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THE SITUATION ROOM

Democrats Take Control of Congress; Nancy Pelosi Becomes First Female Speaker of the House

Aired January 4, 2007 - 12:59   ET

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


WOLF BLITZER, CNN ANCHOR: The power shift taking place right now on Capitol Hill in the Senate and the House of Representatives, the Democrats becoming the majority party in both chambers. Welcome back to our special coverage on this historic day. I'm Wolf Blitzer. We're reporting from THE SITUATION ROOM.
As we're reporting all of this, there's been a dramatic resignation over at the White House. We're just getting word that the White House counsel, Harriet Miers, who was once President Bush's pick to become a member -- a justice of the U.S. Supreme Court has resigned. Bush, according to the White House, has now reluctantly accepted her resignation which takes effect at the end of this month.

We have reporters standing by covering this story, all of our stories. Our reporters include John King and Crowley. We have our White House team, our congressional team. Also joining us, our "Strategy Session," Paul Begala, our Democratic strategist, former Republican Congressman J.C. Watts.

J.C., thanks to both of you coming in.

J.C., let me start with you. You served in the House of Representatives for a long time. You watched the Democrats. Nancy Pelosi now emerging as the speaker of the House. What do you think? What's happening?

J.C. WATTS, FORMER REPUBLICAN CONGRESSMAN: Well, Wolf, I first want to say Harold Ford could have contributed mightily to this House or the Senate. So it's unfortunate that he's not there.

Second, Nancy Pelosi, back in 1997, I believe, I had a daughter with me, one of my kids, two of my kids. They were on the floor of the House with me. And my daughter, who was about 7 or 8 at the time, she said, "Daddy do they have women congressman?"

And I said, "Yes, Julie, they do." And I introduced her to a couple women congressmen.

Today, we're seeing a woman being sworn in as the speaker of the United States House of Representatives. That -- it's not my party, but that's a special deal. That is a big deal.

I mean, there's a side of me -- I left voluntarily, but there's a side of me that wished I would have been on the floor of the House today to experience, I think, the history that's in the making. Jim Clyburn, No. 3 in the majority party, African-American, he ties as the highest ranking African-American ever in the history of the United States Congress with Bill Gray of Pennsylvania, who was majority whip, who resigned in 1992. So this is a special day, in spite of fact that I'm not there and my party's not in the majority.

BLITZER: It's a big deal. The fact that Nancy Pelosi's going to be the speaker of the House, we pointed it out before, after the vice president, she's next in line to become president of the United States

PAUL BEGALA, DEMOCRATIC STRATEGIST: She is. It's an awesome responsibility. I was struck at something Harold Ford said. And as a member of the House, I think J.C. would back this up.

Members of the House view their speaker as uniquely theirs. She now occupies a constitutional office. The leader of the Senate does not. It's the vice president who is the leader. That's a constitutional office. But the chief U.S. senator does not have a constitutional office.

BLITZER: Harry Reid won't have a constitutional responsibility.

BEGALA: Harry Reid is not in line to be the president of the United States. Nancy Pelosi is.

And members in both parties do see their speaker as uniquely theirs, not simply the Democratic Party's speaker. And this will be a challenge for Nancy, for Ms. Pelosi, Speaker-elect Pelosi, because she's been, as ought to be as the Democratic leader, very, very partisan.

I was struck that my friend, Rahm Emmanuel, the congressman from Illinois who nominated her, talked about how she wants a Congress that has -- is known more for its patriotism than its partisanship. They're trying to send a signal. And I think it's an important one.

BLITZER: Is it wise -- let me get you to weigh in first, and then we'll have J.C. weigh in -- for the Democratic majority in the House of Representatives to now do to the Republicans what the Republicans did to them for so many years, basically just ram through some legislation without going through a more deliberative consultative process?

BEGALA: I think yes but. OK. I think for the first 100 hour, yes. The issues that they're bringing up, ethics reform, the minimum wage, making the government negotiate for lower prescription drugs for Medicare recipients, benefits for oil companies that Democrats don't think they deserve, they have been debated. There have been hearings on all of them. These are not new.

And the Democrats ran on them. And I think they can fairly say we had the hearing. We had the deliberative process. It was called the election.

But once those 100 hours are over -- are over, it will be very interesting to see, can the Democrats then loosen up? Can they then open up and allow the Republicans to have rights that the Democrats did not have when they were in the minority? That will be the acid test.

It will come about two weeks from now when they go to what Congress members call the regular order. In the regular order, I hope the Democrats do open up and give Republicans more right. I think they will.

BLITZER: It's going to be about 2 weeks, 2 1/2 weeks for the first 100 hours that the House is in session, the working hours of the House, for the Democrats to try to achieve these goals. What do you think of their tactic?

WATTS: Well, I think, Wolf, as a strategist, if they would have asked me, which they didn't, I would have said, I don't think I would do that. Because I think the American people voted for change. They said, "Give us something different."

And in spite of the fact that Republicans are beating up the Democrats for doing to them what they did to the Democrats, it's still not changed. It's the same old thing.

And I think when we came in in 1995 as a majority for the first time in 40 years, you know, we had had -- you know, welfare reform was on the agenda, the Contract with America, stopping unfunded mandates, Balance Budget Amendment. All of those things were fleshed out. They had committee. They had hearings. They had votes. They had amendments and so forth.

So as a strategist, I would say it doesn't look good starting off on the wrong foot.

BLITZER: Take a look at this live picture we're seeing, Ted Kennedy and Dick Cheney. They don't often get together. They're getting their photos taken. Let's just watch a little bit as this unfolds.

Dana, you're watching this in the House. Andrea Koppel -- Andrea's watching in the House, Dana's watching in the Senate. Update our viewers, Dana, on the process of this transfer of power in the Senate.

DANA BASH, CNN CORRESPONDENT: What you're seeing right now is ceremonial. What you're seeing is a picture of a swearing-in, a mock swearing-in, if you will, going on in the old Senate chamber. So that the senators and their families can there be with them to take the photos for themselves and, of course, for history.

What's going on down the hall...

BLITZER: I just want to point out, Dana, if I could interrupt for a second, that's Mrs. Kennedy in the green between the vice president and Senator Kennedy.

BASH: Correct. Right. That's Senator Kennedy. And some familiar faces from the Kennedy brood there. But as we were just discussing, down the hall in the real Senate, where they are now convened and the Democrats are now officially in charge, and -- in the majority, I should say, Harry Reid -- there you see him -- the new Senate majority leader, he just concluded an opening speech touching on many of the themes we have heard him give over the past several days, trying to make the point that he is trying to change the tone here.

But, you know, Wolf, this is going to be -- the man you're looking at right now, when you're talking about the Democrats' agenda, so much of it falls on his shoulders.

Because as a colleague said to me before, you know, the rules are if you wanted to pass a ham sandwich in the House, you could, but the Senate is a whole different kind of thing because you need to really get 60 votes to get anything through. And that is why the whole agenda of the Democrats really depends on his ability to put his money where his mouth is and really be able to work in a bipartisan way with Republicans. And even more of a challenge might be to get his own Democratic Caucus on board with some of the things he's trying to do.

BLITZER: There's a photo of the vice president, Dick Cheney, with the Kennedy family. They're all there for the swearing-in ceremony, the picture-taking part of this, in the old Senate chamber.

Candy Crowley is watching all of this unfold. This is a nice moment, I got to tell you.

CANDY CROWLEY, CNN CORRESPONDENT: These are -- these are family times. And you know, for a group that doesn't get a lot of family time, for all we've talked about, you know, the do nothing Congress and how they didn't work a full week, this still is a very heavy duty job, because a lot of politicking, a lot of money raising goes on when they're not in the Senate or in the House.

So this is one of the truly made for family times for these congressmen and these senators. And makes them a lot more human, I think, as you watch these things.

BLITZER: Let's check out what's happening on the House side. Andrea Koppel is watching that for us.

Andrea, what's -- what's happening right now?

ANDREA KOPPEL, CNN CORRESPONDENT: I believe, Wolf, they are still doing the roll call, which is going to go on for a little bit more before we have the announcement as to the fact that Nancy Pelosi, as we expect, will win.

But if I could just add something to what J.C. was saying a few moments ago about Nancy Pelosi.

This is a girl who grew up in Baltimore, the youngest of six kids. She grew up in Little Italy, in a working class neighborhood. Her dad was really the big Kahuna in Little Italy. He had been not only the mayor of Italy during her -- of Baltimore during her childhood but also a congressman here on Capitol Hill.

And just before he died, Wolf, he was there when Nancy Pelosi was first sworn in, in 1987. He was in a wheelchair.

And one thing Miss Pelosi has said time and again, she never expected to get into politics. Nobody in her family -- and her mother was also the strategist behind her father's success. Nobody in her family expected her to jump into politics. It was actually her brother Tommy who became -- went on to become mayor of Baltimore.

It wasn't until 1987 that she finally threw her hat in the ring when the person, woman, who did hold the position, was the member from California, passed away. And was -- and Nancy Pelosi was asked to take her seat.

BLITZER: Andrea, hold on a moment. John King is also joining us in our coverage.

John, as much as everyone seems to be very happy and smiling and taking pictures together, I think it's fair to say it's not going to last all that long.

JOHN KING, CNN CORRESPONDENT: No, and I think the veterans like J.C. of the House floor can tell you one of the reasons -- and Candy just noted with the family time -- is savor this day, because this day will quickly pass, Wolf.

The Democrats are acting on those issues you've been talking about all morning right out of the box, because they campaigned on them, but also because they have the votes for them. Those are issues on which there is broad consensus in the Democratic Congress and even considerable support among moderate Republicans to get those things through.

But then will come the hard things. What will the Democrats do about Iraq? They are a governing party now in the United States. Most Democrats believe it's time to start bringing the troops home. The president seems inclined to do just the opposite, at least in the short term. What will the Democrats do?

What will the Democrats do to the president's challenge yesterday? "Yes," the president says, "I want to work with you to balance the budget." But he also says, "I want to make my tax cuts permanent." Well, the Democrats vehemently opposed to much of the Bush tax cut package.

And what will happen when the liberals in the Democratic Party want to do something, say increase spending on education somewhere, increase social spending somewhere, and many of the moderates and conservatives in the Democratic Party, the new members who made the Democrats the majority, what will they say when the liberal lions, as we've called them all morning, say, "It's time. We're in power now. Let's start reversing the Bush and the Republican agenda, and let's start spending money here and there."

So the speaker and, as Dana just noted, even more importantly, leader Reid in the Senate, will face some pretty tough challenges just a few weeks down the road, Wolf, so they should savor today.

BLITZER: And even if -- it goes without saying, John, that even if the House passes all of these initial items on their 100-hour agenda, it's by no means certain the Senate will follow suit.

KING: One of the great fascinating things we are about to see, we're back in the days of divided government. Paul Begala remembers it from his days in the Clinton White House.

We haven't just had 12 years of Republican rule on Capitol Hill. We've had six years of an all-Republican town because of a Republican president.

You have to trade now. You have to do deals. And there's not a lot of trust between the parties in Congress, the Democrats and the Republicans, even though they're all being nice and celebrating today. And there's not a history of trust or bipartisanship or true deal- making, negotiating, except for a few points. Dana noted the education bill earlier, the new Medicare prescription drug benefit.

But since the Iraq war started, especially, there has been very little actual working, trading, deal-making between the Democrats and the Republicans, especially and including this president.

That is the challenge, to get anything done. And it's a huge burden on the Democrats to get things done. And there's a huge burden on this president to prove, "I'm not a lame duck. I can get some things done, too." But wanting to get things done and actually getting things done because of the ideological differences is quite a different thing.

BLITZER: Thanks, John, for that.

We'll take another quick break right. Much more of our special coverage coming up. Jack Cafferty standing by with "The Cafferty File". Lou Dobbs will be joining us, as well, as well as the incoming chairman of the Republican Party, Senator Mel Martinez of Florida.

Much more of our special coverage, "Democrats Take Control of the House and the Senate". We're standing by to hear from Nancy Pelosi, the incoming speaker. She'll be speaking shortly. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back. We're continuing our special coverage of the transfer of power in the House and Senate. From Republican majority to Democratic majority.

In the House of Representatives, they're continuing the roll call right now for the next speaker of the House. Not much question who that will be. It will be Nancy Pelosi.

Andrea Koppel is watching all of this unfold together with us -- Andrea.

KOPPEL: That's right, Wolf. Despite what we heard from John King that the honeymoon is going to end very quickly, today certainly is a day that is being relished.

Chief among them, by Speaker-elect Nancy Pelosi, who will be not only the highest ranking woman to ever hold political office, two heartbeats away from the president, but she'll also be the highest ranking Italian-American to ever hold this high -- this rank of political office.

It is a day that she says is important in her life personally, but she also, Wolf, says that she hopes it will just be the beginning of women holding higher ranks in the U.S. government.

BLITZER: Andrea, thank you.

Jack Cafferty is in New York. He's watching all of this together with us. "The Cafferty File", coming up.

Jack, you've been asking our viewers a provocative question.

JACK CAFFERTY, CNN ANCHOR: Indeed: "How optimistic are you things will change with the 110th Congress?"

There's a little optimism out there. Jeremy writes, "The problem is, there are no real mold-breaking people coming into the office today. They are merely filling the shoes of their respective predecessors and possess no new ways of thinking. Having said that, I don't think it could get any worse than the way it was."

Jennifer in Cleveland, Ohio: "I was hopeful when we, the people, made a stand against what's been happening in our country and because of our country last November. Now unfortunately, I'm seeing the obvious writing on the wall. As you mentioned, the Kool-Aid is served. No, I'm not confident things will change."

Jeffrey writes, "Mr. Cafferty, after the mishigas" -- I like that word -- "and animosity created by the Republicans, I have nothing less than the fullest of confidence and optimism that Mrs. Pelosi and her charges will get the job done in high fashion."

Brian in Memphis, Tennessee: "Jack, the forces outside the official political system are the paying customers of corruption, the politicians inside the system are the vehicles of that corruption, so I don't think expect much, based on past performance. However, I would like to be pleasantly surprised."

And Brenda writes, "Right now, I'm optimistic the new Congress will get some things accomplished. Only time will tell. It also depends how willing the Republicans are to give and take, and of course, Mr. Bush will have a bit to do with how much actually gets done. Give them a chance, Jack. You'll have plenty of opportunities to take shots at them later on" -- Wolf.

BLITZER: Jack, what two or three or four issues are you going to look at in these initial days of the Democratic majority in the House and Senate, things that might make you a little bit more optimistic?

CAFFERTY: Well, I'd be a lot more optimistic if they hadn't been so quick to duck and run, from looking at the financing of this war, looking at the allegations of abuse of power in the executive branch of government.

A piece in "The Daily News" this morning, President Bush has decided, apparently, according to the "Daily News", it's OK if he wants to read our mail, whether he has a warrant or not. Just another example of playing fast and loose with the Bill of Rights and the protections we're supposed to enjoy.

And it seemed to me that Nancy Pelosi was quick to say, "Impeachment's off the table; the war's off the table. We're not going to cut funding for the war."

I mean, it's nice to raise the minimum wage. There are more serious issues that are working against the best interests of all of us. And when I see them address those, then I'll have some confidence they're serious about what they're going to do. So far, I haven't seen that.

BLITZER: And obviously, Iraq is priority No. 1 right now, given the fact that the United States is spending taxpayer dollars, $2 billion a week and we're losing a lot of U.S. troops.

CAFFERTY: Well, and presumably, next week, the conventional wisdom is President Bush is going to go on national television and call for sending another -- up to 40,000 more soldiers over there. He might be the only one that thinks that's a good idea.

You look at every public opinion poll in the country, even the troops, the generals, the people in the Pentagon. We're not getting it done over there. And -- but we're calling it a surge. And the new way forward.

What it is, if he does it, if he does it, is an escalation of the war and stay the course, more of the same. And, again, the Democrats were elected to address this stuff. They need to.

BLITZER: All right, Jack, thanks very much. Jack, we'll be back later.

Joining us now is Republican Senator Mel Martinez of Florida. He's the incoming new chairman of the Republican National Committee.

Senator, thanks very much. I want to give you a chance to weigh in, as well. First of all, on this whole issue of Iraq, which is such a critical issue to the American public right now, given the cost in terms of dollars and lives.

What do you think? Do you support the president if, in fact, he goes forward with the plan to deploy another 20 or maybe even 40,000 U.S. troops to Iraq?

SEN. MEL MARTINEZ (R-FL), CHAIRMAN, RNC: Well, the first thing we have to do, Wolf, is to look at what he proposes. I would hope the president is going to propose a comprehensive plan for success in Iraq. We have to understand that there's a lot at stake, not just in Iraq but on the global war on terror and in the entirety of the Middle Eastern situation. For us to not succeed, for us to cut and run or fail there, would be a terrible disaster for our country. And it would be a bad thing for the Iraqi people, as well.

I think we need to look at whether we'll have a plan for success, whether the president's going to be proposing things that are going to be a comprehensive approach, economic opportunity for the Iraqi people, changes to the way in which we are not only fighting the war but also the politics of Iraq. How do we bring the Iraqis together to form a government that is successful and can govern?

BLITZER: What do you say, Senator, to those who would argue that during this most recent election the American people made it clear they don't want to escalate the U.S. military involvement in Iraq; they want to scale it down and end it?

What do you say to those of your constituents in Florida -- and pretty soon you're going to be chairman of the Republican Party -- who are arguing, you know what, it's time to stop pulling out, not adding more troops.

MARTINEZ: What I think the people were saying in the election is that they want to see a plan for success. They don't want to just abandon the project, but they want to see a way that it's going to be successfully handled.

And so what I hope the president will give us is a pathway to success that's going to lay out a new set of ideas of how we can be successful in Iraq.

What I do hope is that we can pull together, by the way, Republicans and Democrats, in a bipartisan way, to solve the most intractable and difficult problem we face today, which is this war. It is not only about the treasure that we've lost there, but it's also about the lives that have been lost there.

A lot of Floridians are in the front lines of this battle. And you know, when I was there not too long ago, I know that the morale of our troops is high, that they have high confidence in their abilities. What we have to do is lay out a plan where they can succeed.

BLITZER: All right, Senator, Jeff Greenfield is here in THE SITUATION ROOM. He has a question he wants to ask you, as well.

MARTINEZ: Hi, Jeff.

JEFF GREENFIELD, CNN POLITICAL ANALYST: Hi, Senator.

This is the last two years of President Bush's tenure. It's traditionally a time when members of the president's own party begin to express a lot more independence. You've seen Senator Smith of Oregon break with the president on the war. Chuck Hagel's been a longtime opponent. You're coming in as the new chairman of a party. What's the message you have for Republicans in this condition to say, "You'd better stay with the president," even if they're feeling the pressure from their own constituents for more independence?

MARTINEZ: I think it's very important that we look at Republicans just pulling together at a time when it really is a time for all Americans to pull together, particularly on the issue of war. This is too important for politics. It's got to be above politics.

But I think it is awfully important that the president lay out a vision that's going to capture the imagination of the American people, but particularly of Republicans. We need to pull the Republicans together as we look at the decisions that we're going to be making in the next few days about the war. It's a very important issue.

As I say, a lot of Floridians are out there on the front lines. So I feel it rather personally. And I do realize the great sacrifices being made. We need to find a way that we can be successful.

It will be -- the price of failure in Iraq is what we have to weigh everything against. It would be a terrible debacle for us, for our country, for the Middle East if we were to leave a vacuum in Iraq. And it would be a chaotic situation, even beyond where it is today.

BLITZER: Candy Crowley has a question, Senator, as well -- Candy.

CROWLEY: Senator, I'm wondering -- I don't need to tell you you're in the minority now -- I'm wondering what you see your role now as a minority party? And realistically, what can you get through the Senate that's on the Republican agenda?

MARTINEZ: Candy, we have to work together. We have to find a way that there are issues in which we coalesce, in which we are in agreement, that we can move forward.

I understand minimum wage may be one of the first things to come along. We can get something done on something like minimum wage. But we can also -- we'll have our own principles and ideas to bring to the table on these issues.

But there's great consensus of a number of things that we can get done. Some of them, frankly, were almost teed up and ready to go in the last Congress. I hope in a few months that we'll address the issue of immigration, a very divisive issue but one, again, that needs to be handled.

What I think American people were saying in this election, among other things, is that they wanted us to get to work and get something done. I think working together bipartisanly, working together for good policy, that also will adhere (ph) to be good politics, and everybody can be a winner.

BLITZER: You've got a tough challenge ahead of you, Senator.

MARTINEZ: Yes.

BLITZER: Good luck to you, not only representing the beautiful state of Florida but now becoming the chairman of the Republican Party, as well. We hope you'll join us back here in THE SITUATION ROOM.

MARTINEZ: Good to be with you, Wolf. Thank you.

BLITZER: Thank you, Senator.

Mel Martinez of Florida, he's going to be the chairman of the RNC.

We're watching the floor of the House of Representatives. They're up to the "S's" in the roll call. They're getting very close to a final roll call. Nancy Pelosi will be speaking shortly as the next speaker of the House of Representatives. We'll go there live once that starts.

Also, we're standing by. Lou Dobbs will be joining us, as will Michael Steele. He was the unsuccessful Republican candidate for the U.S. Senate from Maryland.

Much more of our special coverage, "Democrats Take Control", right after this.

(COMMERCIAL BREAK)

BLITZER: Welcome back to our continuing coverage. There's Nancy Pelosi with her grandchildren. She's on the floor of the U.S. House of Representatives.

They're continuing the roll call right now. Pretty soon, she will make history as the first female speaker of the House of Representatives.

Andrea Koppel is on the House side, as well. Andrea's watching this with us.

Update our viewers who may just be tuning in on what we can expect over the next 30, 40 minutes.

KOPPEL: Well, once they wrap up this roll call of the list of names, as you mentioned, they're sort of getting towards the end of the alphabet there. They will then announce who the speaker was, who got the most number of votes, and then the speaker will be escorted to the chair by the sergeant at arms.

She will then have -- I thought this was interesting, Wolf -- the new minority leader, John Boehner, is going to go up. And he's actually going to take her and introduce her to the House. She'll make brief remarks, and then you're going to have the swearing in that will take place.

And Wolf, we all know her as Nancy Pelosi, but the woman that you're looking at there used to be Nancy D'Alessandro, a little Italian-American girl who grew up in a political household but never herself thought that she would go into politics. And there, she's surrounded by at least one, I think, of her six grandchildren.

BLITZER: A lovely picture indeed. So many of the young people are there, so many children and grandchildren of members who have been brought on the floor.

We're going to continue to watch this together with you, Andrea. The speaker to be, Nancy Pelosi, promising in the first 100 hours of the House of Representatives to go through several major pieces of legislation.

Starting on January 9, they want to implement all, all the recommendations, of the 9/11 Commission.

On January 10, the Democrats say they have the votes to increase the federal minimum wage.

The next day, they want to expand embryonic and other forms of stem cell research.

On January 12, they hope to negotiate lower prescription drug costs for Medicare recipients.

The following week, on January 17, they hope to cut interest rates on student loans.

Finally, on January 18, they want to end what they call oil subsidies to big oil and invest that money in renewable energy sources.

Our Ali Velshi is watching that part of the story for us.

Ali, what do the Democrats really hope to do by getting this legislation through the House? And they hope it will get through the Senate, and the president will sign it into law.

ALI VELSHI, CNN CORRESPONDENT: That's right, Wolf. And you know, it's one of the more complicated measures that they put out there. But for a long time, people were mad about the price of oil. Right after Hurricane Katrina, right after those record gas prices, oil prices, we saw those massive profits that the oil companies were bringing in.

Well, get this. The oil companies, you know, they don't own the water in which they drill in America; they lease it from the government. In exchange, they pay royalties.

But back in 1998, oil was $11 a barrel. And the government wanted to make sure that the oil companies kept drilling and kept exploring, so they gave them relief from those royalties. And the deal was this: you don't pay right now, but when oil hits 30 bucks a barrel or higher, those royalties kick in again.

Back in 1998, someone missed the boat on this. Someone didn't dot an "I" or cross a "T", and a bunch of oil companies didn't have their contracts with that clause in it.

So all this time, oil's been going up, above 30, above 40, above 50, above 60, above 70 bucks and a bunch of oil companies haven't had to pay those royalties to the government. Well, the Democrats want to close that loophole for good. Five oil companies have already agreed to pay the oil hence forth, pay the royalties on the oil and gas henceforth, but not the back stuff that they've already gotten away without paying. By the government's own estimates, the American government has lost about $10 billion because of this loophole.

BLITZER: They want to -- the Democrats at least, they want to use that money to provide some additional benefits for renewable energy sources.

VELSHI: Yes, that's right. They want to not only emphasize biofuels and other forms of alternative energy, one thing they want to do is do some research and development into ethanol not from corn. Because this whole shift to ethanol has caused corn prices to go up. So we're looking for other things we can do for fuel. America still uses more fossil fuel, more oil, just from driving than any other country in the world. Ten percent of all the oil produced in a given day is used by American drivers. So this is a topic that's close to them and we'll be watching to see whether the oil companies fight back on this one -- Wolf.

BLITZER: Ali, thank you for that.

The House of Representatives, Nancy Pelosi is there with some of her grandchildren. It looks like the vote is over. Not much question who will be the next speaker of the House. Nancy Pelosi has been elected, will be elected the speaker of the house. Lou Dobbs is joining us to watch history unfold right now.

Lou, give us some thoughts as you watch the next speaker of the house get ready to be sworn in.

LOU DOBBS, CNN ANCHOR: Well, first, the idea that this country is now about to have a woman as the speaker of the House is historic and it's important. And a wonderful...

BLITZER: Hold on, Lou, one second, because I just want to hear the formal announcement.

UNIDENTIFIED FEMALE: Pelosi...

BLITZER: They're just recounting some of votes, I take it, Lou. Hold on one second, let's see what she says.

UNIDENTIFIED FEMALE: If there are any members-elect who do not answer the roll call, they may come to the well and vote at this time.

BLITZER: That's Karen Haas, the clerk of House of Representatives. We'll continue to watch it. But once that dramatic moment, the formal announcement is made, we'll go back there.

Sorry for interrupting. DOBBS: Well, not at all. As a matter of fact this process is precisely what makes this an historic day in the longer span of history, that is since the nation's founding, to have the first woman speaker, as you've been pointing out throughout the day.

The fact is, that what -- our history will really be made, will come perhaps not in the first 100 hours, but over the course of the entire Congress. The next two years is an opportunity, as President Bill Clinton has said, for the Democrats who do not have a mandate, but rather an opportunity, to really see whether or not they can do business not as usual.

It is striking that Rahm Emanuel and the Democratic leadership are talking about real ethics reform, that is, ending lobbyist- sponsored travel, trying to curtail gifts. To the degree that they can be successful in rolling back the massive economic and political influence of corporate America over the governance of this nation will be the way in which, certainly, I will judge their success.

They have an ambitious 100-hour program. But just as with the Contract with America 12 years ago, the Republicans stepped forward, the House did much of what they had promised, but, of course, it was not subscribed to in its fullness by the Senate and, therefore, the House could say, yes, we did what we promised, but what they achieved was relatively minor, except on perhaps a few areas, such as unfunded Senate -- unfunded mandates. It's going to be an interesting test, one of honesty, transparency, and a reversal of what has been now at least a 30-year trend, to a reversal of a trend where problems go to Washington to be continually debated but not fixed. And that is the other opportunity the Democrats have here.

BLITZER: Look at this, Lou, Hillary Clinton, the junior senator from New York, in this photo opportunity, with her husband, the former president of the United States, and the vice president, Dick Cheney. He's sworn in all of the new members, all 33 senators who were either re-elected or elected for the first time to the Senate. And then they do these ceremonial picture-taking sessions in the old Senate chamber.

There's Chelsea Clinton as well. She's clearly grown up now, Lou, as our children normally do in these kinds of circumstances.

This is a great moment for the Clintons, a second term for Hillary Clinton. But I suspect she's got some other things on her mind right now as well.

DOBBS: Clearly other things and bigger things on her mind, as do her supporters throughout the country. A wonderful picture to see Senator Clinton, the former president, and, of course, Vice President Cheney, all smiles. One thinks that's probably going to be a relatively rare photo opportunity over the course of the next two years.

BLITZER: And for our viewers who don't know, the fact is the vice president of the United States, according to the constitution, is the president of the Senate. That's why Dick Cheney presides over the Senate. He's getting all these pictures. I noticed that on the Democrats' initial items to pass during these first 100 hours that the House is in Senate, no word of immigration reforms, Lou, although you hear the Democrats, the Republicans, the White House. They say this is a priority issue, but it's certainly not being taken up initially.

DOBBS: Right, nor the war in Iraq, nor border security, nor a host of other critically important issues, important to working men and women in this country.

But the fact is, is that that is an ambitious 100-hour program nonetheless.

You mentioned immigration reform. It is one of the great disappointments to me, Wolf, that our national media, the national news media, which has always been skeptical of the word reform when applied to Washington, as you well know, has fallen into lying behind the word reform. They may be talking about change, but true reform obviously means to make better, better the service to the nation, the common good, and there is nothing in what has been proposed by both this president and supported by the Democratic Party that would make better the circumstances of the nation or relate to the common good, or certainly the national interest. It is change. It is politics. It is pandering. But it is certainly not reform.

BLITZER: So you'd prefer we call it immigration change as opposed to reform, because reform gives it a positive sense? If they're going to have a path toward citizenship, for example, toward some of the millions of immigration -- illegal immigrants in the United States?

DOBBS: Sure, this Senate run by, then, Republicans, as you recall, Wolf, were talking about reforming border security and illegal immigration.

But the fact is that the United States government right now cannot even administer legal, lawful administration, and is talking about, without national dialogue, nor debate, policies that are incorporated in the president's so-called comprehensive immigration reform, which would be embraced by most Democrats, certainly in the Senate, that would simply skew a treacherous reality, if you will, at our borders, that would take a pathway to citizenship, as some would prefer to call it, or amnesty, for a group of people that the government doesn't even know how many lived in this country. The estimates range from 11 million to 20 million people. The costs -- the president has awaiting his signature. Social Security totalization that will give benefits, Social Security benefits, to all of those illegal aliens in this country in 18 months' time, a benefit of citizenship in this country that does not accrue to an American citizen for 10 years. This is the kind of mindlessness that surrounds this issue.

There's plenty of mindlessness in that town, and I don't mean to in any way throw cold water on a wonderful day of ceremony and a historic change of control in the Congress. But the reality is that the nation's business isn't being done. And I hope that the Democrats, in taking control of both the Senate and the House, will start to look to the common good, to the national interest, rather than special interests, and resist that more than $2 billion that is being spent in Washington to lobby them, to secure their votes and to actually craft legislation.

BLITZER: The incoming -- the new speaker -- excuse me, the new majority leader in the Senate, Harry Reid, says that among the first ten items, legislative items on their agenda, will be immigration.

Lou, stand by. We're watching Nancy Pelosi now. She is about to become the speaker of the House of Representatives. They're just finishing up the balloting, the roll call. They're watching all of this. You see her newest -- I assume that's her newest grandchild right there.

She just had a grandchild born, Andrea Koppel. I assume this is the baby.

KOPPEL: That is the baby, named after Nancy's husband, Paul.

And, Wolf, we can report now that Nancy Pelosi has been elected officially now speaker of the House. The vote, the roll call, has ended. She only need a simple majority of the 434 members, not including herself, and she got it. And she got it. So Nancy Pelosi is, now, has set foot in the history books and is the first woman speaker, the highest ranking female woman ever to hold political office.

And she hopes there will be many more that follow her, Wolf. She's surrounded by her -- some of her grandchildren there. She's holding her grandson. But there are granddaughters there, Wolf. And she has said often on the campaign trail that once they place that gavel in her hands and she holds her hands up in the air, they will not only be placing it in my hand, but they'll be placing it in the hands of America's children.

She feels very strongly, Wolf that once they get down to work, that they push through legislation that is going to help not just college kids, the elderly, but also the next generation.

BLITZER: Nancy Pelosi with her grandson Paul, on the floor of the House of Representatives, the vote still being tallied, but she has a clear majority. There you see some members going through the actual balloting.

435 members of the House of Representatives. Nancy Pelosi, the new Speaker. She got the vote, no surprise there, the Democrats have the majority.

Michael Steele is here with us watching all of this. The former lieutenant government. Are you still a lieutenant governor?

LT. GOV. MICHAEL STEELE (R-MD): Until the 17th at 12:00 noon.

BLITZER: He's still the lieutenant governor of the state of Maryland. You had hoped to become a Republican Senator from Maryland. You were defeated by Ben Cardin. When you see what's happening, you have to be -- obviously -- disappointed right now that you're not among those 33 senators who were sworn in by the vice president.

STEELE: I'll be honest with you, I'm really not. I'm excited about what I am seeing here. I'm a witness to history. Wanted to be a part of that history obviously. It speaks to I think what is great about this country, that you can have an election, you can have the change in government, the style of government, the feel of government, and begin to build and move on from there.

So in one sense, yes, you're disappointed. You wish you were in the room. But to be able to watch it and still participate in this way speaks well about what we have done and what we will do as a nation.

BLITZER: You think this era of good feeling that we clearly see today, a lot of smiles, a lot of photos, everyone seemingly saying the right thing is that going to last for more than 24 hours?

STEELE: I give it 101 hours. 101 hours and then we start a whole new regiment. You know, the Democrats have a very aggressive agenda. It's a very easy agenda in many respects. A lot of stuff on the table, minimum wage, et cetera, there's consensus among both parties.

So, it's good to put it out front to get a couple of chits of there and move forward. I think as Lou Dobbs noted, immigration is going to be one that will hit you upside the head as well as the Iraq war.

BLITZER: No consensus on Iraq. As you know, the president next week, we're told, will make a major announcement of a new strategy that he wants to try and put forward. It could include a significant additional number of U.S. troops going into harm's way in Iraq or staged in the region in Kuwait or elsewhere, ready to move in.

This is a tough agenda for the president and for the Democrats. Hold on one second. Let's listen, see what's happening on the House floor. Trying to get everyone in session.

KAREN HAAS, HOUSE CLERK: The tellers agree in their tallies that the total number of votes cast is 435. Of which the Honorable Nancy Pelosi of the state of California has received 233. The Honorable John A. Boehner of the state of Ohio has received 202.

Therefore, the Honorable Nancy Pelosi of the state of California is duly elected Speaker of the House of Representatives for the 110th Congress, having received the majority of the votes cast.

(APPLAUSE)

BLITZER: There you saw John Boehner come over to Nancy Pelosi, the new Speaker, and actually give her a kiss. The Speaker got all -- all of the Democrats to vote for her, 233 Democrats. 202 Republicans, voted for John Boehner. A defeat for the Republicans, as fully expected. But it's now official, Jeff Greenfield. The United States of America has a woman who is the Speaker of the House and directly in line to become president of the United States after the vice president.

GREENFIELD: I was asked a question it that had not occurred to me by a viewer a few weeks ago. Said, do you think Nancy Pelosi's performance will affect the presidential run of Hillary Clinton?

Meaning, would people judge a woman leader by Nancy Pelosi. My first reaction would be to say, that's absurd -- we're beyond that. And the more I thought of it, the more I thought, we've never had a woman seriously contest for the presidency and it's entirely possible, that if Nancy Pelosi does well or ill, failure or not, rationally or not, that could possibly affect Hillary Clinton.

STEELE: It will be a benchmark for a lot of folks, a lot of voters out there, to watch how she performs, to see if a woman can handle the responsibilities and the mantle of government.

I think Nancy has got a lot to prove beyond moving an agenda, setting the style of what a woman leader in a government can be and do. It's going to be very exciting to watch.

GREENFIELD: But given what the men have done, it's not exactly a fair judgment, is it? We don't say look at all the men who screwed things up, we better not elect a guy.

STEELE: But as an African-American I had to go through that running for lieutenant governor and for the Senate.

BLITZER: Here is Nancy Pelosi, the Speaker of the House of Representatives. Shortly she'll be presented the gavel, another symbolic movement before she actually addresses the chamber. Let's listen in.

HAAS: The clerk appoints the following committee to escort the speaker-elect to the chair. The gentleman from Ohio, Mr. Boehner. The gentleman from Maryland, Mr. Hoyer. The gentleman from South Carolina, Mr. Clyburn. The gentleman from Missouri Mr. Blunt. The gentleman from Illinois, Mr. Emanuel. The gentlemen from Florida, Mr. Putnam. The gentleman from Connecticut, Mr. Larson.

The gentleman from Michigan, Mr. McCarter. And the members of the California delegation, Mr. Stark, Mr. George Miller, Mr. Waxman, Mr. Lewis, Mr. Dryer, Mr. Hunter, Mr. Lantos, Mr. Berman, Mr. Galigee, Mr. Herger, Mr. Mr. Rorhbacker, Mr. Dolittle, Ms. Waters, Mr. Besarea (ph), Mr. Calvert, Ms. Eschew, Mr. Philner, Mrs. McKeon, Ms. Roybal- Allard (ph), Mr. Royce, Ms. Woolsey, Mr. Farr, Miss Zolfegren, Mr. Rodonvich (ph), Ms. Melinda McDonald, Mr. Sherman ...

BLITZER: Quite a committee that will escort the Speaker to the chamber. She'll be speaking there. We're going to be very shortly hearing the Sergeant of Arms Bill Livingood announce the speaker from the rear of the chamber.

She will then be escorted by this committee to the chair. She will be introduced by the Republican Leader John Boehner. He will make some brief introductory remarks. And then Nancy Pelosi as Speaker of the House, will address the House of Representatives, indeed, address the entire nation from this historic chamber.

Andrea Koppel is on the House side watching all of this unfold. It's a pretty elaborate arrangement, rich in history, Andrea.

KOPPEL: It is, Wolf. It's probably going to go on for about another 25 minutes or so before she's actually -- before she takes the oath of office and then makes her remarks and then swears in the other new members on the House floor.

We can expect her to say, when she does address the members of Congress and the American people for that matter, she's going to be reintroducing herself. She's going to highlight her past as an Italian-American Catholic. She's going to talk about her growing up as the daughter of the mayor of Baltimore.

And then she's going to really kind of put President Bush on notice, moving beyond sort of the bipartisan comments that we've heard and that she will again mention in her remarks. But she's going to say to Mr. -- to President Bush, the American people rejected an open- ended obligation to a war without end.

And she's going to call on him when he makes his -- when he addresses the American people next week, to articulate a new plan in which the Iraqi people would be taking over control of their own country.

Wolf, she's also going to be mentioning something that's known as paygo, the idea that there is no new deficit spending, and she's going to say that ethics is a top priority and we know that that's their first order of business here later this afternoon and tomorrow.

BLITZER: Andrea, stand by. Lou Dobbs, I want him to weigh in as well. He's joining us in our coverage. We'll all be listening very closely, Lou, to what Nancy Pelosi has to say. What are you going to be listening for?

DOBBS: I'm going to be listening to see how much of what she has to say, if you will, aligns with President Bush's comments yesterday in the Rose Garden and in an "Wall Street Journal" op-ed piece that he put forward.

He, for the first time, talked about real bipartisanship as if the previous six years of acrimony, much of it initiated by the Republicans, did not exist. It's going to be interesting to see how firm and how cordial she is because they are miles apart. A deep chasm separates them, politically, ideologically.

The other part is, it's interesting to me, Wolf, that the president chose to talk about entrepreneurship, small business and the workers of this country, but did not mention U.S. multinationals or the big corporations, which of course has been the source of the money for both these political parties.

If there is a move and it creates at least in the hopeful sense that we have, again, the opportunity to see this Congress start working for the benefit of American workers, for the quality of life in this country, to put aside some of the faux economic jargon that is just spouted daily from corporate America about competitiveness -- and perhaps we'll hear more discussion about quality of life.

Perhaps we'll hear more about the welfare of our people, rather than the competitiveness of corporations, perhaps embrace, even, the idea of Americans first as citizens and secondarily as consumers and taxpayers and units of labor, as has become the view from both parties, again, because corporate America supports both parties.

And I'm going to be listening more to what she said about children, because George Miller who is amongst, of course, the large delegation, most of them from California, that are joining the speaker today, George Miller has committed the Democrats to cutting interest rates by half for student loans -- a very important step if they can succeed if that -- has committed to real, real improvement in our national public educational system which is, as one person put it recently, either mediocre or failing across much of the country.

It's a generation that deserves attention. And Governor Steele, I was interested to hear you say that there is unanimity of view on the minimum wage. One of the reasons, as I think you've correctly pointed out, Governor Steele, is that some of this agenda, while ambitious, may be easy, in the case of minimum wage, for example, 29 states, because of the previous Congresses over the past 12 years have resisted a raise on the minimum wage, 29 states have done so on their own.

So this is a bit of catch up in federal policy, but also very important symbolically. I don't know whether you agree with that, but I certainly feel that way.

STEELE: I do, absolutely. I think you pinned it right on the head. We have seen it in this region and we've seen it across the country. I come from a household of minimum wage earners and appreciate very much what's at stake here for a lot of working families, and it's an important step, and it's good to see businesses, the administration, the Congress, coming together to move forward on this.

BLITZER: Michael Steele is the lieutenant governor of Maryland for a few more days. He had run for the U.S. Senate from the state of Maryland, was defeated in that contest, and he's joining us here today.

I also want to welcome our viewers from around the world who are joining us right now on CNN International. A very historic day here in the United States. The Democratic Party -- Democrats have now formally taken control of both houses of the U.S. Congress, the House of Representatives, as well as the U.S. Senate.

Nancy Pelosi will be the first woman in American history -- more than 200 years of American history -- to become the speaker of the House. She will be next in line to become president of the United States after the vice president of the United States. This is a very historic day in the United States, and it's a very important political day in the United States as the Democrats take charge. We're watching all of this unfold.

Momentarily, Nancy Pelosi will be reintroduced by the sergeant at arms in the House of Representatives. She will be escorted to the podium. She will walk up and she will deliver some remarks. There is a lot of pomp and circumstance tradition involved in this day.

On the House side, Harry Reid of Nevada has been elected the Senate majority leader. First time in a dozen years here in the United States that the Democrats will be in the majority. They will control the legislative branch of the U.S. government, the executive branch still in control -- controlled by Republicans in the name of the president of the United States.

We have a lot of people watching this, including all of our correspondents, the best political team on television. J.C. Watts is here as well, a former Republican Congressman from Oklahoma; Paul Begala who worked in the Clinton administration, a Democratic strategist; the lieutenant governor of Maryland, Michael Steele. Jeff Greenfield is here as well.

J.C., let me ask you about Nancy Pelosi's remarks. She'll begin by saying -- we got some advance excerpts of what she is going to say. "I accept this gavel in the spirit of partnership, not partisanship, and look forward to working with you on behalf of the American people." It sounds beautiful.

WATTS: Well, the lieutenant governor said earlier that bipartisan spirit will last for about 100 hours and -- 100 hours and one minute. You know, I think it's over.

But, Wolf, obviously, there's a lot of work that needs to be done. We've got issues concerning the war. We've got economic issues that I think we need to be concerned about, education issues, health care issues.

But as I've said before, I think ego and power drives Washington. And when ego and power mesh, that is a very dangerous thing. And so I think members and the administration, it's going to be real challenge for them to take their egos and set them aside and really do what's best for the American people.

That's the trick. That's the challenge. There's two parties. There are differences. So how do we make those -- bring those differences together and get something in all of those areas that I mentioned that is good for the American people?

BLITZER: Paul Begala, you noticed that the final roll call, there are 435 members in the House of Representatives, everyone was there, everyone voted, 233 Democrats -- all the Democrats -- voted for Nancy Pelosi. All the Republicans, 202 Republicans, voted for the Republican, now Minority Leader John Boehner.

In the past, when she was elected there were a few conservative or moderate Democrats who didn't like her because of her supposed liberal tendencies. And they voted present, they didn't vote on.

BEGALA: Right, very smart observation because in the past, not just Nancy Pelosi, but I can remember Tip O'Neill or Tom Foley, Democratic speakers in the past who would have two or three or maybe even four of five very, very conservative Democrats voting against them. Speaker Gingrich had several moderate to liberal Republicans vote against him.

So Nancy Pelosi has won already her first victory as speaker, not just becoming speaker but in uniting her party. She's been give that gavel by the moderate wing of her party, and I think she understands that.

BLITZER, CNN ANCHOR: Here's the Bill Livingood, the Sergeant at Arms.

BILL LIVINGOOD, SERGEANT AT ARMS: Madam Clerk, the Speaker-Elect Nancy Pelosi, representative from California and the escort committee.

(APPLAUSE)

BLITZER: So there it is. She's formally announced by the Sergeant at Arms. It will take a few moments for her to make her way to the House of Representatives podium there where she will be seated. She will be introduced by her Republican colleague, the Republican leader now, John Boehner of Ohio.

Lou Dobbs is watching all of this unfold as well.

Lou, were you surprised at all the Democrats unanimously, every single one, voted for her?

DOBBS: Actually, I was not. I think it's interesting that John Boehner failed to get all of the Republican votes but perhaps that's a sign of the times as well.

BLITZER: I think he did get all 202 Republicans.

DOBBS: Did he? Did he?

BLITZER: Yes, he got 202 Republicans.

(CROSSTALK)

BLITZER: I think he did get all of the Republicans, because if you add up 233 and 202 that comes to 435.

DOBBS: We got it. All right.

BLITZER: Yes.

DOBBS: But the idea that she would get all of the Democratic votes is to me -- you know, I think it's -- this is there moment. The Democratic Party has an opportunity. They would be foolhardy beyond measure to not embrace the moment and embrace the woman who's going to be leading them over the course of this Congress. BLITZER: That -- the picture of the leaders of the House of Representatives, the Democratic leader and she will now be the speaker of the House. There will be a separate majority leader. Steny Hoyer will be the majority leader.

And that's John Boehner of Ohio. He'll be the Republican leader, the minority leader in the House of Representatives. You'll hear from him momentarily, and then we'll all hear from Nancy Pelosi.

Andrea Koppel, walk us through a little bit more of this process.

KOPPEL: Well, The process will be just within -- as soon as she finishes speaking, she'll be sworn in by John Dingell who is dean of House Democrats. And then she will turn around and swear in the new members, both Democrats and the Republicans, who were elected on November the 7th.

In her speech, in her remarks that she'll be giving in a few moments, Wolf, she's going to get right down to business and she's going to say that the election of 2006 was a call to change, not merely to change the control of Congress, which obviously, has happened today, but for a new direction for our country. And she spelt it out. She says nowhere were the American people more clear about the need for a new direction than in Iraq.

BLITZER: Jeff Greenfield, we're going to see the formal handing over of the gavel then.

GREENFIELD: Yes, and this is the same thing as 12 years earlier, when Dick Gephardt, the new Democratic leader -- Tom Foley had been defeated for reelection -- turned the gavel over to Newt Gingrich, ending 40 years of Democratic rule.

This ends 12 years of Republican rule, and by my calculation, Nancy Pelosi's speech will be roughly one-third the length of the speech that Newt Gingrich gave when he was elected speaker. Mr. Gingrich had a sweeping view of entire civilization of the United States. Speaker Pelosi has a somewhat more modest agenda.

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