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Candidates Head for New Hampshire; Still No Sign of Missing Hiker; California Hit by Winter Storm; How Do Candidates Measure Up on Financial Issues?

Aired January 4, 2008 - 13:00   ET

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


KYRA PHILLIPS, CO-HOST: Iowa's history. New Hampshire is just around the corner. And many people fear recession is not far behind. Turns out the caucus results aren't the only numbers that could shake up the race for president.
ROB MARCIANO, CO-HOST: And how about these numbers? Ten feet of snow, 145-mile-per-hour winds not out of the question as a monster winter storm slams into California. We're tracking conditions up and down the Sierra.

Hello, everybody. I'm Rob Marciano, in today for Don Lemon at the CNN world headquarters in Atlanta.

PHILLIPS: And I'm Kyra Phillips. You're live in the CNN NEWSROOM.

Iowa has spoken, but now it's just a memory. And today the presidential hopefuls in both parties are off and running in New Hampshire, less than 24 hours after Iowa voters reset the race in dramatic ways.

Democrat Barack Obama basking in the glow of his convincing Iowa victory over John Edwards and Hillary Clinton. Republican Mike Huckabee is vowing to build on his Iowa victory, as well. But there's no time for any candidate to reflect on what worked or what went wrong in the heartland. The New Hampshire primary is just four days away.

And we're waiting for a live event right now in Concord, New Hampshire, Barack Obama getting ready to step up to the mikes. We'll dip into that live as soon as it happens.

And before the first month of the election year is over, a lot of eyes will be on three key states. Iowa's caucuses were last night, of course. New Hampshire's primary is on Tuesday. And two weeks from tomorrow, South Carolina holds its Republican primary. Its Democratic preliminary -- or primary, rather, follows a week later.

And next month, the biggest event of all, Super Tuesday. More than 20 states hold their primaries or caucuses February 5.

Mike Huckabee arrived in New England today with a win on his resume, but now he faces a new electorate with different priorities.

Dana Bash flew overnight with the Huckabee campaign. She joins us live from Manchester. How are you holding up, Dana?

DANA BASH, CNN CORRESPONDENT: Holding up OK, Kyra. One hour of sleep, you know. It's OK. We can handle it.

Mike Huckabee, however, he went to sleep this morning, got some -- got some shut eye. Maybe we all should have done that.

But it was really interesting to be on his plane with him after this really stunning victory that he had, of course, last night in Iowa. Having been with him a lot on the ground in Iowa at event after event after event, you know, he obviously would really wow the crowd and really tried to stoke their passion about the need for change, change, change. That is, of course, the buzz word for this night last night.

But the fact that it actually happened. He was trying as hard as he could as you can imagine, Kyra, to really savor that victory. But of course, he was on a plane with reporters. And those of us who were on the plane with him, we wanted to talk about how he actually capitalizes on that victory and keeps any kind of momentum that he got from Iowa going.

Particularly because of the fact that the victory that he had in Iowa was propelled in large part by evangelicals that make up a large portion of the Republican base in the state of Iowa. So we asked him about that on his plane. Here's what he said.

(BEGIN VIDEO CLIP)

MIKE HUCKABEE (R), PRESIDENTIAL CANDIDATE: We had a great support from the evangelicals. There's no doubt about it. If you look at the numbers, there were a lot of people who aren't evangelicals around here. And it doesn't explain numbers in Delaware and Michigan and places like that.

So is it an important part of our coalition? Absolutely. Is it all of the support we have? Of course not. The numbers reflected that.

(END VIDEO CLIP)

BASH: And you heard him saying -- it was hard to hear there on that plane. What he was trying to say is that he understands that the evangelical base is a big part of the coalition that supports Mike Huckabee. But he's insisting that his base goes beyond that.

And that is going to really be put to the test here in New Hampshire over the next four days. He is going to compete here, even though that evangelical base doesn't really exist like it does in Iowa. He is going to instead play up the other part, Kyra, of his very complex message. And that is his populism.

He's talking already a lot more about the fact that he wants to abolish the tax code. He's playing into the libertarian anti-tax sentiment that really does prevail here in New Hampshire. But it's really unclear if that is going to sort of help seal the deal with him, because he understands that he is not the lead contender here, like John McCain and Mitt Romney are. He's already looking down the road to other -- to other contest states.

PHILLIPS: All right. Dana Bash. We'll be following, of course, Huckabee as well as Barack Obama. We're expecting him to step up to the mikes any moment now in Concord, New Hampshire. We will dip into that live as soon as it happens.

Now, we've got all of the political bases covered here in the CNN NEWSROOM. We're going to get reaction to Democrat Barack Obama's win in Iowa from former presidential candidate Jesse Jackson. And senior political analyst David Gergen weighs in on the Iowa caucuses and next week's New Hampshire primary. We also find out where the candidates stand on the economy. We're going to click onto some of the popular blog sites to see what the buzz is out there.

And if you want to see what your favorite candidate is saying on the trail, tune in to CNN.com. Our Web site will stream campaign events as they come into CNN all day.

MARCIANO: New pictures today of 24-year-old Meredith Emerson, who went for a hike on New Year's Day with her dog, Ella, and vanished in the north Georgia mountains. Authorities are also trying to find a man who was seen with Emerson on Blood Mountain before she disappeared.

CNN's Rusty Dornin up is live with the latest from Blairsville, Georgia.

Rusty, what do we know today?

RUSTY DORNIN, CNN CORRESPONDENT: Well, you can only imagine the agony of family and friends who are going into the third day of waiting to hear anything about the fate of Meredith Emerson.

Now we're on Blood Mountain, which is about 4,500 feet of altitude. You can see above there is really where they're concentrating in the search, where the trails were. Meredith Emerson is believed to have been hiking on New Year's Day.

As you said, police are desperately trying to find Gary Michael Hilton, he's 61. Witnesses do say that he was the last one who was probably seen talking to and perhaps even saw Meredith on the trails before she did disappear.

Now, it looks like that they have not said that they located him yet, but they said they are searching for two Astro vans that apparently he does have. The Georgia Bureau of Investigation is involved in that.

Her godmother, Peggy Bailey, stepped up to the mike to plead with Hilton to please come forward. He's not considered a suspect yet. They do not say that there is any foul play involved. They just want to know about his conversation. Let's listen.

(BEGIN VIDEO CLIP)

PEGGY BAILEY, EMERSON FAMILY SPOKESWOMAN: I hope that if he realized that this would be helpful that his heart would be softened and turned to coming forward with information for Meredith for those of us that love her. We need him to come forward. We need him so much to do that, to give us that missing link of information that we need. He could be so helpful in that.

(END VIDEO CLIP)

DORNIN: You can see, Rob, really there's still a dusting of snow. It got down to 9 degrees last night. They are still saying -- whoops, had an accident -- we're saying that -- that it's still a search and rescue operation, that they still are hopeful that perhaps, if she is lost up here, that the dog has been keep her warm.

Now, they had the search and rescue helicopters out, that sort of thing, combing the area, trying to see if there are any signs of the infrared equipment to see if she is anywhere out there.

They are not scheduling any press conferences at this time. And as I said, the Georgia Bureau of Investigation is involved. And they're very tight-lipped about this person of interest, this Gary Hilton -- Rob.

MARCIANO: Rusty, what's the mood? What's the feel on the ground? Just how hopeful are the authorities, the family members for a good outcome here? As you said, three really, really cold nights. I mean, is optimism beginning to wane up there?

DORNIN: You can see some pretty grim looks on a lot of the family and friends that are walking around here. Her roommate said to me that she does not believe that her friend Meredith Emerson is still on this mountain. She doesn't believe she's lost here. She believes that she might have been taken.

Of course, the authorities are not saying that. They're saying they're going to continue the search and that they're just hopeful that she's alive.

MARCIANO: Well, as you said, she's experienced in the outdoors and, as her friends describe her, a very, very tough young lady. So we're still hoping for a good outcome.

Rusty Dornin, on the scene there in North Georgia. Thanks, Rusty.

PHILLIPS: A triple whammy for California. Blinding snow, heavy rain and fierce winds. Exactly how much snow and rain can we expect on the coast there? Bonnie Schneider is tracking it all in the severe weather center.

Bonnie, what do you think?

BONNIE SCHNEIDER, CNN METEOROLOGIST: Well, Kyra, when it comes to snow we'll be measuring it by the foot. And we're talking several feet, and heavy rain, as well, strong winds. This storm is really a triple threat.

I want to show you a live picture of the Lake Tahoe area now. And we can show you that certainly skies are overcast. We have -- that's actually snow, but when it hits the lens it kind of melts a bit. But definitely some snow in the vicinity.

And as we take you to some of our own cameras here, courtesy of Ski Bunk (ph), what we can show you is some of the ski resorts as we fly into them with our producer, Dave Hennen, operating this bit of equipment. You can go under the rain. There we are now at Lake Tahoe. And we'll get a closer look and a live tower cam of what it looks like, actually, at the ski resorts, where the winds have been whipping fiercely. And we're expecting that to continue.

Here's Tahoe Donner. And look at that. Again, very similar picture with the snow hitting the camera lens.

We have one more camera to show you, not too far away, at Donner Cam (ph). This is at the Donner Ski Ranch. And you can kind of sort of see the skiing in the background, not too much, thought. There's the lifts, grounded right now for, I'm sure, at the higher elevations because of that strong whipping wind.

So we are looking at some very strong winds in that vicinity, and not just there by across California.

Take a look at the snowfall totals we're expecting today alone. Three to five feet in the Sierra Nevada. It's going to be very, very heavy snow, very dangerous as we go through today and tonight. You can see that, actually, on our key in terms of the most snowfall accumulation. It goes beyond that.

This storm is also a powerful wind maker. At the San Francisco Airport, we've had reports of winds as strong as 66 miles per hour. We're watching for heavy rain to accumulate in Southern California, straight through the weekend, where flash flood watches are in effect for that region.

Right now the heaviest rain is in San Francisco. We have a live tower cam to show you of the Bay Area. Airport delays there have been over two hours due to the overcast skies, the strong winds and, of course, the heavy rain.

Take a quick look at some of the sustained winds in the Bay Area right now. They are fierce. We saw a 46-mile-per-hour gust at the Golden Gate Bridge. This is an incredible storm, Rob and Kyra. And it's not over yet. We still have tonight and tomorrow to get through before it really starts to taper down just a bit.

MARCIANO: All right, Bonnie, thanks very much.

PHILLIPS: Sorry. I thought you were going to weigh in. I could see you had some thoughts.

MARCIANO: Well, I always do. I just, you know, try to let Bonnie handle it. PHILLIPS: Let her do her thing. It's a double whammy with both of you.

MARCIANO: And plus we have Susan Roesgen, who's live in the Sierra. We're going to talk to her, if not this hour, coming up in the next...

PHILLIPS: And you know that area well in the Sierra Nevada.

MARCIANO: Yes.

PHILLIPS: And you've been out there doing the live shots and talking about conditions a number of times.

MARCIANO: Well, I'll tell you, those stretch of mountains, they are the first line of defense. They just get hammered. There's nothing in the way when these storms coming in. So you know, ten feet of snow certainly not out of the question and winds over 100 miles an hour. So, as Bonnie said, it's definitely a big event.

PHILLIPS: Well, when weather becomes the news, of course, you can count on CNN, Bonnie Schneider there in the severe weather center, also our Rob Marciano; he's double tasking.

And if you see severe weather happening in your area, send us an I-Report. Just go to CNN.com and click on I-Report or IReport@CNN.com into your cell phone. And you can share your photos or your video.

MARCIANO: On to politics. So long, Iowa, and howdy, New Hampshire. The presidential pack picks up and heads east. We'll listen in on a live event in New Hampshire with Senator Barack Obama, one of the last night's big winners.

PHILLIPS: I like the music. Yes, let's jam with the music.

MARCIANO: Also, a look at how worries about the state of the economy could influence next Tuesday's primary.

PHILLIPS: And the downward slide of pop star Britney Spears. Oops, she does it again. A mysterious trip to the hospital accompanied by police.

You're live in the CNN NEWSROOM.

(COMMERCIAL BREAK)

PHILLIPS: One-fifteen Eastern Time. Here are some of the stories we're working on in the CNN NEWSROOM.

The investigation pries (ph) into last week's death of former Pakistani prime minister, Benazir Bhutto. British investigators now on the case. Pakistan's president says Scotland Yard detectives will solve, quote, "all the confusion" surrounding Bhutto's death.

The International Tennis Federation bans Martina Hingis for two years. They say that she tested positive for cocaine last year at Wimbledon. The 27-year-old Swiss star retired from the sport back in November, denying the drug allegation when it first surfaced.

Oil at $100 a barrel, a subprime mortgage crisis and today's news of higher unemployment figures. What can President Bush do to fix what ails the American economy? The White House says that Mr. Bush is conferring with his economic experts today. He's expected to announce some type of economic stimulus package later this month in his State of the Union address.

MARCIANO: And we're picking apart the results of the Iowa caucuses today. Barack Obama and Mike Huckabee are banking on momentum after last night's big wins. But did Iowans choose their favorite candidate or the issues that candidate stands for?

Iowans say that the economy guided their votes more than any other issue. So money, money, money, money. Let's go to CNN's personal finance editor, Gerri Willis. She's live for us in New York.

Gerri, let's break it down, money-wise. Let's start with the Democrats.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: All right, Rob.

Well, first of all, let's talk about the winners. You know, they really represent change. That was the byword of this thing. And let me tell you, the way the economy, the way tax policy would be run, it would be very different under these candidates.

Starting with Obama. He wants to have a 10-percent mortgage tax credit for people out there who are not, you know, doing the long form when they file their taxes. He wants an automatic 401(k) enrollment so that, you know, even if you're not interested in having a 401(k), you'd be forced to get one anyway.

He wants a credit card rating system, which I think is really interesting. And certainly a different out-of-the box idea.

Now Clinton, of course, the most out-of-the box idea that she's announced so far, probably, is a $1-billion fund to help people in foreclosure. You know, that was a big debate a little earlier in the last year.

She also wants Wall Street to step up and fix that mortgage crisis. And she wants to -- a 401(k) plan for all Americans, because a lot of people aren't offered 401(k) plans.

And let's listen to what she had to say about the economy.

Whoops. We don't have that spot right now.

We can go on to Edwards right now. He's interested in having a commission to review financial products. This is a really interesting idea. We have a Consumer Products Safety Commission but no Financial Products Safety Commission. He would like that.

Also, raising the minimum wage by -- to $9.50 by 2012. Very big hike there. Very interesting. He wants work bonds to help low income workers. So he's got a lot of ideas here that you're seeing that are fairly new and dramatic -- Rob.

MARCIANO: Yes, that's for sure. I mean, and how are those going to be carried forward? Where's the money going to come from? We'll have to wait and see.

WILLIS: Yes.

MARCIANO: Certainly, as far as money goes, Republicans typically have a different view versus Democrats. What do the Republican candidates have to say?

WILLIS: Well, the most out-of-the box idea had to come from Mike Huckabee, who wants to replace the income tax. Think about this: replace the IRS and the income tax with a retail sales tax.

This means you'd be taxed on consumption, a very different thing than what happens right now. You're taxed on income. So just a totally out of the box idea.

He would also line-item veto to control spending. Free trade for cheaper goods. His eyes are on the bottom line here. Very interesting ideas. So Huckabee, of course, out of the box there.

Romney, and this is no surprise here. He's a former business. And he wants lower corporate taxes. He wants to make the Bush tax cuts permanent. Have government spending limits. This is more in line with what we've seen in the past eight years.

Now McCain would end pork=barrel spending. Good luck with that.

MARCIANO: Right.

WILLIS: That's a hard thing to get rid of. Reform Social Security and Medicare. And this is interesting and very difficult to do, I would think, repeal the alternative minimum tax.

Finally, Giuliani, let's talk about him for just a second. He wants to run government like a business. Now think about that. Giuliani in New York City here was sort of known that that. He would extend tax-free savings account and tie the alternative tax to inflation.

So lots of different solutions out there, many of them out of the box. And I think you make the right point, Rob. I'm not sure who's going to pay for it all.

MARCIANO: I mean, great ideas, right? Pay for it. How we get there is different. But it is interesting to see the differences in the Republican Party and the differences among the candidates in the Democratic Party. It really -- it's really amazing to see. And we'll see how it all pans out in the coming months.

You've got a big show coming up. I know I'll want to watch that. Gerri Willis, thanks very much. Can I talk about the show?

WILLIS: Please. Go right ahead. MARCIANO: It's Gerri Willis this weekend, the road to recovery after the mortgage meltdown. That's "Open House" with Gerri Willis tomorrow at 9:30 Eastern Time and Saturday and Sunday on CNN Headline News at 3:30. Thanks, Gerri.

WILLIS: Thank you, Rob.

PHILLIPS: All right. Live picture from the White House right now. We're waiting to hear from the president of the United States. What can he do about the ailing American economy? Of course, we're talking about oil at $100 a barrel, the subprime mortgage crisis, today's news of higher unemployment figures.

Apparently, the president is talking with his economic experts today. He's expected to make some type of announcement. We will take that live as soon as it happens.

MARCIANO: Meanwhile, a triple whammy for California: blinding snow, heavy rain and fierce wind. Our own Susan Roesgen is braving the elements in the Sierra Nevada.

We've been having some technical difficulties, often the case when storm -- covering a big storm like this. Susan, whereabouts are you? Near Donner Pass, I'm being told? And the precip is certainly coming down.

SUSAN ROESGEN, CNN CORRESPONDENT: Yes, actually we are at the start of Donner Pass. And I think the sign, Rob, says it all over there: they're holding traffic.

This is Interstate 80, the main east-west route between San Francisco and Reno. Today, as you can see, it's really just a big-rig parking lot. I hope that nobody has a FedEx package going to San Francisco today, because you can see where the FedEx truck is.

Over here I talked to these folks in this rig. They are from Ontario, Canada. It's empty. They're going to Sonoma to pick up wine to bring back to Canada. But they're out here stuck, too.

This is the infamous Donner Pass. You know, back in 1846, this is where some 80 people tried to get across in the Donner Party. And when it was over, when they got snowed in out here, only 45 of them made it.

Now of course, they didn't have GPS systems. They didn't have chains on their tires, which are required now. They didn't have four- wheel drive. They were in stagecoaches. But this is a very tricky pass right now.

We actually were able to get up to the summit, which is 7,000 feet. We were able to get there, but now the California highway folks say that there have been a lot of spin-outs up. They simply do not want people going up there. So we've got this slushy kind of wet snow here, but it's snowing quite heavily up at the summit. And that's the way the people here have to go to get over, to get over to the other side, to get down into the San Francisco area. And Rob, as you can see right now, they're stuck.

MARCIANO: They are. They'll downright close that pass if they have to. So you touched the summit? I mean, did you have any problems? I don't see traffic moving at all. How did you guys get there?

ROESGEN: We were there about half an hour ago.

MARCIANO: OK.

ROESGEN: And I guess we were just lucky. We were some of the last people to get up there. We creeped along, and we made it through. But now doesn't look like they're going to let people go for a while. And this is a big deal, because this is such an economic life line. This is not something that they do lightly, to shut this interstate down.

MARCIANO: It is an interstate. Got to pack the chains and pack your survival gear and a lunch, as well.

Susan, thanks very much.

ROESGEN: And a hat.

MARCIANO: Good idea. Put one on for us. Please. Thanks, Susan.

PHILLIPS: So long, Iowa, and howdy, New Hampshire. The presidential pack picks up and heads east. Live pictures now from this event in Concord, New Hampshire. Waiting for Senator Barack Obama, one of last night's big winners, to step up to the mike. Once again, he's got the tunes going. Got some good tunes going.

MARCIANO: He's a rock star, so...

(COMMERCIAL BREAK)

PHILLIPS: The December jobs report has come in far weaker than expected, and stocks are already selling off. Susan Lisovicz on the floor of the New York Stock Exchange with the latest.

Hey, Susan.

SUSAN LISOVICZ, CNN CORRESPONDENT: Hey, Kyra.

What a start to the new year, right? Two triple-digit declines in the first three trading days of the year. And a lot of bad news.

And the bad news today is the jobs report for December, which is a pretty graphic sign that all the woes we've seen in the housing market and the credit crunch are spreading to the broader economy.

The December jobs report is this: that only 18,000 new jobs were created last month. Growth, in other words, was flat. It's actually the worst performance since August of 2003 and well below the average monthly gain for last year, which is about 120,000.

At the same time the unemployment rate took a big jump. It went from 4.7 percent to 5 percent. Five percent is historically low, but it is going up. And that is a bad sign, obviously.

The job growth that we're seeing, which is so meager, is not keeping up with the U.S. population. And a lot of folks are saying that "R" word, recession, more frequently. That's playing out dramatically in the stock market.

Right now, the Dow Industrials are off their lows but still down more than 200 points. In fact, of course, Wednesday we saw a more than 200-point decline for the Dow, as well.

Not good for the January effect, which says the first five days of the year are an excellent -- first five trading days of the year are an excellent indicator for the year as a whole.

The NASDAQ, meanwhile, is getting hit even harder. It's down 73 points, so it's a broad-based decline, Kyra.

PHILLIPS: So Susan, does that mean an interest rate cut is more certain now?

LISOVICZ: Kyra, I'm sorry?

PHILLIPS: Does that mean a new interest rate cut is more certain now?

LISOVICZ: Yes. It certainly does. In fact, there's something called the Fed fund futures rate, which bets on what the Fed's going to do. Shot up dramatically after this jobs report came out. The betting now much more likely than not only the Fed will cut but cut by a half a percentage point.

Remember now that the Federal Reserve has already cut interest rates one full percentage point this September since that whole subprime crisis really came to the fore.

And by the way, President Bush is meeting at this hour with his economic team, the president expected to introduce some sort of stimulus plan, most likely in his State of the Union address later this month. And obviously, a lot of concern, not only on Wall Street but in Washington, as well and across the -- across the whole great USA -- Kyra.

PHILLIPS: All right. You said that with a lot of enthusiasm, the old great USA. All right, Susan.

LISOVICZ: Yes.

PHILLIPS: We'll see you in a bit.

LISOVICZ: I think that Iowa caucus thing got to me.

PHILLIPS: All right. We'll see you in a little bit. MARCIANO: All right. We want to tap into something we've been showing you for the past few minutes: Barack Obama's event in Concord, New Hampshire. Waiting for Mr. Obama to show up and speak. He's playing some music, by Kyra's account, to be pretty cool, pretty hip. We'll see if that continues, and when he steps to the mike, we'll bring you some of those highlights.

Well, can victories in the heartland carry two former underdogs in New Hampshire? Well, we'll hear from former White House advisor and CNN political analyst David Gergen.

(COMMERCIAL BREAK)

PHILLIPS: Waiting for Barack Obama to step up to the mics, holding his event there live in Concord, New Hampshire. We'll listen in once he starts talking. Big win for him last night in Iowa.

Well, with just four days till the New Hampshire primary, the candidates for president don't have the luxury of celebrating victory or dwelling on defeat in Iowa. And the bottom line: Mike Huckabee was the big winner for Republicans, and as you saw there, Barack Obama, a very happy man. He scored a broad-based victory among Democrats. So what happens next?

Let's talk to our David Gergen, former White House adviser, now senior political analyst for CNN. He joins us from Harvard University. You are all over the map in the past 48 hours, David. You know, a few months ago, you would have never expected a Huckabee and an Obama to win the Iowa caucus.

DAVID GERGEN, CNN SR. POLITICAL ANALYST: You certainly wouldn't. I must say that -- and they took somewhat different paths to get there. Huckabee, a very late bloomer and just took off in the last four weeks of the campaign. If you look at those entrance polls from last night, a lot of people have made up their minds in the last three or four weeks, went heavily for Huckabee.

Barack Obama, his was a rocket that went up very rapidly in the early part of his candidacy, but then seemed to stall out, level out. And then, in about the last 45 days or so, he -- he's caught fire. I don't know quite what's happened. I think we'll all have to go back and look at that.

But now for him, the real issue is can he create a wave. Can he create a wave coming out of Iowa, you know, across into New Hampshire. He went into New Hampshire just as of yesterday, if you look at an average of the polls, Hillary Clinton was ahead if him by about six points. He's been closing that lead, but he's still down about six points. Now, he has to use that wave, create that wave and see if he can overcome it.

If he can really -- and we'll watch this, I think it's going to be fascinating to watch these candidates this weekend and Monday, Tuesday in New Hampshire to see how they try to generate momentum.

PHILLIPS: Well, and -- how is that going to happen for Hillary Clinton? I mean, you even said to me yesterday, she had the most to lose. And so here she is, coming in with a third place finish. Clinton camp having a hard time dealing with this.

GERGEN: Well, exactly. And as we said yesterday, this was her disaster scenario, the nightmare scenario, not only to lose but to lose and come in third and to have Obama first instead of Edwards. That's the worst outcome for her. She has to pick herself up off the mat.

When she arrived in Nashville this morning, she was very gracious. And she -- it's very clear that she feels that people don't know her very well. And she's trying to open herself up to any questions, whatever they want to know about her. That somehow she's not connecting at an emotional level. She's connecting through their -- through people's heads, he -- Obama is connecting through people's hearts. And that -- you always want the heart rather than the head for starters, then you've got to come along with the head.

And so, I think some ways she's got to make an emotional connection. It's not clear to me that having Bill Clinton at her side is the right decision. We'll have to wait and see. It again turns into a referendum on the Clinton years. And that did not work for her in Iowa. Somehow, I think that she needs to -- if I were sitting in the campaign, say can we buy a 30-minute ad or 30-minute spot on Sunday, Monday night so that she can have a conversation with the people of New Hampshire about who she is and what her hopes and dreams are, make it very personal. Try to make it, make that emotional connection. Be vulnerable.

I mean, and she lost. She's got to act like she did lose. And then say but I need your help. Let's keep this process going. I think that has to be another part of her message. Let's keep this -- don't decide this right away. In New Hampshire, keep it open for the rest of the country can take a good look at everyone in the race.

PHILLIPS: And David, just for the sake of balance, we've got to get off to the ...

GERGEN: Sure.

PHILLIPS: ...Barack Obama event live right now. But we want to hit the Republican side. We don't want this to look like, you know ...

GERGEN: Sure.

PHILLIPS: ...we're all just talking about the Democrats. Stick with us for a minute here while we listen in to Obama.

GERGEN: Fine.

(JOINED IN PROGRESS)

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: ...give them a big round of applause. Come up on stage here, guys. Give them a big round of applause. Wait, wait, wait, wait, wait. Wait, before you go ...

PHILLIPS: All right, I'm going to steal a little bit here, David Gergen, while he's getting his thoughts together. He's welcoming everybody. Let's hit the Republican side. I wanted to ask you about Mike Huckabee. Let's just take a quick listen to part of his speech last night. I want to get your reaction to something.

(BEGIN VIDEO CLIP)

MIKE HUCKABEE (R), PRESIDENTIAL CANDIDATE: But the election is not about me. And the country is not just about me. What is happening tonight in Iowa is going to start really a prairie fire of new hope and zeal.

(END VIDEO CLIP)

PHILLIPS: OK, is it just me or were we starting to hear the preacher up at the pulpit here?

GERGEN: Well, we heard a little bit of the preacher in both Obama and Huckabee last night. And I must say, where I thought the Obama speech was tour de force, Mike Huckabee had a very effective speech. He ...

PHILLIPS: So, he's making that emotional connection that you said Hillary ...

GERGEN: He's making ...

PHILLIPS: ...needs to make, that personal connection that you said Hillary needs to make.

GERGEN: Absolutely -- I mean, if you compared the Romney speech to the Huckabee speech last night, they're just plain -- they're almost like they're in different leagues or different sports. Romney's playing much more the methodical, the tried and true, the managerial approach of politics, the science of politics if you would. And Huckabee is sort of talking a different language. And it's much more from the heart. And it's very authentic.

And I must say, I thought he -- hearing that speech last night for the first time, I fully understood why he won in Iowa. That's what the voters were hearing out there, it's very different about politics. It's looking at politics in a fresh way, not talking very much about issues I might -- and I think he's weak on some of these issues, but it's connective and it's sort of saying you know, let's have a conversation, I don't want to harangue you.

And he's talking about -- there's something in the leadership field, instead of the leader being the authoritarian person on top, that the leader is the servant of others. It's called servant leadership. And he's practicing that. He talked about that last night, coming up with the Chesterton quote about not hating the people in front you and loving the people behind you. There is something about that that doesn't show up in the polls, but it shows up in people's hearts and it moves them and gets them out there. PHILLIPS: And Chesterton, the well known Christian writer.

GERGEN: Exactly.

PHILLIPS: David Gergen, appreciate it. I feel we got more balance in there.

GERGEN: Good, well, I'm glad you came back to that. Thank you, I appreciate the opportunity and we'll go forward and listen to all of these candidates now in their couple ....

PHILLIPS: It'll be interesting to see all of the changes in strategy and how it moves forward. We'll be paying attention to that ...

GERGEN: Sure.

PHILLIPS: ...emotional connection that you talk about obviously within all of the candidates. It says something about right now in the administration leading this country too. It's interesting.

GERGEN: Thank you.

PHILLIPS: Thanks, David Gergen. We're going to take you now to Barack Obama in Concord, New Hampshire holding his live event.

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: In four days time we have a chance to move beyond the bitterness and the partisanship and the anger that has characterized Washington for so long. To end the political strategy that says it's all about tearing your opponent down as opposed to building the country up.

It's an opportunity for us to try to bring factions together, to stretch a progressive agenda from red states to blue states, because I am interested in being the president of the United States of America, that's why I'm running for president. And that's how we will win in November. And that's how we will finally neat challenges that we face.

In four days time you can choose hope over fear. In four days time we can choose unity over division. In four days time we can choose to send a message that resonates all across the country, and penetrates Washington. And finally allows us to deal with critical issues like health care and our schools and climate change and an energy policy that breaks the grip of our dependence on foreign oil.

That's possibility that's before us in four days time. In four days time New Hampshire, we have a chance to say to the corporate lobbyist, your days of setting the agenda in Washington are over. They have not funded my campaigns, they will not run my White House, and they will not drown out the voice of the American people when I am president of the United States. That's what we can do, New Hampshire, in four days.

In four days time you have a chance to elect a president who will be honest about what it will take to meet our challenges, who will actually talk about sacrifice, who won't just tell the American people what they want to hear, but will tell the American people what they need to hear. That's the chance we have in four days time.

And if you listen to what happened in Iowa, they will tell you, I want to be that president of the United States of America if you'll give me the chance. I want to be a president who want finally makes health care affordable and accessible to every single American. I want every American to be able to get health care that is at least as good as the health care I have as a member of Congress.

And we won't -- and by the way, this is personal for me. My mother died of cancer when she was 53-years-old. That was tragic enough. But what compounded the tragedy was in last months of her life she was in her hospital room looking at insurance forms, because the insurance company said that maybe she had a pre-existing condition and maybe they wouldn't have to reimburse her for her medical bills.

So I know what it's like to see a health care system that breaks the spirit, and it's wrong. And that's why not only are we going to make sure that everybody can get health care that works, we're going to make sure that those who have health care can keep their health care by lowering premiums by at least $2500.

That's what we can accomplish, but only if we invite the American people into the process. Only if you know what my plans are and when we are negotiating for that plan, we are going to have C-SPAN on and you will see who is compromising the American people's interests. Who is looking out for drug companies, insurance companies instead of you.

PHILLIPS: Losing his voice, but his message is still being heard. A huge win for Barack Obama in Iowa last night. Roland Martin our CNN contributor live out of New York of course, has been watching all of the speeches from the frustrations to the victories.

But, focusing on Barack Obama for a minute, this conversation you and I were having about how he's sort of transcending race and he's channeling Abraham Lincoln and Martin Luther King, Jr.

ROLAND MARTIN, CNN CONTRIBUTOR: Well absolutely, first and foremost he opened his campaign in February of '07 outside the state capitol building, the old capitol building in Springfield, Illinois where Lincoln gave his famous A House Divided speech on June 16, 1858.

So he echoed Lincoln when he started the campaign, because Lincoln also only served one term in Congress as a member of the House before being elected president. So when you listen to him speak, when he talks about this whole divide, when he says red and blue, when he talks about that -- the whole issue of haves and haves not, Democrats and Republicans, liberal and conservative, he's talking about a nation in 2008 that is a nation divided.

Although Lincoln was speaking about slavery, he is trying to say that we are divided. So when Obama goes after Independents and goes after young voters, what he is saying is we have a generational divide. So what he is trying to convey is that he is somehow the bridge that's able to somehow bring all of these factions together. Because here is someone who is bi-racial, African-American, Kenyan father, international aspect, mother white from Kansas, American aspect. So he's saying wait a minute, I'm bi-racial, I'm American, I'm international. He says I am representing America.

The other aspect, Kyra is that when you read King's book, Why We Can't Wait which deals with -- Letter from a Birmingham Jail, King talks about why we can't wait. People say Obama, you should wait run in 16 years. He is saying no, we must seize the opportunity now.

So any time you hear him talk, you hear him talking about these issues and sort of fusing them together to present this kind of utopian, if you will, picture as to the perfect candidate for these times.

PHILLIPS: You know, Huckabee did the same thing, Roland. He talked about the different classes, and I'm part of your class and you mentioned the ruling class. It was -- I mean, he sort of did the same thing.

MARTIN: Well, absolutely. Again, you saw two guys win, what Huckabee also has to do, though, because the conventional wisdom says Huckabee is only attractive to evangelicals. So what he is trying to and what George W. Bush did in 2000, take his faith and be able to say now let me be compassionate when it comes to the economy, when it comes to education, when it comes to health care.

Sure, I'm a staunch pro life person, but he isn't perceived as being hateful as other people who are pro life. And so, he is trying to sort of broaden this view. The reality that Democrats now understand and Republicans have figured out, is that morals and values, a sense that we are human beings that is what a lot of people are paying attention to.

So, both are speaking to that, so we can say sure, they are change candidates, but they are trying to convey a different kind of politician for the 21st century.

PHILLIPS: CNN contributor, Roland Martin. Thanks, Roland.

MARTIN: Thanks, Kyra.

PHILLIPS: To see all the Iowa results you can go to CNNpolitics.com, it's your one stop shop for the New Hampshire primary too.

MARCIANO: They may be energy savers, but could they also be harmful to your health. Our Dr. Sanjay Gupta will shed some light on those new light bulbs.

And the soap opera that is Britney Spears. Just days into 2008 and there is already a new episode stay tuned for that.

(COMMERCIAL BREAK)

MARCIANO: Well, Britney Spears was under police detention when she was rushed to the hospital late last night for a drug and psychological test. It's the latest turn in the pop star's downward spiral. Lola Ogunnaike of CNN's "AMERICAN MORNING" joins us with the details.

Lola, Lola, Lola. First of all, is Britney OK? What's the story from the hospital?

LOLA OGUNNAIKE, CNN CORRESPONDENT: Well, what we're hearing now is that she is still at the Cedars Sinai. She could be there for up to another 72 hours. She's undergoing psychological evaluations. And when police arrived at the scene, they said she was intoxicated, under the influence of some unknown substance, so they are still trying to determine what that unknown substance is.

MARCIANO: All right, so still getting -- need to get work from the hospital, but it sounds like she will be, at least, physically OK. What about the kids? How are they doing? Where are they in all of this mess?

OGUNNAIKE: Earlier in the day, "TMZ" had been reporting that Jaden, Britney's younger son, also had to be rushed to the hospital. A spokesperson for the LAPD says that's completely not true. Jaden and Shawn Preston, his older brother, are both with Kevin Federline.

But the real truth here is that Kevin Federline is pushing for full custody of the children, Rob. His lawyers called for an emergency hearing earlier today. They've already met with the judge and they are supposed to meet with the judge again this afternoon. So, Kevin Federline could walk out of there being the sole custody bearer of his children.

MARCIANO: It feels like it's been kind of coming to this. With all of the mishaps from Britney, lately, that I would think that Kevin might have custody by now, or at least some custody.

OGUNNAIKE: Well, it's so hard to believe that Kevin Federline is actually the good parent out of this duo, but turns out that he is way better off than Britney right now.

MARCIANO: All right, well listen. You know, she just came out with a new album. It seemed like she was kind of getting her career back on track. What do you make of her career at this point?

OGUNNAIKE: Well that's yet another tragedy. She seemed to be doing really well with her hit single, "Gimme More." And, the album actually debuted at number two on the Billboard charts, Rob. And that was without her doing promotions, without her really being out there in any of the magazines, except for the tabloids of course. And it still managed to do extremely well. And now, she squandered a prime opportunity to get herself together and really start a comeback.

MARCIANO: I can just hear her kids now, "gimme more, gimme, gimme, gimme more." When is this going to end? Well we certainly -- we do hope for the best for her, both physically and psychologically.

And of course, Lola Ogunnaike, from CNN's "AMERICAN MORNING," you will keep us up to date on this ongoing saga. Thanks, Lola.

OGUNNAIKE: Thank you.

PHILLIPS: Good for the environment, but those ugly new light bulbs could be a health hazard. Our Dr. Sanjay Gupta will shed some light.

(COMMERCIAL BREAK)

PHILLIPS: Good for the environment, maybe not so good for you. New energy efficient light bulbs are generating concern that they can trigger migraines. Our chief medical correspondent, Dr. Sanjay Gupta, takes a closer look.

(BEGIN VIDEOTAPE)

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well, it's important to point out that there is no scientific data that actually suggests that these low energy lights cause migraine headaches, but there are enough people that are concerned about where people are starting to really look into this. The concern here is specifically something known as flicker rate. Could these low energy lights be actually flickering at a rate that is more noticeable or could they be giving off dim light that's enough to actually induce a migraine?

There is a long standing, well-known relationship between migraines and light. For example, if you're having a migraine headache, light can actually cause dramatic increase in pain, it's actually something known as photophobia, where people actually become fearful of light. They have to go inside a darkened room and try and get away from it so the symptoms don't get worse.

But the question here is, could the light in the first place actually induce a migraine, or cause a migraine? And that is just not clear, although a lot of people seem to be concerned about that. Migraine headaches, as a lot of people know -- in full disclosure, I suffer from them as well -- are headaches that usually occur on one side of the head or the other. They're often times associated with some sort of visual symptom. So you may see some blurriness of vision or you may have some bright lights in your field of vision. And they can be awful. They can last between four hours and 72 hours, sometimes longer or shorter than that.

They are associated with nausea and again, people really need to get in a darkened room, oftentimes, to try and ward off some of the terrible symptoms. There is also a concern about a relationship between lights and epilepsy. That's more defined. For example, strobe lights possibly causing epilepsy and there's a relationship between migraines and epilepsy. So if you have migraine headaches, you could be more likely to develop seizures or epilepsy.

So there in sort of lies the whole dilemma here. These low energy lights, for the vast majority of people, are a going to be a good thing. But could they be problematic in a certain percentage of the population who actually are bothered by that flicker rate or by bothered by the low dimness of it? Migraines have all sorts of triggers. Again, I suffer from them. Stress can be a trigger in 80 percent of people, women undergoing hormonal changes can have migraines. But also, certain foods, wine, chocolate for example. What's life like without wine and chocolate, I don't know. But for a lot of people, it causes awful headaches. Know your triggers and that might actually get you some relief. Back to you.

(END VIDEOTAPE)

MARCIANO: More medical news. Help may be on the way for people hooked on cocaine. Two researchers at the Baylor College of Medicine say they are working on a vaccine they hope will be the first ever medication to treat cocaine addicts. They're hoping to start a government-approved trial this spring. For now, a treatment for cocaine addiction involves mostly psychiatric counseling and 12-step programs.

PHILLIPS: In Los Angeles, Rock-N-Roll Hall of Famer, Steven Stills, is expected to go home tomorrow after undergoing surgery for prostate cancer. His wife says the procedure went remarkably well and he couldn't be better. She says, the legendary musician plans to be in Utah for the Sundance Film Festival later this month and on the road this spring promoting his latest album.

Next hour of CNN NEWSROOM starts right now.

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