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American Morning
Israeli forces pounding Gaza on several fronts; Obama accepts Richardson's withdraw from Commerce cabinet position; $300 billion in tax cuts included in proposed stimulus package; Obama's daughters start school in DC today
Aired January 05, 2009 - 07:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KIRAN CHETRY, CNN ANCHOR: Well, it's a minute after 7:00 here in New York. A look at the top stories now.
Israeli forces are pounding Hamas militants in Gaza by land, sea and air. Israeli troops are now dug in on the edges of Gaza city.
Israeli defense minister Ehud Barak says the offensive will continue until Israel achieves its objectives of "peace and tranquility" for residents of southern Israel. People there are still being bombarded by Hamas rocket fire. Officials say more than 500 Palestinians have been killed and 2,000 wounded since the fighting began.
Well, an autopsy is scheduled today for John Travolta's 16-year- old son. Jett Travolta was found dead at his family's vacation home in the Bahamas Friday morning. Officials say two specialists will be used for the autopsy to guarantee a thorough analysis into Jett's death. The family hopes to have the body transported back to Florida for a funeral later this week.
And President-elect Barack Obama now searching for a new commerce secretary nominee. New Mexico Governor Bill Richardson withdrew his name from consideration. He gives them a federal investigation into a state contract awarded to a campaign contributor.
Richardson says he and his administration acted properly but that the ongoing investigation could delay his confirmation. Obama says he accepted Richardson's decision with deep regret.
And back to our top story now. The violent clashes between Israel in Hamas militants in Gaza, the ground combat intensifying as Israeli forces push deeper into Gaza. Despite the pounding, Hamas continues to launch dozens of rockets into southern Israel. Gaza city residents are living right in the line of fire.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: We can see tanks coming closer and closer into Gaza to all places just by the shore. We're not really far from the shore so we can hear the bombs and the blasts every other minute. Gaza is pretty much in blackout. We haven't had power for the last few days.
UNIDENTIFIED FEMALE: What are people doing to stay safe? UNIDENTIFIED FEMALE: There's only so much that you can do. I mean every building, every area is at any point to be bombed or threatened with an attack at any moment. And so those who live in the areas by the borders have left their homes a few days ago.
(END VIDEO CLIP)
CHETRY: CNN chief international correspondent Christiane Amanpour is at the Gaza border. And, Christiane, bring us up to speed on what is happening right now?
CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: Well, in terms of the air bombardment that Israel has now had for the last ten days, this is one of the quietest days. There have been artillery outgoing we've heard from here and there's obviously still action on the ground inside the Gaza Strip. But it is quieter than it has been over the last several days and this does coincide with an upsurge in diplomatic activity with the president of France coming here.
The former British Prime Minister Tony Blair here already and other delegations trying to seek an end to this situation. The Israeli government has made it clear that they are not interested in an immediate cease-fire, just for the sake of stopping the action. They want to continue and they say Tzipi Livni, in an exclusive interview with me, has told me that they believe they are affecting Hamas's capability with its rocket fire and they're working on downgrading Hamas's motivation. But as she said to me, this is not all that they want. They want to make sure that the situation of weapons coming in is resolved in the future.
(BEGIN VIDEO CLIP)
TZIPI LIVNI, ISRAELI FOREIGN MINISTER: Another important issue to address, not only by Israel but by the international community is the issue of the smuggling of weapons. Because when we are targeting and affecting their ability, if the day after the operation we see more field of weapons coming to Gaza Strip from Egypt, the meaning is that we're going to face in the future the need to address another problem. So the idea is to stop future rearmament of Hamas and this needs to be handled on the Egyptian/Gaza border.
(END VIDEO CLIP)
AMANPOUR: Meanwhile, as the mighty Israeli army, air force and naval bombardment continues trying to route out this guerilla force really in Gaza city, there are a huge number of casualties, including civilian casualties. And Tzipi Livni herself has said that she expects the street in this neighborhood, in the Arab world and around the world to stop putting pressure on Israel to stop its incursions.
Back to you.
CHETRY: You know, they seem to when we heard from the Israelis try to lower expectations a bit about the goals and also on just how long this could go on, is there any sense of whether this offensive is going to happen for days, for weeks or for even months?
AMANPOUR: Well, from the very start, as you say, they did lower expectations, different to what they had done back in 2006 when they implied and indicated that the fight with Hezbollah would be over swiftly.
This time from the very beginning, they've said it's not going to be easy and it's not going to be swift. Most people think it's going to go on at least for the next several days and they hope to have some diplomatic activity kick in. But again, it's going to be shaped around not just ending the military confrontation but in trying to figure out how to make sure that the Gaza border with Egypt is secure and whether they put international monitors and reintroduce eventually the Palestinian authority on that end. So there's talk about how to do that and open humanitarian corridors as well.
CHETRY: All right. A lot of challenges certainly. Christiane Amanpour on the Gaza border for us this morning. Thank you.
MARCIANO: And breaking political news this morning. President- elect Obama is planning to include $300 billion in tax cuts as part of a massive economic recovery plan. Those tax cuts would benefit individuals and businesses.
CNN's Kate Bolduan is live for us in Washington, D.C., where Obama meets with congressional leaders today. As he lands there, Kate, certainly hitting the ground running.
KATE BOLDUAN, CNN CORRESPONDENT: I would say so. There are new details of the Obama recovery plan, as you mentioned, are emerging this morning. According to an aide to the transition, the president- elect is crafting a $300 billion tax cut for workers and businesses to be included in that plan. It appears in an attempt to try to win over more Republicans.
Many concerned the plan is focused too much on government spending. All of this 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.
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 --
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.
BARACK OBAMA (D), PRESIDENT-ELECT: 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.
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 looks 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.
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 with key lawmakers today -- Rob.
MARCIANO: Busy, busy, Kate Bolduan live for us in Washington. Thanks, Kate.
BOLDUAN: Of course.
CHETRY: So could there be a third President Bush in 2012? Former President Herbert Walker Bush telling "FOX News Sunday that he thinks his son Jeb could have a chance.
(BEGIN VIDEO CLIP)
GEORGE HERBERT WALKER 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: Jeb Bush, a former governor of Florida, is also considering a run for Florida Senate seat in 2012. The elder Bush also went on to talk about his current son who's president, saying that there were some things he clearly deserved criticism for, but the idea that everything that's a problem in this country should be on his shoulders, I don't think that's fair.
MARCIANO: And just what killed John Travolta's son? We're live with the latest developments on that story.
And following a brutal year for stock markets, 2009 kicks off with a strong start. On Wall Street, traders often say as January goes, so does the year. So could Friday's rally be a positive sign of things to come? Ali Velshi takes a look ahead.
Ten minutes after the hour.
(COMMERCIAL BREAK)
MARCIANO: Back in black pinstripes. I like this, yes. Look at the welcome you get.
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: I'm going to stay all week. You guys got songs for the whole week?
CHETRY: Yes, we can go on and on.
VELSHI: Oh, good, good. It's good to be back.
MARCIANO: Ali Velshi here with a check on business. Markets up big on Friday?
VELSHI: Yes, really big. And there's, you know, we're so desperate for good news that we've trucked out this old saying that says as January goes so goes the market. In fact, two-thirds of the time, 60 out of the last 90 years, as January goes, so goes the rest of the year.
Now, no one is quite sure why, what the science is behind that thing. But no other month in the year actually is as consistent as January is in terms of predicting how the year goes. So that's fantastic news.
I should tell you though, we only have -- we've only had one trading day in January so far, but it was a good one. Take a look at Friday how January started on the markets.
The Dow was up 2.9 percent. The S&P 500 up 3.2 percent. The Nasdaq up 3.5 percent. In some cases, this was because the end of the year was an opportunity for people to sell their stocks and take a tax loss if they had one and in many cases people were getting into stocks with new money on Monday.
So again, you're not to read anything into one day of trading, but if January turns out to be not too bad and if that two-thirds of the time thing comes true, we may have a better year. It's probably not a lot of high science to think that 2009...
CHETRY: Right. Put it all on black.
VELSHI: ... is going to be a better year than 2008. The point here is that people should go back to their principles of investing and diversify their money and be in the market. Every time we've had a major decline in the past, it has resulted in a strong year generally speaking the year afterwards. So while everybody has got their science about why this isn't going to be the case, I'd rather bet with history and be in there.
We're taking your e-mails and calls today and we'll be answering some of your investment questions.
MARCIANO: Yes, and you'll be blogging.
VELSHI: Yes.
MARCIANO: As a matter of fact, we're going to go to that and later on we'll take a bite just a big --
VELSHI: Just a big pimping session.
MARCIANO: For Ali. If you have questions on how to survive the financial crisis, you can ask Ali. He's blogging all morning long. Go to CNN.com/am and ask Ali your questions, and we'll answer them either on the air or on the letter (ph).
CHETRY: Thanks, Ali.
VELSHI: OK.
CHETRY: Well, still ahead, after the sudden tragic death of John Travolta's son, there are new questions about the seizure and the fall that may have killed the teenager. The latest on the autopsy that's happening today.
It's 16 minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: Well, today we could learn just what killed John Travolta's son. Two pathologists in the Bahamas today are going to be assisting in Jett Travolta's autopsy.
Alina Cho has been following the developments for us and joins us this morning. Really sad time for the Travolta family.
ALINA CHO, CNN CORRESPONDENT: Just sudden passing, just so heartbreaking for anybody who has been through that, they know.
Good morning, Kiran. Good morning, everybody.
That autopsy is expected to happen today. We could learn a cause of death as early as tonight. Now, John Travolta and Kelly Preston released photos of their son Jett last night.
The 16-year-old's body was found Friday morning in a bathroom at the family's home in the Bahamas. The teen apparently had a seizure and hit his head on the bathtub.
Now, Travolta and Preston have said Jett got very sick at a young age, at age 2, and was diagnosed with something called Kawasaki syndrome. The family has blamed the illness on household cleaners and Travolta admitted obsession with keeping Jett's space clean. Last night on "LARRY KING LIVE," a reporter who covers the family said seizures were common.
(BEGIN VIDEO CLIP)
LARRY KING, HOST, "LARRY KING LIVE": Carlos Diaz, do we know how often Jett had seizures?
CARLOS DIAZ, CORRESPONDENT, EXTRA: It was -- they were prevalent in his life. You know, they were common.
KING: Common knowledge?
DIAZ: It was common. It wasn't something -- and the Travolta family took great lengths to make sure that he was well taken care of.
You know, there was a baby monitor in his room at all times, so they knew how he was sleeping. There was a chime in the bathroom, so they knew if he got up in the middle of the night. He had two nannies.
(END VIDEO CLIP)
CHO: Now critics have charged that Kawasaki syndrome is rare in someone over the age of 8. Jett, remember, was 16 years old and some charge that Jett was actually autistic.
Now, John Travolta, as many people know, is one of the most famous advocates of the Church of Scientology which disapproves of drug and therapy treatment. The family has said that Jett was spectacularly supervised and just this morning the "New York Post" quoting an ambulance driver says Travolta held Jett's hand and desperately pleaded with him to live inside the ambulance.
Now once the autopsy is completed today, Jett's body will be flown to Florida where the family has a home for burial. Of course, John Travolta and Kelly Preston also issued a statement last night saying Jett was the most wonderful son that two parents could ever ask for and lit up the lives of everyone he encountered. We are heartbroken that our time with him was so brief.
And those photos that you're seeing there, the family just released those last night. Just heartbreaking to look at that. And Travolta, you know, and Jett were very, very close.
Interestingly enough, Kiran, the family had actually invited some 60 people to the Bahamas to have a new year's celebration as you know. And, of course, many are saying now that those friends are badly needed now.
CHETRY: I still remember it was years ago that Kelly Preston went on various national television shows talking about the importance of using green products and natural products to clean.
CHO: Of course.
CHETRY: And I remember her at the time saying that they felt the cleaners had almost cost their son his life.
CHO: That's right. In fact, Kawasaki syndrome, some have said can be brought on by household cleaners, fertilizers and so forth. And John Travolta has said, has admitted that he was obsessed with keeping his children's space clean. They believe that a detoxification program through the Church of Scientology actually help cured him.
CHETRY: They also have an 8-year-old daughter Ella.
CHO: Yes, they do.
CHETRY: All right. Alina, very sad situation for that family. Our hearts go out to them. Thanks, Alina.
CHO: You bet.
CHETRY: Obama and the crisis in the Mideast.
(BEGIN VIDEO CLIP)
ED ROLLINS, REPUBLICAN STRATEGIST: American foreign policy towards Israel has been very consistent.
(END VIDEO CLIP)
CHETRY: So far, he's quiet on the violence despite fresh talks from Hamas.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Mr. Obama, your beginning is not good.
(END VIDEO CLIP)
CHETRY: Two weeks from taking power, taking heat from both sides. You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
MARCIANO: Just in at CNN, the sprawling new U.S. embassy in Baghdad is officially open for business. Embassy officials actually moved into to the $700 million facility two weeks ago but celebrated its opening with a flag raising ceremony today. U.S. Ambassador Ryan Crocker says it marks the start of a new era for Iraq and U.S.-Iraq relations.
CHETRY: Well, elsewhere in the Middle East, breaking news this morning. Israeli forces pushing deeper into Gaza now reportedly surrounding parts of Gaza city. Israel is saying it is determined to strip Hamas of weapons within striking distance of southern Israel.
Now, that as a backdrop, President-elect Barack Obama certainly has a full plate as he gets down to work in Washington today. And joining me is Republican strategist and CNN political contributor Ed Rollins, as well as Democratic strategist Lisa Caputo. Thank to both of you for being with us.
LISA CAPUTO, DEMOCRATIC STRATEGIST: Good morning.
CHETRY: So, you know, he starts off already being criticized by Hamas, Ed, and for remaining silent on the crisis. Meantime, there are some Israelis who are concerned that perhaps he sympathizes with the Palestinians more than we've seen past presidents. So what should he do?
ED ROLLINS, CNN CONTRIBUTOR: He should do exactly what he's doing. He's putting his team together. He's getting ready. In two weeks, it will be all on his desk.
Hamas and everybody else are discovering very quickly that American foreign policy is pretty consistent whether it's a Democrat or Republican. Our position is that Israel is our ally, our friend, and we'll do everything we can to be supportive of them, especially when terrorists have been bombing them for a substantial period of time.
CHETRY: And, Lisa, are we going to see a lot of this too, the secretary of state, most likely Hillary Clinton?
CAPUTO: Oh, I would imagine that that's -- I know it's right on her plate right now. And I think that you'll see a team of Middle East envoys being put together by the president-elect and his transition team.
CHETRY: Perhaps former President Bill Clinton?
CAPUTO: I don't know about that, but I think that there are certainly a lot of capable people out there. Somebody like Dick Holbrooke, for example, who is very well versed in these issues, I think will play a major rule. So he'll tap a lot of expertise that have been used in prior administrations.
CHETRY: Are we going to see the focus be turned, whether Barack Obama wants it to be or not on foreign affairs and this ongoing situation in the Middle East right now? Or are we going to see more of a domestic focus?
ROLLINS: It's a duel track. I mean, there's no way you can walk away when there's a war going on in the Middle East. You know, we have two fronts that obviously we're still very involved in. But the Israelis are still encamped in Gaza, which I presume they will for the foreseeable future, you basically have to have some sort of diplomatic at the same time you've got to be moving forward on the economic front.
CHETRY: And, Lisa, speaking of that, we're hearing about Obama's recovery plan. Now "Wall Street Journal" has some details this morning. $300 billion potentially in tax cuts. Some of this going to everyday people keeping with the campaign promise about middle class tax cuts, but also a large amount possibly in debt forgiveness or in being able to write off some taxes with big businesses.
CAPUTO: Right.
CHETRY: Is this -- you know, in a time that we're facing right now where we're looking at possibly spending billions on infrastructure projects and other things, is a tax cut the best idea?
CAPUTO: Well, as the vice president-elect said yesterday on one of the Sunday shows, you know, we've got to stop the bleeding and we need to create jobs and we need to prevent jobs from going away. And so what the president-elect is trying to do is jump start the economy. And that comes with stimuli, meaning that you have to make investments, you have to spend.
So he has this making work pay credit, which will help I think jump start the economy which involves these tax breaks. And don't forget, tax breaks will then again account for capital investment. So these are the kinds of things you need to do to jump start the economy.
And again, I think you have to be strong economically at home to be a strong player abroad in your foreign policy. They're interconnected as Ed said.
I also think in terms of the Republicans jumping up and down perhaps about wanting to have some sort of, you know, question around where is the revenue? The revenue comes later. You have to look at this short term and long term, and I think you'll see them look at options like income tax and the like later on after they get the company moving -- the economy moving.
CHETRY: I'm not even going to ask Ed whether he likes the taxes, because I want to be able to ask you about Richardson. New Mexico Governor Bill Richardson withdrawing his nomination as commerce secretary yesterday. He says it's because of this ongoing investigation, possibly pay to play allegations, I guess.
ROLLINS: Well, obviously what's going in Illinois today with the governor there about to be indicted, I think it's better to happen today than three weeks from now or four weeks from now. You know, where the president can certainly choose another commerce secretary it's finding another major Hispanic to put in his administration is very, very important.
CHETRY: But when we talk about this huge vetting process that was taking place --
(CROSSTALK)
ROLLINS: It's always about how forward you are in disclosure. And my sense is Bill Richardson argued he's been confirmed twice before as U.N. ambassador, secretary of energy, he ran for president. I don't think he told him everything he needed to tell him.
CAPUTO: Maybe the Obama transition team said as much on conditions of anonymity that he wasn't as forthcoming and that's a shame. I think, though, I would slightly disagree with Ed. Let's remember that the president-elect has two Hispanics in his cabinet. He's got Ken Salazar and he's got Hilda Solis. So I don't think the pressure is on for him necessarily to appoint a Hispanic. I think he should appoint somebody who can withstand the test of being fully vetted and who will bring great credentials to the economic team.
ROLLINS: There's no question that Richardson is the foremost Hispanic officeholder in the country. And I think to a certain extent no disrespect to the other two, but that community will be wanting more.
CHETRY: All right. Ed Rollins and Lisa Caputo, great to see you as always. Thanks.
CAPUTO: Nice to see you.
CHETRY: Rob?
MARCIANO: Kiran, just about 30 minutes after the hour now. Here's a check of our top stories.
It looks like we may finally have a winner in the Minnesota Senate race. The state's canvassing board is expected to declare Democratic challenger Al Franken the winner. Minnesota's secretary of state tells CNN Franken defeated Republican incumbent Norm Coleman by 225 votes. Coleman is expected to challenge the outcome in court.
This morning, charges that politics played a role in the drug investigation into Sherry Johnston. She's the future mother-in-law of Sarah Palin's daughter. According to the "Anchorage Daily News," the union representing Alaskan state troopers alleges among other things, the search warrant for Johnston was delayed because of the November general election. The head of the Alaska state trooper said the probe case was conducted just as fairly and as normally as any other investigation.
And authorities in Washington are putting together what appears to be the largest security operation ever for a presidential inauguration. D.C. police plan to have 8,000 officers on patrol. The military will provide more than 11,000 personnel and the U.S. park police says will rely on a force of about 1,000 officers to keep a watchful eye. Tourists and commuters who are in Washington during the inauguration are being told to brace for long lines and crowded subway and buses. Returning to breaking news right now. Hamas rockets are falling in Israel. And Israeli forces are driving deeper into Gaza. Israeli forces reporting taking out dozens of Hamas targets including a rocket launcher in a mosque that was being used to store weapons. And the Middle East showdown is heating up just as President elect Barack Obama gets down to work in Washington. So far, he's been quiet on the violence.
Joining me now from Washington, D.C. is Jim Acosta. Jim, any word that we'll have word from the President-elect on this subject?
JIM ACOSTA, CNN CORRESPONDENT: Not yet, Rob and that silence is speaking volume. Barack Obama is on the ground in Washington this morning. Nearly two weeks from being sworn in as president. While he's had plenty to say about almost every major issue during his transition, the President-elect is avoiding any comments on Gaza.
(BEGIN VIDEOTAPE)
ACOSTA (voice-over): On the same day Israel launched its ground assault on Gaza, Barack Obama released a weekly web and radio address that focused solely on the economy. No mention of the violence in the Middle East.
BARACK OBAMA (D), PRESIDENT-ELECT OF THE UNITED STATES: Economists from across the political spectrum agree that if we don't act swiftly and boldly, we could see a much deeper economic downturn that could lead to double digit unemployment.
ACOSTA: Pressed for comment on the crisis, the Obama transition team returned to its line, "there is one president at a time." As for that president, his deputy United Nations ambassador made current U.S. policy all too clear.
ALEJANDRO WOLFF, U.S. DEPUTY AMBASSADOR TO THE U.N.: We're not going to equate the actions of Israel, a member state of the United Nations with the actions of a terrorist group Hamas.
KHALED MESHAAL, HAMAS LEADER (through translator): Mr. Obama, your beginning is not good.
ACOSTA: Hamas leaders have taunted Mr. Obama, accusing him of ducking the issue, noting the president-elect's willingness to condemn last month's terrorist attacks in India and his decision to stay silent on Gaza. Until the president's swearing in, other Democrats are doing the talking like Senate Majority Leader Harry Reid who sanctioned the Israeli ground offensive.
U.S. SEN. HARRY REID, MAJORITY LEADER: I think what the Israelis are doing is very important. I think this terrorist organization Hamas has got to be put away.
ACOSTA: Also quiet is incoming secretary of state Hillary Clinton, whose husband the former president has been mentioned as a possible Middle East envoy. Mrs. Clinton is still yielding to Condoleezza Rice. CONDOLEEZA RICE, U.S. SECRETARY OF STATE: We need a ceasefire that is durable and sustainable.
ED ROLLINS, REPUBLICAN STRATEGIST: I think what Hamas will discover very quickly is that American foreign policy towards Israel has been very consistent whether it's a Democrat or Republican administration.
(END VIDEOTAPE)
ACOSTA: And Hamas just might get that chance if the fighting is still raging in Gaza on the same day Barack Obama takes the oath of office, Rob, and that is possible.
MARCIANO: Certainly possible the way things are going now. Jim Acosta, thank you. Live from Washington, D.C. Kiran.
ACOSTA: You bet.
CHETRY: Thirty-four minutes after the hour. Time to fast forward to see what stories will be making news later today. Congress begins its investigation into money manager Bernard Madoff's alleged $50 billion ponzi scheme. The house financial services committee wants to know how the scheme went undetected by federal regulators.
Meanwhile Wall Street begins the week at a two-month high. Investors hoping that the market can build on Friday's rally when the Dow Jones snapped a four week losing streak closing above 9000 for the first time since early November. Overnight, Asian financial markets closed higher and right now, Dow futures are up just a point.
And the major automakers released their sales figures for December and it's expected to be pretty bad. Analysts predict U.S. sales in December may have dropped 40 percent. GM and Chrysler did get some help last month in the form of a federal bailout.
Also Apple's final Mac World Expo kicks off today in San Francisco. Some 40,000 developers and consumers are expected to attend the 25th event which runs all week. Apple CEO Steve Jobs is not scheduled to appear though. There has been speculation that Jobs is ill. Rob.
MARCIANO: Kiran, President-elect Barack Obama in Washington today. He is meeting with congressional leaders about the economy. Coming up, we'll take a look at his plan for your money.
And first daughters' first day of school. One in second grade and the other in fifth. What Sasha and Malia Obama can expect at their private school today?
It's 35 minutes after the hour.
(COMMERCIAL BREAK)
(MUSIC PLAYING) CHETRY: Well, forget about government bailout, Jon Bon Jovi is stepping up to help Senator Hillary Clinton with her financial crisis. The musician's is going to be headlining a fund-raiser in New York to help Clinton pay down her remaining debt from her presidential bid. Tickets for the event range from $75 to $1,000. As of last month, the Clinton campaign still owe $6.3 million. If I remember correctly, Rob, your sister is a huge fan, right?
MARCIANO: Well, who isn't? Come on. I think everybody in this room -
CHETRY: I mean a mega Bon Jovi fan.
MARCIANO: Yes, she was there in Central Park when they gave a free concert. They look and sound good to their credit.
All right. Kiran, President-elect Barack Obama hitting the ground running for sure this morning with a little more than two weeks before he takes the oath of office. He's already in Washington. And today, he'll meet with congressional leaders to try and hash out a stimulus package to jump start the economy.
Well, Jeffrey Sachs is an international economist and he's with us this morning to kind of break this down a little bit. Word this morning, $300 billion of this almost $1 trillion stimulus package could come in the form of tax cuts. I mean, for a Democratic elected president that seems more like a Republican strategy. Why do you think he's doing that? Do you think it's a good idea?
JEFFREY SACHS, INTERNATIONAL ECONOMIST: I think it's a surprise first of all. And I think they're giving away money they don't have. The budget deficit is already huge. Probably running at about $750 billion a year. Now they're talking about increasing spending and we need it on the roads, on the bridges, on the broadband, on the health reform, on state and local government. But at the same time, they're saying OK let's cut taxes more.
So the gap, to my mind, is going to open up to levels that are going to be unmanageable out in future years, my big question is do they have a plan that they're going to show us, not for the next six months or a year but for the next five years that show that the books really closed because it doesn't sound to me like they do yet.
MARCIANO: Well, President Bush tax plan was spread over 10 years. His first two years was around half of what this is. So this is even a greater tax cut than President Bush's plan. When people think about deficit, what does it mean for the American people when you talk about a deficit, when you talk about spending all these money, what does it mean for the people back home?
SACHS: Well, remember the Bush tax cuts got us into this ditch, and so to magnify that right now is a little bit surprising.
MARCIANO: Well, there's other issues but it certainly didn't help. SACHS: Well, we need to have some deficit spending because with the collapsed economy, revenues automatically are down. But we've neglected fundamental spending. This is what President-elect Obama has been saying on the roads, the bridges, the broadband, the health system, and so on. So we're going to have to be spending more just to fix the economy.
And where is that money going to come from? Not this year, but next year, the year after, the year after. If they gut the revenues of the federal budget, we'll be looking at deficits $1 trillion plus for years to come. Somebody has got to loan us the money. What we'll see if we do that is a weakening dollar and an international crisis eventually.
So I'm worried about the government building up debt out of control and my question to all of those who are negotiating this is what's the plan for getting this under control, not just for the next six months to pass something but to really get the budget under control?
MARCIANO: They certainly want to pass something and they want to do it quickly, and likely it won't be in the same form it is now. But timeline guess now is probably mid-February this thing actually gets through Congress. Is that too late?
SACHS: I think that makes sense given that we are talking about $1 trillion here and $1 trillion there. That's not something you could do in a few days nor would you want to do in a few days, but the tensions right now are do something quick, do something short-term. But if they expand and open up this hemorrhaging of the budget, we're going to look down the road a year or two from now and say what were we thinking about giving away revenues that we didn't have.
MARCIANO: Well, let's look down the road maybe a little more positive. The Dow hit 9000 on Friday. We've been saying as January goes, so does the market. Obviously, we're on one trading day into that. What do you think we'll see with the stock market this year?
SACHS: Well, everyone wants the best. But this is an economy that still is in a downturn, we're going to see lots of unemployment in the months ahead.
MARCIANO: The stock market is a leading indicator. We're up substantially.
SACHS: The stock market is pretty manic is what we've learned. It goes up and down. It's not so clear what it's an indicator of except mood swings. What we need to do now is think in the medium term in the next few years, how are we going to get out of this, not by a short-term boost, but by a long-term plan that makes sense.
MARCIANO: Jeffrey Sachs, thank you very much for your insight.
SACHS: Pleasure.
MARCIANO: It is 42 minutes after the hour. We'll be right back. (BEGIN VIDEOTAPE)
MARCIANO (voice-over): First daughters' first day. Sasha and Malia Obama start their new school today.
UNIDENTIFIED FEMALE: The Biden grandchildren go there. They're very, very good about security.
MARCIANO: The Quaker connection. And what the little Obamas can expect on day one. You're watching the most news in the morning.
(END VIDEOTAPE)
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CHETRY: Welcome back to the most news in the morning a live picture from Dallas, Texas, this morning. Oh, look at that Rob. Isn't that neat? It's like new year's all year long there.
MARCIANO: Well, happy new year, Dallas.
CHETRY: 35 degrees. Lots of rain, even some sleet expected today. It will eventually taper off, the high in Dallas today, 57 degrees. Right now, we're going to check in with Reynolds Wolf since we got Rob up here. Reynolds is doing the duties down in Atlanta this morning. Checking out extreme weather for us. Hello.
REYNOLDS WOLF, CNN METEOROLOGIST: Hello, you know, you guys started off with Dallas, and just north of Dallas, along parts of i- 35, you may be dealing with some freezing along some of the overpasses, but not a problem as you you're your way through the afternoon hours. Certainly something to watch out for.
Also we're seeing some of that freezing rain through portions of Arkansas, back into western Carolina, back into Virginia, you might have some of those problems, too, and in the Pacific Northwest, another storm system is ramping up from the Willamette Valley northward through Portland and back into Beaverton, even into places like say Seattle, you might have some issues as we make our way through the day.
So the western end of the country, it's going to be cold for you with a good chance of snowfall. But the eastern half, look out for that freezing rain and look for some scattered showers in parts of the southeast. Very quick check on your temperatures, Kansas City, the high for the day 41 degrees, 32 in Chicago, 46 in New York. Nashville, 38 degrees.
And also Kiran, at this time, we've gut a flash - we have flood watch that is in effect through parts of central Tennessee including Maury County, Tennessee. That's the home of the Jack Daniels Distillery. Now, there's nothing wrong with whiskey and a little bit of water but today it might be a little bit of an exception.
CHETRY: Of course you pointed that out and noticed it. It's going to ruin your Friday night now. WOLF: Exactly.
CHETRY: Reynolds, thanks.
MARCIANO: Well Israel pounding Gaza this morning and CNN is right there on the front line. Christiane Amanpour and Anderson Cooper are live along the Gaza border, coming up live in just a sec. It's 47 minutes after the hour.
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CHETRY: Just in to CNN, new video of Barack Obama's motorcade taking his two daughters to school. Today is their first day of classes at Sidwell Friends School in Washington, D.C.. The Obama's moved to Washington over the weekend so that their daughters Sasha and Malia could start their private school on time.
CNN's Joe Johns takes a closer look at the prestigious Washington private school.
(BEGIN VIDEOTAPE)
JOE JOHNS, CNN CORRESPONDENT: Sidwell Friends found in 1883 by a Quaker teacher is among the elite private schools in Washington.
Guest: 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 has 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 in 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."
UNIDENTIFIED MALE: 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.
UNIDENTIFIED FEMALE: 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 in be fifth grade but Sidwell can afford to ask top dollar.
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 belt. So today in a way they're getting a head start on their dad. Rob and Kiran.
(BEGIN VIDEOTAPE)
CHETRY (voice-over): Raising cash for the big bash. The inauguration is the hottest ticket on earth. See the unusual new way they're raising money for the mega party. Plus, what do you war to an event like this.
UNIDENTIFIED FEMALE: I'm very attracted to color because it really lifts our spirit.
CHETRY: His tux, her designer. Our inauguration fashion preview. You're watching the most news in the morning.
(COMMERCIAL BREAK)
MARCIANO: Well it's the party of all parties. The hottest ticket in town. A chance to witness Barack Obama's historic inauguration on January 20th. Tickets are hard to come by, but 10 winners of an essay contest being sponsored by the presidential inaugural committee will get a chance to experience the event firsthand but is that prize really free?
Joining me now to discuss that and other party plans is Linda Douglass, chief spokesperson for the presidential inaugural committee. Good morning, Linda. This is a great idea, fun idea, but you know what are we looking at here? What do you expect that people to say in order to get that prize ticket?
LINDA DOUGLASS, CHIEF SPOKESPERSON, PRESIDENTIAL INAUGURAL COMMITTEE: Well, you know, we've actually had the ability to look at some of these essays. They really are fascinating. It is fascinating to see how much hope people have for what kind of change President- elect Obama and Vice President- elect Biden are going to be bringing to Washington.
What this means is that 10 people who will write essays that will be selected from many, many, we're not giving a number yet, but we've had a very, very energetic response, will be given air fare and lodging in Washington and they will be invited to attend the swearing in, the parade and to go to one of the balls.
This is part of our effort to make this one of the most open and accessible and inclusive inaugurations in history.
MARCIANO: But you're also doing this -
DOUGLASS: They will be able to bring somebody with them, so we will be bringing 20 people to Washington to witness the swearing in, the parade and to come to a ball.
MARCIANO: You're also asking participants to make a donation. How much do you expect to raise?
DOUGLASS: Well, it's hard to say. You don't have to make a donation.
MARCIANO: So you cannot make any sort of donation and if they - if they don't donate anything and somebody else donates $500 those two essays are going to be looked at equally?
DOUGLASS: Absolutely. What we're looking at are two things. We're looking at diversity. We want certainly geographic diversity for the group that we assemble, the group that is going to be brought to Washington. And, secondly, it's really the strength of the essay. So we are looking at all of those things. And the competition, the opportunity to attend the inauguration will close out on the midnight on January 8th. So for anybody who still wants to take the opportunity to go to www.pick2009.org and submit an essay, you might still be considered to attend the swearing in of the new president.
MARCIANO: Well, get your writing skills warmed up. How much money are we spending on the party itself? And, you know, people might feel a little bit uneasy about throwing this elaborate bash, spending all these money when a lot of Americans are hurting in this financial crisis.
DOUGLASS: Well there certainly is, of course, a cost associated with putting on an inauguration that is the most open and accessible in history. We're now seeing this morning that the premiere inaugural ball on the night of the inaugural ball on January 20th, is going to be a neighborhood ball. The tickets will be either very low cost or free altogether. This will be for folks all around the area, people who come into town and people in the Washington, D.C. area to participate in a neighborhood ball.
In addition, we're going to have an interactive feature, a web casting feature where we will be linking up people in their neighborhoods and communities encouraging them to celebrate this inauguration in their own way in their communities. Text messaging, web casting and we will releasing more of the interactive details later on this week. But this is the premiere event, again another great attempt to open this up to more members of the public than ever before.
MARCIANO: Let's talk logistics. What are the estimates now of the public that's expected to attend this and what are you doing to make sure things go smoothly?
DOUGLASS: Well, you know, we expect a big crowd, as you certainly have been hearing. We don't really have any idea how many people are going to be coming to Washington. We've been relying on the law enforcement authorities to put those kinds of numbers out. One of the things we've done to try to accommodate more Americans so that they can feel part of the swearing in is we worked with the federal and local authorities to open up the National Mall for the first time.
That's all the way from the base of the Capitol to the Lincoln Memorial where people can gather together for free at a vantage point that's within the side of the Capital and watch the swearing in on these big jumbotrons that we are installing. So that again is part of this effort to just make this as open and available to the public as ever been done by any inauguration before.
MARCIANO: It should be interesting to watch be it there or from your television sets watching CNN at home. Linda Douglass who is one of the many in charge of planning that big party a little over two weeks away. Good luck to you, Linda -- Kiran.
CHETRY: All right.
