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After Party: Where Do We Go from Here?

Aired December 7, 2008 - 14:00   ET

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


(NOTE: AT 14:00, CNN ACTUALLY AIRED THE OBAMA PRESS CONFERENCE, RELEASED IN A SEPARATE TRANSCRIPT. THIS SHOW AIRED IN PROGRESS FOLLOWING THE PRESS CONFERENCE.)
HILARY ROSEN, CNN CONTRIBUTOR: If the business of America is business, why are Republicans deadset against rescuing the auto industry?

DAVID BRODY, CNN CONTRIBUTOR: Well, I suspect that conservatives would argue it's spending the money the country just doesn't have and can't afford.

I'm Hilary Rosen of the Huffington Post and CNN and I'm going to discuss all this week's top political topics with a panel of progressive thinkers.

BRODY: And I'm David Brody of the Christian Broadcasting Network and I'm going to be right over here with three top consecutive observers. And as soon as Hilary's panel clears, I'm sure they're going to be ready to jump in and point out how you've got it all wrong, Hilary.

ROSEN: Not likely. Don't worry, we'll be watching you. And then we'll get both sides together and hash things out, so just sit back and listen while we begin THE AFTER PARTY.

Let's start with a quick question. The government made it official this week, the United States is in a recession. Now there's a surprise. In a matter of months, the economy will be in the hands of President Barack Obama. How do you think he's going to handle this? Michelle Cottle of "The New Republic" joins us.

MICHELLE COTTLE, "THE NEW REPUBLIC": I'm thinking aggressively. He's a cautious guy but coming in he knows, he's got all this political capital, he's popular, the Congress wants to make him happy. He needs to act fast before everybody kind of realizes he is not going to be able to save everything over night.

ROSEN: Chris Hayes, the Washington editor of "The Nation", what do you think?

CHRIS HAYES, "THE NATION": I'm hoping to see some sort of strategic vision which I think is something he showed in the campaign and that's been sorely lacking over the last few months where you've seen this vacillating, ad hoc response. I think that's going to be the most important thing to see out of the Obama administration.

ROSEN: Jamal Simmons, a long time Democratic strategist. JAMAL SIMMONS, CNN CONTRIBUTOR: As Hillary Clinton during the end of the campaign, jobs, baby, jobs. You're going to see $15 billion a year on the energy proposal, you're going to see new infrastructure projects. You're going to see this president focus like a laser beam on getting people back to work because Democrats think if you can do that, then that will help everything else in the economy.

ROSEN: Let's talk about jobs because this week, we had horrible job news again. We've got the statistics up on the screen. The jobs lost in November, 533,000. Unemployment is highest it has been since October of 1993. So it seems to me that when you look at the big issue over the past week that's been on the table, the auto industry bailout, it's all about jobs.

How do you take what we're learning now about the jobs numbers and attach it to the politics of the auto industry bailout? What do you think?

C. HAYES: Well, look. One of the things that's gotten lost in the discussion about whether we're going to let one of the Big Three or all of the Big Three fail is that let's say that they went under and filed Chapter 11 and 1 million people lost their jobs. So far in this recession, we've only lost 1.2 million. So that doubles the amount of lost jobs right off the bat.

Let's say we give those million people unemployment insurance for 12 months. That's a cost of $25 billion right there. Right off that bat.

So it's not like we're choosing between some perfect outcome in which they fail and everything's fine. We're choosing between two really bad outcomes. The question is what's the better outcome.

COTTLE: They need the job numbers to give them some political cover on the Hill. Right now, they're not thinking so much in just pure kind of practical terms. This is a really, politically unpopular issue. And Barack Obama is a very popular guy and he said that he is in favor of the bailout, but so far he's letting Congress handle this. Which I think politically is very shrewd.

ROSEN: But let's look at, though, what the American public opinion is on this. Before you talk, because you're going to respond to what they ought to be talking about. Sixty one percent of Americans oppose Congress helping the auto industry. So where do you go with that.

SIMMONS: Well, if you look at where these jobs are, Michigan, Ohio, Indiana, they're the states Barack Obama won. And they're also states that pretty much decide presidential elections every time we have them. So these jobs are really crucial to the American economy and to the American body politic. There's no way we can let these jobs go away. Not only are they the people who work in the auto industry, but there are people like my friends who are auto dealers, people who are working at supply shot, people who are restaurants outside of auto companies, people who are small businesses who are working. This has a ripple effect that would go through places like my home state, Michigan, will ripple through the entire economy and be devastating. ROSEN: You know what's interesting to me? Throughout the earlier financial crisis in the fall with the credit situation and banks and Wall Street, Henry Paulson, the secretary of the treasury, was on TV every day. The president made two or three speeches, ineffective, but he made them.

You don't see them anywhere on the auto industry issue. You don't see -- Do they just not think these jobs matter?

COTTLE: Well, once you get into the auto industry, you've gone beyond the financial sector and then I think they worry about the slippery slope. Plus, Americans know a lot more about the auto industry than they do high finance. That was a kind of specific, complicated issue that you talked about liquidity, and you talked about banks failing and things like this.

But people know if they hate their GM car. And they see these Chrysler executives flying in on private jets, there's more for people to latch on to. And it makes it politically unpopular. So nobody's going to jump out on front of this issue and be waving the flag for these guys.

ROSEN: What do you think about where the Republicans are? Do you think there's risk for them not coming to the table here if in fact it results in another million jobs lost?

SIMMONS: There absolutely is a risk. They don't call these folks Reagan Democrats for nothing. A lot of these Reagan Democrats are living in places where they'll lose their jobs. You saw a lot of them shift over to Barack Obama in the course of this last election.

If the Republicans are going to make a play to try to get back in the game 2012 or even in the midterms, they've got to have a case to make. And if they let the auto industry fail, I'm telling you, there's no way the Republican Party will survive that.

C. HAYES: I also think it's important to note that the last time we got this sudden spasm of sort of old time free market religion is when we decided to let Lehman Brothers fail and almost everyone agrees that that was a massive mistake and was indeed the proximate cause for a lot of the cascading crisis that we've seen since then.

I think that has to be kept in people's minds. It's not like we can just sort of do nothing and all pat each other on the back for upholding principles. It's going to have real effects.

ROSEN: It doesn't seem to penetrate to the Republicans, particularly in the Senate. Senator Shelby, who is the ranking Republican on the Banking Committee, he has auto plants. He has Toyota and Honda and Hyundai in his state. There is not much news about that.

He actually, his state has a financial incentive in Detroit going down, yet that's hardly talked about. Do you think they end up paying a price for being that parochial?

COTTLE: I think Shelby will get a little bit of cover. He didn't support the financial bailout. It's not like he's targeted the auto bailout. He doesn't support any kind of bailout, which is in keeping with his basic philosophy. But I'm sure at some point, somebody's going to bring that question up to him.

C. HAYES: The other reason I think we're seeing -- One of the reasons I'm thinking the Republicans have some cover in terms of the public opinion you cited is we're seeing people taking out their frustration on the first bailout on this bailout, right?

People are really - Vikram Bandit (ph) never got paraded before ...

ROSEN: The chairman of Citicorp.

C. HAYES: Of Citigroup. We threw, what, $75 billion into that company and that guy didn't have to sort of march before and humiliate himself sort of abjectly in front of the American people and congressional people. The AIG people came after they had already gotten their money.

So people are really frustrated ...

ROSEN: That's a really good point that in some respects, the workers of the auto industry are paying the price for the bailout of executives in Wall Street.

SIMMONS: They do bear a brunt because frankly the auto industry executives have a lot of work to do. Don't they? They don't have good public relations going on. Not only what's happening now. People have felt for years these guys were living off the fat of these SUV vehicles for so long and not doing the tough work of fixing these auto companies and getting - I actually have driven only American cars in my adult life and so I feel these companies have to start offering cars that more people want to buy. I think that's what Americans are sort of frustrated at, that they go into an auto dealership and they don't like the cars that are there.

ROSEN: Which brings us back to the politics of this.

So Democrats this week, Nancy Pelosi wrote a letter to President Bush and said, we might not get to a bailout in Congress, so we want you to use some of the TARP money, some of the financial bailout money, some of the financial bailout money, to float to the auto industry before the end of the year. Which is when GM in particular says they need a cash infusion. What leverage do the Democrats have over President Bush now and what should they do?

C. HAYES: It would be impossible for the Democrats to have less leverage over the president. It is absolutely rock bottom. There is no incentive at this point for him to do anything particularly if it's unpopular. He doesn't want to take it off the table for the incoming president who is going to have a tough political decision to face.

The delicious irony of course is that they're the ones who asked for these incredibly broad sweeping powers and the Democrats are right to say you wanted this wide authority to buy whatever instrument you wanted, well here you go, you do have the authority to do this. So I think the case is correct but the politics are terrible.

ROSEN: That they've moved off course. They're just not going to do it.

Let's take a break. When we come back, we'll take up this week's election results. Yes, the endless election is barely over and what it means for the next Congress. THE AFTER PARTY will be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. SAXBY CHAMBLISS, (R) GA: You have delivered a message that a balance of government in Washington is necessary and that's not only what the people of Georgia want, but what the people of America want and have demanded by their participation.

(END VIDEO CLIP)

ROSEN: That's Republican Senator Saxby Chambliss celebrating his victory on Tuesday.

Is the GOP on the comeback trail? Welcome back to THE AFTER PARTY. I'm Hillary Rosen. And once again I am joined by Michelle Cottle, Chris Hayes and Jamal Simmons.

Michelle, what do you think? Some republicans are saying that Saxby Chambliss' victory means that Democrats need to get back in line.

COTTLE: If you're Republican, this is all you've got, but I'm sorry. It's Georgia. Barack Obama didn't win the state. The only reason we had this runoff is a Libertarian candidate held Chambliss to under 50 percent last time. And Obama wasn't on the ballot this time.

There's been much made about Obama's coat tails weren't big enough, but I'm sorry, this means nothing.

ROSEN: This will probably be the only thing we agree on. Jamal, what do you think?

SIMMONS: That's true. The message here, don't run against Saxby Chambliss in Georgia during a non-presidential election. Other than that I don't know what else there is that you can say.

ROSEN: Agreed.

C. HAYES: I agreed. It was sort of interesting that Chambliss, the best thing he could say was that people were somehow ratifying divided government. Which is not exactly a huge endorsement of the Republican platform.

ROSEN: Or an endorsement of him.

C. HAYES: Yeah. ROSEN: Let's talk about national security. The Weapons of Mass Destruction Commission that Congress commissioned last year after the 9/11 report came back with its findings this week, saying we should expect an attack and it's likely it could be a biological attack. This has put national security back on the front burner for Democrats and for governing this week.

What do you think Barack Obama's national security team is thinking about right now and how prepared do you think they are for it?

SIMMONS: This is his job. This is the ultimate responsibility of the president is to protect the United States of America.

And he's put a team together that really ought to be able to do that. People like Jim Jones, Hillary Clinton, Susan Rice at the UN.

This is going to be a good team that can go in there and try to deal with these some of these national security threats, even keeping Bob Gates.

But you know, the president of the United States is ultimately responsible. I think Barack Obama takes that responsibility very seriously, but the odds are that we are overdue for another attack.

ROSEN: And the idea we might be preparing for another terrorist attack takes the focus potentially a little bit off of the Iraq withdrawal or does it? Some people are saying that the appointment of Secretary Gates is a problem for Democrats and shouldn't have been done.

Katrina Van Den Heuvel, your editor, this week criticized the appointment of Secretary Gates, saying it's a mistake to keep George Bush's defense secretary there.

C. HAYES: I think there's two problems with it.

I understand that there might be bureaucratic reasons for it because the Pentagon is a very, very intense and entrenched bureaucracy that has to me managed at a basic non-ideological level, but the two problems are one, it sends a message that Democrats can't be trusted with running the national security state.

And I think that's a bad message to send. And number two is that over and above the Iraq War, defense spending has grown by 40 percent in real dollars. Forget about the off-budget expenditures. And Bob Gates has shown no inclination to start cutting away at that. And that's something that a lot of Democrats and a lot of people in the progressive sphere are really worried about.

ROSEN: Well, President-Elect Obama might be concerned about that pressure from the left because he addressed it this week.

Let's listen.

(BEGIN VIDEO CLIP) SEN. BARACK OBAMA, PRESIDENT: I said that I would remove our combat troops from Iraq in 16 months, with the understanding that it might be necessary, likely to be necessary, to maintain a residual force to provide potential training to protect your civilians in Iraq.

(END VIDEO CLIP)

ROSEN: Overall, this national security team is pretty centrist. What do you think about ...

COTTLE: Yeah. And I don't think that necessarily should come as a shock to anyone. For all of his early focus on the Iraq War, later in the campaign he had already kind of started walking that back. Specifically, pointing to combat troops as opposed to troops. I don't think there's anybody who didn't expect there to kind of have to remain a very large residual force in Iraq even after he starts withdrawing the combat troops.

ROSEN: So if the attention is on Iraq and then protecting against potential terrorist threats, you've covered Hillary Clinton a lot over these last two years. Where's Hillary Clinton fit in on this overall national security discussion among the Obama team?

COTTLE: Well, Hillary Clinton is pretty hawkish. We've written stories about her natural inclinations over the years. There's been much made of the fact about her being more to the right of him on a lot of issues, or a little bit more conservative on these things, but that said, he's setting the agenda and she's a very good team player. I don't think you'll have a renegade problem. She packs quite a punch so I think it's a very smart appointment. It will just be completely fascinating to watch and the media is going to go berserk over everything she does.

ROSEN: General Jones of course is the national security adviser. It's kind of his job to mediate among all of these various issues, but there's also criticism of him. For instance, he's been associated with skeptics of global warming. And since energy is such an important national security issue, what kind of credibility do you think he walks in there with Democrats?

SIMMONS: The credibility here is with the president of the United States. I think Barack Obama has said that about 15 times since the election that he has the person that's changed, he is the person setting the direction. He's happy to have these really smart, capable people be a part of his Cabinet, but he's the one who is going to make these decisions. So each one of them may have some individual shortcoming, but Barack Obama's the one I think here who is going to actually set the direction.

ROSEN: I worry about the overall spending agenda when you look at how much needs to be done to protect against terrorist attacks that had not been done over a last couple of years. Do you think that Democrats immediately put some of those issues on the front burner based on this WMD report or do you think that is something that continue to languish? C. HAYES: One of the things I think that comes out of that WMD is that we can focus on this sort of front end terrorist prevention, which is taking your shoes off at the airport and everything that sort of extrapolates out of that.

The other way is locking down the weapons. And I think that's something Barack Obama has quite a good record on. That was one of the first things he focused on with Dick Lugar as he got to the Senate.

It's also something that can be done in an internationally cooperative way and doesn't cost the same amount of money as building a massive national security state we've been doing.

ROSEN: Having commissioned this report, Democrats are going to be in trouble in they don't start to address their recommendations quickly.

COTTLE: Yeah, but they're also going to have to look at Afghanistan. They have so much on their plate. We can't forget Afghanistan is moving backward very quickly. So it's a question of prioritizing and I wouldn't want to be in this mess.

SIMMONS: At the end of the day, if we do have an attack and we don't handle it well, that may be the end of the Barack Obama administration. We've got to figure out a way to deal with these threats up front but also be prepared to have a Homeland Security Department that responds if something happens. I think no one would blame the president for that, but to be able to respond to it effectively.

ROSEN: It would certainly dominate the agenda for the next couple of years.

That wraps up our discussion. Straight ahead, David Brody moderates the conservative panel. But we'll be watching. You're watching THE AFTER PARTY.

BRODY: I'm sure you'll be watching.

ROSEN: We may be in the back, but we're still here.

BRODY: That's right.

ROSEN: No matter how big our majority gets, we don't get rid of them.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: I am more confident than ever that that we have everything we need to renew our economy. We have the ingenuity, the technology, the skill and commitment, we just need to put it to work.

(END VIDEO CLIP)

BRODY: And welcome back to THE AFTER PARTY. I'm David Brody of the Christian Broadcasting Network and with the progressives watching from those cheap seats, it's now time to get the conservative point of view.

You just heard the president-elect. What do you think, folks, Amy Holmes, is Barack Obama the right man to really work on this troubling economy?

AMY HOLMES, FORMER REPUBLICAN SPEECHWRITER: Well whether or not he is, he's the man we elected. I think it's fascinating to watch how his treasury secretary, who worked with Hank Paulson is now the right man to do this. I'm watching all these former Clintonites, Bush people being rehabilitated, all of the sudden are saviors to lead us out of the woods.

BRODY: Stephen Hayes, "Weekly Standard."

STEPHEN HAYES, "WEEKLY STANDARD": I don't think there are many options at this point. Barack Obama is the president-elect. He's going to be the one guiding us through this economy, whether we like it or not. Now half of the country wishes that it were someone else. He's the guy. He's the guy for now.

BRODY: Brian DeBose, "Washington Times", is Obama the guy to lead us out of the wilderness here on the economy?

BRIAN DEBOSE, "THE WASHINGTON TIMES": He has to be. There really is no other option. In fact, we have some Democrats saying that he should take over the reins right now, not even wait until inauguration. Just get involved, get your hands dirty in the economy immediately. I don't know how he does that but he has to be. We don't have an option.

BRODY: I have to tell you. Troubling news this week obviously. Over 500,000 lost jobs this month alone. Unemployment down 6.7%. Barack Obama actually addressed this in a paper statement if you will. Let me read you a quick little snippet of that.

He said, quote, "There are no quick or easy fixes to this crisis which has been many years in the making and it's likely to get worse before it gets better. But now is the time to respond with urgent resolve to put people back to work and get our economy moving again."

Now is the time, but he has, as Brian was saying, you've got Carl Levin and Barney Frank saying where is the president-elect in this time of crisis?

HOLMES: What is interesting about that, I think they're asking that question because they want the president-elect's popularity to give him cover to be making decisions that are deeply unpopular with the American people. We saw the Big Three come to Washington again, this time not in private jets, asking for taxpayer money.

Sixty one percent of the American people are opposed to this bailout. So I think the Democratic leaders are looking at this and saying we can't do this with George Bush because then we'll look bad. We need to do this with Barack Obama, the man of the season. DEBOSE: And they're acting as if he didn't tell them last month, I support the auto bailout, we should give them the money. Then they balked. Now they want him to be the leader and tell them to do the same thing over again. I think he needs to do exactly what he's doing. Keep hands off. Let's see what Congress does. This is their thing. I'll be over here and I'll be waiting until January 20.

BRODY: Don't you think he can at least say, look, we're going to spend some of this TARP money if we need to, doesn't he need to say something along those lines?

S. HAYES: If you are talking about what would be good for the country, yeah, I think it would be nice for him to step up and actually lead.

If you're talking about what's smart for him to do politically, I think it's a different question. I agree with Brian. Much wiser at this point to say one president at a time, we've heard him say it what, dozens and dozens of times.

HOLMES: Isn't it better to inherit the problem than to create it?

S. HAYES: No question it's better to inherit the problem and create. And that's why these unemployment numbers today that are a problem for the entire country are actually, politically speaking, and strictly speaking in political terms, good news for Barack Obama.

BRODY: Let me show you this poll. We've seen these type of polls for a while. This is a CNN/Opinion Research Corporate poll. How well are things going in the country today? Look at the number, badly 79 percent. Going well, 20 percent of folks things are going pretty well.

And here the governors are meeting this week, this past week in Philadelphia, with Barack Obama. Barack Obama's like a human ATM machine. All these governors want money from the guy. I get the sense though that these infrastructure projects that the governors want to get to going, they actually, these infrastructure projects need to happen right away. There's not much time to waste here. This could be a lot of wasted money ...

HOLMES: And also infrastructure projects they can put their name on and their stamp on and say, I built that. What we all know with infrastructure investment, it comes far too late. By the time you get the legislation passed and the money to the states and they're building new roads, that's two years down the road. That's not dealing with unemployment right now.

DEBOSE: In this case, it would be a lot easier to get them started. Because most of that money's already there. The problem is the states haven't that had matching funds to do anything with the money.

What they're going to ask them to do is eliminate the matching funds for right now. We'll try to cover that on the back end.

Secondly, this is typically what Democrats have always done to spur the economy in economic time. Fascinatingly what they've done is emptied the till and now they're saying, we'll have to print more money in order to do that. You can't do that because that drives inflation through the roof and now, we're out of options. There's no more money. Everyone is going to have to go back to the table, cut, cut, cut, cut.

BRODY: All right, speaking of no more money, let's talk about these CEOs of the Big Three automakers that came to town, came to Washington.

I feel like, don't you want to put them in one of those tanks that has the money floating around? Let them just go in, give them a minute and let them grab as much as they can. Just let them -- This song and dance is getting real tired real fast.

S. HAYES: That's giving them too much money. I would not favor doing that. We all know they had this huge change of heart this time because they drove here in hybrid cars instead of flying in their corporate jets.

It really wasn't a change of heart. This was all P.R. at this point. They've upped the amount of money they're asking for now.

HOLMES: This is also - Let's be honest here. Where's the political support coming from since we know most americans don't like it? It's coming from the unions. They're the ones who are putting the pressure on the Democrats. This isn't to save GM or Ford. This is to save the unions and those $28 an hour jobs which the rest of us are supposed to be subsidizing.

BRODY: There's a sense, though, that we're going to go from a recession to a depression if we don't give these automakers the bailout.

DEBOSE: Even Chrysler, when they went through their reorganization which wasn't bankruptcy, it looked a lot like bankruptcy, but it wasn't. Even they lost -- they cut 62,000 jobs. Didn't lose them, cut them. The cut 62,000 jobs and each one of these guys cut 62,000 jobs or more, you're going to have the same effect regardless. It would be easier for them to go through bankruptcy and do it that way.

HOLMES: Here's the question I have. Why aren't we having hearings of the leaders of Toyota, Honda, Nissan, all these companies? And to be watching Barney Frank as if he's all of a sudden become an expert in the automotive industry and I've looked at your business plan and I know how much money to give you so you can succeed. If the guys running the companies don't know that, why would we think our senators and congressmen do?

DEBOSE: We've also been a country to learn from immigrants and learn from outside and bring them in and that's how we've gotten better. I don't understand why, and especially if Barney Frank is calling for leadership. They haven't had the wherewithal to think about that?

S. HAYES: I think there is the philosophical question of whether this is something the government should be doing and where do you draw the line if you think it's proper for government to be doing this, where do you draw the line and what kinds of companies are you supporting?

There's a separate question of whether this money would do what these CEOs are suggesting it would do, which is extend the lives of the companies and make them viable at some point.

It's very unclear that would happen and virtually everybody believes that at some point we're going to see this replay when the CEOs are coming back, saying thanks for the money, it was great, it wasn't enough.

BRODY: Let me switch gears real quick because we just have a few minutes left in this segment and talk about foreign policy a little bit.

These Cabinet appointments by or nominations by Barack Obama this past week. Hillary Clinton, Robert Gates, Jim Jones, feels very centrist, Stephen. I'm wondering, the liberal blogosphere must be wanting to take their heart medication. What is going on here? Republicans seem to be pretty happy with this type of Cabinet so far.

S. HAYES: I think in a way, for conservatives, it's basically the best you could hope for. I believe it's a centrist as it seems, ask me in two years and we'll see if it really ends up that way.

But I think with all of these big names and all of these big personalities I think there are real possibilities for problems as well. You saw earlier this week when Barack Obama introduced Bill Richardson as commerce secretary. He called him the top economic diplomat. Also talked about how Richardson was going to be fundamentally important to energy independence.

He's giving people these massive portfolios that overlap between the economic sphere, between foreign policy, on international matters and I think there's always some turf battles. I think you're going to see a lot more of those.

HOLMES: And here's my question. Joe Biden who?

I mean, didn't he pick him as his vice president precisely because of his foreign policy credentials, that he could help Barack Obama make those decisions? And then Barack Obama's empowering, Hillary Clinton, Bob Gates and these other people. Where is Joe Biden going to fit into this?

DEBOSE: Actually the best news is with Hillary Clinton busy on foreign policy and secretary of state and those matters, she won't have her hands in health care once that comes to the table. I think that's probably the best thing about this ...

HOLMES: Nor will she be throwing darts from the Senate.

DEBOSE: Exactly. That's the best thing about this balance (ph).

BRODY: What's this relationship between Hillary Clinton and Barack Obama going to be like? Is this going to be "Days of Our Lives"? I mean, cue the soap opera music. Are we going to be dealing with four years of she's going rogue and I mean, what's going to happen here, Amy?

HOLMES: One could hope. I mean, that would be so fun.

She has said to Barack Obama, one of her demands of accepting the job is that she would have a direct line to him. That in order for her to be an effective secretary of state, she needs to have the president's support. Now, will he have hers? I think that's a question that remains to be seen.

BRODY: All right. We're going to take a break here.

And even though our progressive friends are ready to jump in, when we come back, we're going to look at the GOP a little bit, Saxby Chambliss down in Georgia and whether they're on the comeback trail. A lot of questions there. Back in a moment.

(COMMERCIAL BREAK)

DON LEMON, CNN ANCHOR: Hello, everyone. Don Lemon live here at the CNN World Headquarters.

We have some headlines. Here's what's happening right now. There's word Barack Obama has made another choice for his Cabinet. CNN has learned Obama plans to nominate retired Army General Eric Shinseki to be his veterans affairs secretary. Shinseki is a former army chief of staff.

President-Elect Obama is also revealing more about his economic plan. He says he wants to make the biggest investments in U.S. infrastructure since the nation's highway system was built back in 1950s. He also called for government buildings to be upgraded and made more energy efficient.

The hearings are over, but it was the 533,000 American jobs lost in November that apparently convinced Washington it can't let U.S. automakers go bust. Sources tell CNN that 15 billion to $17 billion worth of loans are in the works to get Detroit through March.

I'm Don Lemon, more of AFTER PARTY, WHERE WE GO FROM HERE after the break.

We'll see you at 11:00 p.m. Eastern.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. NORM COLEMAN, (R) MN: Yesterday, voters spoke. We prevailed.

(END VIDEO CLIP)

BRODY: Well, that was over a month ago. The bitter battle between Norm Coleman and Al Franken for the Minnesota Senate is really still up in the air. Meanwhile, Saxby Chambliss won handily in a runoff for the Senate seat in Georgia. So who will really run Capitol Hill when the dust settles?

I am David Brody. Once again, I'm joined by Amy Holmes, Stephen Hayes and Brian DeBose.

Brian, I have to say, in the Chambliss race, was it really much of a contest in this runoff because Jim Martin wanted Obama to come down there and Obama stayed away big time instead I think Martin got Ludacris.

DEBOSE: Jim Martin basically got overplayed. He basically got as close as he did in the primary because Obama was running on the presidential ticket and Democratic turnout was so high in Georgia that he got very close to Saxby Chambliss.

Once that sort of died down, it was over. It was guaranteed that Chambliss win and Jim Martin, quite frankly, is a boring candidate. Who knows him? Nobody.

S. HAYES: It's a red state, it's Georgia, Saxby Chambliss is a Republican and he is the incumbent. All of this talk that it was going to be in single digits or it was going to be close was crazy.

HOLMES: But the media is so fascinated with Sarah Palin and they're asking, did she pull him across the finish line.

S. HAYES: No.

BRODY: Let me ask you real quick. Everybody's been making a big deal about the magic number. Sixty in the Senate. All right, so it's 58, 59, whatever it ends up being.

But the reality is that Susan Collins, Olympia Snowe, George Voinovich, these GOP moderates, if I'm Obama, I've got a red phone to these folks to make sure they can get to 60 on some key pieces of legislation.

HOLMES: Certainly. And I worked for Senator Frist when he was majority leader. I remember my chief of staff telling me the Senate is more like roving tribes, these configurations that are brought together to pass legislation and then dissolved. You have to look at each of these senators, their states, their constituencies, where they are in the political spectrum.

So while we say 60, yes, you can peel off some of those squishes, but there are also conservative Democrats who aren't necessarily going to want to go with the party on a particular issue.

DEBOSE: Nelson in Nebraska is one of those guys. Nobody knows what's going to happen with Joe Lieberman. That's really how it comes together in the Senate. Even if they had 60, there's no guarantee you're going to get every one of those votes on every piece of legislation.

S. HAYES: All of which makes it more important he come in strong, I think, and early and get key wins some key wins on legislation early in his first 100 days. Because everybody wants to be behind a winner. And so people like a Susan Collins will be much more inclined to support something Barack Obama's pushing if his approval rate is 68 percent or something.

HOLMES: And make it easier for Mark Pryor, for example, to be able to support him.

BRODY: It's interesting, already, he's not even president of the United States yet and they're taking 2012 polls as to who's running against him.

HOLMES: It's never too early.

BRODY: It's never too early. And let's go to those polls. Cue the music. Take a look.

Mike Huckabee, leading at 34 percent, supposedly, according to a CNN/Opinion Research Poll. That would be the folks that are saying they're very likely to support a Huckabee as the nominee. There is Palin at 32 percent, Romney at 28, Gingrich at 27. Jindal is somewhere down there at 19 percent.

I mean, what do we make of a 2012 race? Why not talk about it now. We've got nothing better to do.

HOLMES: Because we would have guessed in 2004 that John McCain would become the nominee. This is silly, it's fun, it's speculation. And it's good for these candidates to get their name ID out there now and build that up.

S. HAYES: That's essentially what that is. It's a name ID task. You're seeing people who register in these polls, who people already know, have national exposure.

DEBOSE: '96 was the end of the it's your turn operation in the Republican Party as far as presidential candidate. We have no idea. It could be somebody not even thought of right now who emerges just like George Bush did and becomes the nominee.

This is much too early and frankly Mike Huckabee, I'm just not sure about him at all. As long as he's on that show, he's not going to be the nominee, I can tell you that.

BRODY: All right. Let me ask you, Amy Holmes, 2010, let's at least bring it up a little bit here. The republicans have 19 Senate seats to defend in 2010. Mel Martinez now says he's no longer going to be a candidate in 2010. Where does this leave the Republicans? They have got some tough shredding ahead here.

HOLMES: They have some tough sledding but they're not going to have the Bush baggage that's going to be keeping down those races.

So again, we have to see how does Barack Obama govern over the next two years. We saw what happened with Bill Clinton, the first two years he did badly, heath care, gays in the military. The American people turned against that and they put Republicans in charge. So it's up to Barack Obama, but also the Republicans have the advantage they don't have Bush.

S. HAYES: The situation can change ever so quickly. In 2004, Republicans were ascendant, George W. Bush won re-election. You had people seriously talking about another permanent Republican majority. Here we are four years later and things look quite different.

DEBOSE: I think the Mel Martinez story is fascinating. Here's a guy who is directly tied to Bush in every conceivable fashion from HUD secretary to being asked to run in Florida to winning that. And now, just six years later, I don't think I can win because I'm a Bush guy. That is a real testament to where the president is in this country. How he is thought about.

S. HAYES: There are serious talk that JEB Bush may run for that seat and I think it's more likely than not to happen. It will be a test because JEB Bush obviously has the Bush name and has some Bush baggage. In Florida, he's a popular governor.

BRODY: He'd probably do it, wouldn't he? JEB Bush in Florida?

HOLMES: Would he win? Potentially. We know he already won an election in Florida before. But if Floridians hold George Bush against him, I don't think we know the answer.

BRODY: Amy, real quick. Honeymoon period for Barack Obama, how long does it last? How many months do you give him?

HOLMES: Who is he courting, the people or the media? I think the media will give him a very long honeymoon.

But again ...

BRODY: Congress, what kind of honeymoon will he get with them?

I think what we've heard Mitch McConnell say, we have to pick our battles. And we don't just opposed the president automatically out of partisanship.

So I think Republicans are going to hang back and see what Barack Obama does. If he makes his own mistakes, as you say in politics, if someone's going to commit suicide, hand him the rope. You don't have to get involved. We'll see.

BRODY: Stephen, though, he's got to watch his left flank in the House because they're going to get restless. He's a centrist guy supposedly, six months to a year and nothing's moving, and so of these groups want action, Maxine Waters and Lynne Woolsey, these folks, they're going to want to march over to Iraq and pull the troops out themselves.

S. HAYES: Politically, I am not sure that that hurts him, broadly. If you're talking about his standing and his ability to actually get things done, I think he can stand some sniping from the left. It will help him appeal to people like we were talking about earlier, Susan Collins, Mark Pryor, centrists who he's going to need, I think, to do some of the work for him.

DEBOSE: His honeymoon from the Republicans will last much longer than his honeymoon from the Democrats. The one for the Democrats might already be over if you base it on what's going on right now coming out of Barney Frank's mouth.

BRODY: All right. Brian DeBose, Stephen Hayes, thank you both so much. Amy, stay with me here.

Don't worry, in just a moment, we're going to talk some tough talk with a Democrats. Amy will stick around. This is the AFTER PARTY. It's a new way to talk about politics. I know those Democrats are hiding somewhere. I don't know if they're in the cheap seats.

HOLMES: Here they come.

BRODY: I knew they were coming. Hi, Hillary.

ROSEN: I like it when what you were focusing on who's going to run next time. Stay there. Right? Just stay there. Ignore the next four years and focus on Sarah Palin.

(COMMERCIAL BREAK)

BRODY: We're back in THE AFTER PARTY. I'm David Brody back with my co-host, Hilary Rosen.

ROSEN: It's time for "Last Call." We've brought in CNN contributor Amy Holmes and Chris Hayes of "The Nation" back to see if we can find some common ground, or at least talk about it.

Here's the first question -- there's an increasing chorus even from some Democrats that says Barack Obama should get actively engaged in the fiscal crisis. Amy, do you think Republicans would welcome that idea?

HOLMES: I think they would. They would love for Barack Obama to get his hands dirty with this very, very unpopular bailout, as we discussed on the show. Sixty one percent of the American people are against this, in part because they already voted. It's sitting in their driveway and it's called a Honda. They didn't go to Michigan to get their cars and now we're asking taxpayers to give even more money on top of the car they bought?

So I think for Barack Obama politically, as long as George Bush is unpopular, let him end his presidency with this one and Barack Obama can come in new in January with the inauguration and start setting his policy.

C. HAYES: I think from the political perspective, that's right. The Obama people are smart when they spend political capital and when they don't. They didn't go down for Georgia, they didn't cut an ad for Jim Martin in the runoff because they knew that Jim Martin wasn't going to win. And I think they don't think that they can win something in these next two months. It's unclear how they could. They're not going to spend capital. HOLMES: And in the first bailout, the financial bailout on that first vote, Barack Obama, while he said we need to be responsible, to do a responsible thing, he didn't call a single House Democrat to put their vote on the line before November 4th.

BRODY: Chris, why doesn't Barack Obama just simply say, look, we're going to spend some of that TARP money so to speak if it comes to it. Why couldn't he go a little further than he maybe already has so far?

C. HAYES: The question is what's the upside in saying that right now? The problem is they don't -- their cash flow is such they may not make it for the next two months. Something has to happen in this interregnum period between now and when he actually becomes the president of the United States. The votes are barely there to pass it, and certainly not there to override a veto.

ROSEN: And Barack Obama did say that if this problem wasn't solved he would address this problem on the day after his inauguration if it wasn't solved. What happens to the Republican credibility and to President Bush's exit plan for his legacy if the day he leaves office he's just put 1.5 million more people out on the street?

HOLMES: Well, and I think there is a real political danger for Republicans. They can't just be the Grinch who stole Christmas and also fired you on New Year's Eve. So they have to address this. But, again, this is a tough vote for both sides all around what to do about this. George Bush, he can take a politically unpopular position because he's leaving. But for those Republicans, what I say they could vote for it but campaign against it or maybe flip that around in order to maximize their political upside on this. But it's not easy.

BRODY: Chris, let me ask you a little bit about the auto bailout. Why not just a structured bankruptcy? Why wouldn't something like that work? It seems logical, at least to many Americans out there.

C. HAYES: There are a few things out there. One is that there's a good body of research to suggest people will not buy a car from a company in bankruptcy. The reason being that you're essentially investing in the company at a certain level in terms of servicing the car and knowing the company is going to be around. It's very different than a flight that you know will be over in two hours. You're going to have that car for five years. So structured bankruptcy may simply not work.

HOLMES: Wait a minute, they say that. But people buy used cars that they're not going to be necessarily taking to the dealer.

ROSEN: Would you buy one?

HOLMES: It depends on what the price is. That's what markets are about. Will you pay that price? You won't pay $60,000 for a car that can't be serviced but you might pay $16,000. That's something the automakers would have to look at.

C. HAYES: Let me say, though, the "what markets are about" train left the station a long time ago. We just put $700 billion in the financial sector to turn around and say, this $35 billion, I'm sorry, that's the straw that breaks the camel's back ...

ROSEN: This we can't do. And historically, employed Republicans contributed to Republicans ...

HOLMES: How would it look for Democrats to support this bailout and as the experts say, the auto companies come back six months from now for more porridge please. It doesn't look good either.

ROSEN: It ends up being a risk you have to take if you think the consequences of what happens are so bad that you don't want to get there? Doing nothing isn't really the answer then.

BRODY: I do want to move on real quick to Robert Gates. There seems to be some contention here whether or not he should have put in or not. Jack Reed was out there, Wesley Clark, there were others. If Barack Obama is going to talk about change in this new direction and then go with Robert Gates, John McCain could have made that pick.

C. HAYES: I don't think he would have. He would have but he wouldn't have. Here's the change we're seeing. The change is from a neoconservative, incredibly aggressive foreign policy that I think there is now broad consensus that began on the left and moved to the center that coalesced around the fact that we cannot have a foreign policy that is as aggressive and muscular as the one we've had over the last eight years.

That's the change. The question is, is that sufficient change? Do we need to do more to fundamentally reexamine America's place in the world? I think we do. And so I am disappointed in the pick ...

ROSEN: But Gates is a soldier and when push comes to shove, he's a soldier managing soldiers. And if there's a policy that shifts where he has been executing before, he will execute the new policy and I think Barack Obama was convinced that that was the case. Let's have a guy who knows where the soldiers are placed now, who has the support of the commanders in the field. Let's have that continuity. It makes sense from his perspective not to do everything fresh in this times of crisis.

HOLMES: I said earlier, I find it fascinating to see how old Bush nemeses are now being rehabilitated because now they're Barack Obama's picks. The change here is Barack Obama. It's the ever-moving goal post. This was someone who said he wanted troops out by March of '09 and he's keeping as secretary of state, someone who opposed a timetable.

Now as a conservative I think that's the responsible thing to do but that's not how Barack Obama campaigned.

ROSEN: This is going to be President-Elect Obama's decision to make, but that's going to have to be the last word. Amy Holmes got it.

Thanks to you both and to all our guests today. Thanks for the conversation.

David and I will be right back for a final word here on THE AFTER PARTY.

(COMMERCIAL BREAK)

BRODY: All right, let's wrap it up. A look inside the crystal ball. Hilary, I've got to tell you.

One of the things I think we're going to look for starting next week is this Republican climate shift a little bit. In other words, the economic bailout, what's going on there. I get the sense that Republicans could be in the same dilemma like they were on immigration. That all of the sudden people may start losing their jobs on the economic bailout, on the auto bailout specifically and there could be all these problems we're going to hear, the tough stories of the family of four that are suffering, and Republicans are going to look like these mean old guys on Capitol Hill.

ROSEN: I think you're right. George Bush in my view has an opportunity next week to put a big stamp on his legacy. He can come in, use some of that TARP money that's sitting at Treasury and help the auto industry, save a million and a half jobs and demonstrate as he's walking out the door that he finally does get it.

BRODY: So much for a slow week in Washington, DC. All right, we're out of time. I'm David Brody of the Christian Broadcasting Network.

ROSEN: And I'm Hilary Rosen of CNN and "The Huffington Post." Thanks for joining THE AFTER PARTY.

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