Return to Transcripts main page
American Morning
U.S. President-Elect Obama Arrives in Washington; Fighting in Gaza Intensifies; $300 Billion in Tax Cuts Proposed; Obama Girls Start First Day in New School; Israeli Troops Take Control of Northern Gaza; Inaugural Fashion is Previewed; Obama's Daughters Start Classes at New School
Aired January 05, 2009 - 06:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KIRAN CHETRY, CNN ANCHOR: And good morning. It's Monday, January 5th. I'm Kiran Chetry. We have Rob Marciano with us this morning, in for John Roberts. Good to see you.
ROB MARCIANO, CNN ANCHOR: He's such a slacker. Good to see you. First full week of the new year and John Roberts already taking all sorts of time off.
CHETRY: I think he'll appreciate being called a slacker.
MARCIANO: Yes.
CHETRY: This poor guy barely takes --
MARCIANO: Actually, he never takes -- he's in the sheets.
Anyway, first full week of the year and now I think everyone is starting to get back into the swing of things and ready to go back to work.
CHETRY: Yes, especially the Obamas. In fact, it's 15 days before Barack Obama takes office and now he's starting his new life in Washington this morning with his family.
The Obamas will be staying at the historic Hay-Adams Hotel. It's just across from the White House until they actually move into 1600 Pennsylvania Avenue. It's also a big day for the Obamas two daughters, Sasha and Malia. They start their first day of classes at their new school, Sidwell Friends.
Well, Israeli forces are pounding targets in Gaza this morning from the air, land and sea. Troops are now dug in on the edges of Gaza city. Israeli Prime Minister Ehud Barak says that the offensive will continue until Israel achieves its objectives of "peace and tranquility for residents of southern Israel" who are still being bombarded by Palestinian rocket fire. Officials say more than 500 Palestinians have been killed and 2,000 wounded so far.
And another Bush in the White House? Former President George Herbert Walker Bush telling "FOX News Sunday" that he has a candidate in mind, his other son, Jeb.
(BEGIN VIDEO CLIP) GEORGE H.W. BUSH, FORMER PRESIDENT OF THE UNITED STATES: I'd like to see him run. I'd like to see him be president someday.
UNIDENTIFIED MALE: Really?
BUSH: Or maybe senator, whatever. Yes, I would. I mean, right now it's probably a bad time. We've had enough Bushes in there.
But no, I would. And I think he's as qualified and as able as anyone I know in the political scene. Now you got to discount that. He's my son. He's my son that I love.
(END VIDEO CLIP)
CHETRY: Well, Jeb Bush served as governor of Florida and is considering a run for Florida's Senate seat in 2010.
MARCIANO: President-elect Barack Obama is waking up in Washington this morning. He arrived in the nation's capital aboard an Air Force jet last night, and Obama displayed a softer side as he bid farewell to his hometown of Chicago.
(BEGIN VIDEO CLIP)
BARACK OBAMA (D), PRESIDENT-ELECT OF THE UNITED STATES: Well, you know what happened was Malia's friend had dropped off an album, the two of them together. They have been friends since preschool. And I just looked through the pages. The house was empty. And it was --
UNIDENTIFIED FEMALE: What about when they left yesterday?
OBAMA: Well, they're just -- they're having fun.
UNIDENTIFIED MALE: Are you looking forward to go to Washington?
OBAMA: Yes, although living in a hotel for two weeks, we kind of did that for two years.
(END VIDEO CLIP)
MARCIANO: Moving is always a stressful event even if you're the president-elect.
Well, Obama's arrival comes amid a stunning loss to his White House team. New Mexico Governor Bill Richardson withdrawing his name from consideration as commerce secretary because on an ongoing grand jury investigation in his home state.
Meantime, Obama meets with congressional leaders today in an effort to bring his economic recovery bill to life, and news this morning that that could include a $300 billion tax cut.
CNN's Kate Bolduan is live this morning in Washington. Kate, the president-elect already has a lot on his plate. Good morning. KATE BOLDUAN, CNN CORRESPONDENT: Yes, there's quite a lot going on. Exactly, Rob. New details of the Obama recovery plan are emerging this morning with reports of a possible $300 billion in tax cuts for workers and businesses.
It appears an attempt to try to win over more Republicans. Many concerned, of course, the plan is focused too much on government spending. All as Obama is set for a full day of meetings today with congressional leaders.
(BEGIN VIDEOTAPE)
BOLDUAN (voice-over): Out with the old, in with the new, the next Congress hoping to hit the ground running with a visit from the president-elect today. Priority one, an economic stimulus package.
U.S. SEN. HARRY REID (D), MAJORITY LEADER: We must recognize the economy is in deep trouble.
BOLDUAN: But even before they start, lawmakers are lowering expectations. That goal of getting a stimulus bill to the new president's desk on day one --
U.S. REP. STENY HOYER (D), MARYLAND: I doubt that, frankly. It's going to be very difficult to get the package put together that early so that it can have sufficient time to be reviewed and then sufficient time to be debated and passed.
BOLDUAN: President-elect Obama is meeting with congressional leaders to make his pitch. Win over support and try to put his recovery plan to paper.
OBAMA: We need an American recovery and reinvestment plan that not only creates jobs in the short term but spurs economic growth and competitiveness in the long term.
BOLDUAN: Obama's plan could cost in the neighborhood of $775 billion and proposes doubling renewable energy production, infrastructure spending like rebuilding roads, bridges and schools, as well as offering tax breaks.
OBAMA: Create three million new jobs, more than 80 percent of them in the private sector.
BOLDUAN: But Republicans are already voicing concerns over the potentially eye popping price tag and the timeline.
U.S. SEN. MITCH MCCONNELL (R), KENTUCKY: What I worry about is the haste with which this may be done. This is an enormous bill. It could be close to $1 trillion spending bill. Do we want to do it with essentially no hearings and no input from Republican senators who represent half of the American population?
(END VIDEOTAPE)
BOLDUAN: Now both sides are calling for bipartisan support of whatever the final package looked like. Republicans want to have their say in the process, and the Democratic majority may not want be to be solely responsible for such massive spending on the heels of a string of government bailouts. Now as for the president-elect, he's set to meet with House Speaker Nancy Pelosi, Senate Majority Leader Harry Reid, as well as take part in a bicameral bipartisan sitdown today with key lawmakers, Rob.
MARCIANO: Busy day. Kate Bolduan live for us in Washington. Thanks, Kate.
BOLDUAN: Of course.
CHETRY: A political showdown looms in the Senate when Roland Burris, the controversial appointee to fill Barack Obama's Senate seat, tries to take his place in the chamber tomorrow. The Senate's top Democrat and Republican will try to meet today and find a bipartisan solution.
Majority Leader Harry Reid says that they have the legal authority to block Burris's appointment, but he's also left open the possibility that he could be seated. Burris was picked by embattled Illinois Governor Rod Blagojevich who is accused of trying to sell Obama's vacant Senate seat to the highest bidder. Burris telling CNN Sunday that he's not concerned about the political cloud hanging over his selection.
(BEGIN VIDEO CLIP)
VOICE OF ROLAND BURRIS (D), NAMED TO ILLINOIS SENATE SEAT: I am the duly appointed, legally appointed United States senator from the state of Illinois. And I certainly expect that the senators will recognize that and do not deny Illinois its legal representation as we get under way in this 111th Congress. It is my hope and prayer that they will certainly have gotten the message that what the governor has done regardless to his problems, they're not my problems. There's no taint on me.
(END VIDEO CLIP)
CHETRY: Well, two months after Minnesota voters went to the polls, there may finally be a winner in the Senate race. State selection officials today are expected to announce Democrat Al Franken the winner over incumbent Republican Norm Coleman after a final recount.
Franken was ahead by 225 votes. Coleman's campaign indicating it will challenge the results in court that could prevent Franken from being seated when the new Congress convenes tomorrow.
And President-elect Barack Obama tapping Virginia Governor Tim Kaine to head the Democratic National Committee. Kaine will replace Howard Dean. He'll serve on a part time basis until he's gubernatorial term ends next year. Dean plans to step down as DNC chairman January 21st, the day after Barack Obama's inauguration.
Well now to breaking news on the fighting between Israeli forces and Hamas militants. The ground combat intensifying as Israeli forces push deeper into Gaza. Now the goal, according to Israel's defense minister, Ehud Barak, peace and tranquility for residents of southern Israel.
One in 500 Palestinians and five Israelis have been killed since Israel's offensive began 10 days ago. First with air strikes and then a ground assault in Gaza. Israel launched their military campaign in response to Hamas rocket fire into Israel. Despite taking a pounding, the Hamas rockets are still flying. At least 30 rockets reportedly launched from Gaza into southern Israel on Sunday.
And the fighting has triggered demonstrations across the U.S. and in Europe in support of both sides. Diplomatic efforts also underway to try to secure troops.
CNN chief international correspondent Christiane Amanpour joins us now. And you're standing at the Gaza border. Those military operations continuing as we speak. At the same time, diplomatically, there are others who are also now trying to call for a truce. What's the latest?
CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: Well, that's right. This is now the second day of the Israeli ground invasion into Gaza. We know that they're in control of parts of the northeastern part of the Gaza Strip. Also they have split the Gaza Strip in two and they are encircling Gaza city itself.
We're told by the IDF, the Israeli Defense Force spokespeople, that they are not interested yet right now being drawn into urban combat inside Gaza city but they're trying to pound and maintain flattening of the Hamas rocket capability in the open area around it.
Overnight, they say, they had more activity. They were supported as always by air and naval and artillery fire. And they say they struck a mosque that they said was being used as a weapons cache, also some bunkers near the Gaza city area and tunnels near the border with Egypt.
This is what they're trying to do is to try to prevent any more smuggling of weapons to come in and also, as you mention, the defense minister says the ultimate goal is peace and tranquility.
What exactly does that mean? It means, according to Israeli officials, that they want to severely reduce the capability to fire those rockets, but more importantly to reduce the motivation and the will of Hamas to actually use their capability because they know that this kind of military action is not going to be able to take out or silence all the rockets. So what they want to do is really fight the will of Hamas to want to keep firing them.
This also is causing a lot of casualties. You've mentioned the numbers. I spoke exclusively to Israeli foreign minister Tzipi Livni yesterday. And she has acknowledged that fact and says that it will put pressure on Israel as the diplomatic activity continues but they're not yet ready to end these activities right now.
(BEGIN VIDEO CLIP)
AMANPOUR: Many people are calling for a ceasefire. Will you accept a ceasefire?
TZIPI LIVNI, FOREIGN MINISTER OF ISRAEL: The reason one thing that frustrates me, the idea of saying something like Israel and Hamas need to stop, a ceasefire between Israel and Hamas. It's not the same.
I'm not willing to put Israel and Hamas in the same package or even use the same wording because as you said before, we are expressing our right of self-defense. Israel is a state which is a member of the international community while Hamas is a terrorist organization. Israel acts against Hamas because it targets Israel. So they know what to do in order to stop it.
(END VIDEO CLIP)
AMANPOUR: We're hearing periodic artillery fire from close by going out from Israel into the Gaza Strip. We also know that the French president, Nicolas Sarkozy, is due here in the region first to talk to the Israeli defense minister and then to go on and talk to the prime minister as well as the leaders of the Palestinian authority.
Tony Blair, the British -- former British prime minister, is also discussing ways of ending this. And what we're hearing from the Israelis is that they're not interested in just an immediate ceasefire but what they want is an eventual ability to close down the weapons smuggling from Egypt into the Gaza Strip -- Kiran.
CHETRY: Yes, so certainly a lot going on. And when we hear from Israel and they say that their goal is to restore peace and tranquility to the residents living in south Israel to stop the rocket fire, does that also include effectively shutting down Hamas's 18- month rule in Gaza.
AMANPOUR: Well, look, this is a big question, and many people are beginning to ask what is the end game and how will this rocket fire stop? Because the stated goal is not regime change. It is not to get rid of Hamas in Gaza. That's what we've been told by government officials.
On the other hand, some are now beginning to say, well, maybe that should be the end goal. So this is still quite a situation where it's not clear even if they do decide that they've won this latest military confrontation with Hamas, where does it end and how does it end? Because the Israelis believe that their action is going to empower the moderates, the Fatah-led Palestinian authority and disempower, disenfranchise Hamas.
But many are saying, well, how will that resolve the situation? How will Fatah even if it does come out a winner in this, go and take over in Gaza? It's not going to be possible to do that on the back of an Israeli tank. So there are many questions about the full resolution of this that are still unanswered.
CHETRY: Yes. In the meantime, the fighting continues including the ground troops there from Israel.
Christiane Amanpour on the Gaza border. Thank you.
MARCIANO: Time to talk money. Could big tax cuts be coming your way? President-elect Barack Obama heads to Capitol Hill to push his stimulus plan to jumpstart the economy. But can it come soon enough?
Ali Velshi in the house making a comeback next. It's 12 minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: You know, this appears to be a bit of Groundhog Day for me because the last time we played this song, Rob was here...
MARCIANO: Yes.
CHETRY: ... and Ali was making his triumphant return.
MARCIANO: Right.
CHETRY: Although you had a growth on your face.
MARCIANO: Oh, that's right. That was after vacation.
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: That's right. Yes.
MARCIANO: You had a growth.
VELSHI: That little goatee lasted about a day, as I recall.
CHETRY: Management called and said --
MARCIANO: Reminding us that they own us.
VELSHI: I've got to fix early and shave very clean today. Good to be back. Good to see you both here.
CHETRY: We're turning a page on a new year financially and economically. Please say yes.
VELSHI: Well, we might be. We might be. And I'm going to talk to you a little later about how January compares to the rest of the year. We've got a very strong start to January, but there's a little bit of news out there that's being reported by "The Wall Street Journal," and we're trying to get more detail on this.
But there's some sense that there might be a tax cut involved in the Obama stimulus plan that we're all looking for. We don't think that plan is going to be on the table by inauguration day as was initially expected. It's going to take longer to work this out.
But here's what there might be in this plan. First of all, it might be worth $310 billion. That's about 40 percent of the size of the entire stimulus bill that we're expecting to have, and it's going to involve provisions both for individuals and for businesses.
For individuals, there'll be either, according to these reports, either a $500 individual credit or $1,000 family credit against payroll taxes that are used for Social Security and Medicare. So that will sort of give people a bit of a break if these credits are actually in the stimulus bill.
On the business side, and this is designed to get Republican support for a stimulus bill. We're looking at a write-off of 2008 and 2009 business losses. So businesses can write off some massive losses that they've had this past year. They can also write off certain losses to a maximum of $250 million and that would reduce some tax bills going back for five years. So companies that have actually paid tax could end up getting money back from the government.
There's also talk about a tax credit for people who are newly hired or for businesses that newly hire people or reverse some of the layoffs that they've had in the last year. So the idea is give businesses a little more money, encourage them to hire more people because the number one problem with this recession right now, while it started in the housing crisis, is the jobs crisis, the number of jobs that we're losing.
At the end of this week on Friday, we're going to get the jobs report for December. We're expecting that one to be the worst one we've seen in the last year.
CHETRY: So this tax cut plan...
MARCIANO: Yes.
CHETRY: ... would be about the size of the scope of the half of the bailout.
VELSHI: That's right. Yes.
MARCIANO: It's a huge number and it seems odd that for a Democratic president who's already elected to do something that's very Republican.
VELSHI: Yes. But he's going to have to do something to make sure people are on side for what could be close to an $800 billion stimulus package and this might be one of those things. So again, these are early reports. There's a lot of information coming at us right now about what could be in the plan. And the reason there are reports is because the Obama transition team hasn't announced anything just yet.
MARCIANO: Well, we'll just plan it.
VELSHI: We'll just plan it. Exactly.
And I'll be back talking about how might expect markets to do later this month and hopefully for the year.
MARCIANO: Great. Good to see you. CHETRY: Good to see you, Ali.
So how is the current economic crisis affecting you? You can send your questions and comments to Ali by going to CNN.com/am. He is going to be blogging live this morning.
It's 18 minutes after the hour.
MARCIANO: First daughters, first day. Sasha, Malia Obama start their new school today.
(BEGIN VIDEO CLIP)
SALLY QUINN, "THE WASHINGTON POST": The Biden grandchildren go there. They're very, very good about security.
(END VIDEO CLIP)
MARCIANO: The Quaker connection and what the little Obamas can expect on day one.
You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
MARCIANO: It's the first day at a new school for the Obama girls. The soon to be first daughters, Malia and Sasha Obama, start classes at Sidwell Friends.
CNN's Joe Johns has a closer look at the Washington private school that's no secret to students with secret service in tow.
(BEGIN VIDEOTAPE)
JOE JOHNS, CNN SENIOR CORRESPONDENT (voice-over): Sidwell Friends, founded in 1883 by a Quaker teacher, is s among the elite private schools in Washington.
SALLY QUINN, "THE WASHINGTON POST": Sidwell Friends is a Quaker school, first of all, and it's really infused with Quaker values. It's very much about peace and community. It's very progressive. It's about 40 percent minority.
JOHNS: Michelle Obama's spokesperson says a number of great schools were considered. In the end, the Obamas selected the school that was the best fit for what their daughters need right now. So what's so special about Sidwell?
There is the philosophy, Sidwell says its students and faculty are on a search for truth and the school follows a Quaker belief that of God in each of us inspires everything we do, inspires us to show kindness and respect toward one another, and apply our talents and service to others.
BO LAUDER, PRINCIPAL, FRIENDS SEMINARY: I think it's a great fit for the Obama family because the school is a very rigorous academic place that places a lot of value on intellectual inquiry. With Obama's position on war and his own commitment to hope and to the future, I think that he feels probably that the school will equip his children well for bringing about a better world.
JOHNS: And Obama often seems in tune with Quaker principles, seeking consensus with others, talking rather than fighting with opponents. And at least in the case of Iraq, if not Afghanistan, opposing war even when the majority supports it. The Obama girls aren't the only first family children who have opted for Sidwell.
QUINN: Chelsea Clinton went there. Al Gore -- young Al Gore went there. The Nixon girls went there. Teddy Roosevelt's children went there. The Biden grandchildren go there.
They're very, very good about security. They understand about that. And they also understand about children who are in the public eye a lot.
JOHNS: Sidwell isn't cheap. For the lower school where Sasha will attend second grade, tuition is nearly $29,000 and more for the middle school where Malia will be in fifth grade but Sidwell can afford to ask top dollar.
QUINN: Sidwell is a happy school. I think the children who go there are children who really feel good about themselves at the end of the day. They're happy children. It can be a really magical place.
(END VIDEOTAPE)
JOHNS: And by the time the president-elect takes the oath of office, the Obama girls will have two weeks of Washington schooling under their belts. So today, in a way, they're getting a head start on their dad -- Rob and Kiran.
CHETRY: Joe Johns, thanks.
Well, we have breaking news. Israel's ground troops moving now deeper into Gaza as Barack Obama prepares to move into the White House. So with just more than two weeks to go until he becomes commander in chief, we'll take a look at the Mideast challenges Obama now faces.
Also Israel's punishing assault on Hamas provoking outrage across the world and even here at home. We're going to hear what both sides are saying this morning.
It's 24 minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: It's 27 minutes past the hour. Here are the morning's top stories.
President-elect Barack Obama will sit down today with Democratic and Republican congressional leaders to discuss a massive economic recovery plan. But even before the conversation starts, lawmakers are lowering expectation. Steny Hoyer telling "FOX News Sunday" the goal of getting a stimulus bill on the new president's desk on day one is not really feasible.
(BEGIN VIDEO CLIP)
REP. STENY HOYER (D), MARYLAND: I doubt that, frankly. It's going to be very difficult to get the package put together that early so that it can have sufficient time to be reviewed and then sufficient time to be debated and passed.
(END VIDEO CLIP)
CHETRY: Well it may not add up to the $50 billion Bernard Madoff allegedly stole from investors but its clients and employees are now selling keepsakes bearing Madoff's name on eBay. Up for sale, T- shirts, beach towels, umbrellas, mouse pads, even flashlights.
An autopsy is scheduled today for John Travolta's 16-year-old son. Jett Travolta was found dead in his family's vacation home in the Bahamas on Friday morning. Officials say that two specialists will be used for the autopsy to guarantee a thorough analysis of what might have caused Jett's death. The family hopes to have the body transported back to Florida for a funeral later this week.
MARCIANO: Back to our breaking news in the all-out war between Israel and Hamas sparking protests around the world and right here at home.
Check out this i-Report from Orlando, Florida. Palestinian supporters lined the streets on Saturday. The crowd chanting and honking horns for peace and to free Gaza. The demonstrators said they weren't there to back Hamas but rather to rally support for a ceasefire.
And these shots were taken from another one of our i-Reporters. Outrage over the mounting death toll in Gaza erupted outside the Israeli consulate in Los Angeles last week, many blasting what they call Israeli aggression. Similar demonstrations by pro-Israeli groups also taking place over the weekend. Those groups voiced their support for the attacks in Gaza and called on Hamas to stop firing rockets into southern Israel.
And there were protests around the world this morning for and against Israel. CNN's Paula Newton joins us live from London with more on that -- Paula.
PAULA NEWTON, CNN CORRESPONDENT: Rob, you know, we're getting ready for another day across Europe of more protests. They have at times turned violent. Most of them have been pro-Palestinian.
What is going on here is that each day we see the crowds get larger and larger and, Rob, they are playing a part right now in a lot of the diplomatic shuttling going back and forth. A lot of European countries under a lot of pressure to make sure that a ceasefire does happen and happen quickly -- Rob.
MARCIANO: Paula, what role are countries like Egypt, Jordan, Syria playing in this conflict? Are they actually helping or hurting?
NEWTON: Well, they're certainly in a lot of the editorials around the world, many people are saying, look, these countries are sitting back on their hands and they are basically helping Israel. Why?
Many of these countries have made no bones about the fact that they do not agree with Hamas in the way they conducted themselves over the last couple of years in Gaza. And for that reason, some of the Arab editorials and some of the protesters being really tough on their own governments. At the same time, Rob, you couple that with the more restive Arab and Muslim population in Europe, and you're really starting to see a change in terms of the kind of leverage Israel has in these kinds of countries to bring their side to the table.
At every turn, Israel is being greeted by the fact that look this action is not proportional. We hope certainly over the next few days to see more of what's going on in these protests in terms of them actually having a plan. Right now, all we've seen, Rob, are very organized, very loud, very (OFF-MIKE) in terms of exactly what they want to see.
Rob?
ROB MARCIANO, CNN ANCHOR: And not necessarily violence, at least from what we've seen here. Have you heard or seen any violent protests?
NEWTON: Violence in the terms here in London, certainly a little bit in Paris as well. You do see skirmishes. And the days that I've been out there, Rob, they're getting closer and closer to the Israeli Embassy everyday. The other day, it went from just pushing on the barricades to throwing it. Certainly, something authorities here are beginning to look at and they are trying to look at the security situation in these large cities a little bit more closely.
MARCIANO: All right. Paula Newton, live for us this morning in London. Thanks, Paula.
KIRAN CHETRY, CNN ANCHOR: More breaking news this morning. The fighting intensifying right now. Israeli forces say they've taken out dozens of Hamas targets from the air, land and sea and on the ground. Israeli forces backed by tanks have begun to surround parts of Gaza City. At this hour, the Hamas rockets keep coming, volleys of them into southern Israel.
Since the fighting began 10 days ago, five Israelis have died. And in Gaza, the bloodshed has been far greater. The death toll now more than 500. A European Union delegation is in the region trying to broker a truce, something that senior Israeli leaders say is unlikely at this point.
And the exiled leader of Hamas laying into Barack Obama, saying his silence is unacceptable. Joining me to talk about this is Aaron David Miller, who writes Mr. Obama will inherit the 100-year headache called the Arab-Israeli conflict. Miller is a former Middle East negotiator who has advised six secretaries of state, also the author of "The Much Too Promised Land." He joins us now this morning.
Thanks for being with us.
AARON DAVID MILLER, FMR. ADVISER TO SIX SECRETARIES OF STATE: It's a pleasure.
CHETRY: You talk about Barack Obama inheriting this 100-year headache. Just as the Israelis were beginning this ground invasion, what do you think the biggest challenges are ahead for Barack Obama as he gets ready to take office and this will, of course, be landing on his plate in the coming days?
MILLER: Well, this is going to be perceived as the first foreign policy test and crisis of his presidency. And how he comports himself, how his secretary of state deals with it is going to speak volume in the minds and images of Americans, allies and adversaries about what they can expect from the new administration. And in a way, it's inevitable but unfair burden with which he's going to be shackled.
The Israelis are determined to crush Hamas militarily and deny them a political victory. On the other hand, Hamas is determined to try to eke out a political victory. And that's going to be the toughest challenge he's going to face. How is he going to reconcile Israel's need to deny Hamas that victory and Hamas' insistence that something positive result from this and that it emerges as a legitimate force? This is going to be a very tricky issue for him to handle.
CHETRY: So what should his first moves be?
MILLER: I would offer three pieces of very unsolicited advice. Number one, work with the Arabs and the Europeans. We have no direct contacts with Hamas. They would only undermine Abbas and drive the Israelis crazy. He's going to need the Egyptians clearly to carry this forward in terms of any security agreement that's brokered.
Number two, use your secretary of state. Barack Obama cannot be the desk officer for the Arab-Israeli conflict. He was elected to fix America's broken house and that's clearly what he's going to have to do. He'll have to support her but she is going to have to take on the lion's share of responsibility for working this on a day-to-day issue.
And finally, you can be Israel's best friend and reassure the Israelis and that's extremely important because America is Israel's best friend, but at the same time, you're going to have to adopt a policy that is also tough and fair and that reflects the needs of the other parties.
I'm not talking about Hamas here. I'm talking about Abbas, Mahmoud Abbas, President of the Palestinian Authority and the Arabs. Barack Obama must be seen as a credible and effective mediator. And if he's to do that, he has to be an advocate, not just for Israel, but for the Palestinians and key Arab states as well.
CHETRY: You know, it's interesting because it seems like he's starting in a deficit in that way. I mean, as we said, he's been criticized by this Hamas leader for remaining silent. At the same time, there are some Israelis who believe that he's more of a Palestinian sympathizer than we've seen in the White House prior. So how does he gain any leverage?
MILLER: Well, I think he's got to be honest and very clear with both sides about what he can and cannot do. In a way, he's inheriting a very bad hand. America is neither admired, feared or respected in a region of critical importance to the United States as much as it needs to be. In part, that's a question of policies pursued during the Bush administration, and in part it's a policy that results from how difficult these issues actually are.
He needs to make it unmistakably clear. Governing is about choosing. Is the Arab-Israeli conflict going to be a key commitment of the Obama administration? And it's going to take about five minutes for America's allies and adversaries to figure out whether or not it's going to be a priority for this administration.
CHETRY: I'm going to leave with your take on this interesting op-ed that John Bolton, who served as U.S ambassador to the United Nations, wrote. He said that we have to forget this whole notion of a two-state solution, that it needs to be a three-state solution, where Gaza returns to Egypt's control, the West Bank reverts to Jordanian control, and that somehow, those two governments take a major role in helping the Palestinian people and also being brokers for peace with Israel. How realistic do you think that is?
MILLER: John Bolton is a very smart guy, but the picture he's painting is a fantasy. First of all, the Egyptians don't want and will not take Gaza back. The Jordanians, even if they wanted the West Bank, can't do it.
Now, the least bad solution to this -- least bad is a two-state solution in which Israelis and Palestinians separate through negotiation, their core requirements are met and they can live hopefully and it's going to be a while in peace and security. It was either Mark Twain or Ben Franklin that said familiarity breeds contempt and children.
The problem for Israelis and Palestinians is that they're sitting on top of one another. And they've got to find a way to separate not unilaterally but through negotiations and America, I suspect, over time, can lend a huge boost and hand to that effort.
CHETRY: Very interesting perspective this morning from Aaron David Miller, former Middle East negotiator. Thanks so much for being with us.
MILLER: A pleasure.
MARCIANO: Give me my money back. Is that what you feel like saying, especially after looking at your 401(k) statement? Well, Ali Velshi -- I'm so choked up about it because I'm shocked, has written a book on the very subject -- "Your Guide to Beating the Financial Crisis." That's ahead. Plus, the inaugural -- well, it's the biggest party on earth, right? So, if you show up wearing the same dress someone else is, well, that just wouldn't do. So, we're going to talk about what the First Family will be wearing for the big event. 37 minutes after the hour.
(COMMERCIAL BREAK)
MARCIANO: Earlier, we introduced Ali with some Eminem. I suppose we should do a little Britney Spears. Give me, give me more. Give me more.
ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: There you go.
MARCIANO: Give me some money back.
VELSHI: Yes. I just -- as a result of everything that happened in the last several months, I wrote a book called "Give Me My Money Back," and it's available now. And I got -- I wrote that title is because so many people called us and e-mailed me and gave us some sense that they thought that they had done everything that they were supposed to do, they followed all the rules and their money is gone. Someone took their money. Well, nobody really took it.
But even if you would followed all the rules in 2008, the diversification, all the things you were supposed to do, your money was, you know, probably cut in close to half, 30 percent to 40 percent if you were lucky and more than that.
So I've written this with the idea that we have an opportunity in this market. And there is -- there are some simple rules that you can follow to get back in and you should get back in. Now we've already had responses on the blogs to say, yes, right, I got burned doing that. The bottom line is we're not smart enough to know when these markets are going to go up or down. And if you're not invested fundamentally, your money will become less and less valuable.
So follow these five rules, these five steps.
MARCIANO: Going to give it now?
(CROSSTALK)
VELSHI: I'm going to give it to you right now.
(CROSSTALK)
VELSHI: You can buy the book if you want more information, but the bottom line is you have to establish a risk tolerance. All of us have different risk tolerance. It's generally a function of age, but it might just be the kind of person you are. Simple test, it will take a few minutes. There's one in the book. They're all over the Web. Diversify your investment. Obviously, we know that. But allocate your assets.
Most people think that 90 percent of the performance of your retirement money is because you allocate, not about when you buy or when you sell or what you buy. Once you've allocated your assets between the different portfolio classes like bonds and stocks and international and cash, then you optimize. You tweak it a little bit. You need a little bit more of this. You need fewer bonds and you need more international stocks and some small cap.
You tweak it so you get the best performance and then at least once a year, you rebalance that. And it's scientific how to rebalance. It's not an emotional matter. You do these five things and you will be 90 percent of the way to an excellent portfolio. The extra 10 percent is timing and what you buy. But it's really a small portion of it. It's the idea that you follow some long long- established rules. And once in a while a year will come along like 2008 and it will do what it did to you.
MARCIANO: It's tough to get unemotional when that happens.
VELSHI: Very tough, and that's the point of the book. Put the emotional side. Read it for a few hours, and fix your 401(k) or your IRA.
CHETRY: Wow. We wondered why you took a sabbatical on the show.
MARCIANO: Yes, he's an author now.
CHETRY: It's because he was busy writing.
MARCIANO: What a scribe. Congratulations.
VELSHI: Thank you, sir.
MARCIANO: We expect free copies.
VELSHI: Absolutely.
MARCIANO: And everybody else should go buy one.
VELSHI: Hey, we're blogging this morning, so --
CHETRY: Are you live blogging already? All right.
VELSHI: Send us your questions or criticisms.
CHETRY: Good stuff. Well, if you have a question about how to survive through the financial crisis, you can ask Ali. He is blogging all morning. Just go to cnn.com/am, and you can ask Ali your questions, and presumably you'll be writing back.
VELSHI: Yes. I'll bring them here and talk about it.
CHETRY: All right. Love it. Good to see you, Ali.
VELSHI: My pleasure.
CHETRY: It's 43-1/2 minutes after the hour. What do you wear to the party of all parties? Inauguration fashion preview. Will Michelle's favorite designer really be doing her inaugural gown? A sneak peek at the dress sketches. You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
MARCIANO: Oh, so, so beach. Welcome back to the "Most News in the Morning." Speaking of, there is a shot of Miami live for you. It is 74 degrees. High today, expected to get a little close to 80, under mostly sunny skies.
As we all know, the key to an accurate forecast, other than some good hip-hop is some collaboration. So with that, we take you down to CNN meteorologist at the severe weather center in Atlanta. My colleague, Reynolds Wolf. What do you think? 80?
(WEATHER REPORT)
MARCIANO: Very impressed. More so, though, Reynolds, in celebration of Ali's book, you're sporting the vest today. I'm sure he appreciates that.
REYNOLDS WOLF, CNN METEOROLOGIST: For Ali, and the only other vest wearer I know, Han Solo, (INAUDIBLE). It's basically why I'm doing it.
MARCIANO: May the shorts be with you, my friend.
WOLF: That's what I'm saying.
MARCIANO: OK. We'll check back with you, buddy. See you.
CHETRY: Well, there's some new information on Michelle Obama's inaugural gown. Will her favorite designer really be making the dress that will go down in history?
Also with a big day for the Obama girls, on their first day at their new school, we're going to see what makes this school for this family an especially good fit. It's 48 minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: Well, in between moving, getting her daughters ready for school, picking up that promised puppy, Michelle Obama needs to pick a gown for the scores of inauguration balls she'll be attending in just 15 days. So what will the future first lady be wearing? Lola Ogunnaike is here to tell us the latest. You're on inaugural ball watch.
LOLA OGUNNAIKE, CNN ENTERTAINMENT CORRESPONDENT: Exactly.
CHETRY: The first thing you want to avoid of course before you pick anything is picking the same thing that someone else is wearing. It happened to Laura Bush back in 2006 at the Kennedy Center Honors. So how do you avoid that? OGUNNAIKE: Well, one Web site aims to help you do just that. It was started by this West Palm Beach businessman. His wife flew all the way to New York City just to ensure that she would not have on the same dress that anyone else had at a charity event. So he decided let me start a Web site that will allow you to not only register the description of your dress but to upload a picture, and there's a number that you put on there, and it is associated with a certain event that you're attending.
So let's say you're attending the bow tie and boots ball. You can upload your number, upload the description of your dress and a picture. So that can help to go a long way to ensuring that no one else has the same dress, but it's not guarantee.
CHETRY: Right. Because there are some people that don't know about it, right? But at least you're trying.
OK, so, for Michelle Obama, it's rumored that she's going to be wearing a -- well, it's rumored that she could be trying to look to her long-time friend and stylist, is it Maria Pinto?
OGUNNAIKE: She may go with Maria Pinto. She's a Chicago-based designer. She's been very good to her in the past designs. A lot of her dresses for her major events. So she may go with the homegrown designer. Some people say that she might play it safe and go with Oscar de la Renta because the Narciso Rodriguez dress she wore the night that Barack Obama won was a bit of a risk. So she may play it safe and go with Oscar de la Renta because he's dressed a number of first ladies in the past.
CHETRY: And it's also rumored that President-elect Obama will be wearing a -- is it a Hart Schaffner Marx tuxedo?
OGUNNAIKE: Yes. Hart Schaffner Marx tuxedo. He's been wearing Hart Schaffner Marx for all of his major events since the summer, so he may go that route.
But just in case someone happens to have on your dress at an event, you have one or two choices. You either go up to the woman and say, you have a great taste, or you can spill a glass of red wine on her, Kiran.
CHETRY: Oh no. We'll make her change. Do we have any sketches to look at?
OGUNNAIKE: Yes. Women's wear daily actually commissioned a bunch of designers to dream up their favorite dresses or their ideal dresses for Michelle Obama. So everyone from Monique Lhuillier to Michael Kors weighed in on what they thought would look great on her. Again, we don't know just yet but there are a lot of great options out there.
CHETRY: Right. So they let people jokingly try to pick the first puppy, but it's all going to be Michelle Obama, right, picking her dress? OGUNNAIKE: It's all about the dress. And you just have to keep in mind that she's not dressing for herself anymore. She's dressing for history.
CHETRY: Wow. A lot of beautiful ones to choose from. Maybe not the red one in blue motif. No offense.
OGUNNAIKE: Yes. I'm going to stay away from the Betty Johnson red, white and blue dress. But I do like the red Monique Lhuillier.
CHETRY: I love that.
OGUNNAIKE: Oscar de la Renta is always a classic. And there's a lovely Michael Kors blue dress that's just gorgeous, off the shoulder, fitted at the waist. I think she would look great in that.
CHETRY: One thing we can pretty much guarantee, she's going to look fabulous whatever she wears.
OGUNNAIKE: Absolutely.
CHETRY: All right, Lola. Thanks so much.
OGUNNAIKE: Thank you.
CHETRY: The Obamas make the move to Washington. Two weeks until inauguration day, but doing big business already.
(BEGIN VIDEO CLIP)
BARACK OBAMA (D), PRESIDENT-ELECT: If we don't act swiftly and boldly.
(END VIDEO CLIP)
CHETRY: Economic crisis intervention. Today step one, win over Congress. But why is he quiet on the Mid-East conflict?
Plus, domestic issues on the home front. The little Obamas first day of school.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Sidwell is a happy school. I think the children who go there are children who really feel good about themselves.
(END VIDEO CLIP)
CHETRY: What the girls can expect in class today. You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
MARCIANO: Well, Barack Obama won't take office for 15 days, but today is a big day for the Obama girls. Malia and Sasha, the soon-to- be first daughters start classes today at Sidwell Friends School in Washington. So what will the transition be like for them?
Well, Doug Wead is a presidential historian and author of the book "All the President's Children." He joins us live now from Orange County, California.
Doug, it's early out there. We appreciate you getting up. A big day for the girls out there. You have interviewed six presidents, 19 presidential children. I mean, seriously, how normal can a child's life be if you're living in the White House and going to school in D.C.?
DOUG WEAD, AUTHOR, "ALL THE PRESIDENT'S CHILDREN": Well, it's not going to be normal at all, but the object is to try to make it as normal as possible.
MARCIANO: Well, Barack Obama has said that that's the one thing that he wants to do. These girls are little bit younger than when Chelsea started school. She was about 12. These girls are I think 10 and 7. Is that going to be an advantage for them? Plus, the fact that they're two sisters -- two siblings going to the same school, maybe a team effort to help them along?
WEAD: Yes. The fact that they're sisters will be an advantage. Many of the children of the presidents I interviewed were amazed at how Chelsea Clinton was able to negotiate, navigate these waters all by herself. And they said if they hadn't had each other, they didn't know how they would make it. So Malia and Sasha having each other will make a difference.
MARCIANO: Tell us about this school. It seems to be one dignitarie's children go to. The vice president, I think, his grandchildren have gone there. Give us a little bit of insight about the school.
WEAD: Yes, this will be very important. The fact that the school has an institutional memory of dealing with presidential children, and perhaps even more importantly the secret service has experience at this school. That would make a big difference. They've been around a long time, even one of Theodore Roosevelt's kids attended this school. And the Nixon girls at various times attended this school. So that makes a difference.
MARCIANO: What's going to happen today? I mean, how far back? Do the secret service hang out? Are they hanging out in the hallways? Give us a picture as to what school will be like for these girls?
WEAD: Well, it's -- the security is paramount. And this is a very popular president. So it's going to be a bit of a circus. It won't be the same experience it was for Amy Carter, who went to a public school. Won't be that kind of a circus, because it's a private school. It will be under control.
It will be stressful for the girls. But the children this age look to the parents to get the cue. Are we victims here? Are we having fun? And the President-elect and Michelle Obama have made it very clear, we're having fun. And I think the girls are picking up on that signal. So it will be a little less stressful than it otherwise would be.
And the fact that the president, they're actually making three moves to the Hay-Adams, to the Blair House and then the White House. That shows the kind of commitment they're making to these children, and that's going to be very important for Malia and Sasha.
MARCIANO: You said they're having fun. It seems their interaction with the media on the campaign trail, the girls certainly were having fun. Does it behoove the president-elect to continue to fill the girls out in the media?
WEAD: Well, the experience has been with some exceptions that the most successful of presidential children are kept away from the media and out of the limelight and in some cases even out of Washington during the White House years. And that's a trend that's broken occasionally and there are exceptions, but it's pretty remarkable.
Jackie Kennedy studied presidential children and came to that conclusion. And the Bush family has adhered to that over the years. So I think eventually the Obamas are going to be pretty careful.
There's political advantages in getting the kids out there. The American people are going to demand it because they love this family, but they'd be wise to follow that pattern.
MARCIANO: I'm guessing they'll be pretty popular in school. They shouldn't have too hard a time making friends.
Doug Wead joining us, an expert on presidential children. Good morning to you.
WEAD: Thank you. Thank you.
MARCIANO: Kiran?
