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THE SITUATION ROOM

Subpoena Threat for Obama Aides; Public Glad to See President Bush Go; Fears of Pakistan-India War

Aired December 26, 2008 - 16:00   ET

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


SUZANNE MALVEAUX, CNN ANCHOR: Happening now, the dark cloud over Barack Obama's Hawaiian holiday. The scandal surrounding the Illinois governor could touch the Obama transition team in the form of a subpoena.
Plus, Americans say they're more than ready for the Bush era to end. Just how unpopular is the president in his final days in office? Well, we have a new snapshot of public opinion.

And in the midst of the auto bailout, union workers apparently are bracing for a new fight with carmakers. I'll ask the UAW president if he's putting the industry's rescue at risk.

Wolf Blitzer's off today. I'm Suzanne Malveaux.

And you're in THE SITUATION ROOM.

Well, the Illinois governor's fight against impeachment is threatening to make President-elect Obama's political life more complicated. An attorney for the governor wants a state House panel considering his possible ouster to issue more than a dozen subpoenas. A state lawmaker says the list of potential witnesses includes incoming Obama chief of staff Rahm Emanuel and senior adviser Valerie Jarrett, as well as Congressman Jesse Jackson Jr. It is yet another twist in the investigation of the Illinois governor accused of trying to sell Obama's former Senate seat.

Our Senior White House Correspondent Ed henry is with Obama in Hawaii.

And Ed, what is the Obama team saying about this new development today?

ED HENRY, CNN SR. WHITE HOUSE CORRESPONDENT: Well, good afternoon, Suzanne.

Not much, because as you know, team Obama has been trying ever since last Tuesday to really turn the page on this whole story, every since they released that internal investigation suggesting there really was no wrongdoing by either the preside-elect or any of his staff in this matter. But clearly, Governor Blagojevich wants to try to keep some of these questions alive.

He's under a lot of pressure right now because of this criminal investigation. Just a short while ago, a spokesman for the Illinois House Speaker Michael Madigan confirmed to CNN that the impeachment panel has received this letter from the governor's attorney saying he wants subpoenas of Rahm Emanuel, Valerie Jarrett, among other people, certainly those two key people in the president-elect's inner circle. And this impeachment panel's next meeting is going to be Monday at 11:00 a.m. So that would be their next chance to review this.

But it's important to point out that, as you know, the prosecutor in the case, Patrick Fitzgerald, has been very clear that he doesn't want this impeachment panel to be interfering with his ongoing criminal probe. So it's also very possible that even if these subpoenas were to go forward, that they could be blocked by the prosecutor in this case -- Suzanne.

MALVEAUX: And Ed, obviously speaking of interfering, how much of this is a distraction to the Obama team here? Obviously they're trying to look ahead, focus on the economy, on other pressing matters. What do you get a sense from talking to aides and officials there?

HENRY: Well, they realize that every minute the president-elect and his staff spend talking about this instead of the economy or national security could be a distraction in the days ahead. But I spoke a little while ago to Steve Elmendorf, a Democratic strategist, who said there's a big difference between what's going on right now and what, for example, the Clinton team had to face 10 years ago during that impeachment drama.

Take a listen.

(BEGIN VIDEO CLIP)

STEVE ELMENDORF, DEMOCRATIC STRATEGIST: Well, I think it's helpful to have people around who know something about politics in Washington and fights, but I think the Blagojevich thing is totally different in that nobody is suggesting that Barack Obama or anybody around him did anything wrong. So I think it's very easy for them to stay on their game, because they don't have any reason to get distracted because there's nothing that anybody is alleging that impacts him or the people around him.

(END VIDEO CLIP)

HENRY: And it's also very clear, as you'll remember from the campaign, Suzanne, that this transition team is very disciplined on staying on message. So even as we continue to press with questions and whatnot, even if Governor Blagojevich is going to try to get subpoenas issued, they have been very effective in the past about staying on message and not being distracted -- Suzanne.

MALVEAUX: Ed, very good point. We've noticed that throughout the campaign. Obviously, it will be a similar tactic that they use for the administration.

Thank you so much, Ed.

As Americans look ahead to the Obama administration, they're also taking the measure of the man who has served in the White House for the past eight years. Our Senior Political Analyst Bill Schneider has new some poll numbers out on President Bush and his big exit.

Bill, what are you finding?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Suzanne, the Bush era is drawing to a close. Not a moment too soon for most American.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): As President Bush prepares to leave office, the American public has a parting thought: good riddance. At least that's the way three-quarters feel. Fewer than a quarter say they'll miss President Bush.

It's been like a failed marriage. Things started out well. When President Bush first took office, more than 60 percent saw him as strong and decisive. That impression was reinforced after 9/11.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The people who knocked these buildings down will hear all of us soon.

SCHNEIDER: The public still saw Bush as strong and decisive when he took office a second time in 2005. No more.

The public's confidence in this president has dropped dramatically, especially over the past two years. President Bush did once have a reputation as a good manager. Then came Hurricane Katrina.

BUSH: And Brownie, you're doing a heck of a job.

SCHNEIDER: And Bush's reputation as a manager got blown away.

Mr. Bush got elected on a promise.

BUSH: I think people look for someone who is a uniter, not a divider.

SCHNEIDER: But the vast majority of Americans believe he betrayed that promise. He took a country that was divided under President Clinton and he divided it worse. Even some conservatives feel betrayed.

PAT ROBERTSON, CHRISTIAN BROADCASTING NETWORK: I think we've had some goofs along the way. The Katrina matter was terrible. The rebuilding of Iraq has been terrible. The hailing of the economy right now has been terrible.

SCHNEIDER: Fewer than a third of Americans believe George W. Bush will go down in history as a good president. Forty percent say he left a poor legacy. Another 28 percent called Bush the worst president in American history.

(END VIDEOTAPE) SCHNEIDER: President Bush's job approval rating has been at or below freezing since the beginning of the year. Where does it stand now? Twenty-seven percent. One of the lowest ratings for any president ever -- Suzanne.

MALVEAUX: OK. Thanks, Bill.

And more perspective on just how low President Bush's approval ratings are as he prepares to leave the White House. We want you to check out this eight-year approval ratings are as he prepares to leave the White House. But we want you to check out this eight-year approval trend line compared to the last two-term presidents.

Both Bill Clinton and Ronald Reagan ended their presidencies with approval ratings somewhere in the 60s. That is compared to 27 percent for Mr. Bush right now.

And breaking news right now. Both the president and president- elect are keeping tabs on a potential blowup of tensions between Pakistan and India. Pakistani military officials tell CNN that they have moved troops to Pakistan's border with India amid fears of a raid by Indian forces.

CNN's Elaine Quijano is with President Bush at his ranch, his Crawford ranch in Texas.

What is the administration saying about this potential situation?

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Well, Suzanne, U.S. officials are obviously monitoring the situation very closely. Officials are certainly aware of these reports, and they say that U.S. officials have been in contact certainly with the embassies in the region.

Now, White House spokesman Gordon Johndroe today told reporters aboard Air Force One that the United States has been in very close contact with India and Pakistan on the issue of the Mumbai investigation to urge closer cooperation, Johndroe said, in investigating the deadly Mumbai attacks and also in fighting more broadly the issue of terrorism. Now, in a written statement, Johndroe said the United States "hopes both sides will avoid taking steps that will unnecessarily raise tensions during these already tense times."

But certainly, Suzanne, the United States is keeping a very close watch as this situation continues to unfold -- Suzanne.

MALVEAUX: OK. Thank you so much, Elaine, for keeping us abreast of all of that.

Jack Cafferty is off today.

Right now, new trouble may brewing within the auto industry. Carmakers and workers appear ready for a showdown over terms of the federal bailout. I'll ask the UAW president why he is preparing to fight new concessions. Plus, playing the lottery in tough economic times. Are Americans more or less likely to gamble their hard-earned cash? The answer and what it means state by state.

And was Barack Obama's first choice to be CIA chief torpedoed by bloggers?

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

MALVEAUX: The new year may bring a new showdown between carmakers and the autoworkers union. At issue, wage and benefits concessions required under the terms of the industry's federal bailout.

Now, the White House demanded that auto companies slash worker compensation to the levels paid of the U.S. divisions of foreign carmakers Toyota, Nissan and Honda.

Well, joining us now, United Auto Workers president Ron Gettelfinger.

Thank you so much for being here with us in THE SITUATION ROOM.

I want to start off by first reading "The Washington Post" last Saturday about President Bush's bailout plan and for you to respond.

It says, "The Bush administration seems to have struck the right balance requiring the companies, their bondholders and the UAW to make painful but necessary sacrifices in return for the money. No, wage equalization won't solve all of the industry's problems, but it will save companies about $800 per vehicle at a time when every little bit helps. That doesn't seem unfair in return for saving thousands of jobs that would still provide $45 an hour in wages and benefits, as opposed to about $28 for the average worker-taxpayer."

Mr. Gettelfinger, do you think they have a point here?

RON GETTELFINGER, UAW PRESIDENT: (AUDIO GAP). Secondly, labor costs are 10 percent of a vehicle's assembly. So it's a little unfair to try to equate everything back to labor. And look, we're going into these negotiations very optimistic and very hopeful, but we also expect everyone else to step up to the plate as well.

MALVEAUX: And I'm sorry, I had an audio problem with the first part of your answer. Can you repeat the first part?

GETTELFINGER: Well, I was saying that the auto costs or the workers' costs on an assembly of an automobile is about 10 percent. And so, to try to put everything back on the workers, to us, is unfair.

MALVEAUX: Well, what do you say to your critics who say it's either no job or at least a job that pays something? That a job that pays something is better than no job at all? That there have to be those kind of concessions that the workers make?

GETTELFINGER: Well, I would say, first of all, in '03 we made concessions; '05, in contract, we made concessions; '07, we made major concessions that were referred to as a transformational agreement. No one else has come in to the ballpark and we're already on third base, and we just made concessions again about three weeks ago.

So we're very concerned about this industry and we've done our part. But Suzanne, we want to see everyone else at the table sharing in this sacrifice. It's can't all be on the backs of the workers. And by the way, if we worked for nothing, that would not fix the problem here.

MALVEAUX: I want you to listen to what Barack Obama said. I know that your organization, you're a big supporter of Barack Obama. And here's how he explains what needs to the done in the coming year.

Take a listen.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: My intention is to have my economic team work with not only auto management, but also the UAW, and talk to workers and find out what can we do in order to ensure that their jobs are preserved, but not just for the next few months, that they're preserved for years to come and that a next generation of autoworkers are going to be put in place? So there are going to be some painful steps that have to be taken.

(END VIDEO CLIP)

MALVEAUX: You're a big supporter of Barack Obama. He does seem to have some leeway here when he steps into the Oval Office, into the White House here.

What do you expect of him? Do you want him essentially to waive those concessions, those wage concessions that President Bush has set up here?

GETTELFINGER: Well, First of all, I think his statement was very refreshing, because he said, "work with." That's two words that to us are critically important. And I think that we all do need to sit down, take a look at what we have done, what we're prepared to do in the future, and then go from there.

We're looking forward to the opportunity to sit down with people and talk our way through this situation. There is no question in our mind the importance of this industry is going to require us to do more. We just want to make sure that the men and women of the UAW, the workers, if you will, are treated fairly in comparison to everyone else.

MALVEAUX: And what does that mean? Can you be specific here? What are you asking for Barack Obama to do?

GETTELFINGER: Well, at this point in time, why were the workers singled out is the one question that we're asking ourselves when we look at the requirements that came with the TARP funds. Suppliers were mentioned only by name. Dealers were mentioned only by name. But then workers have got this set of stringent rules that are placed on them, a lot of which we don't even understand what they mean.

The term "target" as an example -- "target," does that mean you hit or miss? You try, you don't get there?

Look, we want this industry to survive. We're willing to take part in the restructuring of it. But by the same token, I think it's unfair to say that workers have to work at a rate that's comparable to other foreign brands of manufacture here.

As an example, if we want to use one of those companies as the benchmark, then we're already there. We don't have to do anymore, because they pay more than what our membership makes.

Then on the other hand, I guess we could keep searching until we find one that pays much lower than we do and save us a benchmark. And I just don't that that's fair and an equitable way to go about this restructuring. And look, again, we're willing to do more, but at this juncture we can't define exactly what that is.

MALVEAUX: And the fact that you can't define it, in terms of what it is, this delay, this negotiating process, is there a risk here that more people will lose their jobs, that things will only get worse as you go through this process trying to go through with the next administration?

GETTELFINGER: Well, first of all, I think we need to take a step-by-step approach here. The 29th is a very important date this month because that's when the $4 billion in General Motors and Chrysler's case should start to flow. If that happens, then we're prepared to come right in and go into bargaining.

We've got our bargaining committees, our teams, if you will, lined up. We are already working with the outside experts on the VEBA, the Voluntary Employee Beneficiary Association. We're doing a lot of things right now. We've got actuaries...

(CROSSTALK)

MALVEAUX: Let's talk about that bargaining, if I may here.

This is from "Car Culture," Warren Brown, out of a "Washington Post" editorial. It says as a result of the bailout, "The result will be a smaller General Motors and Ford in America, a bigger and more robust GM and Ford overseas, and barring the birth of a truly international labor union, a United Auto Workers that is a union in name only."

What is your position of strength here?

GETTELFINGER: Well, look, the United Auto Workers is a very proud, historic union, it's got a lot of background to it, and we have got a bright future ahead of us. Look, we continue to organize workers in different sectors. So if this is about organized labor going away or weakening a union, that's not going to happen in the final analysis.

What's important here is that we do restructure these companies. Will General Motors be smaller? I believe that you're correct, they will be. But, look, why is it that we're picking on the workers so much in all of this debate and discussion?

Workers are like everybody else. We're a slice of society. We give back to our communities. We build quality products. We've got -- of the 10 most productive plants in the United States and Canada, all of them are represented by either the UAW or the CAW.

MALVEAUX: Mr. Gettelfinger...

GETTELFINGER: Yes?

MALVEAUX: ... we're going to have to leave it there. Obviously there's going to be much more debate on this discussion.

Thank you so much for joining us here in THE SITUATION ROOM.

GETTELFINGER: Well, thank you very much.

MALVEAUX: California is counting the days before it goes broke. Should your tax dollars be used to bail out California? Residents are caught in the middle of a multibillion-dollar budget battle.

And you know her catlike purr very well. Eartha Kitt's voice is now silenced. We have the latest on the singer/actress once called the most exciting woman in the world.

(NEWSBREAK)

(COMMERCIAL BREAK)

MALVEAUX: You're in THE SITUATION ROOM.

Happening now, we are set to hear chilling screams from help as a man dressed as Santa goes in his former in-laws' home, shoots an 8- year-old girl in the face, unloads rounds of gunfire, then sets the house on fire before finally killing himself. A police news conference is just moments away.

President Bush prepares to pardon a man who pleaded guilty to fraud, then reverses course on that pardon. Now there's a flurry of questions. Among them, did the man get special treatment from the White House because of his political connections?

And many people will surely attend Barack Obama's inauguration, but it may be far less crowded than first thought.

Wolf Blitzer's off today. I'm Suzanne Malveaux.

And you're in THE SITUATION ROOM. Right now many Americans are strapped for cash amid the rough economy, especially after Christmas shopping. So how about a chance for some easy money? Various state lotteries offer that, but even the lure of millions of dollars isn't enough for some people needing every dollar they have.

Brooke Baldwin is in Atlanta.

You've been looking at the declining sales. And what have you been finding?

BROOKE BALDWIN, CNN CORRESPONDENT: Well, Suzanne, it's sort of a mixed bag. You know, in this economy, many of us, many Americans, could use some quick cash. But people who do play the lottery, of course hoping to strike it rich, say this time they would rather sit on the sidelines than risk striking out.

(BEGIN VIDEOTAPE)

BALDWIN (voice-over): In these tough economic times where many Americans are spending less and saving more...

(on camera): Are you feeling lucky?

EDGELL GROVES, LOTTERY PLAYER: I feel lucky all the time.

BALDWIN (voice-over): ... Edgell Groves opens his wallet every day in hopes of hitting the jackpot.

GROVES: Yes, I cut down a little bit on it. But still, you know, you have to play to win.

BALDWIN: Assaf Kitri plays four time as week, even though he admits work has been hard to come by lately.

(on camera): So just because the economy is bad, that doesn't stop you?

ASSAF KITRI, LOTTERY PLAYER: No. It's not stopped me.

BALDWIN (voice-over): The economy hasn't stopped many millionaire hopefuls here. Employees of this Atlanta Shell station say lottery sales haven't hit a slump yet.

DENES PELARTE, SHELL GAS STATION: This is the time that people have Christmas to try to win money.

BALDWIN (on camera): The Christmas spirit?

PELARTE: Yes, correct.

BALDWIN: So once we start January...

PELARTE: Yes, maybe it slows down.

BALDWIN (voice-over): Nationwide, contrary to popular opinion, state lotteries are not recession-proof. According to "The Wall Street Journal," lottery ticket sales fell two percent in the third quarter of this year compared to last year.

A portion of proceeds from state lotteries helps funds public services, like education. Fewer sales may mean fewer funds.

That report cites that sales in California fell 10 percent and 4 percent in Texas in just the last couple of months. But, in New York, home to North America's largest lottery, officials report a 3.2 percent overall increase as compared to this time last year. That state's lottery contributed nearly $2.6 billion to help support public education last year.

While the smart plan may be a conservative approach with his paycheck, this Georgia businessman still can't resist the lure of quick cash.

EDGELL GROVES, LOTTERY PLAYER: I think it's good to plan the 401(k)s and the IRAs. I think that's important. But, still, yet, you know, I think the opportunity to win a lot of money for a little bit of an investment is good.

(END VIDEOTAPE)

BALDWIN: Well, it's important to point out though, here, Suzanne, that New York lottery officials told us the economy isn't the only reason sales were down. Of course, the size of the jackpot right here in Georgia is just about $29 million. Not a lot to some people. Gas prices also factored in. But now that gas prices are finally down, who knows. They say lotto sales might just rebound.

MALVEAUX: Thank you. Thank you so much.

BALDWIN: Sure.

MALVEAUX: Did you know that lotteries are about as old as America's history? All 13 original colonies had lotteries to help raise revenue. Even elite schools like Harvard, Yale, and Columbia were partly funded through lottery proceeds. The first state to sponsor a lottery was New Hampshire in 1964. Currently, 42 states, the District of Columbia and Puerto Rico have lotteries.

And California is counting the days before officials say it completely goes broke. The state is reeling amid a multibillion- dollar budget shortfall. And now one question is being asked. Should California get a bailout?

Our CNN's Dan Simon is in San Francisco with that -- Dan.

DAN SIMON, CNN CORRESPONDENT: Well, hi, Suzanne.

It is back to work for state lawmakers, who are trying to come up with a fix to this budget mess, but the deadline keeps getting pushed back.

(BEGIN VIDEOTAPE) SIMON (voice-over): Governor Schwarzenegger's goal was to get a state budget by Christmas. Well, there's still no deal between him and the legislature. So, what are they fighting about? Taxes, spending cuts and the environment. Schwarzenegger wants a broader exemption from the state's environmental laws for highway projects, which he says will improve the infrastructure and create jobs.

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: We need jobs right now. For me, the people are the most important thing. Then we can worry about all the other regulations. But let's get the people to work. That's the important thing.

SIMON: As for taxes, Republicans are unwilling to go along with increases, but Schwarzenegger, of course a Republican himself, appears willing to break with party ranks and agree with some of the Democratic tax proposals. Among the ideas, a 13 cent hike for each gallon of gas.

There's also the question of whether California should seek federal bailout money. But the government this week has been firm.

SCHWARZENEGGER: We are not asking the federal government to make up for anything for our failure. We have to always first solve our own problems, because we can do that. Right now, what I am talking about are self-inflicted wounds.

SIMON: Wounds that could leave California, the eighth largest economy in the world, broke. The state controller says California is just two months away from running out of money. Among the possible consequences, tax refund checks next year could be delayed.

JOHN CHIANG, CALIFORNIA STATE CONTROLLER: That is especially not helpful in difficult economic times, where families need the money to pay their bills, whether it's a rent bill, a mortgage bill, transportation, or food. So, it's going have a strong impact in all our communities across California.

(END VIDEOTAPE)

SIMON: Well, it's now believed that a legislative vote could come next week. And the headline here, Suzanne, is that this Republican governor could go along with some tax increases, but, in exchange, he wants deep spending cuts -- back to you.

MALVEAUX: Tough choices.

Thank you, Dan.

Meanwhile, in Illinois, as the current governor finds himself the target of a federal corruption investigation, his predecessor sits behind bars, the result of his own political troubles. That case has also crossed party lines, but not in the way you might expect.

CNN's Elaine Quijano joins us again from Crawford, Texas -- Elaine. QUIJANO: Well, Suzanne, it's an unusual situation, one that unfolded before the arrest of Illinois' current embattled governor. This is a story of a Democratic senator asking for mercy for a convicted former Republican governor.

(BEGIN VIDEOTAPE)

QUIJANO (voice-over): On one side is Democratic Senator Dick Durbin of Illinois, who's written President Bush a letter requesting that the president commute the six-and-a-half year federal corruption sentence of former Republican Governor George Ryan.

SEN. RICHARD DURBIN (D), ILLINOIS: This action would not pardon him or his crimes or remove the record of his conviction, but it will allow him to return to his wife and family for their remaining years.

QUIJANO: On the other side are members of George Ryan's own Republican Party, including Illinois Congressman Mark Kirk, who's also written a letter to the president, but one adamantly opposing commutation.

REP. MARK KIRK (R), ILLINOIS: For someone that so abused their office, he should not skip out of jail on a political favor. He should stand like any other criminal seeking release.

QUIJANO: In 2006, George Ryan was unanimously convicted on 18 corruption counts, including squashing an investigation of bribes paid in exchange for truck driver licenses. One of those truck drivers was involved in a fiery crash that killed six children from the Willis family of Illinois.

KIRK: This kind of public conduct should not be tolerated in any state, and was not tolerated in our state.

QUIJANO: But Senator Durbin says he believes the 74-year-old Ryan has paid a price during the roughly 13 months he has served so far. Durbin says what he's asking for now is compassion for Ryan's wife, who he says is in frail health.

DURBIN: He has a loving wife who needs him and that he is going to pay a price for as long as he lives for his official misconduct. And it's now in the president's hands.

(END VIDEOTAPE)

QUIJANO: Now, earlier this month, White House aides said they had received Senator Durbin's letter, but they are not commenting beyond that.

Now, in a separate development, Senator Durbin has also sent a letter to the current Illinois governor, Rod Blagojevich, asking him to search his heart and step down -- Suzanne.

MALVEAUX: Fascinating story. Thank you, Elaine -- Elaine Quijano out of Crawford. A month after the terrorist attacks in India, what, if anything, is the U.S. government doing to make sure a massacre like that one doesn't happen here? We're looking at a fresh look at port security.

And Caroline Kennedy says she will have to work twice as hard as other senators if she gets Hillary Clinton's seat -- a new interview with Kennedy in our "Strategy Session."

And we are standing by for new information about the Christmas Eve shooting spree by a man dressed as Santa Claus. We expect to hear some powerful 911 tapes from the party that turned into a bloodbath.

(COMMERCIAL BREAK)

MALVEAUX: On this day after Christmas, the Midwest is finally thawing, but the West is getting socked with a new snowstorm, and many travelers are suffering.

Let's bring in CNN severe weather expert Chad Myers.

What are you looking at, Chad?

CHAD MYERS, CNN METEOROLOGIST: Some numbers out here that are amazing.

Dollarhide Summit, Idaho, picked up 46 inches of snow with this storm, Suzanne. And now this storm is moving out of the Rockies. So, the snow is ending, but it's moving into the Plains, and that could cause some severe weather.

Couple of bad areas of airport delay today, Atlanta and O'Hare have been delayed all day, already two hours delayed, and not getting any shorter at this point in time. There will be some severe weather across the Plains this weekend, also the potential for flooding across Illinois and Indiana, where three inches of rain could fall in a very ice-filled, snow-filled area. We will have to watch that. Flood watches are already in effect -- Suzanne.

MALVEAUX: All right, thanks, Chad. Has not easy to travel this holiday season.

MYERS: It hasn't.

MALVEAUX: Now to America's security at risk.

As the Obama administration prepares to take the reins of power, the threat of terrorists slipping in aboard small boats is really a growing concern. The massacre at Mumbai last month drove home that danger, along with current tensions between India and Pakistan.

Well, here's our homeland security correspondent, Jeanne Meserve.

And, Jeanne, what can be done about this problem?

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Well, Suzanne, the Coast Guard is proposing new regulations that they say will reduce the risk from terrorists aboard boats.

(BEGIN VIDEOTAPE)

MESERVE (voice-over): The attackers slipped into Mumbai undetected on small, inflatable boats. We all know what happened next.

(EXPLOSION)

MESERVE: It underlined a security challenge for the U.S.

THAD ALLEN, U.S. COAST GUARD COMMANDANT: I don't think there are adequate resources in the Coast Guard, or the country, for that matter, to completely guard 95,000 miles of coastline.

MESERVE: But, to lower the risk ,the Coast Guard is proposing that all vessel arriving from outside the U.S. be required to give advance notice. A more controversial measure would require midsized ships, like some ferries and fishing vessels, to carry an automatic identification system, or AIS, which acts like a transponder, so they can be identified and tracked.

DEBBIE GOSSELIN, PRESIDENT, WATERMARK CRUISES: I Cannot envision how that will enhance security for our country.

MESERVE: Debbie Gosselin's firm conducts boat tours in Annapolis, Maryland. If the new proposals are adopted, she predicts she will have to install transponders on five boats, at a cost of $10,000 to $20,000 apiece. Search questions how that will reduce the risk on a summer day, when thousands of recreational boats are on the water.

GOSSELIN: If you look through here, all these little white dots are recreational vessels. None of these boats would be required to have an AIS.

MESERVE: And any one of them could pose a threat.

But at Coast Guard Sector Baltimore, the view is different.

AUSTIN GOULD, COMMANDER, U.S. COAST GUARD: You will see that that is the Lady Tramp, which is a bulk carrier, carrying sugar, which is either -- which is off-loading in the Port of Baltimore.

MESERVE: AIS gives the Coast Guard a virtual view of large ships like the Lady Tramp in the harbor. If more midsized vessels carry transponders, security patrols can spend more time looking at small vessels and other possible threats.

GOULD: What it will enable us to do is identify what we refer to as the anomaly. What's unusual in the port? What doesn't belong? Who's not broadcasting AIS that should be?

(END VIDEOTAPE)

MESERVE: There are an estimated 17.5 million recreational boats in the U.S. The Coast Guard has suggested in the past that they be more tightly regulated, but there's been a lot of pushback. The proposals on midsized ships don't ensure security, but they may take the country a step closer -- Suzanne, back to you.

MALVEAUX: OK. Thank you, Jeanne.

In the "Strategy Session": Seventy-five percent of Americans are ready for President Bush to leave the White House. But could Jeb Bush revitalize the family's name?

And Caroline Kennedy says she's ready to work twice as hard as any New York senator. So, why haven't New York's governor made up his mind?

And an SOS to Barack Obama -- why J.C. Penney and Saks Fifth Avenue are among those saying, save our stores.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Have you told Jeb to run for the U.S. Senate in Florida?

BUSH: Yes.

CROWLEY: Is he going to?

BUSH: Don't know.

CROWLEY: Really don't know?

BUSH: I really don't know.

(LAUGHTER)

BUSH: I wish he would. He would be a great senator.

(END VIDEO CLIP)

MALVEAUX: Well, the president hopes his family continues to win in politics. Could another Bush help the president's own image, though?

Our CNN/Opinion Research Corporation poll says, only 33 percent of Americans think Mr. Bush should remain active in public life. Sixty-six percent apparently would rather see him fade from memory.

Here for today's "Strategy Session," Democratic strategist Jonathan Prince and Republican strategist Karen Hanretty.

Obviously, you know, there -- looking at this poll, looking at the comments here, is there any sense that President Bush, the current president, can salvage his legacy by having Jeb get involved?

Karen, I will start with you. KAREN HANRETTY, REPUBLICAN STRATEGIST: I think the only thing that will salvage President Bush's legacy is time and probably a great deal of distance.

You know, Jeb Bush is his own man, and, in Florida, left as a very popular governor. I think he would probably -- I hate to say he would walk away with the seat. I think he would probably win that U.S. Senate seat quite handily.

But I don't think that there's a connection between Jeb Bush and George W. Bush.

MALVEAUX: Jonathan?

JONATHAN PRINCE, DEMOCRATIC STRATEGIST: Well, I think that's totally correct.

I mean, I think the one thing we see from these polls that you have got today, when you have 75 percent, 80 percent of the country saying it's time for him to move out, that he actually turned out to be a uniter, not a divider, perhaps in a way he didn't expect. But, after all, he's kind of brought the country together in its desire to have him kind of move on.

Look, Jeb is a guy who's been a reasonably successful governor of Florida. If he wants to come to the Senate, and he wants to work with President Obama and try and move the country in a new direction and be a parent for change, that will probably be good for Jeb Bush. I don't think it will help George W. Bush much at all, though.

MALVEAUX: How does -- how does his reputation, his image, compare to George W. Bush, and the father, H.W.?

HANRETTY: Boy, that's an interesting question.

I think that so much has happened in these past eight years. So much more history has occurred, I think, than happened in the four years his father was president. You have a historic war. We have had Hurricane Katrina. We had an historic economic meltdown.

So much defines this president in ways that I think his father just didn't -- he had a successful Iraq war, but it was short. It wasn't prolonged -- world of difference.

PRINCE: I do think -- they're, obviously, clearly, very, very different presidents.

I do think, though, if you look at the way each of them went to war with Iraq, it kind of demonstrates the very different approach each of them had to governing. This president, you know, from a purely ideological bent, went to war alone, basically, whereas the first Bush, who was really a pragmatist, who believed in making government work as well as it could -- obviously, I disagree with a lot of his views and approaches, but really went and built a campaign around the world to bring a whole coalition together against Iraq. It was really a very different approach to war, and a reason, I think, in some respects, that one war was much more successful than the other.

MALVEAUX: And, Jonathan, one thing you mentioned, too, is -- and I want to talk about this poll, CNN/Opinion Research Corporation poll -- did Bush unite the country? Yes, 17 percent say. But 82 percent -- a whopping 82 percent say no.

Karen, how much is that -- is that a surprise to you? How much of that is a problem for him as he moves on and is trying to shape his legacy here?

HANRETTY: Well, look, I think this -- his presidency started off very divided.

I mean, you know, from the 2000 election, the recount Florida, I think it was very difficult for him in a very partisan -- you know, in a nation that felt very differently and had very divergent views in the direction they wanted to see the country to go in the first place. I think that was -- uniting the country, I think, was a -- something probably beyond any president after the Florida recount.

MALVEAUX: Want to turn the corner real quick. We have this just in. This is sound, fresh sound, from Caroline Kennedy, giving an interview with the Associated Press on New York One.

Here's a little bit of what she had to say.

(BEGIN VIDEO CLIP)

CAROLINE KENNEDY, DAUGHTER OF PRESIDENT JOHN F. KENNEDY: I think that I have relationships in Washington that I would like to put to work to benefit the people of New York.

You know, I ran -- helped run the vice presidential search process for Barack Obama. I have a good working relationship with him, you know, and I saw -- I know what -- you know, people in Washington, and I want to be able to be part of the team that uses all my relationships.

(END VIDEO CLIP)

MALVEAUX: Jonathan, the question is, is she experienced enough?

PRINCE: Well, I think she's got everything that it takes to be a great senator. She understands how the government works. She understands how to wage a public campaign. She understands what is -- you know, how to bring people together, diverse groups of people, like she did in the school system.

And she has got a really important connection to the next president of the United States, which I think is something that obviously critical, a real source of power for someone in the United States Senate. So, I think she would be a terrific senator. I also think that it's obvious why -- you know, there's tons of speculation. Everyone is so interested in this. But it's kind of -- Governor Paterson has got some time to make up his mind and...

MALVEAUX: Karen, do you think it helps her or hurts her...

HANRETTY: I...

MALVEAUX: ... that she's giving these interviews now, too?

HANRETTY: Well, "I'm a Washington insider" is not usually a message that, you know, candidates -- she's not your traditional candidate, but it's usually not someone that someone who wants to be a U.S. senator or a member of Congress goes out and says publicly.

And that's essentially what her argument is: I am a Washington insider. Send me to Washington.

I think she would probably do well to show that she's also, you know, a man of the people, as her father was.

MALVEAUX: All right, Karen, Jonathan, thank you so much for joining us here in THE SITUATION ROOM.

PRINCE: You bet.

HANRETTY: Thanks.

MALVEAUX: There's still a conspicuous hole in Barack Obama's national security team, the case of the vanishing CIA chief. Did bloggers force the president-elect's choice to go away?

And new information is coming in about the massacre by a man in a Santa suit. We are standing by for a news conference and the release of stunning 911 calls for help.

(COMMERCIAL BREAK)

MALVEAUX: While the president-elect is on holiday in Hawaii, he may be taking some time to mull possible candidates for CIA chief. And he may be mindful about reaction on the blogs, given what happened to his first choice.

Our Brian Todd is here.

Brian, this opening in Obama's national security team really seems to be a hot topic in the blogosphere. Tell us why..

BRIAN TODD, CNN CORRESPONDENT: It certainly has been, Suzanne, and it has got people using a term called "blogocide." I had never heard that one before. That's because there are implications that bloggers caused the demise of Obama's first nominee as CIA director. The transition team says that's nonsense.

But the political ramifications of this post are significant right now. (BEGIN VIDEOTAPE)

TODD (voice-over): In an otherwise well-received transition, one prominent hole remains. The Obama team is still looking for a CIA director.

Former top counterterrorism official John Brennan withdrew his name, citing "strong criticism in some quarters prompted by my previous service with the Central Intelligence Agency."

Some liberal bloggers had blasted Brennan's past support for rendition, the capturing and transporting of terror suspects to other countries for interrogation and detention. Some also claimed Brennan supported harsh interrogation techniques, which he strongly denied.

Two knowledgeable sources tell CNN the Obama team pressured Brennan to withdraw. Obama transition officials say it was his own decision.

Was this nomination torpedoed by blogs?

JEFF STEIN, NATIONAL SECURITY EDITOR, "CONGRESSIONAL QUARTERLY": I don't think the bloggers knocked him out, so much as that they realized they would have to have a fight at his confirmation hearing.

TODD: Analyst says, if Brennan didn't support harsh interrogation, his overall ties to the post-9/11 era at the CIA, with the prewar intelligence flap and all the controversial tactics in the war on terror, would have made him tough to confirm.

Human rights officials are throwing down their gauntlet.

ELISA MASSIMINO, CEO AND EXECUTIVE DIRECTOR, HUMAN RIGHTS FIRST: It really is incumbent on the incoming administration to choose people for those slots who don't have any baggage from the previous policies and can demonstrate a clear break from those policies.

TODD: Elisa Massimino says that doesn't mean everyone who served in the CIA then should be automatically disqualified. But analysts say it will be hard to find a really qualified spy chief who doesn't have some tie-in to that period.

A former CIA officer says, if the Obama team can find someone like that:

TYLER DRUMHELLER, FORMER CIA CHIEF OF EUROPEAN OPERATIONS: They have a unique opportunity to make changes now in the agency, the way the agency fits in to the intelligence community, get back to the real core mission of the service, to recruit agents and have -- collect intelligence through classic espionage.

(END VIDEOTAPE)

TODD: Tyler Drumheller says the ideal person for that would be, not a former analyst, but someone from the operations side of the CIA, the division that actually carries out missions in the field. So, the challenge right now for Obama's team, find someone like that who is not associated with the controversies of the past eight years.

Suzanne, it's going to be a very tall order. That really narrows the field.

MALVEAUX: OK, Brian Todd, thank you so much.

You're in THE SITUATION ROOM.

Happening now, breaking news: Authorities will soon release details, pictures and sound of the 911 calls, as a ninth body is found where a man dressed as a Santa Claus went on a rampage with handguns and a homemade flamethrower.

Pakistani troops move toward the border with India, as nuclear- armed neighbors take a step closer to the brink. Will tensions over last month's Mumbai massacre push them to war? I will speak with the Pakistani ambassador.

And, after the worst holiday shopping season in decades, desperate store owners, including J.C. Penney and Saks, ask president- elect Obama for help.

Wolf Blitzer is off today. I'm Suzanne Malveaux, and you're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

MALVEAUX: We begin with breaking news.

We are moments away from hearing, for the first time, the calls for help as a man dressed as Santa walked into a party, guns blazing, then set a raging fire.

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