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THE SITUATION ROOM

Obama Filling Cabinet With Familiar Names; Automakers Plead For Billions

Aired November 19, 2008 - 18:00   ET

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


WOLF BLITZER, CNN ANCHOR: And, to our viewers, you are in THE SITUATION ROOM.
Happening now: Something old becomes something new. Barack Obama's list of Cabinet secretaries apparently gets yet another surprise, but why are some of these new assignments being filled with so many familiar names? Stand by?

Can you spare a few billion? Automakers desperately pleading for taxpayer dollars, but why won't they say exactly how much they need?

And Osama bin Laden's top deputy ridiculing Barack Obama and hatefully operative calling him a racial slur. Why this? Why now? All of this plus 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 are in THE SITUATION ROOM.

If Barack Obama keeps up his current rate, he could have his entire Cabinet picked in just a few weeks. The president-elect apparently making another surprise move to help him run the government, but how different will Barack Obama's Cabinet be from the previous Democratic administration?

Let's go straight to CNN's Jessica Yellin in Chicago where the transition unfolds.

Jessica, what is the latest?

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Wolf, you know, on the campaign trail, Barack Obama talked a lot about how he wants to change Washington, but it seems he is going to lean heavy on experienced Washingtonians to make that change happen.

(BEGIN VIDEOTAPE)

YELLIN (voice-over): President-elect Obama's latest choice for his cabinet? Former Senate Democratic majority leader Tom Daschle, who will also serve as health care czar. It's another indication the president-elect will not let devastating economic times slow his push for health care reform.

One of the cabinet posts still not spoken for, secretary of state. Will Senator Clinton take that chair?

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: Whatever they want. This is a deal between the president-elect and Hillary. And you should talk to them. But I will do whatever they want.

YELLIN: CNN has learn that former President Bill Clinton is cooperating with the Obama vetting process. He's agreed to release the names of major donors to his foundation and would allow the Obama administration to review sources of future income. He'd also agree to remove himself from day-to-day responsibility for his foundation.

CLINTON: We're both committed, completely committed to his success. So that's for them to work out. Whatever they do, I will support.

YELLIN: The Clintons are also offering help in less direct ways. As Obama's team takes shape, there are plenty of familiar faces -- chief of staff Rahm Emanuel, tradition head John Podesta, likely attorney general Eric Holder, likely budget director Peter Orszag, all alums of the Clinton administration.

Back on the campaign trail, Barack Obama sounded like this --

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: I am not in this race to run against Senator Clinton. She is a able, intelligent, hard- working Senator, and she has won a terrific campaign. But I am running to change how business is done in Washington.

YELLIN: But in a Washington awash in crises, inside experience may matter more than outside change.

(END VIDEOTAPE)

YELLIN: And, Wolf, today, the Obama team announced a couple more additions to the White House staff, among them, David Axelrod, the senior adviser you have seen by Obama's side so much during the campaign, and Greg Craig as White House counsel. Both names have been reported already by CNN, but now it is official.

Wolf, they did have a lighter moment at transition headquarters today. I believe we have a photo of president-elect Obama presenting Joe Biden with birthday cupcakes. It is Biden's 66th birthday tomorrow. Only 12 candles, though, on that display there. Obama apparently said to him, you are 12 years old, and Biden said, in dog years. They also exchanged some Chicago sports fan paraphernalia -- Wolf.

BLITZER: Happy birthday, Mr. vice president-election.

Jessica Yellin, thanks very much from Chicago.

Let's go to Atlanta.

The former president of the United States is out on the campaign trail right now. He's speaking at a rally for Democrat Jim Martin, who is challenging Saxby Chambliss in a runoff.

Let's listen in.

(JOINED IN PROGRESS) CLINTON: Now, you need to know that this election has enormous significance for the things that you want out of the new administration in Georgia and in America.

And let me just say, you have got a clear choice here. The reason the incumbent senator can say you have to vote for him to create a firewall is that he might be able to do it. One of the problems I had when I became president is that, over and over, we got a lot done in my first two years, but we couldn't pass health care reform and we couldn't do one or two other things, because of the Republican filibuster in the Senate.

But Americans did not know that, which is one of the reasons we took a whipping two years later in the congressional election. They said, shoot, old Bill Clinton has got a majority of the Congress. Why can't he just snap his fingers and give us all health care?

Because of the filibuster. And here is what the rule is. Every single solitary bill in the United States Senate that is not part of the budget requires more than a majority vote to pass. If 41 of those 100 senators say, I don't think so, they can kill anything but the budget.

In other words, the government can open up its doors and that is about it. That is the firewall the senator is talking about. And their little old firewall is getting thinner and thinner, because they took a pretty good whipping in this election.

(CHEERING AND APPLAUSE)

CLINTON: Now, should we have balance? Yes.

The president-elect has promised to work with the Republicans in Congress and he has promised to put Republicans in the Cabinet. And we should support that. Nobody is right all the time. We need the best ideas from every corner of America and all thoughts that we can possibly get up.

We have got a lot of unprecedented problems, but we don't need a firewall. We need a bridge. Martin is a bridge. Chambliss is the firewall. This is not rocket science.

You have got to decide what you want. When I came here last time for Jim Martin, I was so excited, when I got home, I -- Hillary was down in Washington. I was up here. I called her. I said, Hillary, I just met this guy Jim Martin again. I said, he is an amazing person. He's a very unlikely candidate. He is such a nice, modest man, but he was a brilliant legislator. He was a great administrator in state government.

He started out like Hillary did in legal services trying to give poor people a fair deal in court. He is the kind of person we ought to send to the Senate. I was so excited about it.

And you gave him enough votes to get him to this moment. Now, it just depends on how bad you want it. It depends on how bad you want a bridge, instead of a firewall. This is not rocket science. This is a very simple thing. And I will give his opponent this. He has honestly told you what is at stake. It is the firewall or the bridge.

Two weeks ago, people voted for the bridge. Don't let Georgia put a firewall up in front of the bridge.

(CHEERING AND APPLAUSE)

CLINTON: This bridge can take us to millions of new jobs. It can take to us energy independence. It can take us to middle-class tax relief, not special interest tax subsidies. This bridge can take to us a more respected position in the world, where we have got more partners and fewer adversaries.

This bridge can make sure these 70,000 wounded veterans that have come home from Afghanistan and Iraq are decently and honorably treated and cared for.

(CHEERING AND APPLAUSE)

CLINTON: This bridge can give us a newly reconstituted military, where these families are not being broken, not just the regular military, the National Guard and the Reserves, by multiple deployments, where you can't raise your kids, and you can't pay your bills, and you can't hold on to your small-business jobs.

This bridge will give us, as I said, the military we need and the message we need, which is we are proud of this, but it is a last resort, not a first option. That is what the bridge can do. This bridge can give us political reform, where we don't deny science and we don't abuse power and we don't put the people that are being regulated into the power of the regulated positions.

This bridge in short can give us an America that works the way it ought to and gives us the 21st century future our children deserve. It is the bridge against the firewall.

You know, I adore your former senator, Max Cleland. He and I have been friends --

(CHEERING AND APPLAUSE)

CLINTON: And he and I have been friends for more than 20 years. And when we met, I promise you, nobody outside of our next nearest relatives ever thought either one of us would ever get as far as we did in life.

(LAUGHTER)

CLINTON: And I will never forget one time, when I was president, Max Cleland called me and said, I want to go to the golf course with you and ride around in your golf cart.

You remember that? And he hauled himself out in his wheelchair and in with one arm, he hiked up into my golf cart. And I said, you know, I have got a terrible reputation as a driver. (LAUGHTER)

CLINTON: And I said, this is going to be the most fun you have had since you joined -- went to boot camp. Hold on tight, baby.

So, there we were going up and down hills, going up and down hills, talking about our lives and our hopes and our dreams for America. I never will forget that.

And when I saw somebody wanting a Senate seat so bad, so bad, they would say that he endangered the national security of this country by voting against the homeland security bill that President Bush himself had been against until a couple days before. And then right after he decided he was for it, you were a traitor if you weren't for it, the way he doctored it up, a bill that did nothing to improve the security at Hartsfield Airport, for example, nothing.

But people were afraid, and they stopped thinking. That's what happened. You know as well as I do what is -- you know that, don't you? You know, I grew up -- I remember one time, I was mowing the lawn when I was a little kid and I looked down and there was a rattlesnake vibrating my lawn mower. I was not thinking very straight. I just got the heck out of there.

When people are afraid, they don't think. So, now this guy is trying to give you chapter two of the song that was not worth a flip when he sung it the first time.

(CHEERING AND APPLAUSE)

CLINTON: Now you are supposed to be afraid of what you just voted for. You are supposed to be afraid of getting the economy back on track, afraid of middle-class tax relief, afraid of affordable college, afraid of health care reform, afraid of energy independence, instead of energy dependence on people that do not wish us well.

I am not scared of that. I am welcoming it. And I want it just quick as we can get it. And I think you do, too.

(CHEERING AND APPLAUSE)

CLINTON: It just depends on how bad you want it.

So, that's what I came here to tell you. Don't you think for a minute that you can't win this thing. You can win it. You can win it big if you want it more. But you need to know -- don't be under illusion here. This is not about Democrat or Republican. It is about yesterday and tomorrow. It's about the bridge against the firewall.

And I want you to go home tonight thinking about that and I want you to think about it every time you have got a free hour between now and December 2, that you could go out and make phone calls or knock on doors or do something to tell people, Jim Martin ought to be the senator from Georgia. He is the kind of person we can respect and honor and support and be proud of. BLITZER: There you have it, the former president of the United States Bill Clinton. He's speaking at this rally in Atlanta right now making the case for Jim Martin, the Democratic challenger to Saxby Chambliss, the incumbent Republican. There's going to be in a runoff in December in Georgia and Bill Clinton making it clear he is still very angry at Saxby Chambliss for the campaign he ran six years ago that eventually defeated Max Cleland as the Democratic senator from Georgia.

We are going to invite Senator Chambliss to join us here tomorrow in THE SITUATION ROOM. We will get his response to some of what Bill Clinton is saying right now. That is coming up tomorrow right here in THE SITUATION ROOM.

Also coming up today, it is a number that sent chills down investors' spines, the Dow Jones industrials closing below 8000 today, hitting a five-and-a-half-year low. What is going on? How low can it go? CNN's Ali Velshi is standing by.

And al Qaeda launching a racial insult at the president-elect of the United States, Barack Obama. What is the terror group's number- two leader saying in a brand-new tape?

And modern-day pirates hijacking ships and posing a growing threat to trade in one of the world's most vital waterways.

(BEGIN VIDEO CLIP)

GEOFF MORRELL, PENTAGON SPOKESPERSON: Trust me, this -- this subject is being dealt with at the highest levels of this government. It is a real concern.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: Your money and possibly your own job could be on the line. That is exactly what the Big Three automakers are now suggesting. If the companies don't receive some $25 billion, taxpayer money, they told lawmakers today the industry will crash possibly take down millions of American jobs.

Our congressional correspondent Dana Bash is on Capitol Hill working the story for us.

Dana, these executives, they are pleading for very speedy action. Are they going to get it?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Not likely.

And, actually, we just moments ago saw evidence of that on the Senate floor. One of the senators trying to find compromise tried to get agreement to at least have a vote on something, potentially tomorrow, and the Senate majority leader, Harry Reid, said that he would try, but he also said that everybody has to face what he called reality. That reality is that time is running out. The House side, they are going home, and the reality, the translation of what he is saying is that there are different approaches and no consensus on how to deal with this.

But Wolf, that didn't stop the CEOs from Detroit from trying here today.

(BEGIN VIDEOTAPE)

BASH (voice-over): Auto executives came back to Capitol Hill to make their case one more time for a $25 billion rescue. And lawmakers' deep skepticism gave way to sparring.

REP. PAUL E. KANJORSKI (D), PENNSYLVANIA: Can't you just tell me in absolute terms how much money do you need to survive, General Motors, from today until March 30?

RICK WAGONER, CHAIRMAN & CEO, GENERAL MOTORS: I -- Congressman, it's going to depend on what happens with suppliers and markets.

KANJORSKI: I understand that. Give me your worst-case scenario.

WAGONER: In the worst-case scenario, the amount of money would be significant. I mean, we have -- we have supplier --

(CROSSTALK)

KANJORSKI: What is significant, Mr. Wagoner?

(CROSSTALK)

WAGONER: -- $4 billion or $5 billion every month.

BASH: GM's CEO could not fully answer that question, but he insisted $25 billion will keep them afloat.

WAGONER: Eighty percent of consumers said they would not buy a car from a company in bankruptcy.

BASH: But their urgent cry for help was undercut by news of corporate excess. ABC News reported, the Big Three CEOs flew to Washington to ask for taxpayer money on costly company jets.

ACKERMAN: It's almost like seeing a guy show up at the soup kitchen in high hat and tuxedo.

REP. BRAD SHERMAN (D), CALIFORNIA: I'm going to ask the three executives here to raise their hand if they flew here commercial. Let the record show no hands went up.

Second, I'm going ask you to raise your hand if you're planning to sell your jet in place now and fly back commercial. Let the record show no hands went up.

BASH: Spokesmen for the auto executives insist, using private jets is standard practice, for security reasons. Meanwhile, with time running out, auto bailout supporters scrambled behind the scenes for compromise on the major divide, where the money should come from.

SEN. CARL LEVIN (D-MI), ARMED SERVICES COMMITTEE CHAIRMAN: We should not leave without trying to find common ground between those two pots of money, both of which exist. And we're working it, hard.

BASH: But, back at the hearing, evidence of Detroit's huge challenge.

REP. MICHAEL CAPUANO (D), MASSACHUSETTS: But, damn it, I don't want to help again, and get it stuffed back in our ear at home that you took the money and you blew it.

(END VIDEOTAPE)

BASH: Now, leaders on both sides of the aisle do insist that they want to help the auto industry, but they say that they are just deadlocked on how to do that.

So, Wolf, you might ask what about the most influential person of all? And that is Barack Obama, who also says that he wants to help the auto industry. Well, CNN's Ted Barrett talked to one of his closest confidants today -- that is Senator Dick Durbin -- and he said that Obama is not engaging. He said he is not making phone calls. He is actually not twisting arms. He said he is not really doing anything at all -- Wolf.

BLITZER: Dana Bash on the Hill, she's working hard for us -- thank you, Dana.

The news keeps getting worse on Wall Street, the Dow Jones industrial average dropping more than 400 points today. That is more than 5 percent on this day alone. And it left the Dow below 8000, seen by many experts a as an important psychological benchmark. That is the first time it has gone that low in some five years.

Let's go to our chief business correspondent, Ali Velshi. He is looking at this story for us.

Is it related to these Big Three automakers, the fact that they seem to be on life support right now?

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Yes, Wolf, as you said, five-and-a-half, March of 2003, on the Dow and the S&P 500.

This is a broad-based sell-off. Why? Because it does seem like it's going to be hard for these automakers to get this deal done by Friday, in which case it can't be done under this Congress and it would have to wait until January.

But what that could do is ,it could trigger bankruptcy for GM. While they don't want to admit that or talk about it, the fact is, this is a company that has got a lot of problems. And if that were to happen, General Motors and Ford and Chrysler, they in many cases share a supplier base. Those suppliers are having a tough time, too. So, the fear is that it triggers a supplier to go into bankruptcy. Those suppliers can't parts to GM and to Ford and Chrysler, and that could then trigger those companies into laying off people or closing down plants.

So, the overall effect here, Wolf, is that if GM were to go into bankruptcy, the number of people who would be out of jobs would contribute to this recession. So, instead of maybe thinking that this might sort of end early or middle of 2009, it then becomes that much more serious. And that is what has investors very scared.

It is not just a psychological level. It was a technical level. In fact, for the last -- over the month, we have seen, almost more than a month -- we have seen the Dow trade largely between this range of 8500 to 9000. There were a lot of people who thought that was sort of the forming of the bottom. Now we are very -- we're far below that, Wolf, and that is what has got a lot of people worried. How low can this market go now?

BLITZER: Deeply worried, indeed. All right, thanks very much, Ali, for that.

VELSHI: Thank you.

BLITZER: A message from al Qaeda's number two, a message to president-elect Barack Obama.

(BEGIN VIDEO CLIP)

AYMAN AL-ZAWAHRI, SECOND IN COMMAND OF AL QAEDA (through translator): You represent the direct opposite of honorable black Americans, like Malik Al-Shabazz or Malcolm X.

(END VIDEO CLIP)

BLITZER: And that is not all that person believed to be Ayman al-Zawahri had to say. You are going to hear the rest of his tirade in just a moment.

Also, the media's so-called infatuation with Barack Obama, does it go too far? Our Howie Kurtz is standing by. He's got a closer look.

And Hillary Clinton mulling over the secretary of state job. You are going to find out what sources are saying about her decision.

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

(COMMERCIAL BREAK)

BLITZER: To our viewers, really in THE SITUATION ROOM.

Happening now: Al Qaeda's number two, Ayman Al-Zawahri, has released an audiotape with a message for the president-elect, Barack Obama. We are going to tell you what he said. Hillary Clinton considering an offer to become the secretary of state. An answer is expected soon. We will have the latest on what we are hearing from our Democratic sources.

And the news media's focus on Barack Obama, is it over the top? And is money the motivation? We are taking a hard look at how we and other news organizations are covering the president-elect.

All of this, plus the best political team on television.

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

It appears the world is hearing the anti-U.S. hatred that awaits the incoming president. Terrorists bent on destroying Americans and killing Americans have apparently just released a message and it is slamming Barack Obama, even referring to him with a racial slur.

Let's get details from our justice correspondent, Kelli Arena.

Kelli, this is a pretty startling development, but perhaps not too surprising. Update our viewers.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Well, Wolf, this is a message like none we have heard before. It is the first public statement from the al Qaeda leadership about Barack Obama's victory. And it is really ugly.

(BEGIN VIDEOTAPE)

ARENA (voice-over): It's a direct shot at the president-elect, and intelligence experts say al Qaeda's attempt to undermine Barack Obama's popularity, especially among Muslims.

AL-ZAWAHRI (through translator): You represent the direct opposite of honorable black Americans like Malik El- Shabazz, or Malcolm X.

ARENA: Ayman al-Zawahri, who is al Qaeda's number two, continued the personal attack referring to Obama as a house Negro, Malcolm X's term for blacks who were subservient to whites, and berating the president-elect for being Christian.

AL-ZAWAHRI (through translator): You were born to a Muslim father, but you chose to stand in the ranks of the enemies of the Muslims.

Intelligence experts are reviewing the tape but have no reason to believe it's not legitimate. The audio plays over still pictures of Zawahri, Malcolm X praying, and Obama with Jewish leaders.

DANIEL BENJAMIN, FMR. COUNTERTERRORISM OFFICIAL: I think it's clearly both an effort to be relevant and an attack on Obama because al Qaeda needs to reassert its story and really thwart the danger posed to it by an American president who wants to establish a new relationship with more than one billion Muslims. ARENA: Barack Obama didn't take the bait and would not comment, but he has said al Qaeda remains a top target. OBAMA: I think it is a top priority for us to stamp out al Qaeda once and for all.

ARENA: Part of his plan is to send more U.S. troops into Afghanistan, a plan Zawahri claims is destined for failure.

Al Qaeda has released messages before around a U.S. election. This one hit the Internet as the U.S. has increased the number of missile strikes along the Afghan/Pakistan border targeting terrorists.

(END VIDEOTAPE)

ARENA: You know, if this tape is any indication, al Qaeda is just as worried about losing another war, and that is the war for hearts and minds in the Muslim world -- Wolf.

BLITZER: Kelli Arena working the story, thank you.

Senator Ted Stevens has officially now conceded his race to his Democratic rival, Mark Begich, the mayor of Anchorage, Alaska. Senator Stevens told our producers up on Capitol Hill that he now plans to -- quote -- "enjoy life."

Let's go to our senior political analyst, Bill Schneider. He's working the story -- this is another important seat, Bill, for the Democrats in the Senate.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Yes. It brings the Democrats agonizingly close to the magic number they need to control the Senate agenda.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): Has hell frozen over?

No. But there's a partisan thaw in Alaska. Alaska has just elected a Democrat to Congress -- the first one in nearly 30 years.

(BEGIN VIDEO CLIP)

MARK BEGICH (D), SENATOR-ELECT: And I will always be an independent voice for Alaska.

(END VIDEO CLIP)

SCHNEIDER: Anchorage Mayor Mark Begich has defeated Ted Stevens -- the longest serving Senate Republican in history. The astonishing thing isn't that Begich won. It's that Stevens almost got re-elected, even though he was convicted last month on seven counts of corruption. Stevens is an icon in Alaska, as Begich himself acknowledged.

(BEGIN VIDEO CLIP)

BEGICH: He's done a lot for our state and I've shared Alaska's respect for him. But the past year has been a difficult one for Alaska. And with the verdict, we can put this behind us.

(END VIDEO CLIP)

SCHNEIDER: Republicans were ready to throw Stevens out of their party.

GOV. MARK SANFORD (R), SOUTH CAROLINA: Ted Stevens out in Alaska became the personification of much of what had gone wrong with the party.

SCHNEIDER: Stevens' defeat saves the Republicans the embarrassment of having to expel him. On the other hand, if Stevens had won and then resigned or been expelled, there would have been a special election and Republicans might have saved his seat. Who knows, Governor Sarah Palin might have run.

Democrats now have 58 seats in the new Senate -- two shy of the 60 they need to cut off Republican filibusters. Two seats remain undecided -- Minnesota and Georgia. Democrats need every Senate vote they can get, which is one reason why they have decided not to drive Senator Joe Lieberman out of the caucus, despite his disloyalty to the Democratic ticket.

SEN. JOSEPH LIEBERMAN (I), CONNECTICUT: I think this was done in a -- in a spirit of reconciliation.

SCHNEIDER: Or party interests.

(END VIDEOTAPE)

SCHNEIDER: Wonderful news for political junkies -- the election isn't not over. They've just begun a hand recount of the Senate ballots in Minnesota. And there is, of course, that runoff for the Georgia seat on December 2nd, where Bill Clinton is campaigning right now.

BLITZER: Yes. We saw him live. All right. Two more Senate seats still to go and we'll see what happens. Bill Schneider, thank you.

Let's check in with Deborah Feyerick. She's monitoring some other important stories incoming into THE SITUATION ROOM right now -- Deb, what's the latest?

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, Wolf, California's highest court will hear legal challenges trying to overturn Proposition 8, which bans gay marriage. But in the meantime, the court will not allow gay couples to resume marrying. Prop 8 passed this month with 52 percent of the vote. Three lawsuits claim the ban limits the civil rights of a vulnerable minority group.

Iran's alleged nuclear weapons program continues to baffle U.N. investigators. A report released today and obtained by the Associated Press finds Iran is expanding its uranium enrichment program, despite repeated Security Council sanctions. However, investigators are deadlocked on the scope of the program because of stonewalling by Teheran. The report also finds a Syrian site bombed by Israel in 2007 did have traits similar to a nuclear reactor.

And President-Elect Barack Obama will face a record budget request from the Pentagon as he enters office. The Pentagon is expected to ask for a baseline budget of $525 billion for 2010. That's $9 billion more than last year. The total budget is actually less than last year, but it's supplemental money that pushes it over the top. And that includes an additional $57 billion to sustain the wars in Iraq and Afghanistan through the end of 2009 -- Wolf.

BLITZER: A billion here, a billion there. That's what happens. A lot of money.

FEYERICK: Yes.

BLITZER: All right, Deb --

FEYERICK: Easy come.

BLITZER: Thanks very much.

Bands of lawless pirates -- they're on the attack right now. We'll tell you what's happening off the African coast. It's shocking military officials around the world.

(BEGIN VIDEO CLIP)

ADM. MIKE MULLEN, JOINT CHIEFS CHAIRMAN: I'm stunned by the range of it, less so than I am the size. These are -- these are pretty capable -- they've proven to be pretty capable and can get on and off lots of vessels.

(END VIDEO CLIP)

BLITZER: So how is the U.S. telling ships to protect themselves if pirates attack? We have details.

Some political watchers say Barack Obama will be making a huge mistake if he picks Hillary Clinton as his secretary of State. Why is that? What's the latest on her possibly becoming the next secretary of State?

And Mike Huckabee slamming Mitt Romney in a new book -- he came here to THE SITUATION ROOM to explain why.

(BEGIN VIDEO CLIP)

MIKE HUCKABEE (R), FORMER PRESIDENTIAL CANDIDATE: I didn't dislike him. It wasn't a matter of dislike. It's a matter of he was taking positions on issues that he had never taken before at the same time he was bashing people like me.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: High drama on the high seas -- a violent confrontation today between a pirate so-called mother ship and an Indian warship in the Gulf of Aden. The Indian Navy says pirates opened up fire on the frigate, which then fired back, leaving the pirate boat engulfed in flames. It was just the latest of a series of pirate attacks off the African coast.

Our Pentagon correspondent, Barbara Starr, is working this story for us -- and it's causing alarm bells, Barbara, in navies and other military establishments around the world.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Absolutely, right, Wolf. Piracy is not a Hollywood movie right now, it's a full blown security and economic crisis.

(BEGIN VIDEOTAPE)

STARR (voice-over): One hundred million dollars in oil destined for the U.S. hijacked by pirates in a stunning raid on this Saudi supertanker more than 400 miles off of the coast of Africa. Pirates seem to be operating at will, with the world's navies struggling to stop them.

The chairman of the U.S. Joint Chiefs of Staff expressed frustration.

MULLEN: Tactically, they're very good. And so once they get to a point where they can board, it becomes very difficult to get them off, because, clearly, now they hold hostages.

STARR: Sixteen thousand ships a year pass through these waters. Already, more than $20 million in ransom paid by ship owners to free their vessels, cargoes and crews. Though dozens of attacks have been thwarted, nearly 20 ships are still being held, with more than 300 crew members aboard.

GEOFF MORRELL, PENTAGON PRESS SECRETARY: Trust me, this subject is being dealt with at the highest levels of this government. It is a real concern. And we are constantly evaluating what the best approach is.

STARR: Pirates are now able to grab a ship within minutes. There are barely a dozen warships patrolling the area. With more than one million square miles of water, they cannot watch everywhere.

With no ready military solution, the U.S. is telling shippers to carry armed guards and to be ready to try to outrun pirates if they come under attack.

(END VIDEOTAPE)

STARR: Earlier today, NATO military chiefs meeting in Brussels talked about the problem. But ship owners are talking about steering clear of this whole area, sending their cargo ships, instead, around the entire coast of Africa. And that will raise the price of oil and other goods shipped to Europe and the United States -- Wolf.

BLITZER: Enormous ramifications as a result. Thank you, Barbara. The International Maritime Bureau is mapping all these reported pirate attacks online. Let's bring in our Internet reporter, Abbi Tatton -- Abbi, show our viewers what we can see online.

ABBI TATTON, CNN INTERNET REPORTER: Wolf, what this bureau is saying that off the Horn of Africa, this area here, the reports are coming in so fast that it's getting increasingly difficult to track. Let's look at how this has increased in the last year or so. In 2008, we're already at 95 attacks this year. That's more than double the amount in 2007 and the year is not over yet.

Where these attacks are clustered -- look at that -- around the Gulf of Aden right there. But increasingly spreading further south, as well, and further out to sea. That supertanker that was attacked over the weekend was hundreds of miles into the Indian Ocean, off of the coast of Kenya.

Now, experts say today, as you heard from Barbara Starr's report, the very safest way to avoid this trouble is to travel all the way around the Cape -- all the way via South Africa there. But that's going to add 10 to 12 days, in some cases. And some reports put the estimate at about $30,000 per extra day.

BLITZER: All right. Who would have thought pirates in the 21st century? Thanks very much, Abbi, for that.

BLITZER: It's not a done deal -- not yet. Some people hope it will never be a done deal. We're looking at some of the emphatic arguments being made right now against Hillary Clinton as possible secretary of State.

Plus, the Republican leadership struggle -- who's ready to command the GOP in the wake of its electoral loss?

The best political team in television is standing by live. They will weigh in.

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

(COMMERCIAL BREAK)

BLITZER: Everyone is not all that thrilled with the prospect of Hillary Clinton becoming the next secretary of State.

Let's talk about that and more with our senior political analyst, Gloria Borger; our CNN contributor, Dana Milbank, of "The Washington Post;" and our CNN political contributor, Steve Hayes, of "The Weekly Standard."

Tom Friedman, writing in "The New York Times": "When it comes to appointing a secretary of State, you do not want a team of rivals."

David Broder, writing in "The Washington Post": "What Obama needs in the person running the State Department is a diplomat who will carry out his foreign policy. He does not need someone who will tell him how to approach the world or be his mentor in international relations."

And David Ignatius in "The Washington Post": "The idea of subcontracting foreign policy to Clinton -- a big hungry, needy ego surrounded by a team that's hungrier and needier still -- strikes me as a mistake of potentially enormous proportions."

Wow! What do you think?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Oh my god. Oh my god. The sky is falling. You know, they're right in their concerns. But what about Hillary Clinton leads them to believe that she will not be a team player in this administration? Ask any Republican in the Senate, ask any Democrat in the Senate whether she has been a team player with them on all sorts of issues and the answer is going to be yes. I think she knows how to do that. So I don't have any indication, even though they ran against each other, it was a hard-fought campaign, that she would understand that he was president of the United States.

BLITZER: What do you think, Dana?

DANA MILBANK, CNN CONTRIBUTOR, "THE WASHINGTON POST": Well, I think the concerns may or may not be valid. But as a practical matter, it's probably too late at this point when you have sort of Bill Clinton saying, OK, I have agreed to hand over my records. Now it's built up to such a level that if she doesn't get the job --

BORGER: It has to happen.

MILBANK: -- it's going to be a catastrophe in the Democratic --

BLITZER: So you think it's -- that train has left the station?

BORGER: It's gone.

MILBANK: Well, there's going to be another little Democratic civil war if it doesn't happen at this point.

STEPHEN HAYES, SENIOR WRITER AT "THE WEEKLY STANDARD": But this is --

BORGER: Right.

HAYES: But this is part of the problem. We are on now, what, day seven of this new Clinton/Obama drama.

BORGER: Is this like the hostage --

HAYES: I mean this is --

BORGER: Is this like the hostage watch?

HAYES: Yes, I mean this is --

BORGER: Yes.

HAYES: So this is the problem.

MILBANK: Four years.

HAYES: I think this is what we're going to see in the State Department is we're going to see, you know, I'm going to ask my editors for a switch. I don't want to be covering the White House anymore. I'd rather be at the State Department.

(LAUGHTER)

HAYES: Get leaks from the State Department. It's going to be -- I think David Ignatius is right, she's got this ego and they're going to see it.

BLITZER: If she's the State Department -- if she's leading the State Department, if she's the secretary of State, that's going to be a, shall we say, a more glamorous beat to cover.

BORGER: Well, it would. And, look, it has -- it hasn't gone unnoticed among the Obama people that, yes, the State Department could become a little, shall we say, oasis or a backwater -- whatever word you want to use. But they think her value is such -- and, clearly, Obama thinks her value is such that she would make a statement for him all across the world. And why wouldn't she be a team player, in that sense?

HAYES: Well, part of the --

(CROSSTALK)

HAYES: But I think part of the problem is that she, in the primary and even before the primary, has articulated a different view of foreign policy than he has on some of the biggest issues. You look at North Korea, you look at Iran, you look at Pakistan, where she said he was naive to think that we were going to send troops in --

MILBANK: Well, but this --

HAYES: Those are not small differences they'll have to get by.

MILBANK: But this also serves to shore him up on all those things -- on Israel, on a tough foreign policy. And, you know, we can now have Bill Clinton being the special envoy to the Middle East.

BORGER: Yes. Right.

BLITZER: And remember, it would go like this. It would -- there would be a president of the United States, a vice president of the United States and then there would be a secretary of State.

BORGER: Right.

BLITZER: So, you know, they would all have to work together.

BORGER: Right.

BLITZER: But there is a hierarchy in that --

BORGER: It's not mommy daddy.

BLITZER: No.

BORGER: It is not mommy daddy.

BLITZER: It's all of that. What do you think about this little fight that's going on in the Republican Party right now for leadership?

BORGER: Little?

HAYES: Well, as someone who likes fights to cover, I think it's -- I think it's fun. This is sort of a natural, I think, fleshing out period after the election. This was inevitable. I think we'll see more of it before we see less of it. And the more it's focused on ideas and policies, and not personalities, I think the better it will be for the Republican Party.

BLITZER: We had Mike Huckabee here in THE SITUATION ROOM earlier. He's making it clear in his new book and what he told us, no great love there, for example, for Mitt Romney. Pretty strong words that are being said.

BORGER: Yes. I mean he -- he thinks Mitt Romney wasn't true to whatever his identity might be.

BLITZER: Flip-flopping -- that's basically what he said.

BORGER: Flip-flopping. He thinks -- you know, he thinks well, you didn't know who Mitt Romney was because he changed his opinion on abortion, among other things

But I think if you -- Mike Huckabee would also probably tell you that he doesn't think Sarah Palin is sort of an in to be the next leader of the Republican Party. I mean she did leapfrog a little bit, but --

BLITZER: Who is best -- of these three -- Huckabee, Romney, Sarah Palin, Dana -- who is best positioned to emerge as the real strength of the Republican Party right now?

MILBANK: I think it's Ron Paul, Wolf.

(LAUGHTER)

MILBANK: Well, you know, they've each got their -- their points there. Romney, very interestingly, is now coming out and saying, fine, let the auto industry go bankrupt. So I guess he's not counting on the Michigan --

BORGER: Michigan.

(LAUGHTER)

MILBANK: -- next time around.

But the Republicans are going to have the exact same problem that the Democrats have been having for years and that is there is no obvious legitimate leader. You're going to have John Boehner. You're going to have Mitch McConnell --

BORGER: It's good for the --

MILBANK: -- you're going to have the RNC --

BORGER: It's healthy --

HAYES: It is good for them.

MILBANK: (INAUDIBLE).

BORGER: It's healthy.

HAYES: I think the leadership will come from the states. The leadership is going to be coming --

BLITZER: From the governors?

HAYES: From the governors.

BORGER: Yes.

HAYES: And people like Bobby Jindal, people like John Huntsman in Utah, who is an incredibly articulate person talking, you know, about a reformist agenda.

(CROSSTALK)

BLITZER: What about Tim Pawlenty in Minnesota?

HAYES: Tim Pawlenty.

BORGER: Sure. You know --

HAYES: Sarah Palin.

MILBANK: Bob Dole said yesterday that he's available, as well.

BORGER: Right.

(LAUGHTER)

BLITZER: Bob Dole?

MILBANK: He was in the Senate yesterday and said that he'll throw his hat in.

BLITZER: He told you that --

(CROSSTALK)

BORGER: I'm not surprised.

MILBANK: Indeed.

BLITZER: That's a direct quote. He's ready to throw his hat back in the ring.

MILBANK: This is breaking news.

BORGER: Well, but, you know, the Republican Party is so used to the establishment candidate, is so used to the Bob Dole model -- it's his turn to be president. That's gone now. That's totally gone. And so now they have to start from scratch, just like the Democrats did.

BLITZER: We'll watch it every step of the way, guys.

BORGER: Do you think?

BLITZER: Thanks very much. We'll do this again tomorrow.

He's an undisputed star, that's sure. But is some of the coverage of President-Elect Barack Obama crossing a journalistic line? We're taking a closer look at the growing controversy over what some are calling Obama mania in the news media. Howie Kurtz is standing by for that.

Plus, the first lady of France -- she's singing on late night TV and our Jeanne Moos finds all of this "Moost Unusual." There she is -- Carla Bruni. We'll see what she's saying right here.

(COMMERCIAL BREAK)

BLITZER: Let's take a look at some of the "Hot Shots" coming in from our friends at the Associated Press -- pictures likely to be in your newspapers tomorrow.

In Washington, Abraham's "Gettysburg Address" is on display for the reopening of the National Museum of American History.

In India, Tibetan monks play a game outside a Buddhist monastrey -- monastery, I should say.

In Egypt, colorful lasers light up the ancient Giza pyramids during a sound and light show.

And in Arkansas, fifth grade students fill a miniature hot air balloon they made by hand for a class project.

Some of this hour's "Hot Shots" -- pictures worth a thousand words.

It's normal for newly elected presidents to have a so-called honeymoon period. But some critics now say what they're calling Obama- mania in the news media has simply gone way too far.

Howard Kurtz of CNN's "RELIABLE SOURCES" is here with a closer look at the media's treatment of the president-elect -- Howie? HOWARD KURTZ, CNN ANCHOR: Wolf, every newly elected president gets their star treatment. But Barack Obama is in a class by himself. Media outlets can't get enough of him and some are trying to make a few bucks in the process.

(BEGIN VIDEOTAPE)

KURTZ (voice-over): The only real controversy -- which presidential giant does he most resemble?: "Time" cast Obama as FDR, while "Newsweek" likened him to Lincoln.

It's not just the news magazines like "Time," which is owned by CNN's parent company. It's the feature magazines, such as Time Warner's "People," "Us Weekly," "Rolling Stone" and others that are treating him as celebrity-in-chief. And the sometimes gushing coverage extends to Michelle, Sasha and Malia.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: This first family bumps fists, sports BlackBerries, graces the cover of fashion magazines and even listens to hip-hop.

(BEGIN VIDEO CLIP)

CAROL COSTELLO, CNN CORRESPONDENT (voice-over): Imagine you're Michelle Obama about to decorate the White House -- your personal style, one for the history books.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: She is most often compared to a first lady best known for couture.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Sasha and Malia Obama visited the White House to check out their new digs.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

LOLA OGUNNAIKE, CNN CORRESPONDENT: They have managed to -- to sort of engulf pop culture at large. And people aren't even thinking about Brad and Angelina. At this point, it's all about Barack and Michelle.

(END VIDEO CLIP)

KURTZ: Some pundits say the Obama clan, like Bill Cosby's old TV family, the Huxtables, could change the way African-Americans are viewed. But are the media crossing the line from chronicling history to merchandising it?

Major newspapers are selling hundreds of thousands of special editions about Obama's victory. "Newsweek" and "Time" are hawking commemorative editions. NBC is coming out with a DVD called "Yes, We Can: The Barack Obama Story."

An HBO documentary is in the work, as are a slew of Obama books.

And the tone -- check out these headlines -- "Generation O," "Obamaism

It's A Kind of Religion," "Bamelot" -- that, of course, a play on Jack Kennedy's Camelot.

Some critics on the right say the celebratory mood has gone too far.

(BEGIN VIDEO CLIP)

SEAN HANNITY, CO-HOST: It's almost like the messiah descending from the heavens.

(END VIDEO CLIP)

KURTZ: But the president-elect also produces heavenly ratings. Sunday's "60 Minutes" sit-down with the new first couple drew 25 million viewers -- the program's biggest audience in a decade.

All this after a campaign in which studies showed Obama drew far more favorable coverage than John McCain.

(END VIDEOTAPE)

KURTZ: Journalists say they're just feeding the public's appetite for Obama-mania. But they also seem to be creating that appetite and cashing in on it -- Wolf.

BLITZER: Howard Kurtz reporting for us. Thank you, Howie.

In our "Political Ticker" today, with so many Republican losses this election year, at least one Republican gets to keep his job.

Ohio Congressman John Boehner will remain the House minority leader. House Republicans reelected Boehner today, denying that post the only his challenger, the California Republican congressman, Dan Lundgren.

House Republicans also voted Virginia Congressman Eric Cantor to the number two leadership post and Indiana Congressman Mike Pence to the number three post.

First ladies don't usually sing on TV shows -- but then again, they don't usually have a record to sell. The first lady of France does. And she's taking to the airwaves to promote it, leading to some Moost Unusual moments. Here's CNN's Jeanne Moos.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): It takes a flashy first lady to make David Letterman speak French.

(BEGIN VIDEO CLIP)

DAVID LETTERMAN, HOST "THE LATE SHOW": Bon soir.

CARLA BRUNI, WIFE OF NICOLAS SARKOZY: You are so very --

LETTERMAN: Tres romantique.

BRUNI: Yes.

LETTERMAN: Aviento?

BRUNI: Aviento (INAUDIBLE).

LETTERMAN: Ah. Merci beaucoup.

BRUNI: Merci.

(END VIDEO CLIP)

MOOS: We're used to seeing a prince kissing her hand, a queen receiving her courtesy. Here's the wife of President Nicolas Sarkozy doing a last night comedy show, being promoed on morning TV.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Then France's first lady, Carla Bruni, has a special performance for us. We're going to get rid of that tape.

UNIDENTIFIED MALE: Yes, I think so.

(END VIDEO CLIP)

MOOS (on camera): Just imagine any other first lady out there hawking a CD -- Laura Bush, Michelle Obama.

(voice-over): But Carla Bruni is a former model and now a singer.

(VIDEO CLIP)

MOOS: And her Web performance after she appeared on "Letterman." She didn't seem to mind his jokes.

(BEGIN VIDEO CLIP)

LETTERMAN: The guy with the guitar? Secret Service.

(END VIDEO CLIP)

MOOS: Dave was about as flirtatious as you can get with France's first lady, Italian-born.

(BEGIN VIDEO CLIP)

LETTERMAN: If I was Italy, I'd try to get you back.

(END VIDEO CLIP)

MOOS: Dave even implied the pope was charmed by her.

(BEGIN VIDEO CLIP)

LETTERMAN: Now, I know he's the pope, but he's also a guy. So he must --

(LAUGHTER)

(END VIDEO CLIP)

MOOS: And on "The Today Show," the first lady was asked about her famous quote, "love lasts a long time but passion, maybe two or three weeks."

(BEGIN VIDEO CLIP)

BRUNI: (INAUDIBLE).

Did I really say that? Maybe. Maybe I try to be funny.

(END VIDEO CLIP)

MOOS: So did a pair of French Canadian radio hosts. Remember when one of them pretended to be President Sarkozy?

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: Yes, hello, Mrs. Governor?

(END VIDEO CLIP)

MOOS: And actually got through to Governor Sarah Palin. Carla came up.

(BEGIN AUDIO CLIP, COURTESY CKOI RADIO)

GOV. SARAH PALIN (R-AK), FORMER VICE PRESIDENTIAL CANDIDATE: And your beautiful wife, oh my goodness.

UNIDENTIFIED MALE: Do you know wife would love to meet you, you know, even though she was a bit jealous that I was supposed to speak to you today.

(LAUGHTER)

PALIN: Well, give her a big hug for me.

UNIDENTIFIED MALE: She even wrote a song for you.

PALIN: Oh, my goodness. I didn't know that. (END VIDEO CLIP)

MOOS: Carla the song writer told Letterman it was love at first sight when she met President Sarkozy at a dinner.

(BEGIN VIDEO CLIP)

BRUNI: You know, it's not so comfortable to sort of be dating when you're like the president of France.

LETTERMAN: Right.

(LAUGHTER)

LETTERMAN: We had a president who dated and it didn't work out either.

(LAUGHTER)

(END VIDEO CLIP)

MOOS: The celebrity blogs dissed her for looking ghostly pale. But that paled in comparison to Letterman's warmth, not to mention Dave's French dressing.

(BEGIN VIDEO CLIP)

LETTERMAN: Madames and Messieurs, merci (INAUDIBLE).

(END VIDEO CLIP)

MOOS: Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

BLITZER: Very funny stuff last night. Thanks very much, Jeanne Moos.

That's it for us. Thanks very much for watching.

I'm Wolf Blitzer in THE SITUATION ROOM.

Up next, "LOU DOBBS TONIGHT".

Kitty Pilgrim sitting in for Lou -- Kitty.