happens next.
Obama's election reduced Jesse Jackson Senior to tears. His son, the congressman from Illinois, talks about the emotion of this moment in political history and whether he might replace Obama in the United States Senate.

And Republicans regroup. A congressional leader is stepping down and GOP lawmakers plot strategy for dealing with the Democrats' triple threat: control of the House, Senate and the White House.

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

In Chicago right now, the Obama White House is beginning to take shape. The president-elect is turning to a fellow Chicagoan with a reputation as a pit bull to run the show at the White House. That would be Congressman Rahm Emanuel.

In a statement just moments ago, Obama said, and I'm quoting now, "No one is better at getting things done than Rahm Emanuel." And other top posts could be filled at any moment. Right now we're expecting a whole batch of early appointments.

CNN's Jessica Yellin is covering the Obama transition team in Chicago. Jessica is joining us live.

Jessica, we haven't seen much of President-Elect Obama, but there's a lot happening behind the scenes. Update our viewers.

JESSICA YELLIN, CNN CORRESPONDENT: Exceptionally busy time right now, Wolf. Barack Obama taking meetings with his transition team, thinking ahead who he wants to be in Treasury, State, Defense.

His first pick is Rahm Emanuel, a man not only who knows how to get things done, as Barack Obama says, but a man who has extensive experience, a veteran of the White House, of Congress and of Wall Street. Three areas where Barack Obama needs expertise right away.

(BEGIN VIDEOTAPE)

YELLIN (voice-over): President-Elect Obama keeping a low profile here, leaving the Chicago offices of the FBI after his first top- secret intelligence briefing. Later in the day, heading into private meetings. But we already know his first move.

REP. RAHM EMANUEL (D), ILLINOIS: I'm going to go have lunch with my wife. I recommend to all of you to go have lunch yourselves.

YELLIN: That's his new chief of staff, Congressman Rahm Emanuel, known for his brash manner and political savvy.

EMANUEL: My parents are alive to see their middle son have a choice in his career between being a congressman, with one chance -- one opportunity down the road of maybe rising into leadership, and being the chief of staff to a historic presidency at a historic time. I'm very fortunate that my parents are alive to see that, whatever choice I make.

YELLIN: Emanuel was a key strategist in both terms of the Clinton White House. An investment banker and then a Chicago congressman, he helped Democrats retake the House of Representatives in 2006. Democratic legislators owe him.

Republican House Minority Leader John Boehner calls Emanuel "... an ironic choice for a president-elect who has promised to change Washington, make politics more civil, and govern from the center." But many Democrats applaud the pick.

SEN. CHRIS DODD (D), CONNECTICUT: It touches all of the critical elements, it seems to me, in beginning that kind of transition you'd like to have. So I think it's a great choice.

YELLIN: The new administration's top priority? Responding to the financial crisis.

Tomorrow, Obama meets with top economic advisors, then holds a press conference. Among the names under consideration for treasury secretary, former Clinton Treasury Secretary Larry Summers, considered a brilliant economist, but prone to making controversial remarks. And Tim Geithner, head of the New York Fed, also well respected in academic circles and on Wall Street, also a relative Washington outsider.

(END VIDEOTAPE)

YELLIN: Wolf, it's no secret that this was a tough choice for Congressman Emanuel. Folks in Washington know that he hopes some day to become speaker of the House. While that doesn't make this an impossibility, it certainly makes it less likely -- Wolf.

BLITZER: And there are reports that David Axelrod will be a senior White House adviser, and Robert Gibbs is going to be the White House press secretary. What do we know about all this? Because we anticipate a news conference by the president-elect tomorrow, including more appointments. Is that right?

YELLIN: That's right. We are hearing from the transition team that the formal offers have not been made and accepted. But we understand that this is exactly the direction we'll go in. Expect to see Robert Gibbs behind that podium in an Obama administration, and David Axelrod advising him by his side, also from the White House -- Wolf.

BLITZER: All right. The team is slowly but surely coming into shape.

Jessica, thank you.

The president-elect and his wife Michelle are now set to visit the White House on Monday. Senator Obama will meet with President Bush in the Oval Office. Mrs. Obama will tour the private residence with Mrs. Bush.

We'll have much more ahead on this White House transition and what President Bush is doing right now to help move it along as smoothly as possible.

Congressional Republicans, meanwhile, are making a transition of their own. They're trying to figure out how to stay relevant with their numbers in Congress reduced and with a Democrat about to take charge of the White House. In the midst of the turmoil, a top House Republican is now giving up his leadership post.

Let's go to Brian Todd.

Brian, a lot of hand-wringing and second-guessing among these Republicans. What's going on?

BRIAN TODD, CNN CORRESPONDENT: Absolutely, Wolf. It's a new sign of disarray in the opposition party today. The second shake-up in two days.

(BEGIN VIDEOTAPE)

TODD (voice-over): The Election Day defeat for Republicans claims another top leader. The GOP's number two in the House will step aside.

Roy Blunt joins their number three, Adam Putnam, in giving up a leadership post after the Republicans' defeat in the polls. Two consecutive Republicans have the support of Minority Leader John Boehner to take over.

How will the new GOP minority deal with the new Democratic president? Conservatives say Republicans need to stand firm -- less spending, less government and lower taxes. But one former congressional aide offers them this advice...

JOHN FEEHERY, REPUBLICAN FORMER CONGRESSIONAL AIDE: Think of what Barack Obama is saying, and find ways you can find agreement with him. And then find ways that you can -- with your principles, you can principally oppose him. But don't just knee-jerk oppose him right off the top.

TODD: And top Republicans says the burden is on President-Elect Obama to keep his agenda moderate if he wants any GOP help. MIKE DUNCAN, REPUBLICAN NATIONAL COMMITTEE CHAIRMAN: To turn change we can believe in into change we can actually see, he'll need Republicans' help fighting back the rigid, liberal orthodoxy of his congressional leadership.

TODD: And if the Democrats overreach when they take the reins in January...

SUSAN MOLINAR (R), FMR. U.S. CONGRESSWOMAN: It's not just good enough to take advantage of Democrat mistakes. You have to make sure that the Republicans show that they have the right approach to the solutions.

(END VIDEOTAPE)

TODD: Now, in the meantime, there is at least one advantage to being in the minority. One Republican source tells us at least when things go this badly, you're not to blame -- Wolf.

BLITZER: Brian, where are those areas of agreement where the Republicans might be able to work very quickly with Senator, now President-Elect Obama?

TODD: Well, this week, top Republicans have said they like Obama's goals of increasing energy production and cutting taxes for the middle class. But they say they're going to stand firm against any tax increases for small businesses. So you can see the lines starting to be drawn there.

BLITZER: And there will be plenty of lines, no doubt about that. Brian, thank you.

Let's check in with Jack. He's got "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Wolf, President Barack Obama rallied the support of the U.S. auto industry during his campaign and he promised a summit meeting with the heads of Ford, GM, Chrysler, and the United Autoworkers Union, soon after being sworn in in January. The problem is that meeting might not come soon enough.

Last month saw the weakest pace of U.S. auto sales in 25 years. Chrysler's sales down 35 percent. Ford's sales down 30 percent. General Motors' sales plunged 45 percent. GM is expected to release some very disappointing earnings tomorrow, as well.

House Speaker Nancy Pelosi is meeting right now with the heads of all three autoworkers and the UAW to discuss the possibility of a second $25 billion loan to the auto companies. The auto industry hopes that Congress will include that you loan and other aid in a new economic stimulus plan, but there's no guarantee when or even if that's going to happen.

Meantime, Detroit is shedding jobs like they're going out of style. Michigan Governor Jennifer Granholm issued a plea today to the Democratic leaders in Congress: "Help us."

Here's the question. Should the federal government come to the aid of the U.S. auto industry?

Go to cnn.com/caffertyfile and post a comment on my blog -- Wolf.

BLITZER: All right, Jack. Thank you.

Once Barack Obama becomes president of the United States, his U.S. Senate seat will be open. Is Congressman Jesse Jackson Jr. interested in the job? I'll ask him about that and about his dad's tearful response to Obama's election.

Plus, the balance of power in the Senate remains up in the air, but one Republican appears ready to throw in the towel. What will it mean for President Obama?

And we have the best political holograms on television. Our election night technology has a lot of people talking and joking. We're having the last laugh.

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

(COMMERCIAL BREAK)

BLITZER: Now that Senator Barack Obama is President-Elect Barack Obama, someone will have to take over his Senate seat. The responsibility of naming someone falls to the Illinois governor who's a Democrat. And there's talk that my next guest could be named to fill Senator Obama's seat.

Democratic Congressman Jesse Jackson Jr. is joining us from our studios in Chicago.

Congressman, thanks very much for coming in.

Congratulations to you, because I know you were one of the early Barack Obama supporters. I know how excited you are about all of this.

But before we talk about that, let's talk been replacing Barack Obama in the U.S. Senate. Do you want that job?

REP. JESSE JACKSON JR. (D), ILLINOIS: If the governor offered meet opportunity to serve in the enormous shoes of Barack Obama, I'd be honored. I'd be humbled. I'd honored.

It would be a tremendous opportunity for me, a tremendous opportunity to advance Barack Obama's agenda on the floor of the United States Senate. But Wolf, in the final analysis, it is a decision of the governor of the state of Illinois, and I believe that he will make a decision in the best interests of our state and nation.

BLITZER: How quickly do you think that decision ought to be made? Because the earlier someone replaces Barack Obama, the more seniority that junior senator from Illinois will have.

JACKSON: Well, that is certainly part of the consideration I would hope that the governor would calculate. Also, there's an economic stimulus that the Congress of the United States is presently thinking about.

Illinois deserves representation on the floor of the Senate on that occasion. And there's some question as to whether or not the president-elect will actually go back to Washington to participate in that stimulus debate. But one way or the other, I'm prepared to live with the outcome of the decision of the governor and the president- elect.

BLITZER: As you know, Barack Obama has been the only United States senator who is African-American. There have been earlier ones, but in the current Senate there are no other African-American.

How important do you believe it is that this Senate seat being vacated by Barack Obama should be filled by an African-American, whether you or someone else?

JACKSON: Wolf, it should be a factor. It doesn't have to be the factor.

Barack Obama, as senator from the state of Illinois, was an American first. He ran his Senate campaign as someone who wanted to do something for all of Illinois.

Of course, Illinois has a historic divide between upstate and downstate. And so in the final analysis, the governor has to make a decision for someone who can keep our state united. And so African- American, that may be a criteria, but it can't be the sole criteria.

The governor yesterday at a press conference laid out a number of criteria and factors that he will take into consideration. I certainly hope that as I place my name, my 13 years in the Congress on the table -- I've only missed two votes in almost 14 years in the Congress. No Democrat or Republican can say that. Based on that record of service, I hope the governor would give me consideration.

BLITZER: I'm sure he's giving you serious consideration, Congressman.

We were all moved the other night when we saw your dad, Jesse Jackson, crying, openly crying, those tears really coming down his face when the world learned that Barack Obama was going to be the next president of the United States. I'm sure you spoke to your father about this. Tell us what it means to Jesse Jackson.

JACKSON: You know, I was born March 11, 1965 in Greenville, South Carolina. My father was in Selma, Alabama, when John Lewis and Viola Luizzo was beaten, a white woman. Reverend James Reeb was beaten for helping African-Americans register to vote and participate in the process, and subsequently died from wounds during the great campaign from Selma to Montgomery.

And so for Jesse Jackson to see in a way, in a spiritual way, that bread that they had cast upon the water to struggle for the great Voting Rights Act of 1965, to see millions emerge as not only new citizens, but psychologically a new people, to watch the president- elect, the 44th president of the United States, come on that stage, I can imagine that for John Lewis, for Julian Bond, for Reverend Jesse Jackson, for Dorothy Height, for luminaries who made that enormous trek across that bridge, that that must have been an extraordinarily emotional moment.

BLITZER: What about for Jesse Jackson Jr., you?

JACKSON: Well, it was an emotional moment for me. Clearly, it was an emotional moment for me when I saw on August 28th, Barack Obama accept the Democratic nomination. And clearly, the election on November the 4th, my tears streamed. I tried to make sure they weren't on camera.

But what was most important to me was the somber mood of President Obama, that the president-elect immediately began focusing on the promises that he made to the American people and the enormous, the great task in front of him, of toggling together, pulling together a government, restoring confidence of the American people in their government. And I just got some sense of the enormity of it there, and so I began feeling a lot more for Barack Obama than the historical significance of the hour.

BLITZER: Congressman, we'll see you back here in Washington either as a member of the House of Representatives or potentially a member of the U.S. Senate. Either way, we'll look forward to seeing you back here.

Thanks very much for coming in.

JACKSON: Wolf, thank you.

BLITZER: Senator Joe Lieberman is under a bright spotlight right now. Just a short while ago, he met with the Senate majority leader, Harry Reid. Many Democrats are, as you know, furious with Senator Lieberman. It's because the Democrat-turned-Independent's open support for John McCain during the presidential race, and statements like this over at the Republican National Convention.

(BEGIN VIDEO CLIP)

SEN. JOSEPH LIEBERMAN (I), CONNECTICUT: Senator Barack Obama is a gifted and eloquent young man who I think can do great things for our country in the years ahead. But my friends, eloquence is no substitute for a record. Not in these tough times for America.

(END VIDEO CLIP)

BLITZER: All right. Let's go up to Capitol Hill. Brianna Keilar is standing by.

Brianna, you ran into Senator Lieberman today. Did we get a definitive piece of information, whether he will stay as part of the Democratic Caucus or will caucus now with the Republicans?

BRIANNA KEILAR, CNN CORRESPONDENT: No, he didn't commit to an answer on that. And I asked him Wolf.

Senator Lieberman, after having a meeting, a closed-door meeting with Senator Majority Leader Harry Reid, held a press conference. He took no questions, he left out of a back door. But I did run into him in a hallway and I asked him if he's going to, as well, retain his chairmanship on the Senate Homeland Security Committee. All he would say is, "We'll see."

There's also that other question you raised. Is he going to continue to organize with Democrats, to caucus with Democrats? And he wouldn't obviously touch upon that subject today, though he did have some good will at his press conference for President-Elect Barack Obama, pledging to work with the new administration.

(BEGIN VIDEO CLIP)

LIEBERMAN: The election is over. And I completely agree with President-Elect Obama that we must now unite to get our economy going again and to keep the American people safe. That is exactly what I intend to do with my colleagues here in the Senate in support of our new president. And those are the standards I will use in considering the options that I have before me.

(END VIDEO CLIP)

KEILAR: There's a fine line here, because Senator Lieberman, aside from the war issue, homeland security issues, he, by and large, votes with Democrats. He used to be a Democrat, ran as an Independent in 2006 after losing the Democratic primary in Connecticut.

Now, before this last election, he gave Democrats -- he was the 51st senator who organized with Democrats allowing them to have control of the Senate floor, allowing them to control committee assignments. And even though Democrats picked up some new Senate seats this election, Wolf, they still need him because they didn't pick up enough to have that 60-seat filibuster-proof majority.

So they still need Lieberman. They're going to have to make a decision as to his political fate here, in about the next week or so, ahead of a meeting among Democratic leaders on exactly what committee assignments are.

BLITZER: Brianna, thanks very much. I know you'll stay on top of this story for us. Lots of interest in what Senator Lieberman is going to do.

Meanwhile, President Bush does not want history to repeat itself. He doesn't want some offensive things done when he first came to the White House done to President-Elect Obama. We'll update you on what's going on.

And the U.S. General David Petraeus, he's speaking to CNN about preparations for an Obama administration. Our Barbara Starr sat down with him, and we got some advice that he's about to give the incoming president about talking with Iran.

You'll want to hear this. Stay with us. You're in THE SITUATION ROOM.

(NEWSBREAK) (COMMERCIAL BREAK)

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

Happening now, a major campaign security breach revealed. And neither side immune. At the height of the presidential race, both sides hit by hackers.

We're taking a closer look at who might have infiltrated their systems and why. Very disturbing information.

And the transition begins. Could part of President-Elect Obama's new team come from the old guard over at the Pentagon? We'll ask our Senior Military Correspondent Jamie McIntyre about what's going on.

And never-before-seen photographs of the Obamas in the campaign days. You're going to...

In 75 days, the next president of the United States will assume the reins of power. So today, the current president promised to do all he can to help President-Elect Barack Obama.

Let's immediately turn to CNN's Kathleen Koch over at the White House.

The president says this is a top priority, Kathleen. What do we know?

KATHLEEN KOCH, CNN CORRESPONDENT: Well, Wolf, you know, a transition, it's more than just putting the right people in the right jobs. It's a very delicate dance. And today, President Bush was trying to set the right tone.

(BEGIN VIDEOTAPE)

KOCH (voice-over): His entry to the presidency was contentious.

(CHEERING AND APPLAUSE)

KOCH: Now George Bush is laying the groundwork for a graceful exit.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: And ensuring that this transition is as smooth as possible is a priority for the rest of my presidency.

KOCH: After a pep talk to 1,000 executive office employees, the White House announced the president would be meeting with Barack Obama Monday. Treasury Secretary Henry Paulson today became the latest Cabinet member to pledge to ensure a smooth and effective transition. Press Secretary Dana Perino says there will be a two-way exchange of ideas.

DANA PERINO, WHITE HOUSE PRESS SECRETARY: We are certainly going to be mindful of the need to have their input on a lot of different issues as we move forward. We have a lot of responsibility right now.

KOCH: Historians point to the handoff from Herbert Hoover to Franklin Roosevelt during the Depression as an example of how a rocky transition can impact the nation. The two men couldn't see eye to eye, and faint signs of economic recovery faded. The Depression deepened. Few expect a repeat of that in this transition.

STEPHEN HESS, PRESIDENTIAL HISTORIAN, BROOKINGS INSTITUTION: These two people understand their roles, understand the importance of cooperation, understand what help one can give the other, but I think also, clearly, because both have said it, understand who has the power when.

KOCH: President Bush knows about divisive transitions. Clinton staffers were so angry about the election results, some pried W's from computer keyboards and engaged in pranks and minor vandalism.

Mr. Bush urged his White House employees to conduct themselves with decency and professionalism in the final months.

BUSH: I will be honored to stand with you at the finish line.

May God bless you.

(APPLAUSE)

(END VIDEOTAPE)

KOCH: A very emotional moment for the president and his staff on the South Lawn today.

Now, as to this much-anticipated meeting between the president and the president-elect, it will take place here at the White House Monday afternoon. At the same time, the first lady will be welcoming Michelle Obama in the residence. Wolf, the children will not be in attendance. But Perino says the president and the first lady are looking very much forward to meeting them eventually.

BLITZER: Children got to go to school. That's very important. All right.

KOCH: That's right.

BLITZER: Thanks, Kathleen, very much.

Moments from now, we're expecting is Oregon Republican Senator Gordon Smith to concede his tough reelection battle. That would mean another pickup for Senate Democrats.

Our senior political analyst, Bill Schneider, is joining us right now.

Bill, how close are the Democrats to getting to that filibuster-proof 60 votes in the Senate?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Wolf, Democrats will have to win all three Senate races where the outcome is still in question.

(BEGIN VIDEOTAPE) SCHNEIDER (voice-over): Great news for political junkies: The election's not over. The results of three Senate races are still not final. So far, Democrats have gained six Senate seats, New Hampshire, Virginia, North Carolina, New Mexico, Colorado, and a close race in Oregon that CNN has just called for the Democrat.

In Minnesota, Republican Norm Coleman is leading Democrat Al Franken by fewer than 500 votes.

SEN. NORM COLEMAN (R), MINNESOTA: I recognize that, because of my margin of victory, Mr. Franken has a right to pursue an official review of the election results.

SCHNEIDER: Dean Barkley, who ran under the banner of Jesse Ventura's Independence Party, took 15 percent of the vote. We asked Barkley voters in our exit poll how they would have voted if the choice were between Coleman and Franken. Nearly half said they would not have voted. The rest would have given Franken a small lead over Coleman, enough to have made Democrat Franken the winner.

In Georgia, incumbent Republican Senator Saxby Chambliss is leading, but shy of the 50 percent need to win under state law. If no candidate gets 50 percent, it triggers a runoff between the top two candidates on December 2. African-Americans were only 16 percent of the vote in Georgia in 2006. If their turnout falls anywhere near that level in the runoff, it will be hard for the Democrat to win.

In Alaska, Republican Ted Stevens, convicted of seven felony counts of corruption last month, is leading. Most Alaska voters said Stevens' trial was not an important factor in their vote. Stevens is already facing pressure from his Senate colleagues to resign.

SEN. TED STEVENS (R), ALASKA: I'm not going to step down.

SCHNEIDER: If he doesn't, two-thirds of his colleagues could vote to expel him.

(END VIDEOTAPE)

SCHNEIDER: Would they? Well, I asked our political editor, Mark Preston, who said, in his opinion, in a year when both Democrats and Republicans ran on change and to root out corruption, it would be pretty hard for them not to.

If Stevens is expelled, under Alaska law, the state must have a special election to replace him within 90 days. And among those who could run for the Senate? Governor Sarah Palin -- Wolf.

BLITZER: All right. We will see what she does up there.

Thanks very much.

A U.S. adversary is reaching out to president-elect Obama. It's a sign of opportunities and challenges facing the new commander in chief. And in our "Strategy Session": Is Rahm Emanuel too partisan to be an effective White House chief of staff? Donna Brazile and Kevin Madden, they are standing by.

And a rather disturbing security breach -- the Obama and McCain campaigns had their computers hacked by foreigners -- details of that and future threats coming up right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Look who's congratulating Barack Obama on his election victory, the Iranian president, Mahmoud Ahmadinejad.

It's the first time an Iranian leader has sent kind wishes to a U.S. president-elect since the 1979 Islamic revolution. Obama has left the door open for direct talks with U.S. adversaries, including Iran.

As our State Department correspondent Zain Verjee reports, Obama faces a variety of global challenges and very high expectations.

(BEGIN VIDEOTAPE)

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: The new dawn of American leadership is at hand.

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT (voice-over): The president-elect set the bar high.

OBAMA: To those who would tear the world down, we will defeat you. To those who seek peace and security, we support you.

VERJEE: The world shared in America's historic moment, but now has great expectations.

Nicholas Burns is a former undersecretary of state.

NICHOLAS BURNS, FORMER UNDERSECRETARY OF STATE FOR POLITICAL AFFAIRS: We have to be engaged. We have to kind of win back the confidence of some people around the world, who have lost confidence, clearly, in American leadership.

VERJEE: The world wants the U.S. to fix the global financial crisis and for Barack Obama to deliver on campaign pledges to withdraw from Iraq, to confront terrorists in Afghanistan and Pakistan, and to fight global warming.

BURNS: I fear that perhaps the international expectations of what can realistically be accomplished will be too high.

VERJEE: As he rides a wave of global goodwill, the president-elect will have to reduce those expectations and prioritize.

Already, Russia's President Medvedev as greeted the Obama election by blasting the U.S. on the Georgia conflict, blaming it for the financial crisis, and threatening to deploy Russian missiles against the U.S. missile defense shield. Candidate Obama promised to make Mideast peace a priority on day one. Israelis and Palestinians are looking to the U.S. to lead them out of the deadlock.

(on camera): Expectations of the president-elect are sky-high. And experts say that he's going to have to prioritize and manage those expectations.

Zain Verjee, CNN, New York.

(END VIDEOTAPE)

BLITZER: The war in Afghanistan clearly is one of the greatest challenges for the incoming president, and for the new head of the U.S. military's Central Command, General David Petraeus, as well.

CNN's Pentagon correspondent Barbara Starr is at the Bagram Air Base in Afghanistan.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): The morning after the election, we caught up here with General David Petraeus in Afghanistan. He told us, like other top commanders, he's already getting ready for the transition to the new Obama administration.

GENERAL DAVID PETRAEUS, COMMANDER, U.S. CENTRAL COMMAND: We're already, actually, again part of that process. In fact, I was just reviewing some material this morning before getting on the plane to come out to Bagram. I will provide what I have tried to provide most recently as the Multinational Force Iraq commander. And that would be forthright advice and recommendations.

STARR: We asked him flat-out what he would tell the president-elect about talking to Iran.

PETRAEUS: Well, I wouldn't go into specifics here, obviously. But, clearly, what is required is a comprehensive approach. It has to be an approach of partnership with the other nations in the region, all of them demonstrating a degree of unity, if you will, in response to potentially provocative actions by Iran.

STARR: General Petraeus made it clear he favors a policy of engagement with countries throughout this troubled region.

PETRAEUS: Well, I think it would be helpful for someone, again, to have a -- a very direct conversation with Syrian leaders about the presence of foreign fighter facilitators in their country who have, indeed, provided resources, suicide bombers, explosives, and expertise to the al Qaeda elements inside Iraq.

STARR (on camera): It may not be the U.S. military that does the talking, but he is in favor of discussions with countries throughout this area -- General Petraeus also telling us he's already hearing from leaders in this region that they believe this election was a historic moment for the U.S. on the world stage. Barbara Starr, CNN, Bagram, Afghanistan.

(END VIDEOTAPE)

BLITZER: Congressman Rahm Emanuel will wear many hats as the new White House chief of staff. Does he have the right stuff to be Obama's right-hand man, chief operating officer, and political enforcer? Stand by.

And is it risky for Obama to recruit too many Clinton White House veterans? Donna Brazile and Kevin Madden, they are here for our "Strategy Session" -- right after this.

(COMMERCIAL BREAK)

BLITZER: In our "Strategy Session," we get more now on the breaking news we're following: president-elect Barack Obama's decision to pick a new White House chief of staff, the Democratic Congressman Rahm Emanuel of Illinois.

Some are praising Obama's pick, but the top Republican in the House of Representatives, he is not speaking all that fondly of it.

Let's discuss with our CNN political contributor the Democratic strategist Donna Brazile, and Republican strategist Kevin Madden.

Kevin Madden, John Boehner, the top Republican in the House, saying this is an ironic choice for a president-elect who has promised to change Washington, make politics more civil, and govern from the center. It sounds like Boehner is not especially high on Rahm Emanuel.

(CROSSTALK)

(LAUGHTER)

KEVIN MADDEN, FORMER ROMNEY CAMPAIGN NATIONAL PRESS SECRETARY: Well, my old boss, John Boehner, is right.

I think, if you look at the rhetoric that Barack Obama disposed during the campaign, this is somewhat of a departure. Rahm Emanuel is known as somebody who is a partisan.

But, I think if you look back from -- again, a cold-hearted analyst point of view, Barack Obama has to pick people that he believes are the best and brightest. And there is no doubt -- I think Republicans and Democrats in this town will tell you, that Rahm Emanuel is good at what he does.

So, I think that it's going to be incumbent upon Barack Obama...

BLITZER: But can he work with Republicans?

MADDEN: Well, that's going to be the question. And he has a reputation as being somebody who goes after Republicans, who raises money for Democrats, and tries to take them out. So, the big question is going to be whether or not Barack -- whether or not Barack Obama can sort of rein in some of the partisan instincts that Rahm Emanuel has, when he's trying to forge bipartisan coalitions up on Capitol Hill on critical legislation.

BLITZER: He was raising that money when he was the leader of the DCCC, the Democratic Congressional Campaign Committee, whose job it was to get Democrats elected and get Republicans defeated.

Is he the man, though, that -- you know what a White House chief of staff has to do -- is he the man that can put this all together for president-elect Obama?

DONNA BRAZILE, CNN POLITICAL ANALYST: Short answer, yes.

I have watch Rahm over the last 20 years grow from being just a -- an organizer to a national statesman. He understands what's at stake. Senator Obama -- or president-elect Obama selected him because Rahm is smart. He's intelligent. He's very disciplined. He has knowledge of both the executive and legislative branches of government.

He will be someone who will carry out the legislative and, of course, policy decisions of president-elect Obama.

BLITZER: It's interesting, Donna, that, during the whole primary battle between Hillary Clinton and Barack Obama, he sat on the sidelines. He didn't get involved directly, because he worked for the Clintons in the Clinton White House, for -- for President Clinton when he was running for the White House. But, of course, he's from Illinois, and he's very close with Barack Obama.

Obviously, that didn't hurt him with Barack Obama.

BRAZILE: And, you know, Rahm Emanuel's interest was the -- the party. His interest was the country. He's a confidant of not just president- elect Obama, but the Clintons.

And I think again, Rahm is tough. Now, look, I know. I have had some bruising battles with him. And, if you haven't been in a battle with Rahm, you don't know just how dedicated he is to getting things done.

(CROSSTALK)

BLITZER: Very -- he's a very quiet, soft-spoken guy...

(LAUGHTER)

BLITZER: ... as -- as we all know.

Go ahead. Make your point.

MADDEN: Well, I think that that shows at just how skilled an operator he was, that he could, you know, play both camps. And he didn't do so in a way that stabbed either one in the back, that he played it straight. But I also think that, you know, Republicans are going to be very closely watching this to make sure that -- that they hold Barack Obama to his word on being bipartisan and looking to forge unity up there, rather than being divisive and sending Rahm Emanuel up to the Hill as a bit of a political or legislative hit man.

BLITZER: It's interesting that Clinton's White House chief of staff, John Podesta, who did support Hillary Clinton throughout this process, is now in charge of the transition.

He says he doesn't want a job in the new administration. But it's interesting that Barack Obama has reached out to all these Clinton folks to try to help him right now.

Is that a good idea, a bad idea?

BRAZILE: Absolutely. Look, you're looking for the very best talent possible. You're looking for people who know their way around, not just Washington, but the country and the world.

And Senator -- well, and I keep -- president-elect Obama...

(LAUGHTER)

(CROSSTALK)

BLITZER: ... hard to remember.

BRAZILE: Well, it's not just hard. It makes me quite emotional when I say it, so I have to keep myself steady.

But president-elect Obama is going to reach out beyond just Washington, D.C., Clinton, but he's going to reach for the very best in our country, because we deserve nothing less.

BLITZER: Is it -- is it a good idea or a bad idea to reach out to all these Clintonites?

MADDEN: Well, I think it's important that you do have people who are experienced. Ultimately, the change vision and the -- the idea of -- of, you know, challenging the status quo in Washington, the vehicle for that is president-elect Obama.

He's going to be the person who provides the vision for the people that he chooses in his Cabinet and on his staff. And it's up to him to make sure that they're carrying out that charge.

So, you know, I think anybody who would come from outside of Washington and get thrown in as the top of a Cabinet agency, they would be -- they would be in big problems -- they would be in big trouble if they didn't have that experience. So, choosing wise hands, steady hands, that have been there before, know the avenues of legislation, know the avenues of power in this city, is an important thing to do up there.

BLITZER: Donna, you know, it's been almost 48 hours since Senator Obama became president-elect Obama.

It was 11:00 p.m. on the East Coast when we -- when we projected that he would be the 44th president of the United States. You have had a couple days almost now to digest the history, what's going on.

Speak from the heart. Tell us what this means to you.

BRAZILE: Well, I -- I -- I just cannot relax enough, because it is still emotional.

And it's hard to walk outside and see ordinary people and people hugging each other because they worked so hard. And this is still just -- everyone is celebrating. It is emotional.

BLITZER: Because -- and what it means to you, as someone who has struggled in the civil rights movement so many years, seeing this moment -- did you ever think it would happen?

BRAZILE: You know, Wolf, I got involved because I thought I could make a difference.

And there were people along the way who really gave themselves, their lives. And I'm so glad to have lived to see this day.

BLITZER: I can't tell you how many people have just been coming up to me over the past couple days, as I'm walking around the streets, or whatever, whether it was in New York or back here in Washington, you know, who are just so happy and so excited about this opportunity in our history, you know, whether they're Democrats or Republicans.

(CROSSTALK)

MADDEN: Right. And let me put partisan aside.

I think that I'm genuinely always affected when you see people, like Donna Brazile, who have invested lots of time, emotion into, you know, essentially politics, which is the war of ideas, the war of -- of competing visions for where we want to take this country.

Ultimately, we put that test before the voters. And Donna Brazile's side won, and my side lost. But, ultimately, the participation is just as important. So, when we lose, and we lose valiantly, and we lose having -- after having put our ideas out there, and left the voters to judge, and president-elect Obama wins, and he does so in a way that has sent a historic message to, not only the rest of the people in this country, but the world, that is why folks like us play the game. That's why we get involved in this process.

BLITZER: And it says to every child in America...

BRAZILE: To every child.

BLITZER: ... boy or girl, you know, no matter what their ethnic background, their race, their religion, you know what? You can grow up to be president of the United States.

BRAZILE: I just want to add what my mother and father would say, but you had to work hard and you had to get a good education.

BLITZER: And an education.

(CROSSTALK)

BRAZILE: That was key.

MADDEN: As my father used to say -- he emigrated here from Ireland in the 1960s -- only in America.

BRAZILE: Only in America.

(LAUGHTER)

BLITZER: I think we all agree on that.

BRAZILE: That's right.

BLITZER: All right, guys, thanks very much.

BRAZILE: Thank you.

MADDEN: Thank you.

BLITZER: A startling breach of commuter security during the presidential campaign, could it happen again inside the Obama White House?

And CNN equals politics and nifty new gadgets, as well. Wait until you see who's having a field day with our election night hologram.

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

(COMMERCIAL BREAK)

BLITZER: On our "Political Ticker": When Barack Obama pays all the bills for his presidential campaign, there may be some cash left over in his record-breaking war chest. There are several things he can do with the money, under federal election law. He can donate it to charities, party committees, or other candidates. He can put it into a political action committee for future federal campaign accounts.

And he could also even give the money back to donors. But he can't use it for personal expenses -- interesting tidbit.

Remember, for the latest political news any time, you can always check out CNNPolitics.com.

On election night, CNN broke new some ground, introducing hologram technology with our correspondent Jessica Yellin. Probably, a lot of you remember this exchange. It was pretty remarkable.

And we have been getting some interesting feedback from the late-night shows, including Comedy Central's "The Daily Show With Jon Stewart."

(BEGIN VIDEO CLIP, "THE DAILY SHOW WITH JON STEWART") JON STEWART, HOST, "THE DAILY SHOW": Yes, Jessica, we could have just had your image crystal clear on one of those 10-foot-high HD plasma screens we have all around the studio.

(LAUGHTER)

STEWART: But I like this weird, unbelievably distracting "Mortal Kombat" video game thing we decided to do.

(LAUGHTER)

STEWART: But, of course, that technology did come in handy later with an exclusive interview they had with Governor Arnold Schwarzenegger.

BLITZER: A thousand miles away, but it looks like you're right here.

(LAUGHTER)

BLITZER: Tell us what's going on in Chicago right now.

(LAUGHTER)

(CHEERING AND APPLAUSE)

STEWART: Are you Sarah Connor? Are you Sarah Connor?

(LAUGHTER)

(END VIDEO CLIP)

BLITZER: And Jay Leno had a little fun with us last night as well. We will show you that clip. That's coming up.

But Jack Cafferty, he always has some fun with us -- Jack.

JACK CAFFERTY, CNN ANCHOR: The question this hour is: Should the federal government come to the aid of the U.S. auto industry?

Thom writes from Negaunee, Michigan: "It is imperative this industry not go under. A good start would be supporting the merger of GM and Chrysler. At least the government would not be rewarding an industry of crooks, as it did in the case of CEOs and the banking industry and Wall Street. However, the stipulation that jobs be returned to the United States, no more shipped out of the country, should be attached, as well as a provision that any new auto plants must be built at home."

Teeps writes: "Yes, if the auto industry doesn't get help, it will put thousands and thousands of people out of work. It's called a trickle- down effect: from the auto plant to the part suppliers and on. The banks aren't the only ones that need help. People should think about buying American cars, too. Keep the wealth in our own country."

Gene writes: "No. Why throw good money after bad? Again, why should the U.S. taxpayers pay for mistakes made over the years by executives of the big three auto companies? If they can't compete, they should, and probably will, go out of business."

Mel in Georgia: "My husband works for Mopar, the parts division of Chrysler. The UAW community and our families are desperate. Hours have been reduced greatly. Paychecks have decreased, and fears of layoffs and plant closings loom everyday. A rescue package focused -- focused on making our autos more green will help with job creation and retention, reduce oil dependence, and improve the environment."

Marva in Oklahoma: "In a word, no. The auto industry has only itself to blame for its refusal to manufacture quality economy-efficient cars. It chose to go along for the ride with big oil, and it must now hang on, like everyone else. Isn't it odd that corporate America believes itself entitled to relief, via the taxes paid by middle-class America, and yet middle-class America reaps none of the benefits?"

And, finally, Marco says: "Yes, yes, yes. Maybe they don't deserve it, but let's face it: The auto industry is an engine of this economy. And we need the jobs."

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

BLITZER: Thanks, Jack.

And, to our viewers, you're in THE SITUATION ROOM.

Happening now, the breaking news we're following: president-elect Barack Obama naming his chief of staff, other appointments right now in the works, the next administration taking shape right now. Decisions being made right now could have a huge impact over the next four years.