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THE SITUATION ROOM

Obama's Energy Team is Introduced

Aired December 15, 2008 - 17:00   ET

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


WOLF BLITZER, CNN ANCHOR: I'm Wolf Blitzer. You're in THE SITUATION ROOM.
New appointments at key posts, his first meeting with his entire national security team -- there's certainly lots for Barack Obama to talk about in his news conference. That's expected to begin in a few seconds.

But the president-elect is certain to face a flood of questions about embattled Illinois governor, Rod Blagojevich, who is accused of trying to sell Barack Obama's Senate seat. Just a short time ago, the Obama team announced it had has completed a review of staff contacts with Blagojevich.

We're covering all angles of this story with the best political team on television.

But, first, I want to bring in our chief national correspondent, John King, who's getting ready to watch this news conference, together with all of us.

He's going to be answering reporters' questions, although I suspect he's not going to want to -- but maybe he will -- say something about the Blagojevich scandal in his opening remarks. We see the team, John, by the way, walking in.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Well, Wolf, just interrupt me if he starts to speak, please, the president-elect.

One of the key questions is they are -- they have conducted and have completed an internal review. And they say the findings of that review are that no one involved in the Obama transition -- it's time for me to stop.

BARACK OBAMA (D), PRESIDENT-ELECT: Good afternoon, everybody.

Over the past few weeks, Vice President-elect Biden and I have announced key members of our economic and national security teams. In the 21st century, we know that the future of our economy and national security is inextricably linked with one challenge: energy.

So today we're pleased to introduce the majority of the team that will lead our efforts on energy and the environment. I say the majority, because we are going to be doing separate announcements for the secretary of the interior, who's going to have a lot to do on energy policy. And, obviously, interior or -- transportation and agriculture will be important, as well. In the next few years, the choices that we make will help determine the kind of country and world that we will leave to our children and our grandchildren.

All of us know the problems that are rooted in our addiction to foreign oil. It constrains our economy, shifts wealth to hostile regimes, and leaves us dependent on unstable regions. These urgent dangers are eclipsed only by the long-term threat of climate change, which, unless we act, will lead to drought and famine abroad, devastating weather patterns, and terrible storms on our shores, and the disappearance of our coastline at home.

For over three decades, we've listened to a growing chorus of warnings about our energy dependence. We've heard president after president promise to chart a new course. We've heard Congress talk about energy independence, only to pull up short in the face of opposition from special interests.

We've seen Washington launch policy after policy, yet our dependence on foreign oil has only grown, even as the world's resources are disappearing.

This time has to be different. This time we cannot fail, nor can we be lulled into complacency simply because the price at the pump has for now gone down from $4 a gallon.

To control our own destiny, America must develop new forms of energy and new ways of using it. And this is not a challenge for government alone; it's a challenge for all of us.

The pursuit of a new energy economy requires a sustained all- hands-on-deck effort, because the foundation of our energy independence is right here in America, in the power of wind and solar, in new crops and new technologies, in the innovation of our scientists and entrepreneurs and the dedication and skill of our workforce.

Those are the resources that we have to harness to move beyond our oil addiction and create a new hybrid economy.

As we face this challenge, we can seize boundless opportunities for our people. We can create millions of jobs, starting with a 21st- century economic recovery plan that puts Americans to work building wind farms, solar panels, and fuel-efficient cars.

We can spark the dynamism of our economy through a long-term investment in renewable energy that will give life to new businesses and industries with good jobs that pay well and can't be outsourced.

We'll make public buildings more efficient, modernize our electricity grid, and reduce greenhouse gas emissions, while protecting and preserving our natural resources. We must also recognize that the solution to global climate change must be global.

I spoke a few days ago with Senator John Kerry, who updated me on the recent climate negotiations in Poland. Just as we work to reduce our own emissions, we must forge international solutions to ensure that every nation is doing its part.

As we do so, America will lead not just at the negotiating table; we will lead, as we always have, through innovation and discovery, through hard work and the pursuit of a common purpose.

The team that I have assembled here today is uniquely suited to meet the great challenges of this defining moment. They are leading experts and accomplished managers, and they are ready to reform government and help transform our economy so that our people are more prosperous, our nation is more secure, and our planet is protected.

Dr. Steven Chu is a Nobel Prize-winning physicist who has been working at the cutting edge of our nation's efforts to develop new and cleaner forms of energy. He blazed trails as a scientist, teacher, and administrator, and has recently led the Berkeley National Laboratory in pursuing new alternative and renewable energies.

Steven is uniquely suited to be our next secretary of energy as we make this pursuit a guiding purpose of the Department of Energy, as well as a national mission.

The scientists at our national labs will have a distinguished peer at the helm. His appointment should send a signal to all that my administration will value science. We will make decisions based on the facts, and we understand that facts demand bold action.

For my administrator of the Environmental Protection Agency, I've chosen Lisa Jackson. Lisa has spent a lifetime in public service at the local, state, and federal level.

As commissioner of New Jersey's Department of Environmental Protection, she helped make her state a leader in reducing greenhouse gas emissions and developing new sources of energy. And she has the talent and experience to continue this effort at the EPA.

Lisa also shares my commitment to restoring the EPA's robust role in protecting our air, our water, and abundant natural resources so that our environment is cleaner and our communities are safer.

Nancy Sutley will be an integral part of this team as the chair of my Council on Environmental Quality in the White House. In recent years, we've seen states and cities take the initiative in forging innovative solutions on energy.

Nancy's been at the cutting edge of this effort, working as the regional administrator for the EPA, at the state level in Sacramento, and recently as the deputy mayor for energy and the environment in Los Angeles. Now she will bring this unique experience to Washington and be a key player in helping to make our government more efficient in coordinating our efforts to protect our environment at home and around the globe.

Finally, the scope of the effort before us will demand coordination across the government and my personal engagement as president. That's why I'm naming Carol Browner to a new post in the White House to coordinate energy and climate policy. Carol understands that our efforts to create jobs, achieve energy security, and combat climate change demand integration among different agencies, cooperation between federal, state, and local governments, and partnership with the private sector.

She brings the unmatched experience of being a successful and longest-serving administrator of the EPA. She will be indispensable in implementing an ambitious and complex energy policy.

As I said before, later this week, I will be announcing my designee for secretary of the interior, which will fill out my energy and environmental team. The Interior Department will play a critical role in meeting the challenges that I've discussed today.

Looking ahead, I'm confident that we will be ready to begin the journey towards a new energy frontier on January 20th. This will be a leading priority of my presidency and the defining test of our time. We can't afford complacency nor accept more broken promises.

We won't create a new energy economy overnight. We won't protect our environment overnight. But we can begin that work right now, if we think anew and if we act anew. Now we must have the will to act and to act boldly.

So with that, I'd like to invite my team to say a few words, starting with Dr. Chu.

STEVEN CHU, ENERGY SECRETARY NOMINEE: Thank you.

I'm honored to be selected as the nominee for secretary of energy. In the years ahead, the Department of Energy will be a major force in meeting the challenges that the president-elect has described.

Its role is to support energy research and development that will lead to innovation in the private sector, to nurture broad-based scientific research that is essential for our future prosperity, and to provide scientific leadership to minimize the proliferation and use of nuclear weapons.

In our current economic crisis, people are losing their jobs and homes, companies are collapsing. Some say we have to concentrate exclusively on re-establishing the health of the economy. I look forward to being part of the president-elect's team, which believes that we must repair the economy and put us on a path forward towards sustainable energy.

In the preface to a study, "Lighting the Way: Toward a Sustainable Energy Future," the two co-chairs, Jose Goldemberg and I, wrote, "We believe that aggressive support of energy, science and technology, coupled with the incentives that accelerate the development and deployment of innovative solutions, can transform the entire landscape of energy, demand and supply."

What the world does in the coming decade will have enormous consequences that will last for centuries. It's imperative that we begin without further delay.

On December 10, 1950, William Faulkner spoke at the Nobel banquet in Stockholm. He said, "I believe that man will not merely endure; he will prevail. He is immortal, because he has a soul, a spirit capable of compassion, and sacrifice, and endurance."

President-elect Obama has set the tone and pace for moving our country forward with optimism and calm determination. I hope to emulate his example. With these virtues, the United States and the world can and will prevail over our economic energy and climate change challenges.

LISA JACKSON, EPA ADMINISTRATOR NOMINEE Mr. President-elect, thank you for your nomination to head the Environmental Protection Agency. As an environmentalist, as a public servant, as a native New Orleanian, as a New Jerseyan, and, most importantly, as a mother, there is simply no higher calling for me than to lead this vital agency at this vital time.

Now more than ever, our country is in need of leadership on a host of urgent environmental challenges that face our communities, our cities, our farms, and our rivers, streams, lakes, and oceans. At the top of the list is the threat of climate change, which requires us to transform how we produce and use energy throughout the economy.

But there is much more on the agenda: air pollution, toxic chemicals and children's health issues, redevelopment and waste site cleanup issues, and justice for communities who bear disproportionate risk and have much to gain from your green-collar economic agenda.

EPA was born in 1970 out of urgency and reflected the American commitment that the environment must be embraced. Its talented staff, engineers, scientists, attorneys will now rise again to meet our nation's 21st-century needs.

Mr. President, if confirmed, I pledge to lead the agency in support of your vision and in cooperation with the immensely talented team you have formed here to answer our country's call and to protect our country's environment.

I want to thank you for this opportunity, Mr. President-elect.

And I also want to thank my husband, Kenny, and my sons, Marcus and Brian, who are here, for their patience and support. Public service often comes at their expense and much less often, as it does today, at their reward.

Thank you.

NANCY SUTLEY, HEAD, COUNCIL FOR ENVIRONMENTAL QUALITY DESIGNATE: Thank you, Mr. President-elect, for giving me the opportunity to serve our nation as chair of the Council on Environmental Quality. I'm honored, grateful and humbled.

In your campaign, you talked about growing the green economy. You recognized that the challenge to our planet from global warming is a challenge we must meet for ourselves and our children. We must transform our economy and create new jobs and a new prosperity based on sustainability.

I believe as you do that we can do it. We have seen states like California and cities like Los Angeles take on local and global environmental threats, innovate and create a more sustainable path.

You're rightly focused on restoring the federal government to its rightful role as a leader and a partner at home and abroad in protecting public health and our environment.

My parents came to the United States with little more than their hopes for a better life. They believed in the power of the American dream.

Mr. President-elect, I promise to you and to the American people that I'll do my part to restore the American dream to its fullest measure by strengthening our economy and creating a more sustainable future. Thank you.

CAROL BROWNER, ENERGY CZAR-DESIGNATE: Thank you, Mr. President- elect and Mr. Vice President- elect. It is a great honor to be a part of America's new team; it is also a tremendous responsibility.

This is a pivotal moment in our nation's history. The challenges are immense, but the opportunities are even greater, especially in the interrelated fields of the economy, our security, and our energy and environmental future.

The American people believe we can do better, and they are right. We can create jobs, curb greenhouse gas emissions, reduce our dependence on foreign oil, and help restore America's leadership around the world by shaping an environmentally sustainable world economy.

To succeed, we must work together. We must work across party lines. We must enlist both the private and public sectors. And we must summon the best from our partners around the world.

I am deeply grateful for the opportunity to serve in your administration and pledge the full measure of my time and energy to help create a brighter future for the American people.

Thank you.

JOE BIDEN (D), VICE PRESIDENT-ELECT: Well, Mr. President-elect, what we've seen here today are four very outstanding individuals that you've chosen for something that's been sorely lacking, in my view, the past eight years when it comes to combating climate change and protecting our environment with this clarity, commitment, and a deep conviction that each of the people you've chosen shares.

There's no doubt about the challenges in front of us, but there is no putting our heads in the sand, either, as in my view we have done for some time, particularly when it comes to science.

Welcome, Doctor.

I -- there is -- there's no confusion, as well, about the need for us to act.

In Carol Browner, we have a proven and forceful advocate for the environment. I've worked with Carol for some years.

In Dr. Steven Chu, we have a Nobel Prize-winning physicist who understands that technology and innovation are the cornerstones of solving our energy and climate problems.

In Lisa Jackson and Nancy Sutley, we have two individuals who cover us coast to coast, New Jersey to California, who have been in the forefront of these environmental issues in their respective states.

The president-elect has made it clear that this will be an administration and a White House -- and a White House committed to freeing this nation from its dependence on fossil fuels, and to leading and combating the -- the threat of climate change, and reinvigorating our commitment to a cleaner environment.

As President-elect Obama and his incredible team lead us in tackling these challenges, I'm proud to assume the office held by a man who -- who awakened the world to these issues, Al Gore.

And I pledge to the American people that the office of the vice president will no longer be an obstacle to environmental protection, but it will be, as it was under President Gore, a force for leaping ahead.

So, President-elect Obama, congratulations on the team you assembled, and -- and the podium is yours.

OBAMA: OK, let me take some questions.

Let's start with Stephen Power (ph).

QUESTION: How quickly does your administration intend to (OFF- MIKE) to regulate automobile greenhouse gas emissions? And do you have any intention of reinstating the ban on off-shore oil drilling that expired a few months ago?

OBAMA: Well, both are items that my environmental team, as well as my energy team, are going to be reviewing in the weeks to come. But I think it is very important just to look at the history, when it comes to the regulation of emissions in California. Consistently, California has hit the bar and then the rest of the country has followed. And rather than it being an impediment to economic growth, it has helped to become an engine of economic growth.

And one of the key points that I want to make at this press conference -- and I will repeat again and again during the course of my presidency -- is there is not a contradiction between economic growth and sound environmental practices. I think that the future of innovation and technology is going to be what drives our economy into the future. A new energy economy is going to be part of what creates the millions of new jobs that we need. And that's why my economic recovery plan is going to be focused on, how can we make a series of down payments on things that we should have done 10 or 20 or 30 years ago but have delayed?

And so we get a twofer: We get a immediate jumpstart to the economy and jobs that are immediately being created on things like a smart grid or working to make our buildings more energy efficient. And, at the same time, we're setting the path for long-term, sustained economic growth.

With respect to the moratorium on off-shore drilling, what I said during the campaign was that I was open to the idea of off-shore drilling if it was part of a comprehensive package to achieve energy independence.

I'm not thrilled with it simply lapsing as a consequence of inaction without broader thought to, how are we going to achieve energy independence and reduce our dependence on foreign oil and fossil fuels?

So what this team will be charged with, in part, is figuring out, how can we arrive at a comprehensive energy strategy that meets the goals of our national security, meets the goals of our economy, and meets the goals of preserving our planet for our children?

Mark -- Mark Memmott at "USA Today"?

QUESTION: Thank you, sir. Sticking with the economy, you've warned that things will probably get worse before they get better. But can you give the American people a sense of when things will start getting better? And how should they hold you accountable? Is it reasonable to expect in a year that we'll be seeing job growth or will we still be in the same situation we are now?

OBAMA: Well, I want to be completely honest with the American people. I don't have a crystal ball. What I have control of is making the good, smart decisions that lead to long-term, sustainable economic development and growth.

Now, here's what I'm confident about, that our economic recovery plan, our 21st-century investments will create jobs immediately that would not otherwise be created.

We've got shovel-ready projects all across the country that governors and mayors are pleading to fund. And the minute we can get those investments to the state level, jobs are going to be created.

We know that there are buildings -- school buildings, in particular, but I think public buildings generally -- that need to be retrofitted to make them more energy-efficient and that we will get that money back so that not only are we creating jobs, but we're also making those operations more efficient and saving taxpayers money over the long term. That is work that immediately is going to be created as a consequence of the economic recovery plan.

So we know that we are going to create jobs that wouldn't otherwise be created. We know that we're going to put ourselves on the path to long-term sustainable growth. We know that we're going to start getting serious about how our federal budget operates so that we're not wasting money on programs that don't work, and we're going to do an exhaustive review.

We know that, by setting up the financial regulatory structure that is long overdue, we can prevent this crisis from happening again. And we know that we can put in place the kinds of relief for homeowners and foreclosure prevention plans that help to strengthen the base of the economy.

And it is my expectation that, by doing those things, we are going to create 2.5 million jobs, as I discussed earlier.

But my hope, more importantly, is not only are we creating jobs through this economic recovery process, what I'm also looking for is the private sector, the financial system to regain confidence and that, through our actions, we're able to jumpstart an era of innovation that leads to competitiveness in the world economy over the long term.

QUESTION: (OFF-MIKE) yardstick (OFF-MIKE)

OBAMA: Well, I think the yardstick should be, am I creating these jobs? And are we strengthening our economy?

UNIDENTIFIED MALE: Last question.

OBAMA: All right. Brian Naylor at NPR.

QUESTION: (OFF-MIKE) ... on behalf of my Chicago colleagues and others here, I'm -- I'm curious. Your office put out a statement earlier today saying that there were no inappropriate contacts between your office and the governor of Illinois. And I'm wondering if you could address reports that your incoming chief of staff did speak with the -- the staff of Governor Blagojevich?

OBAMA: Well, as I said in a press conference last week, I had no contact with the governor's office, and I had no contact with anybody in the governor's office. And what I indicated last week is that there was nothing that my office did that was in any way inappropriate or related to the charges that have been brought.

Now, beyond that, as we said in the statement today, we were prepared to release the findings of the review that had been done, which are thorough and comprehensive. The U.S. attorney's office asked us to hold off releasing those for a week. So, I would ask for your patience, because I do not want to interfere with an ongoing investigation.

But there is nothing in the review that was presented to me that in any way contradicted my earlier statements that this appalling set of circumstances that we've seen arise had nothing to do with my office and that, you know, those facts will be forthcoming to all of you in due course. We just want to make sure that we're not interfering with an ongoing and active investigation.

OK? All right, guys. Thank you so much.

BLITZER: All right. So there you have it -- Barack Obama, the president-elect of the United States, announcing some important -- some major cabinet selections, including a new secretary of Energy designate, Dr. Steven Chu of California; a new administrator for the EPA -- the Environmental Protection Agency -- Lisa Jackson; a new chair of the Environmental Quality Office over at the White House, Nancy Sutley; and Carol Browner, a veteran of the Clinton White House, will now become a special coordinator on energy and climate change in the White House herself.

I want to bring in our John King, our chief national correspondent, who was watching this together with the best political team on television.

Lots of interest, though, as all of our viewers know, John, in the ongoing scandal in Illinois involving the embattled governor, Rod Blagojevich. And you heard the president-elect insist that based on this thorough review he's received, nothing inappropriate -- as far as he can tell -- occurred.

KING: He says nothing inappropriate, Wolf, And he also says at the request of the federal prosecutor, it is going to be a week or so before they do release a report that, we are told, will have the names of any aides, including Rahm Emanuel, the incoming chief of staff, who did call the governor's office to discuss the vacant Obama Senate seat.

The president-elect there saying there were no inappropriate conversations -- no involvement at all in the alleged pay for the seat -- the pay to play scandal involving the Illinois governor.

But they say they have been asked by the prosecutor, while the investigation is in a very sensitive stage, not to release that report, because, we are told, it would have the dates, the times, the individuals involved in those phone conversations. And if you're a prosecutor investigating a case, you don't want the other side to know exactly what you know. You don't want some of this information out in the public.

So it would be nice for the president-elect's team to be able to put this behind, to put out the report and say here it is, this is everything, we did absolutely nothing wrong and, you know, any or all of these phone calls were absolutely appropriate.

But they say we have to wait another week for that at the request of the prosecutor.

You could tell from the president-elect there -- and I can tell from you a couple of conversations with people on his team -- they want this to be over, because they want to discuss the policy agenda. They want to discuss the qualifications of his new team and they want to look forward. Instead, they're caught up in this Illinois political scandal -- at the moment just because these are questions that need to be answered.

BLITZER: And he says it was a thorough and comprehensive study that he has now and that he's made it available to the U.S. attorney. He's got a liaison who's dealing with the U.S. attorney, his incoming White House counsel, Greg Craig, who knows a great deal about dealings with U.S. attorneys because he's got a history going back to the Clinton White House, when he served an important role, as well.

KING: And I'm sure as he's preparing to take this new job, Wolf, as the White House counsel, the last thing Greg Craig wants us talking about is his role in the Clinton impeachment days.

You saw John Podesta, who was the former Clinton White House spokesman chief of staff. He was off in the corner there with Rahm Emanuel, who will be the new White House chief of staff, and David Axelrod, watching this event unfold.

This is one of the things the Obama team simply does not want -- us making references to Greg Craig's involvement in the Clinton White House, us saying they can't release the names just yet or where is this chronology of any contacts with the governor's office.

It is a temporary distraction, but still a distraction. They want to get this over with as soon as possible so they can talk about what this administration plans to do when they take office just a little over a month from now, Wolf. It is fast approaching.

And so is this any long-term damage?

Not if all of that information turns out to be true and there were no inappropriate contacts. But the fact that we're having this conversation and not about what the new administration wants to do when it comes to climate change, how it will change the energy policy of the United States and how it believes it can not only protect the environment, but create jobs at the same time -- that is the frustration inside Team Obama at this moment.

BLITZER: I'm sure they're feeling that frustration.

I want to go to our national political correspondent, Jessica Yellin. She's at that news conference. She was in the room over at the Drake Hotel in Chicago.

And, Jessica, are you sensing, as John suggests and as I'm hearing, there is a sense of frustration, that, you know, like it or not, they've sort of been dragged into this scandal?

JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: Well, enormous frustration -- even annoyance -- with the press for continuing to bring up this issue; irritation that we would ask all those Blagojevich questions at the last press conference. I even think I detected some smiles or sighs when the first two questions at this press conference today were on the topics of the day -- the economy and climate change. The difference from last week, we did see, as John pointed out, Rahm Emanuel, chief of staff, was here at the press conference, smiling, looking relaxed. He was not here last week, which raised eyebrows. And as we all know, we've reported already that he has been told he's in no way a target of this investigation.

And even Barack Obama seemed sort of lighter this time than did he last week. But still, it hangs over them as John points out. There will be another press conference tomorrow. The -- the Obama team has announced that and no doubt they will continue to get some of the Blagojevich questions.

Wolf, I venture to guess it's no coincidence that they released their statement saying they're not going to put out information on Blagojevich right before this press conference so they could shut down any questions that might be coming their way.

WOLF BLITZER, CNN ANCHOR: Yes, I -- I suspect they would have liked to get it over with today, release that -- that chronology and move on. But we're going to have to wait at least a week for that chronology to come forward.

Right now, do we know, Jessica, what he's going to announce, more appointments tomorrow, tomorrow morning? As you say, he's got another scheduled news conference.

YELLIN: We don't but it's at a school. And he has yet to announce his secretary of education so connect the dots. That could be what he's announcing. But I -- I have no information confirming that it is.

BLITZER: We do...

YELLIN: I'll work on that.

BLITZER: Yes, we do know, John, also that he was asked a pretty good question about, you know, when -- when will we know if your economic plan is working? Is it going to be a year? When will the American people be able to hold you responsible, Mr. President-elect, for turning this economy around?

And that is "ISSUE #1". And he was vague, because you know what? He said he doesn't have a crystal ball.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: That line, Wolf, I don't have a crystal ball was the trademark Obama caution. Here is a guy being told by the top members of his economic team and people outside the administration things are likely to get worse before they get better. And there's this great sense of anticipation, this great sense of hope.

And so on the one hand, just him being out there several times a week is part of an effort by team Obama to create confidence, that there is change coming, that it will be positive change because one of the big logs, if you will, on the economic fire in the United States is consumer spending. And consumer simply aren't spending right now, even those who have money because they're not confident in the future. So on the one hand, he wants to convince people to be confident, but on the other hand, Wolf, you nailed it.

It is just his caution that if things are going to get worse and unemployment goes up in the early months of the Obama administration, he does not want to be on the record now, saying well, there will be $2.5 million jobs and 500,000 of them will be created by date X, say six months into office or eight months in office.

He does not want to lay down a barrier -- a marker that we can go check three, four, six months down the road.

YELLIN: And Wolf, if I could just add, he's planning to meet with his economic team tomorrow here in Chicago. My understanding is they'll be talking, in part, about their plans for the stimulus.

My understanding also is that it's not ready to be released but that is their huge package to jump start the economy and make sure things do get better in time. So we're hoping to hear a little something from that economic team in the coming weeks. They're making progress on that stimulus deal.

BLITZER: And did he meet, correct me if I'm wrong, with his national security and foreign policy team today, Jessica.

YELLIN: Correct. He did meet with the full team, their -- first full working meeting but we're not getting any details out of that. It is a tight hold and, I guess, nobody's better at keeping secrets than your national security team. So we're not getting much from them.

BLITZER: Yes.

I think John King has got something else to add. John?

KING: I just wanted to say quickly, Wolf, we talked about the president-elect saying he delayed the release of that have report on contacts with Governor Blagojevich's office at the behest of the prosecutor.

And the prosecutor's office has just released this statement. This is from Patrick Fitzgerald, the prosecutor in Illinois, and it says simply this, "After the president-elect announced an internal transition team investigation, the United States Attorney's Office requested a brief delay of the release of a report of that investigation to conduct certain interviews."

So the prosecutor, essentially, confirming what team Obama is saying, that they were asked by the prosecutor to hold off on public release of report of any contacts with the governor's office because of the sensitivity of the investigation at the moment.

BLITZER: Yes. Well, that suggests to me as someone who's covered these kinds of investigations over the years that this -- this prosecutor, the U.S. attorney, Patrick Fitzgerald, he probably thinks that between now and next week, he's on to something and he doesn't want to -- see anything that could derail the leads that he's going on.

Who knows what he's doing? Who knows what, if any kinds, of conversations he has with the governor himself? But we'll stay on top of this story.

I want both of you to stand by. Don't go away, because we still have a lot more to talk about, including the message that has just been sent out there about the energy issues and the environmental issues by the individuals selected by the president-elect.

We're going to talk about that and a lot more with the best political team on television. They're standing by to react to what we just heard from the president-elect at his news conference.

David Gergen, James Carville and Alex Castellanos. They're standing by live. We're going to go to them in a few moments.

Also, John McCain's next act. What can we expect him to take on? Even perhaps a higher profile in the U.S. Senate in the wake of his White House defeat? What's going on with the senator from Arizona? And what he said about Sarah Palin that might find some people scratching their heads.

And the "Saturday Night Live" skit that some say is no laughing matter. Among those taking serious offense, New York's legally blind Governor David Paterson.

Stay with us. Lots of news happening right now right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: As you saw live here in THE SITUATION ROOM, President- elect Barack Obama unveiling his energy and environment -- environment team and fielding a question about contacts with the embattled Illinois governor, Rod Blagojevich.

Let's get some reaction from our CNN senior political analyst David Gergen and our political contributors, Democratic strategist, James Carville, and Republican strategist, Alex Castellanos.

James, let me start with you. What did you think of the -- the way he responded specifically to the most sensitive issue out there, at least politically, charged issue right now, the transition team's dealings with Blagojevich?

JAMES CARVILLE, DEMOCRATIC STRATEGIST: Well, Wolf, for those -- for those who are smart enough and fortunate enough to watch CNN yesterday, this very panel, David, you and I were talking about the very possibility that this might be held up by the United States attorney, this on going investigation, and it turns out to be that was the case. And I think that yes, they would like -- as our team is saying, they would like to get this information out ASAP but Mr. Fitzgerald, for reasons that might become clear to us later on, asked them to hold it up, and of course, they're going to do that.

What is really clear here is that this is not going to be much of a story. Yes, people -- call the governor's office to talk about somebody from the Senate. We see that happening completely appropriate in New York where people lobby on behalf of Caroline Kennedy. So there's not much here and reason it's being held up as we predicted yesterday on CNN was that the United States attorney asked them to hold it up.

BLITZER: Are you ready, Alex, to say this is not going to be much of a story, much of a problem for Barack Obama and his team?

ALEX CASTELLANOS, REPUBLICAN STRATEGIST: I hope it's not because the country has serious business to do. However, you know, this is -- this is not new to Chicago politics. That's the place where four out of every two people voted for Barack Obama. So the problem is you start pulling threads out of sweaters like this in Chicago politics and you don't know where they lead.

These stories don't tend to stop on a dime with the release of a report next week. Who talked to whom? Who did what? Did some staffer at some point not want to antagonize an unbalanced governor and fail to say no when he should have said no?

Clearly Rahm Emanuel and those people are bright, tough people. And they get Chicago politics. I'd be stunned if there was anything there. But, but this story is still going to create this atmosphere that's not going to be good for the administration. And that's not good for the country, much less Republicans or Democrats.

BLITZER: David, when you heard at that news conference, you saw the statement that Barack Obama's team issued earlier in the day, what do you think?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: I think they're in much stronger position today as a team than they were entering the weekend. They've now completed this report, which was very, very important. They've talked to everybody. They've got all their facts together. That's the first step in damage control.

Secondly, there is -- what one finds in his team today is a lot of confidence that there's nothing here, that -- everybody is in the clear starting with Rahm Emanuel, which was very important to all of them.

And thirdly, by putting it into the hands of the special prosecutor, Mr. Fitzgerald, it's -- they've made it clear they want it released. James is right. They want it right away. They hope they can get it out today before this news conference. He's going to hold it for a week.

But you know, when he -- when he says to them go ahead and put it out, he in effect will be blessing what's in that report so that they can go on and say look, you know, we put here the facts. The prosecutor has go ahead and told us to put this out publicly.

That's very important for them. So I think the clouds are clearing finally on this. I think they can get back to business. I do not think, it -- based on everything we've seen so far, this is going to be a problem with them. I think James is right about that.

BLITZER: All right. Let's get to the two issues that were on the agenda today, the issues of energy and the environment, although a good question came up on the economy as well.

The -- naming of this team, James, I suspect that a lot of, you know, environmentalists out there and those who believe in climate change that man as a -- has a role in climate change, they're going to be reassured by this selection. But I'll let you tell me what you think the message that was sent today by the selection of these four individuals.

CARVILLE: I think the underlying message that I got is science matters again. And you know, as Nobel Prize winner that was appointed secretary of energy and they were pretty clear of that. And I think that was one of the messages that they wanted to get through. Carol Browner is obviously the eminently qualified on how they thought of as environmentalist, but I guess...

BLITZER: And she's got very closely associated with...

CARVILLE: All politics is -- right.

BLITZER: She's closely associated with Al Gore.

CARVILLE: She is. And she was -- President Clinton's EPA director. But I -- all politics is local and (INAUDIBLE) and David understands this. I jumped out of my chair with joy when I saw the new EPA director was a native New Orleanians especially...

(LAUGHTER)

CARVILLE: You know the greater the ongoing environmental disaster going on without coastlines, so I was cheering. I was like I just jumped up and said yes. I was very delighted about that. But this is -- I think the real underlying message that I sort of heard here is science is going to be front and center in this White House...

BLITZER: Well...

CARVILLE: ... and this is going to really matter again.

BLITZER: You know I think I -- he makes a good point, Alex, as James always does, that while there may have been some liberals disappointed by the selection of his national security team, Robert Gates staying on at the Pentagon, for example, I think the liberals are going to be pretty happy with this environmental and energy team.

But what do you think? CASTELLANOS: Well, I think liberals are and I think some conservatives maybe not so much. Certainly Dr. Chu has impeccable scientific credentials. I mean he's obviously one of the great scientists of our time. But you know, science is here to serve us, we're not here to serve science.

Last time an arrogant Washington got a hold of science it, gave us ethanol. And ethanol, of course, a great contribution to environmental rehab that we needed to do, but it also, that program ended up driving up the cost of food. It ended up forcing people to clear-cut forests so they could plant grain that could turn into ethanol.

The perverse effects -- you know, we're talking about building a new economy as I think Senator Obama -- President-elect Obama said today. What I didn't see up there today was anyone who understood business, understood the economy.

And for the people who are going to build a new green economy not to have any touchstone on the economy I think is a little bit of a concern.

BLITZER: Is that a concern to you, David?

GERGEN: No, and I want to -- I -- with all due respect to my good friend Alex, this administration has been at war with the scientific community over the last eight years. There have been a number of scientists, many Nobel Prize winner, who have fiercely objected because not only on the environment, it's on stem cell research, on some -- a host of other issues.

(CROSSTALK)

CASTELLANOS: But those weren't objected on the grounds of science, David. Those were policy grounds. Again, there are -- wacky stem cells have been proved right.

GERGEN: Well, Alex, Alex, Alex, on global warning.

CASTELLANOS: There are other ways.

GERGEN: On global warming they have simply rejected -- the Bush administration rejected the scientific findings of the intergovernmental panel of the United Nations made up of leading scientists from around the world. They simply dismissed them as being wrong.

That they took -- this radical view that global warming was not -- had anything to do with men. They've changed here in the last few weeks. But you know, they were rewriting reports out of the EPA. They were taking the science out of it. And they have been -- the scientific community feels completely estranged, completely divorced from the Bush administration.

And this is, this is a major step forward to put Dr. Chu in that office and to make -- and to embrace science. The next few days, I think we're going to get a new NIH director and we're going to get a new surgeon general which will then, again, emphasize that. And I think we're getting a science adviser.

BLITZER: And we might be getting a education secretary maybe as early as tomorrow.

(CROSSTALK)

GERGEN: Yes, that's right.

BLITZER: But go -- I'll let Alex respond. Then I want to bring James back in.

CASTELLANOS: Well, again, I think there's a very different take on the Bush administration's dealing with science when you have a different policy objective, you -- and so I think the Gore group, I think, in the previous administration had, you kind of drop on a different area of science.

And just because the Bush administration didn't agree, there are lots of scientists out there who have different views on what we can do about global warming and the contribution that man makes and the cost implied.

So right now, for example, we're deciding, well, we're -- Washington trillions of dollars in debt is now going to force Detroit that's billions in debt to build greener cars that Americans right now aren't buying and Detroit can't sell.

So we're going to end up subsidizing something that -- forcing Detroit to build cars that people don't want to buy.

BLITZER: All right.

CASTELLANOS: Is that -- and somebody in Washington is going to be a car czar. Is that -- is that -- you know how are we going to build an industry like that?

BLITZER: Let me bring James back in for a moment. I'll get back to that. The issue of the report that the Obama team has completed but the U.S. Attorney Patrick Fitzgerald asked hem to delay making public at least for one week until next Monday.

When I heard that, my alarm bells rang that something -- he was working on something right now, Patrick Fitzgerald...

CARVILLE: Right.

BLITZER: ... that was time sensitive and he needs a week to get that resolved. But I'm just a suspicious reporter by nature. What do you think?

CARVILLE: I kind of had the same impression you did, Wolf. That -- you know, why a week? You know, I guess what he said was a few days or something like that. It sort of makes you wonder what in this intervening things would you say that you wouldn't want to do it? And I'd also address something my friend Alex said is, there's nobody who knows more about Chicago corruption than Patrick Fitzgerald. He's put more people in the Illinois politics in jail than any five people and he's assured us time and time again that we don't have anything to worry about in terms of the president-elect or chief of staff Rahm Emanuel and his people so we can all relax. There's nothing to worry about there.

But, yes, I was -- I had the same reaction you did. And I guess the question is, he asked him to wait. Obviously they're going to wait. Who wouldn't under these circumstances? But it is going to be interesting to see if anything happens in this intervening time frame. We'll be watching it very closely, I'm sure.

BLITZER: If they can wait, if they can wait, we certainly can wait another week, as well.

CARVILLE: Yes.

BLITZER: All right, guys, I want to thank all of you for joining us here in THE SITUATION ROOM and we'll continue this conversation.

Coming up, John McCain's next act. He returns to the Senate but in a unique position with certain advantages. What we expect him to be doing. Stand by for information.

And there are major new developments and efforts to force Governor Blagojevich out of office. CNN's Drew Griffin caught up with a lawyer who's considering defending him.

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

(COMMERCIAL BREAK)

BLITZER: He's back in the U.S. Senate after losing to Barack Obama, but don't expect John McCain to fade into the political background. In fact, we may see quite the opposite.

Let's go to CNN's Samantha Hayes. She's working this story for us.

All right. So what's the next act for the senator from Arizona, Sam?

SAMANTHA HAYES, CNN CORRESPONDENT: Well, Wolf, his party is in the minority, but you may see John McCain at the center of almost every major political debate.

(BEGIN VIDEOTAPE)

HAYES (voice over): If you heard one thing from John McCain during his run for the White House, this was it.

SEN. JOHN MCCAIN (R), ARIZONA: I will veto every pork barrel, earmark bill that comes across my desk.

HAYES: Back in the Senate, he can't veto, but he can try his old maverick trick, working with Democrats.

NORM ORNSTEIN, CONGRESSIONAL SCHOLAR: He has an ally in Russ Feingold, his old partner in arms, on campaign finance reform. He has at least a declared ally in the president. And the movement now to try and reduce the kind of earmarking where members of Congress basically direct huge amounts of federal money is a ripe one.

HAYES: It also puts McCain in an unusual position of influence for a defeated candidate.

ORNSTEIN: Despite the fact that we had a pretty tough and even bitter campaign at times, we're going to see more John McCain going to the White House to meet with Barack Obama than we will perhaps for a whole lot of other Democrats who are Obama's natural allies.

HAYES: McCain put his own party on notice Sunday on ABC, criticizing the Republican National Committee's push to tie President- elect Barack Obama to Illinois governor, Rod Blagojevich, who was charged with trying to sell Obama's Senate seat.

MCCAIN: In all due respect to the Republican National Committee and anybody -- right now I think we should try to be working constructively together not only on an issue such as this, but on the economy, a stimulus package, reforms that are necessarily.

HAYES: Republican strategist, Phil Musser, says McCain has outlined his new goals and will try to use his old reputation to accomplish them.

PHIL MUSSER, REPUBLICAN STRATEGIST: He's had a couple of weeks off. He's gotten a chance to get his thoughts back together. I think what you probably saw was a little bit of the trademark, Straight Talk, meaning that John McCain is probably going to call it just the way he sees it and probably won't be one who will hem to party ideology.

(END VIDEOTAPE)

HAYES: Well, speaking of the future of the GOP, McCain was asked about whether he'd support his former running mate if she ran in four years. Well, McCain said he appreciated and admired Sarah Palin but he added, "We've got some great other young governors." He said I think that you're going to see the governors assume a greater leadership role in our Republican Party.

And Wolf, we talked about Tim Pawlenty and John Huntsman of Utah.

BLITZER: Sam, thanks very much. I'm sure that John McCain is not going away by any means.

The Illinois House takes its first step toward impeaching the embattled governor, Rod Blagojevich. Can he withstand the newest pressure or will he answer the growing calls to resign?

That, plus Barack Obama on this growing scandal in his own words. And the "Saturday Night Live" skit that has New York's governor and advocates for the blinds simply outraged. Did "Saturday Night Live" cross the line?

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

(COMMERCIAL BREAK)

BLITZER: New York's governor isn't laughing about a "Saturday Night Live" skit that portrayed him as a bumbling leader with disabilities.

Let's go to Deborah Feyerick. She's working the story for us.

All right, Deb, what's this all about?

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, Wolf, essentially what happened is the impersonation of the governor by comedian Fred Armisen got a lot of laughs as he tries to decide who he should pick to replace Senator Hillary Clinton, and especially with everything that's going on with the governor in Illinois. So it's had a lot of people shaking their heads.

(BEGIN VIDEOTAPE)

FRED ARMISEN, ACTOR/COMEDIAN: It's bad out there, Seth. And if you don't believe me, take a look at this graph that I got here. Now, as you can see...

(LAUGHTER)

ARMISEN: It shows that unemployment in 2008 is...

SETH MYERS, COMEDIAN: Governor, it's upside-down.

ARMISEN: You bet it is.

FEYERICK (voice over): The "Saturday Night Live" parody covers all bases. The New York governor's extra-marital affairs, his drug use years ago. Even his accidental rise after a prostitution scandal knocked out his predecessor.

MYERS: You were in our shot.

AMY POEHLER, COMEDIAN: You were in the shot.

MYERS: You were in our shot.

ARMISEN: So sorry about that.

MYERS: It's OK.

(CROSSTALK)

FEYERICK: The skit got lots of laughs, but Governor David Paterson who is legally blind says the comedians crossed the line making fun of his disability.

GOV. DAVID PATERSON (D), NEW YORK: I'm afraid that the kind of 3rd grade depictions of individuals and the way they look and the way they move add to that negative environment.

FEYERICK: A negative environment, Paterson says, in which 63 percent of people with disabilities can't find work.

UNIDENTIFIED FEMALE: OK. You want to stick the cup underneath there?

FEYERICK: At Helen Keller's Services for the Blind in Brooklyn, once attended by Paterson, a former U.S. Air Force pilot, Ranson Rhoden, was angered by the "SNL" skit saying even though he can't see, he's still got his computer doctorate and parachutes as a hobby.

RANSON RHODEN, HELEN KELLER SERVICES FOR THE BLIND: The fact that when this disability, or when you're disabled, it's not right because, you know, they're thinking of, oh, every blind is stupid and all that stuff.

FEYERICK: "Saturday Night Live" is off this week and told CNN no one was available to comment.

Frank Primeggia who runs the school says those kinds of stereotypes hurt everyone with disabilities.

FRANK PRIMEGGIA, HELEN KELLER SERVICES FOR THE BLIND: This has now created a more difficult environment for us, placing someone in a work environment.

FEYERICK (on camera): Do you think Governor Paterson is fair game as a politician?

PRIMEGGIA: Most definitely. But just what he says, not because of his physical handicap.

FEYERICK (voice over): Although everything for "Saturday Night Live," it seems, is fair game.

ARMISEN: They don't have to be blind.

(LAUGHTER)

ARMISEN: I need someone with like a gamy arm or...

(LAUGHTER)

ARMISEN: You know, maybe a giant gums with the tiny teeth.

(END VIDEOTAPE)

FEYERICK: The big issue, of course, many people who are visually impaired already have to overcome obstacles. Being made fun of, they believe, is a giant step backward -- Wolf.

BLITZER: Deb Feyerick, thank you.