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Campbell Brown

Biden Meets With Cheney; Secretary of State Hillary Clinton?

Aired November 13, 2008 - 20:00   ET

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

CAMPBELL BROWN, CNN ANCHOR: Hey there, everybody. We begin with breaking news tonight.
Senator Hillary Clinton under consideration for secretary of state in the Obama administration? Would she want that job? Will she take the job? Our own Gloria Borger has just confirmed the information for us here at CNN. And she is joining us right now with the very latest details. Gloria, tell us what you know.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, Campbell, we have some sources that are close to the Obama transition that tell CNN that Hillary Clinton, her name is on a list as a possible secretary of state.

But I want to add a word of caution here, Campbell. We don't know whether Hillary Clinton has indeed been contacted by the Obama campaign and asked whether she would be secretary of state. What we do know, and my colleague Jessica Yellin has reported this, is that, as of early yesterday, Hillary Clinton had not been contacted by the Obama campaign.

So, if you recall, she was on a list also to be vice president. And we later learned that she had never been contacted, nor had she been vetted. So we have a to say, look, she is clearly on their list. She's clearly somebody that folks in the transition are considering, but we don't know for a fact whether they have indeed reached out to her.

BROWN: And, Gloria, just based on your own reporting and what you know about Hillary Clinton, I mean, as far as I know, she's never really expressed an interest in this, has she?

BORGER: No, she hasn't.

And, in fact, she had before the election said quite specifically that she did not want to be a Cabinet member. But on Monday night, she was in an awards ceremony in New York. And she was asked whether she would consider taking a post in the Obama administration. And she was a little less Shermanesque.

She said, "I'm happy being a senator from New York," but she also went on to say, "I want to be a good partner and I want to do everything I can to make sure that Senator Obama's agenda is going to be successful."

So, there's a little wiggle room in there, and there are lots of folks who believe she would be a very good secretary of state and that she ought to be on any Obama list for that position.

BROWN: So, Gloria, if she were interested in the job, who is her competition right now?

BORGER: Well, Senator John Kerry of Massachusetts is her competition. Senator -- Governor Bill Richardson of New Mexico has also been mentioned, and he was an Obama supporter that ended up alienating the Clintons, if you will recall, because he went with Senator Obama.

Dick Holbrooke, former U.N. ambassador, would also be on anyone's list. So, I think there is some stiff competition, but there's also a sense in this administration, I mean, in the Obama world right now, that they want a really diverse Cabinet.

Hillary Clinton would certainly add to that, and she certainly knows the issues, having served on the Armed Services Committee. But, if you will recall, during the campaign she had a few differences with Senator Obama on foreign policy.

BROWN: Absolutely.

All right. Gloria, you're sticking around. We're going to talk about this a lot more in just a few minutes with our panel. So, we will see you in a minute. But for now, thanks very much, Gloria Borger for us reporting that story for us tonight.

(CROSSTALK)

BROWN: And there is a lot of news tonight to get to.

In a moment, we're going to get to the Dow industrials neck- snapping 911-point swing today and Congress' strong signal that it probably will not bail out U.S. car companies.

And we're all talking about this question. Could you pass the test to become a member of the Obama administration? The test is seven pages long with 63 questions. And among them, have you ever sent an e-mail or kept a diary that contains potential -- a potential source of embarrassment to you, your family or the president-elect? And what are the Internet addresses of all the Web sites that feature you, including Facebook and MySpace pages?

Another bullet point tonight, tonight's friendly get-together, as vice president-elect Joe Biden and his wife, Jill, visit the home of their old friends Dick and Lynne Cheney. Wouldn't you love to be a fly on the wall for this one? Remember all those lovely things Biden said about the vice president during the campaign?

(BEGIN VIDEO CLIP)

SEN. JOSEPH BIDEN (D-DE), VICE PRESIDENT-ELECT: Vice President Cheney has been the most dangerous vice president we have had probably in American history.

Dick Cheney has been wrong on everything for the last eight years.

No longer will you hear the eight most dreaded language -- words in the English language: The vice president's office is on the phone.

(LAUGHTER)

(END VIDEO CLIP)

BROWN: And guess who is in the spotlight while everybody else is in the background?

Sarah Palin's presence led to some pretty awkward moments, we're reporting, at today's Republican governors conference. We're going to show you what happens.

And look who is back in action the campaign trail tonight, a U.S. senator who lost last week now campaigning for a fellow senator who didn't quite win.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: Saxby Chambliss is doing what we Republicans should have done for eight years. And that's restrain spending.

(APPLAUSE)

(END VIDEO CLIP)

BROWN: But first, as always, we're cutting through the bull tonight.

It was less than two months ago that Congress passed a $700 billion bailout package. Do you remember how it went down? Treasury Secretary Hank Paulson went to Capitol Hill. He got down on his knees. He begged House Speaker Nancy Pelosi, warning us all there would be financial Armageddon if he didn't get this cash.

He asked for a blank check. And, at the time, I criticized him and applauded Congress for saying no way. There has to be oversight. You must account for the money you spend and answer to us every step of the way.

Well, what a joke, because here we are today. More than a third of the 700 billion has been spent. Paulson tells us yesterday, oh, by the way, he doesn't think the money is being spent the right way and he's now going to redirect the rest of it.

Now, for all I know, Paulson is right. Maybe the original plan was a bad one and we do need to regroup right now, but where the heck is the oversight?

I mean, members of Congress, you delayed the passage of the bailout bill because you wanted checks and balances. You wanted oversight over what Paulson does. Today, "The Washington Post" reports that the independent oversight jobs that were created as part of this bailout plan, they haven't even been filled. No one is keeping watch on how 700 billion of our tax dollars are being spent right now.

The law requires that Congress get a formal report by a certain deadline. The deadline has passed, and -- big surprise here -- there's no report.

Here's the quote "The Post" had from the Treasury Department's inspector general: "It's a mess. I don't think anyone understands right now how we're going to do proper oversight of this thing."

He is right. It is a mess. And who is to blame? Both the White House and Congress were supposed to nominate people to these oversight positions and confirm them. Both the White House and Congress have dropped the ball and not done their jobs.

And because of that, Hank Paulson, a former Wall Street banker, has a blank check and our money. We should all hope and pray he is doing the right thing, because, right now, he is answering to no one.

To help us cut through the bull tonight and the bailout and the markets, I have chief business correspondent Ali Velshi with me live.

OK, so, Ali, big change...

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Yes.

BROWN: ... was reported yesterday in terms of how Paulson wants to spend this money. Walk us through where things stand today and whether this is going to work now.

VELSHI: OK.

Well, initially, we had this credit freeze. That's why this was introduced. And the credit freeze was going to be broken by virtue of the Treasury buying these bad loans out there. I showed you. This is a chart we have actually all seen before, first time on this show, probably a couple months ago, and I explained to you how this credit market works.

There are major investors in the world. These might be hedge funds or pension funds or foreign governments. They lend money to banks and they lend money directly to corporations. Those corporations use that money for operating expenses, including jobs and salaries, and that leads to you. That was problem number one, I was suggesting, that needed to be solved.

Problem number two, they lend money to banks. Those banks make loans to you for a car loan, a home loan, a student loan. They also make loans to other people who need to buy things from you. So, maybe these other people are people who are getting a mortgage from you. That's what this was meant to solve.

Take a look at what's actually happened now. This has worked. Corporations are able to get their money, sometimes from major investors, sometimes directly from the Federal Reserve. Banks are getting their money, but guess what's not happening? It's not becoming substantially easier for regular people or small businesses to get loans.

There are still some loans for people with absolutely stellar credit, but the interest rate is not going down on them and they aren't being made more readily available. There's a stoppage here, and that needs to be solved.

So Treasury Secretary Paulson is saying they are going to give up on buying up these bad loans they thought they were going to buy, and they are going to recapitalize the banks. They're going to giving more money to the bank, in the hopes that they will give that money to you. Guess what? That's not happening either.

There are a number of major banks who have said they're going to use the money from the Treasury to acquire other banks, not making any more money available to people who are buying something from you or for you to borrow -- Campbell.

BROWN: And that's amazing to me, because it's Congress' fault, right?

VELSHI: Right.

BROWN: They didn't write it into the bill that banks had to use the money this way, right?

VELSHI: That's right.

And I think they were trying to give flexibility to the Treasury secretary, thinking that these guys are smart. They know what's going on. I have got to tell you, I'm doubtful that allowing banks to use that money to buy other banks is the best use of this situation.

So, we have still got this situation on our hands, Campbell, and I'm not sure we have a solution. I think it's time that we have to hold their feet to the fire and say exactly what is this money going to be used for and how is it going to help this situation?

BROWN: All right, Ali Velshi, we have got a lot more to talk about on this front. Appreciate it.

So, how is the new Obama administration going to handle this financial mess? We do have one of the president-elect's advisers joining us tonight. You can see him right now. You will recognize former labor secretary Robert Reich. He will be with us shortly.

And, then, later, our NO BIAS, NO BULL look at the questionnaire you have to fill out if you want to work for the new Obama administration. Question number eight: Briefly describe the most controversial matters you have ever been involved in during the course of your career. Briefly? We will go through all of these little gems coming up in just a movement. Plus, if you can't put the presidential campaign behind you, you have got company. We're going to see what veteran campaigners John McCain and Sarah Palin are up to today.

(COMMERCIAL BREAK)

BROWN: As we were just talking about a few moments ago with Ali Velshi, big changes to the $700 billion bailout plan that's being handled by our treasury secretary, Hank Paulson, transparency being a big issue here, a lot of other questions about what's going on with it.

And we have got former Secretary of Labor Robert Reich. He has studied business and government for more than 30 years. He's got a book out. The latest book is called "Supercapitalism: The Transformation of Business, Democracy, and Everyday Life."

And we should also mention, Secretary Reich, that you are advising president-elect Obama on the economy; is that correct?

ROBERT REICH, FORMER LABOR SECRETARY: Yes. I'm one of about 17 of his economic advisers who are overseeing the transition, Campbell. But nothing I say should be attributed him. My own opinions only are going to be expressed tonight.

BROWN: All right. Well, let's start there, then. And give us your sense, your own opinion, of what's happening right now with the bailout plan. Is what Secretary Paulson is doing, do you believe, the right thing, the thing that is actually going to help the economy?

REICH: Well, it's very difficult to tell exactly what he is doing.

I mean, as Ali said before, he originally told Congress that what he wanted was this $700 billion to buy back these assets that were toxic assets, create a market for securities that otherwise did not have a market. Now he's completely changing direction.

There is not adequate oversight, Campbell. There is not adequate transparency. Nobody knows what's going on. And this is a very large sum of money. We're talking about up to $700 billion. And I don't have to tell you how many other things we could do with $700 billion.

(CROSSTALK)

BROWN: No, without question, but let me just ask you, because we have seen -- we do know where some of this money is going. It's pretty clear a big chunk of it is going to AIG. A big chunk is going -- there has been an openness about that.

I guess, theoretically, you know he's going to give money to the banks so they can shore up their balance sheets, so hopefully credit lines for average people, like me and you, will open up a little bit. Is that likely, in your view, to stimulate the economy and get us back on track?

REICH: Well, if credit lines really did open up, that would help.

But what's happened, unfortunately, is at least to date very, very little credit has found its way to Main Street. A lot of big banks that have got these extra infusions of money have given dividends to their shareholders -- they couldn't have done it without these extra infusions -- or bonuses and extra money, deferred compensation to their executives, or are thinking about acquiring other banks.

Now, again, I think, when Congress gets back, I would not be surprised if Congress tightened the criteria, particularly for the second $350 billion that Hank Paulson has not yet spent.

BROWN: Secretary Paulson is doing this job for only two more months, and everybody agrees we are in the middle of a real crisis here.

Is the Obama transition team, you and the economic advisers, I know there are a lot of you, but are you working with Secretary Paulson, so that, essentially, everybody is on the same page when the new administration takes over?

REICH: Well, certainly, there are economic advisers who are working with Secretary Paulson, getting information.

But the clear reality everybody understands and recognizes is that George W. Bush is the president of the United States January 20, not Barack Obama.

(CROSSTALK)

BROWN: But wait a minute. Let me stop you there for one second, because I recognize that, but this is a crisis that we should all be able to rise above politics in a situation like this.

And there has been a recognition by the Bush administration that they are only handling this for two more months. And, seemingly, consistency in terms of how we deal with this problem is more important than anything else. You would think that the Obama transition team and the Bush administration could come together on this, so that we're all operating from the same playbook.

REICH: Well, consistency is very important, Campbell, unless the Bush administration is doing something that doesn't make a lot of sense.

Now, Hank Paulson is changing direction with regard to this huge bank bailout, but there does need to be more oversight. And, as you said yourself, we don't know -- there's not enough transparency. The criteria are not sharp enough. I would not be surprised -- and, again, I'm not speaking out of school. I'm just talking about my own view.

I would not be surprised if the president-elect wanted more oversight, better criteria to make sure this money actually does get to small businesses and students and homeowners who are in trouble. BROWN: Former Goldman Sachs chairman John Whitehead, he just said that he believes this crisis is going to be worse than the Great Depression. Do you agree with that?

REICH: Well, I don't think it's going to be worse than the Great Depression, but it certainly shows signs of being a very, very severe recession.

In addition to getting this bailout right, it's -- another big question is how big a stimulus package there is going to be. And a lot of people are talking maybe $200 billion, $300 billion. But it may be that it's got to be much larger than that, because, remember, consumers are at the end of their ropes. They are not spending. Investors are not investing because consumers are not buying.

And, so, the only entity capable of actually spending money, getting people jobs, getting money in people's pockets is -- whether you like it or not, regardless of your ideology -- government.

BROWN: All right.

Secretary Reich, it's good to have you on. I hope you will come back. I want to talk about the auto industry, but we have limited time in the show. And that's a whole separate discussion in and of itself.

REICH: So much to talk about.

BROWN: So, we will invite you back to cover that ground with us very shortly. Appreciate your time tonight.

REICH: Thanks, Campbell. Bye-bye.

BROWN: And coming up: It used to be that we never heard from Sarah Palin. And, what, has it been every day this week, how many times a day? She attended today her first full-blown news conference for the national media.

But, coming up, why Karl Rove is not amused with what Palin is up to these days.

And more about Hillary Clinton as a possible choice for secretary of state. We're going to dig into all of it when we come back.

(COMMERCIAL BREAK)

BROWN: Transition season is always a strange time in Washington. Hatchets are buried, attacks are forgiven, dogs and cats start bonding big time. And it was in this spirit of togetherness that Dick and Lynne Cheney welcomed Joe and Jill Biden to their new D.C. digs just a few hours ago.

So much love in this picture, it's easy to forget some of the choice words candidate Biden had for Vice President Cheney.

Let's take a look back, shall we? (BEGIN VIDEO CLIP)

BIDEN: John McCain received a coveted endorsement. He was endorsed by Vice President Cheney.

Vice President Cheney has been the most dangerous vice president we have had probably in American history.

Dick Cheney has been wrong on everything for the last eight years.

(CHEERING AND APPLAUSE)

BIDEN: Cheney is on a roll. The man is on a roll.

(CHEERING AND APPLAUSE)

BIDEN: Folks, do you need any more proof?

A bizarre notion invented by Cheney.

Vice President Cheney.

Dick Cheney.

I love it.

Cheney is on a roll.

Vice President Cheney came out and endorsed John McCain.

If it was Cheney Stadium, we would be at an undisclosed location.

(CHEERING AND APPLAUSE)

BIDEN: You would never have been able to find us.

(LAUGHTER)

BIDEN: Pretty soon, he's going to be calling me Dick Cheney.

AUDIENCE: No!

BIDEN: And that wouldn't be good.

(END VIDEO CLIP)

BROWN: Well, tonight, the vice president's office put out a statement saying, no hard feelings. He knows how things happen on the campaign trail, no big deal.

The Bidens also put out a statement -- or the vice president- elect's spokeswoman said, "The Bidens thank the Cheneys for welcoming them into their home and for their gracious hospitality."

Feel the love, everybody. Meanwhile, the Obama transition rolls along. And if you're looking for a job in this new administration, you better sharpen your pencils, because the president-elect has some homework for you. CNN has obtained the seven-page questionnaire that's being sent to anyone seeking Cabinet or other high-ranking jobs.

And this is just one of the 63 questions.

"Please, specifically describe any affiliation you, your spouse or any member of your immediate family have or have had with any financial, banking, mortgage or insurance institution that's currently the subject of federal government intervention as part of the ongoing economic crisis. This question includes, but is not limited to the following, Fannie Mae, Freddie Mac, AIG, and Washington Mutual."

Here is yet another one for you. "Do you presently have or have you in the past had occasional or regular domestic help, for example, a housekeeper, baby-sitter, nanny, or gardener?"

And one more: "Do any members of your immediate family own a gun?"

So, we're getting into the nitty-gritty here, pretty intense. A

And I want to run it by our NO BULL panel of top-notch political observers, CNN contributor Stephen Hayes, a senior writer for the conservative-leaning "Weekly Standard" magazine, Gloria Borger, CNN senior political analyst, with us once again, and Errol Louis, "New York Daily News" columnist and morning talk show host at WWRL Radio in New York.

OK.

So, Gloria, if I have five parking tickets, basically, I can't get a job in the Obama administration. Is that what this means?

BORGER: Well, what it means is you have to tell them everything. You have to tell them -- also, one other thing, Campbell, is, have you ever written an e-mail that could be potentially embarrassing to the president of the United States?

I guess that would eliminate me, so -- and lots of other people out there. Look, they want to be sure they don't make the mistakes of the Clinton administration on the nanny issue, which was the Zoe Baird issue, for example.

But they have also moved into a new generation of sort of e-mail questions. You have got questions about Fannie Mae, Freddie Mac. They don't want any lobbyists. So, they are being a little particular here.

BROWN: Well, I was going to say, maybe we didn't use the best questions to express this in the lead-in here, but, I mean, they want to know if you're on MySpace and Facebook, and what your aliases are, and what your handles are.

Errol, does it go overboard? Does it go too far?

ERROL LOUIS, COLUMNIST, "THE NEW YORK DAILY NEWS": I think it does go too far.

You start to wonder, could Michelle Obama, could Barack Obama survive this kind of a vetting? It reminds me actually of the stepladders that you see plastered with all of these warnings, and if you look at them, they are like a history of all of the different accidents people have had.

The questionnaire reads like a list of all kinds of mishaps that past administrations have had. And you have to start to wonder if, out of hundreds, if not thousands, of people who might want to consider doing the work, how many are going to actually put up with this intense, kind of invasive scrutiny?

BROWN: And, Steve some might call it overkill, I guess, to ask would-be Cabinet officials to say -- quote -- "Please list all the aliases and handles you have used to communicate on the Internet." This is one of the real questions. "Please provide the URL address of any Web sites that feature you in either a personal or professional capacity," as I was mentioning a moment ago, Facebook and MySpace.

Is the thinking here basically that you don't want to find out your assistant secretary of defense is on Match.com with a screen name like Big Hot Stud? I mean, that's what they're getting at here.

(LAUGHTER)

STEPHEN HAYES, CNN CONTRIBUTOR: Yes.

No, I mean, that's what it sounds like. But, look, I actually just think they are being prudent. If you look, there have been scandals of this nature. You had a senior Homeland Security official in the Bush administration get in trouble this way.

You have got all sorts of these kinds of scandals. And one thing we know about the Obama operation, formerly the campaign, now the transition, is that they like, as they say, no-drama Obama. They are just trying to look for every possible thing that a potential Cabinet official or potential high-ranking official could possibly have gotten themselves into that could cause them problems. I think they are just being prudent.

BROWN: OK, guys, I want to go to what Gloria and I were talking about at the top of the show.

You know, it's been, what, a bit of time since I think we have really discussed Hillary Clinton, so I just want to get your thoughts on the record for what Gloria had reported earlier, that she is apparently in the running for secretary of state.

What do you think, Steve? Will she get offered the job, and would she accept it?

HAYES: Boy, I would be surprised if she were offered the job, and I would be very, very surprised if she accepted it.

You know, I think she has her sights set higher than that, frankly. I think she wants to run again. This is not based on any inside information with high-ranking Clinton officials, but just based on my following her career. It seems to me she wants to be president. She's wanted to be president for a long time. And I would be sort of surprised if she were willing to take this -- this job in the meantime.

BROWN: But let me just read you a quick statement that was put out by one of her senior advisers tonight, saying -- quote -- "Any speculation about Cabinet or other administration appointments is really for president-elect Obama's transition team to address."

And that, to me, doesn't sound like a denial.

LOUIS: No, not exactly a denial.

On the other hand, I would have to agree. I would be very surprised. Look, she represents 19 million residents of New York State. It's a very powerful kind of a position. On the other hand, if you become a secretary of state, even a senior Cabinet member, you serve at the pleasure of the president. He can put you out in the wilderness on a whim for any reason or for no reason. And all of the work and all of the ambition would then have been for nothing.

So, I would be surprised if she were to jump at that. On the other hand, you know, you never know. You never know.

BROWN: And, Gloria...

(CROSSTALK)

BROWN: Yes, go ahead, Steve.

HAYES: Think, too, about -- you know, think about how obsessed we were, everybody was, all the media was for so long through their primary and then afterwards about the relationship, about how powerful she was.

I mean, is that the kind of thing that Barack Obama would have to be dealing with or want to be dealing with on a daily basis or even a weekly basis during his presidency? It would really surprise me.

BROWN: And, Gloria, on to that point, quickly, to the relationship.

BORGER: Well, you know, he did not make her vice president, so lots of people ask the question, if he didn't make her vice president, why would he make her secretary of state?

However, I think that the change in tone in her answer to this question before the election to now is something we ought to take note of. And it makes a lot of sense that she would be on their list. I still say the question is, have they reached out to her and actually touched her and asked her about it? BROWN: All right. We will keep track of this story for sure.

Stay with us, guys. We have got a lot more to talk about. If you thought John McCain was done with campaigning, think again. We're going to tell you why he's back on the trail. We caught up with him today in Georgia. Yes, he is out campaigning again. We will be right back.

(COMMERCIAL BREAK)

BROWN: You had enough of the 2008 campaign? Oh, come on. John McCain is still out there. He's on the stump, for real, and that begins our PDB tonight, the "Political Daily Briefing."

Ed Henry is in Chicago with all the details for us. And, Ed, McCain made his first campaign appearance since the election stumping for Republican Senator Saxby Chambliss. Chambliss in a very tough runoff for his seat next month. Tell us about it. How was the reception?

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well, he was received well because despite a strong Democratic push in Georgia, John McCain still won it by five points. And here's why this runoff matters so much.

Democrats with their gains in this past election already have 57 Senate seats. They can win this runoff next month in Georgia, it will be up to 58. That's just two short of a filibuster-proof majority in the U.S. Senate, which means it will be much harder for Republicans to block Barack Obama's agenda.

And John McCain is going back to the Senate himself and his pitch to voters in Georgia tonight was very simple. Basically, one vote can make the difference in blocking the economic plans, energy plans, you name it, the health care plan from Barack Obama. Take a listen.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: There's a lot at stake here. The eyes of the country and the world will be on the state of Georgia on December 2nd. And let's make sure that we do not only what's best for us but our children and our grandchildren who can live in a safer and better world.

(END VIDEO CLIP)

BROWN: And Ed --

HENRY: So --

BROWN: Go ahead, sorry.

HENRY: Well, McCain was in Georgia, but what's interesting, the real story here is that Barack Obama has not committed to going to Georgia himself yet, and that's because he wants to be very careful about using his political capital. If he goes to Georgia and Democrats lose this runoff in December, he'll burn some political capital before he's even sworn in so that's why he's being careful, Campbell.

BROWN: All right. Ed, and give us an update on these two fascinating Senate races in Minnesota and Alaska, both still unresolved.

HENRY: Interesting because in Minnesota the Republicans only up by about 200 votes. It's headed for a statewide recount next week, so you got to watch that. It could be another Democratic pickup there.

And then Alaska, even more fascinating, because now the Democrat has jumped ahead by about 800 votes. But what's really fascinating there are, you know, 10,000, 20,000 ballots still uncounted in Alaska. At some point, they might have to send out Sarah Palin's husband, the first dude, who, you know, won all those snowmobile races to get these ballots and get them counted. It's been almost two weeks and they still haven't finished counting ballots, Campbell.

BROWN: Unbelievable.

And finally, Ed, McCain-Feingold federal campaign finance law. Didn't win McCain too many friends on the Republican side. He actually made light of it on a recent "Saturday Night Live" appearance. Let's watch.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: Maybe someone who likes fine jewelry and also respects a politician who can reach across the aisle, if so, you can't go wrong with McCain-Feingold.

(END VIDEO CLIP)

BROWN: You know, Ed, the Republican National Committee, they're not laughing though. It is now suing -- the RNC is now suing to overturn McCain's signature legislation? I mean, explain their gripe. What's going on?

HENRY: That's right. It's a rebuke of their own presidential nominee, Campbell, and the reason why is because they feel that basically the Republican National Committee was hamstrung by that law, were outspent big time by Barack Obama. And now as an incumbent, he could raise even more than the $600 million or $700 million that he just raised in the last election. So if the Republicans can't raise more money, they might have to go on QVC themselves in the next cycle, Campbell.

BROWN: All right. Ed Henry for us tonight. Ed, thanks.

And in our newsroom today, a lot of talk about Sarah Palin and a sort of awkward looking photo-op where she was front and center surrounded by the other Republican governors down in Miami today.

Up next, it's shocking, I know, but Sarah Palin is in the spotlight. (BEGIN VIDEO CLIP)

GOV. SARAH PALIN (R), ALASKA: We're focused on the future and the future for us is not that 2012 presidential race. It's next year and our next budgets and the next reform in our states.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BROWN: Other news to tell you about now and Randi Kaye is with me for "The Briefing."

RANDI KAYE, CNN CORRESPONDENT: A busy day, Campbell. Virginia Tech police locked down a campus dorm this afternoon after reports of gunfire. Police searched every room in the dorm. They say the noise probably came from a nail gun at a nearby construction site. A gunman murdered 32 people at Virginia Tech last year.

Divers searched a lake in Orlando, Florida, today looking for missing 3-year-old Caylee Anthony. They found a bag containing toys and what appeared to be bones. Police say it is not connected to Caylee's disappearance.

More than five million people took part in today's Great Southern California ShakeOut. A simulated 7.8 magnitude earthquake had everyone dropping to the ground and diving under desks. The drill was designed to remind 22 million Californians that they are overdue for a major quake.

And 3-year-old Alaina Pitton of Oregon is one lucky little girl.

(BEGIN VIDEO CLIP)

ALAINA PITTON, FELL THROUGH A FENCE: It was so, so scary.

(END VIDEO CLIP)

KAYE: That is Alaina posing for a family video. Yes, that's right, Campbell, when she fell through a fence at the edge of a 150- foot cliff. She managed to grab some brush and hold on, and a very quick-thinking relative pulled her to safety.

Makes you think twice now about taking those family photos.

BROWN: Can we -- OK.

KAYE: God, look at that.

BROWN: I cannot watch that video anymore.

KAYE: She's OK though.

BROWN: I know. It doesn't matter. Every time I watch it I have heart failure. I hate it.

KAYE: She fell right through that fence.

But how quick thinking was she to grab on to something at that age?

BROWN: OK. Don't even get me started on her parents for making her stand there in the first place.

KAYE: I won't. She's fine.

BROWN: OK. Moving on, Randi.

KAYE: Let's just ramp (ph) a bit.

BROWN: I know. I know. I'm a new mother. I freak out about that stuff.

KAYE: (INAUDIBLE).

BROWN: Coming up next, Sarah Palin with the other Republican governors sorting out how they can somehow fix the mess that the GOP finds itself in today.

(COMMERCIAL BREAK)

BROWN: Sarah Palin continued her comeback tour of the Lower 48 today stealing the show at the Republican governors conference in Miami. Palin started the day doing something she never did in her whole campaign for VP. She held a formal news conference.

Now it was supposed to last 20 minutes or so, but Governor Palin took only four questions before the whole thing abruptly ended. Baby steps, people.

Later, Palin was again in front of the microphones taking part in a panel discussion on the future of the Republican Party. Let's take a listen.

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN (R), ALASKA: It hasn't been that long I think since we all gathered, but I don't know about you but I managed to fill up the time. Let's see, I -- I had a baby, I did some traveling. I very briefly expanded my wardrobe.

I made a few speeches, met a few VIPs, including those who really impact society like Tina Fey. And aside from that, it was pretty much the same old, same old since we last gathered.

In politics, people sometimes go to great lengths to avoid stating the obvious. But I think it's about time that we all remember that the greatest measure of a president is whether he protected and defended this great country. America's 43rd president took that foremost responsibility, that most important charge seriously. He poured his life into it. He succeeded in keeping America safe from another attack.

I'm thankful he is my soldier's son's commander in chief, and for that I say God bless George W. Bush and I thank you, Mr. President.

(END VIDEO CLIP)

BROWN: We want to bring back tonight's panel right now. Stephen Hayes, Gloria Borger, Errol Louis, with me once again.

And Steve, Karl Rove had some pretty harsh words for Governor Palin today. He said, "If she wants to run for president, she's going to have to get somebody to move to Anchorage, Alaska, and help her take her game to another level."

I know you got an interview with her today. Do you think she gets that?

HAYES: Yes. I mean, I think, you know, clearly if she's going to run, she's going to be a national leader there, I think she needs to improve on. I think she needs to improve her fluency on foreign policy and national security issues. You know, I think she could use help in some of her speaking techniques which I think appeal to people in Alaska but are sort of foreign to people in the Lower 48, as you put it.

So, yes, I think there are things to work on but I have to say that, you know, the press conference this morning, as odd as that was, was followed by this speech, which you played a clip of, but the speech went over reasonably well. I thought that the audience there was pretty receptive. I thought she came out of the speech doing pretty well, but the press conference was, I would just say, odd or sort of bizarre.

BROWN: Well, that's how it was described, Gloria, by our Dana Bash, who was also there that it felt very awkward. You know, you had this bunch of her fellow governors standing sort of silently by her and then one governor told Dana that, and this is a quote here, that, "Unfortunately, it sent a message she was the de facto leader of the party," the key word there being unfortunately.

I mean, there are some of the governors who have been pretty explicit about saying they believe her campaign rhetoric especially really set the party back.

BORGER: Right. And, you know, don't forget you've got a bunch of governors there who think that they could be president and that they should be the ones who are the center of attention, and they resent her being the center of attention, although they won't say that out loud.

And, by the way, she was talking about the past instead of the future, and this Republican governors conference is supposed to be about what Republicans need to do in the future to win back the Congress and to win back the White House and to expand the base of their party, and that's not quite what she was talking about today.

BROWN: And, in fact, they got a really sobering assessment. A pollster sat down with them and showed them the numbers on how poorly they did overall in this election and said, "You've got real problems on your hands here."

LOUIS: Oh, yes. I could have told them the same thing. I mean, the pollster undoubtedly told them that they got crushed among women. They lost out among suburban voters. They lost out among young voters which is critical.

I mean, they got killed 2-1 among voters under 30 and that's their future. So if they're not going to just be a regional party that's confined to a very small slice of the electorate, they've got to really rethink their whole operation and what it is that they stand for and who they want to get to support them.

BROWN: And really quick, Steve, do you think they got that, that there needs to be a real revamping of the thinking in the party and their whole philosophy for moving forward?

HAYES: I think there's a little bit of a split. You know, we heard from Haley Barbour yesterday who said that really conservatives need to get back to their roots. Republicans need to get back to their roots. And then you have others like Tim Pawlenty and Jon Huntsman who say no. Conservatives and Republicans have to look forward. They have to embrace these changing demographics and speak accordingly.

BROWN: Fascinating to see how this plays out in the coming months and years probably.

Steve Hayes, Gloria Borger, Errol Louis, thanks, guys. Appreciate it.

And up next, the Ku Klux Klan is back but with a surprising and disturbing twist down in Louisiana. We've got that story for you when we come back.

(COMMERCIAL BREAK)

BROWN: There is no point pretending that racial ugliness in America was wiped out on Election Day. It was not, by any means. And tonight, we have the story of an ugly organization, the Ku Klux Klan, now suspected of murder down in Louisiana.

The victim is a white woman who apparently changed her mind about joining the KKK, and Tom Foreman is covering the story in New Orleans for us tonight -- Tom.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT (voice-over): All around this town the alleged Klan members call home shock and alarm. The sudden violence, the arrest, the robes, reminders of a past many blacks and whites hoped was gone.

UNIDENTIFIED MALE: It's a tragedy, terrible. There shouldn't be Ku Klux around anyway here. Nobody should be prejudiced.

UNIDENTIFIED MALE: Because I figured, you know, maybe in the '70s and '80s, they was (ph) real serious about it but, yes, that does surprise the hell out of me, you know.

FOREMAN: Authorities say from Ray Foster's home, his group reached out through the Internet to find like-minded recruits. They found one, Cynthia Lynch, in Oklahoma, and they invited her to come here to be initiated into the Klan. But at a remote camping spot the ceremony went awry.

Investigators say after 24 hours of chanting and running around with torches, Lynch simply wanted to leave. Foster knocked her down. She got up, and authorities say he shot her. St. Tammany sheriff, Jack Strain.

SHERIFF JACK STRAIN, ST. TAMMANY PARISH: Foster, we believe, immediately removed a knife from his pocket and rolled over the victim and began a process of trying to remove the bullet from her body.

FOREMAN: Because he didn't want to be connected to this.

STRAIN: That's exactly it, because he was trying to destroy evidence where law enforcement would not be able to piece these things together.

FOREMAN: Investigators say other group members helped burn Lynch's clothes and hide her body. Their crime was discovered only after two emerged from the woods the next day and asked a convenience store clerk how to get blood out of their clothing. The clerk called the law.

FOREMAN (on camera): So this is a certificate for a Klansman for weapons training.

UNIDENTIFIED MALE: Apparently that's what it is.

FOREMAN (voice-over): After the other six suspects were pulled from the woods, detectives searched Foster's home where they say they found extensive records of Klan rules, application forms, loyalty oaths sealed in blood, and evidence of ongoing recruitment.

(on camera): So these weren't just a disorganized bunch of --

UNIDENTIFIED MALE: Oh, no. Not whatsoever. Not whatsoever.

FOREMAN (voice-over): The Southern Poverty Law Center, famous for tracking hate groups, says it's been watching Foster for seven years, that he was previously the national grand wizard of four chapters of the Klan in four states, chapters that the center says encouraged violence much more than other white supremacists.

STRAIN: So I'm confident that not only did we cut the snake's head off, but we destroyed his body at the same time.

(END VIDEOTAPE)

FOREMAN: All of this happened about an hour north of here. Right on the line between Washington and St. Tammany parishes, both sheriffs departments are involved, so is the FBI at this point. Foster is charged with second-degree murder, the rest of them with obstruction of justice. They'll be in front of a judge tomorrow for the first time, and we'll hear if they have anything to say about all of this -- Campbell.

BROWN: Wow. A horrifying story.

Tom Foreman for us from New Orleans tonight. Tom, thanks.

We are moving on now to the White House, to the new administration. Everybody is speculating about moving day at the White House.

Tonight, Washington holds its breath on this big question. Will the Obama girls go to public school there?

Plus, tonight in our "Bull's-Eye," a new puppy, but not Sasha and Malia's. That's right. We just can't help ourselves. We'll show you when we come back.

(COMMERCIAL BREAK)

BROWN: Now it is time for "Welcome to the White House," our nightly update on the Obama family's move to Washington. And Erica Hill is here with all the details -- Erica.

ERICA HILL, CNN CORRESPONDENT: It's like the official -- the official Obama watch here. It's getting very busy, a busy day for us.

First up, Sasha and Malia in the spotlight because of Washington abuzz over reports that the new first daughters may, in fact, attend public school after all. We do know Michelle Obama visited two private schools on Monday, but D.C. officials have actually released a statement saying the Obamas have also been in discussions about public schools and when you get that statement, I guess it's confirmation that Washington is officially Obama crazy, which brings us to the latest inauguration news.

More than a million people are expected to crowd the capital for the big event. Hotels are already booked solid. The average price, by the way, $400 a night.

And some lawmakers have actually stopped taking ticket requests. Get this, Senator Jim Webb of Virginia said he has already received 26,000 inauguration ticket requests. Can't fulfill them all. Virginia, of course, is right next to Washington, so Webb is hoping that may earn his state a few extra tickets.

By the way, eBay has already banned sales of inauguration tickets on its Web site because the tickets are supposed to be free. So don't try to pick them up that way. Of course, it's actually only the bleacher seats that are reserved so you can watch from the sidewalk, if you can find a spot. You may want to start camping out now.

BROWN: Yes. Get a tent. HILL: Exactly. For all the VIPs out there, though, who may not be feeling the economic crunch, you do have another option. You can actually buy your seats legally. An organization called Charity Buzz is auctioning off a pair of exclusive seats at the inauguration.

Now those seats come with a private meet and greet with Barack Obama. The group estimates it will raise $80,000 to benefit cancer research. That's rich for your blood though. How about $1.99? Because that's all it will cost you for a six pack of Barack Obama trading cards from Topps. The special inaugural edition cards go on sale in January. Not clear if the gum comes with the cards, Campbell, for you to know.

And since no Obama watch would be complete without the latest puppy news...

BROWN: Yes, give us the puppy news.

HILL: Read the puppy news. The nation's largest non-profit pet adoption Web site has actually started a campaign to convince the Obama family to choose a shelter dog. The petition could be found at presidentialpoochpardon.com. It already has more than 8,000 signatures that's going to be delivered to the White House, we're told. The Web site is run by adoptapet.com, which includes slogans like "yes, we can adopt," and "mutt we can believe in."

BROWN: I love that.

HILL: Very cute.

BROWN: All right. Erica, thanks.

We've got to take a break. More puppy news when we come back.

(COMMERCIAL BREAK)

BROWN: We've got an all puppy "Bull's-Eye" tonight. First up, Sasha and Malia aren't the only ones getting a dog. We all are. At least that's how it looks in this YouTube video from the Internet geniuses at Eclectic Method.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), PRESIDENT-ELECT: Senator McCain, you have earned the new puppy.

Governor Palin, you have earned the new puppy. For all that they've achieved, David Plouffe, David Axelrod, Joe Biden, you made this happen. You have earned the new puppy that's coming with us to the White House.

A government of the puppies, by the puppies --

(END VIDEO CLIP)

BROWN: Can somebody say puppies? We've got your puppies right here. We're just going to end the night checking in yet again on the Web site we have been watching all day -- puppy cam, and those six Shiba Inu pups from Ustream.tv. Love it.

That's it for tonight. CNN special "Escape from Jonestown," Soledad O'Brien reports, starts right now.