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Israel, Hamas Reject U.N. Appeal; Illinois Governor Impeached

Aired January 9, 2009 - 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're in THE SITUATION ROOM.
Happening now: Barack Obama torn between the economy and security, why he's telling critics of his policy to show him something better.

Plus, historic job losses in 2008, unbelievable numbers. This hour, how much your suffering may depend on where you live.

And the Illinois governor impeached, but still defiant. What is next in the corruption case against Rod Blagojevich? The best political team on television is standing by.

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

It's a mind-boggling number that president-elect Barack Obama could not ignore today, 2.6 million American jobs lost in the year 2008. It was the worst year for unemployment in the United States in more than six decades. And it drive homes president-elect Obama's election mandate to change the ravaged economy for the better.

Let's begin with our senior political correspondent, Candy Crowley. She's here in THE SITUATION ROOM.

Candy, this whole jobs lost, and these numbers are really, really staggering, it took away from the completion, if you will, of his national security team, which he announced today.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Absolutely.

It was just too big to ignore. It would have been in the elephant in the room there. And certainly he would have been asked about it. So, this is sort of an object lesson for the president- elect in the multitasking he's going to have to do.

(BEGIN VIDEOTAPE)

CROWLEY (voice-over): The double trouble that awaits the Obama administration was in evidence when the president-elect arrived at a news conference with two key players in the battle against terrorism and then opened with his take on new devastating job loss figures.

BARACK OBAMA (D-IL), PRESIDENT-ELECT: Today's job report only underscores the need for us to move with a sense of urgency. We have received a stark reminder about how urgently action is need. This is the moment to act, and to act without delay. Clearly, the situation is dire. It is deteriorating. And it demands urgent and immediate action.

CROWLEY: Faced with some preliminary Democratic dissension to aspects of his gargantuan stimulus plan, the president-elect declared himself open to discussion on a fast track.

OBAMA: If it works better than something I have proposed, I will welcome it. What is not an option is for us to sit and engage in posturing.

CROWLEY: Moving on, no need for a compass to find Obama's message to the U.S. intelligence community either, with his unmistakable reference to the after-the-fact discovery there were no weapons of mass destruction in Iraq.

OBAMA: We have learned that, to make pragmatic policy choices, we must insist on assessments grounded solely on the facts, and not seek information to suit any ideological agenda.

CROWLEY: Retired Admiral Dennis Blair, Obama's choice for director of national intelligence, is all in.

DENNIS BLAIR, DIRECTOR OF NATIONAL INTELLIGENCE NOMINEE: And the intelligence services will support you with facts, interpretations, assessments in a straightforward manner. And we will tell you how well we know what we know and what we don't know.

CROWLEY: Ditto Leon Panetta, former chief of staff to President Bill Clinton, who made note of the inscription on the wall of the old CIA headquarters.

LEON PANETTA, CIA DIRECTOR NOMINEE: And ye shall know the truth, and the truth shall make you free.

If confirmed, Mr. President-elect, I will be honored to lead the men and women of the CIA, to seek and speak the truth.

(END VIDEOTAPE)

CROWLEY: Now, as we know, there has been some criticism of Leon Panetta, saying that he does not have a deep wealth of intelligence experience. That criticism, however, seems to have died down on the Hill, Wolf. And nobody expects there will be much problem with either of these two men.

BLITZER: Yes, Blair and Panetta, they will both probably be confirmed.

CROWLEY: Right.

BLITZER: Thanks very much for that, Candy.

And as we talk about so many Americans who are really hurting right now, we want to take a closer look at where much of the job loss pain is happening. Our Mary Snow is joining us.

Mary, a very grim situation also has a grim outlook.

MARY SNOW, CNN CORRESPONDENT: Yes. Wolf, you know, following massive job cuts last month, and also in 2008, economists are only expecting things to get worse before they get better. And these cuts are broad-based.

(BEGIN VIDEOTAPE)

SNOW (voice-over): The latest casualties of the weakening economy show just how widespread the losses are. Aircraft-maker Boeing is slashing 4,500 jobs. World Wrestling Entertainment is no match for the recession, cutting 10 percent of its work force.

The layoffs come on the heels of the worst yearly unemployment level since 1945. In 2008, nearly $2.6 million jobs were shed. That's roughly the population of Nevada. More than half-a-million were cut in December.

MICHELE GIRARD, RBS GREENWICH CAPITAL: At the first sign of weakness, firms are quick to shed workers. And I think, in this case, a lot of it is coming in anticipation of perhaps further weakening in 2009.

SNOW: The unemployment rate now stands at 7.2 percent. And that's not including the millions of people who have given up looking for work, and millions more who have been forced to cut back their hours or work part-time.

OBAMA: Clearly, the situation is dire.

SNOW: President-elect Obama warned the unemployment rate could reach double digits. Economist Michele Girard doesn't think it will get that high, but says it could reach 8.5 percent.

GIRARD: Well, I think we are going to continue to see declines in the manufacturing sector. The auto sector is going to remain under pressure. And I think we're going to continue to see mounting job losses there.

SNOW: And it may come as no surprise that Michigan, the home of the auto industry, has the highest unemployment rate in the country, followed by Rhode Island, California, South Carolina, Oregon, Nevada, and Washington, D.C.

On the reverse side, Wyoming has the lowest unemployment rate, followed by North and South Dakota, Nebraska, and Utah.

Bucking the trend of massive layoffs, health care -- recruitment firm Challenger Gray & Christmas reports 372,000 new jobs last year.

JOHN CHALLENGER, CEO, CHALLENGER GRAY & CHRISTMAS INC.: And those are jobs in medical practices, doctors' offices, hospitals, even pharmaceutical companies and medical equipment companies. That's the area of the economy that's really been the bulwark through this economic storm.

SNOW: And the sector hurt the most, according to Challenger, was the financial industry, which shed 260,000 jobs in 2008.

(END VIDEOTAPE)

SNOW: And, Wolf, there's concern now that the next wave of layoffs could come from retailers. That's following dismal sales during the holiday season. And compounding their problem, as the unemployment rate rises, consumers keep tightening their spending -- Wolf.

BLITZER: People are so nervous out there about losing their jobs. It's really sad what's going on. Mary, thank you very much.

Let's check in with Jack Cafferty once again. He has "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: We were talking about dancing earlier.

Sarah Palin is back again. Now she's taking shots at Tina Fey, Katie Couric, John McCain, and the news media. The former vice presidential candidate gave an exclusive interview to conservative John Ziegler for a documentary he's doing on how Barack Obama got elected. In it, Palin lashes out at Tina Fey and Katie Couric for exploiting her during her 12-week odyssey as John McCain's running mate.

Palin said that a "Saturday Night Live" skit crossed the line when Tina Fey, who parodied Palin, said that marriage is a sacred institution between two unwilling teenagers. It was a reference to Palin's then pregnant and unmarried daughter.

Palin blamed the McCain campaign for the often referenced interview which CBS News anchor Katie Couric, in which Palin couldn't name the newspapers that she reads. Palin says it's McCain's fault for granting additional access after the first interview with Couric went poorly.

Poorly is an understatement. Palin came off as functionally illiterate.

Today, Palin's office released a statement accusing the news media of taking her statements out of context to -- quote -- "create adversarial situations" -- unquote. She also said -- you can't even do this stuff with a straight face -- she also said the media would have gone easier on her and her family if she had been on the Democratic ticket.

It should be noted the conservative Ziegler went pretty easy on Palin. He didn't ask her any difficult questions, including, for example, what newspaper do you read, Governor?

So here's the question. Is there anything you would like to ask Sarah Palin? Go to CNN.com/caffertyfile. Post a comment on my blog -- Wolf.

BLITZER: Jack, thanks very much. We will talk to Sarah Palin hopefully soon one of these days again.

A scandal now has an official stamp. Listen to this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The House does adapt House Resolution 1671, and Governor Blagojevich is hereby impeached.

(END VIDEO CLIP)

BLITZER: But the Illinois governor is striking back. Wait until you hear him blast at those who just impeached him.

And can they all simply just get along? We're talking about Joe Biden, Hillary Clinton, and their teams. Biden is doing something that is causing some to wonder if he will be stepping on Hillary Clinton's toes in the Obama administration.

This Sunday will be last Sunday anchoring "LATE EDITION." We have some very special guests coming in, the vice president, Dick Cheney, and the House speaker, Nancy Pelosi. We will talk about all of that. We did the interviews. We are going to have some clips for you this hour. You will want to hear them and see them right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Right now, Joe Biden is doing something that's not unusual for senators or for vice presidents. But with it being so close to inauguration, his activities are raising some questions.

Brian Todd has been looking into this story for us.

There's no doubt that Biden is a very experienced foreign policy expert.

BRIAN TODD, CNN CORRESPONDENT: Absolutely.

As a senator, he's met with plenty of foreign heads of state, Wolf. But now that he's vice president -- vice president-elect, rather -- taking a trip overseas is a little bit more complicated for Joe Biden.

(BEGIN VIDEOTAPE)

TODD (voice-over): Joe Biden in Pakistan, meeting leaders in one of the most sensitive regions for American national security, 10 days before becoming vice president. Is he being quick off the mark or too soon out of the gate?

THOMAS DONNELLY, AMERICAN ENTERPRISE INSTITUTE: I think it's far too early for the incoming administration to have anything like a coherent South Asia policy, to be -- that would be an unfair expectation of them.

TODD: But a Biden Senate aide says there's no time to waste and that Biden's purpose is "to gather facts and listen to the leaders and commanders in the region. He's not articulating policy or engaging in diplomacy."

President-elect Obama this week reiterated that, until January 20, only President Bush speaks for the U.S. Biden's office says he's traveling in his capacity as senator with Republican Senator Lindsey Graham.

But what about the risk of Biden stepping on the toes of Hillary Clinton, president-elect Obama's choice for secretary of state?

STEVE CLEMONS, AMERICAN STRATEGY PROGRAM DIRECTOR, NEW AMERICA FOUNDATION: Right now, the real reality is, Hillary Clinton is not secretary of state, and they wanted intel from top foreign policy people very early on.

TODD: It's certainly not unheard of for a vice president to play a role in foreign policy, but another analyst is wondering whether there will be a turf war between Joe Biden and the secretary of state.

DONNELLY: It's -- it's not a train wreck, but there are a lot of big trains traveling at very high speeds. And we don't know whether there's going to be an intersection of the tracks or whether they're just going in parallel direction.

(END VIDEOTAPE)

TODD: Now, Hillary Clinton and Joe Biden are not the only heavy- hitters in this discussion. There is talk that Mr. Obama may appoint former U.S. Ambassador to the U.N. Richard Holbrooke as a special emissary for Afghanistan, Pakistan, and South Asia.

Wolf, you know Richard Holbrooke, no shrinking violet there.

BLITZER: No. He's outspoken all the time.

Why wouldn't Joe Biden wait to do this trip after January 20?

TODD: Well, an aide to Biden says, if they waited until after that, it would have taken four to six weeks to set up this trip.

By going now, he's able to report back to them on some of their first meetings on Pakistan and Afghanistan. They can hit the ground running a little better. They think it will give them a better start in dealing with those very difficult regions.

BLITZER: And he's on a bipartisan litigation. Lindsey Graham, the Republican from South Carolina, is among the senators who are with him on this trip.

All right, thanks, Brian, very much.

In Illinois, meanwhile, Governor Rod Blagojevich says he's not surprised the state House has stated overwhelmingly to impeach him. But he says he's sure he will be cleared of any wrongdoing, the governor offering a rambling defense of his record, even as faces stunning allegations of corruption.

CNN's Susan Roesgen is in Chicago.

Susie, the stage now set for a Senate trial of Blagojevich?

SUSAN ROESGEN, GENERAL ASSIGNMENT CORRESPONDENT: That's right. At the end of this month, Wolf, the Senate will start looking at this case now. But even after being impeached, the governor is as defiant as ever.

(BEGIN VIDEOTAPE)

GOV. ROD BLAGOJEVICH (D), ILLINOIS: From the very moment of my reelection, I have been engaged in a struggle with the House to try to get things done for people. I have worked very hard, and continue to keep pushing and prodding the House to pass a capital construction program.

ROESGEN: Governor Rod Blagojevich spent most of a 10-minute news conference touting all the ways he says he's helped the people of Illinois. State lawmakers say people in Illinois should be fed up.

TOM CROSS (R), ILLINOIS STATE REPRESENTATIVE: You ought to be disgusted. You ought to be mad as hell, because this is our state. This is our system.

ROESGEN: Lawmakers knew about the accusation that the governor tried to sell Barack Obama's open Senate seat. But a legislative investigative committee found so much more, charges that the governor's office hired an interpreter for the deaf who didn't know sign language, started a cheap prescription drug plan to bring in drugs illegally from Canada, and that the governor withheld funding for Chicago's children hospital waiting for a campaign donation.

UNIDENTIFIED MALE: The House does adopt House Resolution 1671, and Governor Blagojevich is hereby impeached.

ROESGEN: In voting to impeach him, lawmakers called Blagojevich everything but a scoundrel.

UNIDENTIFIED FEMALE: It's amazingly fitting that Governor Blagojevich face impeachment today, of all days, on his self-admitted hero Richard Nixon's birthday.

ROESGEN: And what does the governor do while lawmakers were voting to impeach him?

UNIDENTIFIED FEMALE: How can you jog when you have been impeached, Governor?

ROESGEN: The governor had been invited to tell his side to the legislature, but never appeared. Later, he was as defiant as ever.

BLAGOJEVICH: The things we did for people have literally saved lives.

I don't believe those are impeachable offenses. So, we're going to move forward. And I'm going to continue to fight every step of the way. Let me reassert to all of you, once more, that I am not guilty of any criminal wrongdoing.

(END VIDEOTAPE)

ROESGEN: Well, the vote was 114-1 to impeach the governor. The one person who voted no said he just didn't feel he had enough information to impeach him -- Wolf.

BLITZER: Pretty lopsided vote, no matter how you say it, though.

Thanks very much, Susie, for that.

A new ruling, by the way, today from the Illinois Supreme Court on the governor's choice of Roland Burris to be the next U.S. senator from Illinois. The court says the Illinois secretary of state does not need to sign off on the disputed appointment for it to become valid. Secretary of State Jesse White has refused to give his OK.

Senate Democrats are reviewing the ruling and weighing their options on whether to seat Burris.

The majority leader, Harry Reid, had cited White's signature as key to allowing Burris to be sworn in.

There's also some important news developing out in the Middle East, Israel and Hamas shrugging off the United Nations cease-fire resolution. And there seems to be no letup in their all-out war.

Let's go live to our senior international correspondent, Nic Robertson. He's out on the scene for us with more on what's going on.

Nic, what is the latest? Hamas rockets, I take it, still coming into southern Israel, and the Israelis continue to pound positions in Gaza.

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: More than 30 Hamas rockets fired out of the Gaza Strip into Israel by the middle of the day today. That's quite a large number, relative to the past few days.

What we're witnessing here just now, if you look behind me, that's the northern end of the Gaza Strip. It is now dark. The electricity went off there several hours ago, not clear why, but we have heard a lot of tank movement. And, in the last few minutes, we have heard in the distance towards Gaza City a lot of heavy explosions, a lot of heavy machine gunfire and the sound of more tanks moving in that direction.

The indications do seem to be that the battle is continuing, as it was yesterday, regardless of what the -- of what was said at the U.N. Security Council -- Wolf.

BLITZER: What about the status of those humanitarian convoys that are coming in to Gaza?

ROBERTSON: You know, the U.N. hopes to get its convoys moving again. They stopped them yesterday because they said that two of their workers were killed by Israeli tank and machine gun fire.

Israeli Defense Forces say they have investigated it. Now they say it wasn't them, which implies that it must have been Hamas. Israeli officials say that they will improve communications, work closely with the international community. And the U.N. does seem to be edging towards getting the humanitarian supplies going.

It is a desperate humanitarian situation in Gaza, by all accounts. More than 790 people have been killed now, and the U.N. very concerned that they need to feed all the other 1.5 million people there -- Wolf.

BLITZER: Still a dangerous, very dangerous situation. All right, Nic, thanks very much. Be careful over there.

Growing tensions among Democrats over the president-elect's economic recovery plan. I will ask the House speaker, Nancy Pelosi, what it will take to work things out.

And new details about the Obama inauguration -- why it's shaping up to be the most diverse in U.S. history.

Plus, their job of helping America outsmarts its enemies may soon be shrouded in secrecy. President-elect Obama unveils his intelligence team, but he still gets some criticism in the process.

We will tell you what's going on today right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

(NEWS BREAK)

BLITZER: Democrats in the new Congress are flexing their muscles by jumping into the gender wars of equal pay for equal work.

Plus, the Obama team promising a diverse inauguration in more ways than one.

And, later, the president-elect goes public with his choice for spy chief. Still, there are some questions about Leon Panetta's qualifications.

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

(COMMERCIAL BREAK)

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

Happening now: congressional Democrats flexing their newly built muscle, pushing their priorities, what it means for incoming president-elect Barack Obama. Also, the outgoing vice president, Dick Cheney, reflecting on this historic Obama inauguration, an event he calls -- and I'm quoting Cheney -- "really remarkable." We're going to talk about that one-on- one.

And my interview with House speaker, Nancy Pelosi, warning that Obama's economic recovery plan won't necessarily simply get a rubber- stamp from Democratic lawmakers -- all of this, plus the best political team on television.

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

The president-elect today took the wraps off his cloak and dagger team, the top officials who he says will help America face terrorist networks, weapons of mass destruction, and failed states and rogue regimes. But are the men he picked to head the intelligence effort up to the job?

CNN's Brian Todd has been looking into this story for us.

Brian, there's some criticism of these picks.

TODD: There has been, Wolf, since these men's names were first reported in the media. And now that we have got these nominations, the primary question seems only to be growing louder. Can either of these men compensate for his lack of hands-on intelligence experience.

(BEGIN VIDEOTAPE)

TODD (voice-over): A formal unveiling that's been the talk of Washington, Admiral Dennis Blair as director of national intelligence. Leon Panetta as head of the CIA, an intelligence team with impressive resumes, but insiders maintain, not for the world they're about to enter.

ROBERT GRENIER, KNOLL ASSOCIATES: Neither man really has very much of an intelligence resume. So, I think that, within the bureaucracy, they are going to be under particular scrutiny.

TODD: Former CIA counterterror chief Robert Grenier says it will be hard for Blair and Panetta to get the running start they will need, given the complicated, dangerous and largely unseen U.S. efforts in Afghanistan and Pakistan, operations like the recent missile strike in northern Pakistan, which killed two top al Qaeda leaders on the FBI's most-wanted terrorist list.

But their prospective boss touts the credentials Blair and Panetta do bring to the spy community.

OBAMA: They're public servants with unquestioned integrity, broad experience, strong management skills, and the core pragmatism we need in dangerous times.

TODD: But another key question, will Blair and Panetta completely eliminate the practice of enhanced interrogation techniques on terror suspects? President-Elect Obama says he's made it clear to them.

OBAMA: Under my administration, the United States does not torture.

TODD: Vice President Cheney doesn't call the techniques used for the past seven years torture. In an interview with Wolf Blitzer, Cheney said some enhanced methods used with terror suspects worked.

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: We were able to persuade them to cooperate, to give us the intelligence we needed and to give us the base of understanding about Al Qaeda.

TODD: Some intelligence veterans say certain enhanced techniques should be kept in place. Others say those methods are counterproductive.

ADM. JOHN HUTSON, RET, FORMER NAVY JUDGE ADVOCATE GENERAL: The techniques that are effective are not enhanced, hot and cold, all of that. Those are not the techniques that are most likely going to produce the intelligence you want.

(END VIDEO TAPE)

TODD: Now, after today's news conference, we pressed the Obama transition team again on that question -- will all enhanced interrogation be completely scuttled under Administration Blair and Leon Panetta?

We were told that the president-elect is sticking to his plan of making all interrogators adhere only to what's called the Army "Field Manual," which outlaws things like forced standing, sleep deprivation, exposure to extreme temperatures. Again, some call that torture, but intelligence officials have told us some of those techniques have been very effective for the last seven years, Wolf. Everybody is going to be watching this as Mr. Obama takes office. It is not going to be eliminated.

BLITZER: It's going to be one of the most sensitive issues.

We'll be watching.

TODD: That's right.

BLITZER: Thank you very much, Brian, for that.

Even before the new president is sworn in, Democrats in Congress are trying to assert themselves.

But will their efforts help President-Elect Obama or hurt him?

Let's go to our senior Congressional correspondent, Dana Bash -- Dana, what are the Democrats trying to do?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, you know, Congressional Democrats spent eight years without enough votes or, of course, a Democratic president to advance many of the things on their agenda. And now -- in fact today, they made the first moves to correct that. But they're also warning Barack Obama, Pennsylvania Avenue is still going to be a two-way street.

(BEGIN VIDEOTAPE)

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: The bill is passed.

The bill is passed.

BASH: Over Overwhelming House approval of two bills giving women more legal rights to force employers to pay them as much as men.

PELOSI: And in this very first week of this first new -- of this new Congress, the change that we want to make is in the lives of America's families. This legislation hits home.

BASH: Behold Congressional Democrats elated about total control of Washington, flexing their new muscle -- moving to pass long-stalled priorities like equal pay for women now that they've won new Senate votes to pass it and a president who promised to sign it.

(BEGIN VIDEO CLIP FROM OCTOBER 15)

OBAMA: If a woman is out there trying to raise a family, trying to support her family and is being treated unfairly, then the court has to stand up if nobody else will.

(END VIDEO CLIP)

BASH: Republicans are slamming Democrats for misplaced priorities.

REP. BUCK MICKEON (R-CA), EDUCATION AND LABOR COMMITTEE: And what signal does this send to the nation and the world, that the first substantive order of business of the 111th Congress is not job creation or tax relief or economic stimulus, but rather a trial lawyer boondoggle?

BASH: Congressional Democrats plan to act fast on many agenda items blocked by President Bush. Like on SCHIP, money for children's health insurance. But they are also laying down an early marker with the incoming Democratic president -- don't expect a rubber stamp.

SEN. BARBARA BOXER (D), CALIFORNIA: This particular moment is not about personalities. It's not about party. It's about country.

BASH: In fact, on the big issue, economic stimulus, Obama aides met behind closed doors for the second day in a row with Democrats who criticized his tax plans.

CNN is told Congressional Democrats are increasingly warning Obama's team they want a stimulus with more spending on infrastructure, less tax cuts. REP. RON KIND (D-WI), WAYS AND MEANS COMMITTEE: I mean I don't think anyone really expects that -- that this stuff is going to come down from some mountain written on tablets and then given to the Congress.

(END VIDEO TAPE)

BASH: Democratic lawmakers all say there's no question that there will be a stimulus package done in the next month or so. They say there's no question about that. But they are increasingly demanding a big say in what is going to be in that. And, you know, there's a sign that the Obama team gets that, Wolf. They're coming back here to Capitol Hill this weekend with all Democratic senators. It's going to be a rare Sunday meeting -- Wolf.

BLITZER: Rare, indeed.

All right. Thanks very much, Dana, for that.

Dick Cheney doesn't like Barack Obama's politics, necessarily, but he still has some very kind words to say about the president- elect. The vice president talks with me about his personal memory of race riots and Dr. Martin Luther King's assassination to express his feelings about Barack Obama's victory and the inauguration, coming up.

And I'll admit I couldn't necessarily help myself -- Ellen DeGeneres played the music.

So guess what?

I did the dance. You're going to see it and more, right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: This Sunday morning will be my last anchoring "LATE EDITION." And we'll have some special guests. Among them, the vice president, Dick Cheney, and the House speaker, Nancy Pelosi. Among the things the vice president talks about are his feelings about seeing President-Elect Barack Obama assume the reins of power less than two weeks from now.

(BEGIN VIDEOTAPE)

BLITZER: Finally, as you leave office are you encouraged or worried about the Obama administration?

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: I -- obviously, I didn't vote for Barack Obama. I voted for John McCain. I'm a Republican, a conservative. He's a liberal Democrat.

On the other hand, I have the same feeling that I think many Americans have, that it's really remarkable that what we're going to do here in a few days is swear in the first African-American president of the United States. When I came town in 1968, we'd had the Martin Luther King assassination, the Bobby Kennedy assassination, riots in the cities -- major, major disturbances, a lot of it racially motivated -- around the country.

And, in fact, things have changed so dramatically that we're now about to -- to swear in Barack Obama as president of the United States. That's really a remarkable story and, I think, a record of tremendous success and progress for the United States.

BLITZER: Pretty historic (INAUDIBLE).

(END VIDEO TAPE)

BLITZER: A long, long interview with the vice president, 30 minutes. You'll see the whole thing on "LATE EDITION."

My other guest on "LATE EDITION," the House speaker, Nancy Pelosi. And I asked her about growing tensions among some Democrats over the president-elect's economic recovery plan.

(BEGIN VIDEO CLIP)

PELOSI: The administration -- the Obama administration will propose, Congress will work its will, we'll come to terms and we will have legislation before we leave for the Presidents Day.

BLITZER: What I hear you saying is that you don't want the Democratic majority in the House -- and you can only speak for the House, you can't speak for the Senate.

PELOSI: That's right. That's for sure.

BLITZER: ...to be simply a rubber stamp for the Obama White House.

PELOSI: And I don't think the Obama White House wants that, either. They have been very receptive to our conversations about where we think the resources can be deployed more rapidly or some changes in priorities in the legislation. These meetings are ongoing hour to hour. And I'm so -- I'm so proud of the dialog that is taking place. And, of course, we want that dialog to include the Republicans, as well.

(END VIDEO TAPE)

BLITZER: And, once again, you can see both interviews in their entirety, the interview with Dick Cheney and the interview with Nancy Pelosi, on "LATE EDITION" this Sunday morning. It all starts at 11:00 a.m. Eastern.

And standing by, the best political team on television -- Gloria Borger, Steve Hayes and Candy Crowley. We're about to discuss what Cheney and Pelosi are saying, plus more of the news of the day.

And the Obama inauguration -- it's on track to be the most diverse in American history -- and we're not just talking about race.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Lou Dobbs is getting ready for his show that begins right at the top of the hour -- Lou, what are you working on?

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Wolf, thank you.

Coming up at the top of the hour, we're reporting on the steep increase in unemployment in this country. The unemployment rate now more than 7 percent -- the highest level in 16 years. We're also going to be reporting what you haven't heard anywhere else -- and that is the rising minority unemployment rate in this country.

I'll be joined by four of the best political analysts, as well, to tell us how the new Obama administration will be tackling our economic crisis.

Also, a new warning for the Obama administration about an issue we've been reporting on here for years -- nine of the Food and Drug Administration's own scientists say their agency is suffering from gross mismanagement and corruption. We'll have that report.

And this recession is claiming an unlikely victim -- a college football team in Washington State.

How many more college football teams are at risk?

We'll have that story and we'll be examining stunning charges that Communist China is supplying Hamas with the weapons with which to attack Israel.

Please join us at the top of the hour for all of those stories, all the day's news.

That's next -- Wolf, back to you.

BLITZER: Thanks very much, Lou.

The House speaker, Nancy Pelosi, pledging to work with Barack Obama, but telling me during our one-on-one interview that the next president's economic recovery plan won't get a rubber stamp in the House of Representatives.

Let's talk about that and more with our CNN senior political analyst, Gloria Borger; our CNN political contributor, Steve Hayes, of "The Weekly Standard;" and our CNN political correspondent, Candy Crowley.

Easier said than done -- she raised her hand, Nancy Pelosi, and looked at me and looked at that camera and said: "I promise there will be no earmarks, no pork barrel spending" in that $700 billion or $800 billion recovery plan.

GLORIA BORGER, SENIOR POLITICAL ANALYST: It depends. You know, what pork is some -- is to some is kosher to other people. It depends. It's in the eye of the beholder.

Will there be Republican pork?

Probably not.

Will there be some Democratic programs?

Probably yes. But they are promising that this is going to be a federal stimulus package and not a constituency-based district by district package in the Congress.

We're going to have to see if they can keep that promise. BLITZER: What do you think?

BORGER: (INAUDIBLE).

BLITZER: Can they do it, because, you know, there's a lot of -- Barack Obama, the other day, promised basically the same thing.

STEPHEN HAYES, SENIOR WRITER AT "THE WEEKLY STANDARD": Yes. It's fascinating to me that they're on record so early saying this again and again, and again. Because what it's going to do is give their critics an opportunity, when this goes through, to point to different things and say this is pork, this is pork, this is pork.

BORGER: Well, someone is going to be in favor of...

HAYES: This is unnecessary.

BORGER: ...some of these projects.

HAYES: Sure. But I think what they've done is they've set a very high bar. Republicans are going to be able to pick through and say these things are pork and they're wasteful spending, you haven't been honest with us.

BLITZER: Because, Candy, you've covered Capitol Hill for a long time. You know how these earmarks are done. Some Congressman from some state, he gets, you know, a project in his or her district and slips it in.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: I don't think there will be any slipping in. I think that they will -- I mean I think they can sort of make that not happen.

But I can imagine a scenario where Congressman X says no, there's just no way I'm doing this.

And they'll say, well, what if in our list of state projects, your library in your district got the renovation that, you know, you have been wanting?

OK. Well, then it's in -- you know, in the list of public works projects and it's not pork, you know.

HAYES: And, you know, they're also already getting lots of pressure from mayors, from governors, who are asking for infrastructure spending that I think a lot of us...

BORGER: (INAUDIBLE).

HAYES: ...especially fiscal conservatives, would consider pork from the get go.

BORGER: And those are those things that Obama keeps referring to as "shovel ready" projects.

HAYES: Right.

CROWLEY: Right.

BORGER: ...projects that are -- that's a new phrase we hear a lot, "shovel ready."

BLITZER: Yes. Well, there's a lot of need. The infrastructure in big parts of the company is crumbling right now.

BORGER: Sure.

BLITZER: And they've got to fix a lot of those bridges and those roads. And so there's work that has to be done.

Now, the vice president -- I spoke with him -- I know you did, as well, Steve. He was very, you know, very excited about this historic moment when an African-American is about to be sworn in as president of the United States.

HAYES: Yes. It was interesting, when I asked him -- we asked some of the same questions. And, you know, he's -- he was. He said this is a remarkable moment. You look back at when I came to Washington in 1968 and the monumental changes that have taken place over the past 40 years. This is a milestone for the country and something we all should be proud of.

BLITZER: I keep hearing that, Candy, from a lot of conservatives, a lot of Republicans -- you know what, they voted for John McCain, they don't like Barack Obama, but they're very excited about what's about to happen.

CROWLEY: Well, history doesn't happen every day. I mean histories are moments. You know, when you look at history, it takes a moment in time. This is a moment in time.

So who's not to be excited?

This is -- you know, history is different from politics. I mean any time you watch something that you know is going to be a chapter in the history books, it's exciting. I mean it doesn't surprise me.

BORGER: But it doesn't mean that Obama is going to get a free ride from conservatives

CROWLEY: Oh, no, no, no.

(CROSSTALK)

CROWLEY: What they're interested in...

BORGER: You know, where...

CROWLEY: ...and what the American people are interested in...

BORGER: Exactly.

CROWLEY: ...is, OK, great history.

Now what are you going to do for me?

BORGER: Exactly.

CROWLEY: Yes.

BORGER: Exactly.

BLITZER: Yes. So the pressure of the expectations on Barack Obama are enormous right now, as all of us have been saying.

BORGER: They are enormous. And, you know, folks in the transition team understand that that could become a problem for them, because there's all this goodwill. The American public, every poll shows, expects him to succeed. There's goodwill in Congress right now. And if he doesn't do well, that -- that's going to be a big problem.

CROWLEY: I think that's why you're also getting a lot of this is not -- you know, that sort of the Darth Vader of the economy for the last couple of days -- you know, it's dire and we might not be able to get out of it and you have to hurry. And, oh, by the way, here are the things that aren't my fault. I think that's, you know, a little bit of what you're hearing.

BLITZER: All right. We're going to change subjects dramatically right now.

I was out in Los Angeles last night, as you know.

BORGER: We heard.

BLITZER: I taped an appearance on "The Ellen DeGeneres Show." It will air on Monday. Check it out. I walked out there and this is what happened.

(VIDEO CLIP)

BLITZER: That's it. She welcomed me warmly. She's a good dancer. I am not.

BORGER: Yes. BLITZER: But, you know, I did a little -- and I moved a little bit.

BORGER: I think our chiron should be Dances with Wolfs, don't you think?

BLITZER: Yes, dances with Wolf Blitzer.

(LAUGHTER)

BLITZER: It's a sequel to the Kevin Costner film.

You know, it was a lot of fun, I've got to tell you. Wait until you see the whole thing -- the all 10 minutes or so on Monday in the Ellen show...

BORGER: I hear it gets better.

BLITZER: It gets -- it -- it's a lot of fun.

HAYES: All you were missing was the white man's over bite. I thought you were going to start to grind a little.

BLITZER: Ooh, look at Steve. Yes.

(LAUGHTER)

(CROSSTALK)

BLITZER: She's been teaching you that move, right?

CROWLEY: I noticed, also, that you were not mouthing the words to that song.

BLITZER: Yes.

CROWLEY: Quick, what was the name of it?

BLITZER: "Low, Low, Low." (ph)

You know who sings that, it's a little, very popular?

Flowrider.

BORGER: Oh, well...

HAYES: I didn't know that.

CROWLEY: Oh, wow!

BLITZER: Flowrider.

BORGER: All right.

(CROSSTALK)

HAYES: The things you learn...

BLITZER: You guys obviously...

(CROSSTALK)

BLITZER: You obviously don't have a 27-year-old daughter, any of you.

BORGER: Or a producer.

BLITZER: Yes.

BORGER: Right.

HAYES: I have a son.

BLITZER: You have a son.

All right.

Jack Cafferty, Flowrider and Jack Cafferty -- that's the way to go.

CAFFERTY: Are we doing this right now?

BLITZER: Yes.

CAFFERTY: You've got it.

The question this hour is there any...

(LAUGHTER)

CAFFERTY: How do you follow that?

Is there anything you'd like to ask Sarah Palin?

She was out whining in some interview with some conservative kid who's doing a documentary on how Obama won the election. And she's blaming everybody in the universe for why she didn't do well. Didn't make mention of the fact that she came off like a functional illiterate during a good part of the campaign. It was everybody else's fault.

So, anyway, what would you like to ask her?

Bill in New Jersey writes: ""I'd like to ask her if, knowing what she knows now, she'd do it again for 50/50 odds of winning?"

J.D.: "Actually, I have two questions for Governor Palin. One, when is your 15 minutes up? Two, where is a good place to buy fresh turkey?"

Tom in Wisconsin writes: "Nothing. She's already told us everything she knows." Terry in Iowa: "Dear Miss. Palin, would you please go away? You're an embarrassment to yourself and the State of Alaska. You ought to be the poster child for the declining standards of our education system and the ignorance and arrogance of the greatest oxymoron of all, the Christian right."

Karl in San Francisco: "During the campaign, you sounded dumb. Now you sound dumber. Which is the real Sarah Palin?"

Gerry in Toronto writes: "I have only one question for Sarah Palin -- what does it cost to get you to stay in Alaska and keep your mouth shut?"

R.M. in Poland, New York: "Is stupidity something you practice or does it come naturally to you?"

And Michael in Florida: "I'd like to know why she puts up with people like you."

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

It isn't Ellen DeGeneres, but Sarah Palin is almost as good -- Wolf.

BLITZER: Yes, no, Sarah Palin -- you know, we'd love to have her back here in THE SITUATION ROOM. You know, I went down to Florida, as you remember, after the election...

CAFFERTY: Oh, yes.

BLITZER: ...and interviewed her. It was a pretty good interview, I think.

CAFFERTY: Well, you -- you conducted one of the more cogent conversations that I can remember from that whole three month debacle. Your interview wasn't bad. But some of that stuff with Katie -- you know, the first thing she did with Katie Couric, where you and I were carping about it on the air. You were up here in New York. That thing was put on YouTube. There have been four million views of that little piece of Cafferty File.

BLITZER: Yes. I know. You get four million viewers with your Cafferty File a lot on YouTube.

CAFFERTY: Well, I don't know about that but a lot of people...

BLITZER: Jack, when is your book coming out?

CAFFERTY: The book comes out in March. It's called "Now or Never." Next week, I can show you the cover. I just got the art work today.

BLITZER: Good. CAFFERTY: But it's a -- the subtitle is something about it's time to go to work and try to recapture what's left of the American dream or something like that.

BLITZER: I can't wait. I can't wait. And a lot of our viewers can't wait, as well.

CAFFERTY: All right.

BLITZER: Jack, thank you.

CAFFERTY: See you Monday.

BLITZER: The queen of soul soon to be singing for the nation and the new president.

(VIDEO CLIP)

BLITZER: And classical and hip-hop artists also will be performing, along with marching bands. But the inaugural diversity extends far beyond the music.

And a country gripped by frigid winter weather -- just one of our Hot Shots.

That and more coming up here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Here's a look at some of this hour's Hot Shots.

In Zimbabwe, amid economic collapse, a man carries goods on bike usually transported by automobile.

In India, gas station workers play cricket during a fuel shortage.

In Iraq, police demonstrate their skills to mark the 87th anniversary of the police force.

And in Germany, a family takes a trip across a frozen lake.

Some of this hour's Hot Shots.

And now to the Obama inauguration. We're learning new details about it. And we're also learning why it's shaping up to become the most diverse and most unusual in U.S. history.

CNN's Fredricka Whitfield once again joining us -- Fred, what are you finding out?

WHITFIELD: Well, 11 days from now, the nation will witness what is expected to be the inclusive presidential inauguration to date. For the first time, the length of the National Mall will be open to the public to witness the swearing-in of the 44th president. And that's just the beginning. (BEGIN VIDEOTAPE)

WHITFIELD (voice-over): On the steps of the Capitol, expect even more of what was seen in Chicago's Grant Park.

DANIELLA LEGER, CENTER FOR AMERICA PROGRESS:

I think you're just going to see a much broader diversity of people who are going to be participating. And you look at the Obama campaign, he brought in young people, he brought in African-Americans, Hispanics, Asians, Native Americans.

WHITFIELD: But the diversity is not just measured by color. There are different political persuasions. Obama's pick of conservative minister Rick Warren to deliver the opening prayer ruffled some feathers because of Warren's opposition to gay marriage. But Obama -- unruffled -- maintained differing views can be unifying.

(VIDEO CLIP)

WHITFIELD: Other variations are being played out through different artists, including multiple Grammy winner Aretha Franklin...

(VIDEO CLIP)

WHITFIELD: ...cellist Yo-Yo Ma and Itzhak Perlman, performing a new piece of music commissioned by Obama. And relatively unknown to most, until now, Pulitzer finalist, Yale Professor Elizabeth Alexander -- the poet of Obama's choice, whose father advised President Johnson and was instrumental in the passage of the Voting Rights Act.

And Obama's personal guests?

Any of the 300 or so surviving Tuskegee airmen. Despite segregation, the elite group of black airmen heroically fought in World War II. This is their first personal invitation to a swearing- in.

UNIDENTIFIED MALE: The men -- we have overcome a lot.

WHITFIELD: And then there are the inaugural balls -- 10 official ones, which the Obamas plan to attend -- and countless others.

Hip hop mogul Russell Simmons, who, along with many performers, spearheaded huge youth vote drives, is hosting a ball to celebrate what Obama symbolizes to people of all ages and backgrounds.

RUSSELL SIMMONS, HIP-HOP ACTION NETWORK: He represents a shift in consciousness in this country. And for that, everyone is proud -- you know, Republican and Democrats alike. You know, whites and blacks and Latinos and others see ourselves as evolving in a very positive direction. That, for me, is a very big statement.

(END VIDEO TAPE)

WHITFIELD: Lots of history being made on January 20th. Obama will take the oath of office on the same bible, Wolf, used by Abraham Lincoln at his first inauguration in 1861. This is the first time that bible has been permitted to leave the Archives.

And, Wolf, you know, this is a little history for the Whitfield family, too. My dad is a Tuskegee air man. And he, too, is among those invited to witness the swearing-in.

And guess who gets to be the escort?

BLITZER: You.

WHITFIELD: Me.

BLITZER: You should be. We'll look forward to it.

(LAUGHTER)

BLITZER: And I know how thrilled he must be.

WHITFIELD: Yes.

BLITZER: And we congratulate him for reaching this milestone.

Thanks very much.

WHITFIELD: Thank you.

BLITZER: Thanks. And thanks to all of our viewers.

I'm Wolf Blitzer in THE SITUATION ROOM.

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

DOBBS: Wolf, thank you.

Tonight, the unemployment rate is above, now, 7 percent. It is at the highest level in 16 years. We'll be examining President-Elect Obama's plan to save or to create three million jobs, as he puts it.

And tonight, Governor Blagojevich is impeached by the Illinois House of Representatives. We'll have a live report on what is next for the governor and the people of Illinois.