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President Bush Unplugged; Roadblocks to Obama's Agenda; Israel Insecure About Iran's Nuclear Agenda

Aired January 12, 2009 - 16:00   ET

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


WOLF BLITZER, CNN ANCHOR: Happening now: new moves by Barack Obama to jump-start the economy on day one in office. But the president-elect keeps being thrown curve balls by Congress, including from some fellow Democrats.
Also, the president of the United States, President Bush unplugged. He's defiant and unusually reflective in his final news conference over at the White House.

And we're standing by for word from the U.S. Senate on the disputed appointment of Roland Burris. The Illinois Democrat could get the green light to claim his seat any minute now. We're watching this story.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Right now, a double-barrelled push by Barack Obama to tap into last $350 billion in federal bailout money as soon as possible. The president-elect's top economic adviser today spelled out priorities for the money and plans for strict oversight, in hopes of reassuring many wary members of Congress.

The president-elect also asked President Bush to formally request the funds, so they will be ready to go when he takes office. Mr. Bush spoke -- Mr. Obama, that is, spoke just a short while ago about the bailout money known as TARP funds after lunch with the president of Mexico.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT-ELECT OF THE UNITED STATES: I called President Bush to trigger the second half of what's known as the TARP program, that's related to financial rescue. I did so because, in consultation with the business community and my top economic advisers, it is clear that the financial system, although improved from where it was in September, is still fragile.

And I felt that it would be irresponsible for me, with the first $350 billion already spent, to enter into the administration without any potential ammunition, should there be some sort of emergency or weakening of the financial systems.

(END VIDEO CLIP)

BLITZER: Earlier, President Bush had signaled to president-elect Obama that he was waiting for him to give the green light on getting the bailout money released, the president's remarks coming during his final news conference in the White House.

He spoke at length about the economy, fears of another Great Depression, and mistakes made during his eight years in office.

Let's go to the White House. Our senior White House correspondent, Ed Henry, is standing by.

It was an unusually reflective President Bush, I should say, Ed.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: That's right, Wolf.

We have heard for months, this president doesn't like navel- gazing, he doesn't like to talk about his legacy, but it was different today. One week from leaving office, he was much looser and he was very eager to defend his legacy, but also trying to show he's serious about trying to root for his successor.

(BEGIN VIDEOTAPE)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Thank you.

HENRY (voice-over): The 45th and final press conference was classic George W. Bush, defiant to the end.

BUSH: And in terms of the decisions that I had made to protect the homeland, I wouldn't worry about popularity. What I would worry about is the Constitution of the United States and putting plans in place that makes it easier to find out what the enemy is thinking, Because all these debates will matter naught if there's another attack on the homeland.

HENRY: But on the way out the door, the president also showed more passion and introspection than usual.

BUSH: I believe the phrase "burdens of the office" is overstated. You know, it's, kind of, like, "Why me?"

(LAUGHTER)

BUSH: "Oh, the burdens," you know."Why did the financial collapse have to happen on my watch?"

It's just pathetic, isn't it, self-pity?

HENRY: That newfound freedom to express what is on his mind was evident in blunt comments about the financial crisis.

BUSH: I readily concede I chucked aside some of my free market principles when I was told by chief economic advisers that the situation we were facing could be worse than the Great Depression.

The actions we have taken, I believe, have helped thaw the credit markets, which is the first step toward recovery.

HENRY: He was also reflective about his mistakes, without really giving much ground. BUSH: You stand by your decisions and you do your best to explain why you made the decisions you made.

There have been disappointments.

Abu Ghraib, obviously, was a huge disappointment, during the presidency.

Not having weapons of mass destruction was a significant disappointment.

HENRY: And there was some advice for his successor about the inevitable low moments.

BUSH: Sometimes the biggest disappointments will come from your so-called friends.

And there will be disappointments, I promise you. He will be disappointed. On the other hand, the job is so exciting and so profound that the -- the disappointments will be clearly, you know, a minor irritant.

(END VIDEOTAPE)

HENRY: Now, the president also spoke movingly about how he thinks there will be a moment when Obama first walks into the Oval Office as president and really feels the weight of the presidency on his shoulders.

But Mr. Bush said he never felt isolated here in this White House, that he doesn't think Mr. Obama will either, noting that he's just a 45-second commute away from a loving wife and two daughters, who will help keep him grounded -- Wolf.

HENRY: Ed, we're also getting word from Barack Obama on what he intends to do involving the detention center at the U.S. Naval base at Guantanamo Bay in Cuba.

HENRY: Officials close to the transition are confirming that, as early as the first week in office, Barack Obama is going to move to close down that military prison at Guantanamo Bay. It's become a huge symbol for critics of the way President Bush has executed the war on terror.

And what is interesting is what is going on behind the scenes. You know that yesterday in an interview with ABC's "This Week," the president-elect seemed to be hedging ever so slightly about how quickly he will move on this. So, now sending the signal that they are going to try to move quickly to close it might be something to try to calm down liberals who are concerned that maybe there's some backpedaling going on.

But it's important to note that, even if an executive order comes out very quickly to close it down, it still could take months to actually physically shut it down to deal with all the legal issues, all the detainees and prisoners that are there -- Wolf. BLITZER: Ed Henry over the White House, thanks for updating that.

And as Ed mentioned, today marks the 45th solo news conference President Bush has held during his eight years in office. That's fewer than Bill Clinton, who had 62 news conferences during his two terms. But it's on par with Ronald Reagan, who held 46 solo sessions with reporters. Franklin Roosevelt, by the way, had more news conferences than any other president -- get this -- 1,023. But that was over the course of his unprecedented four terms in office.

ANNOUNCER: This is CNN breaking news.

BLITZER: All right, I want to go right to Capitol Hill.

Dana Bash, our senior congressional correspondent, has important news on the fate of Roland Burris, who's been designated the next senator from Illinois.

What are you learning, Dana?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Been designated, and he will be seated now.

Now we have official word from the leadership inside the Senate, the Democratic leadership, that they have in fact decided to seat Roland Burris as the junior senator from Illinois and the senator who will take the spot of Barack Obama.

And we don't need to remind our viewers of the incredible drama that has gone on White House regard to this seat and the fact that the Democratic leadership has done a total 180 since just last week when Roland Burris was turned away in the rain and told that he was not able to come in and be sworn in with the rest of the new senators in the 111th Congress.

Now, what we are told and what is clear in a statement from the two top Democrats in the Senate, Wolf, is that he's going to be sworn in barring any problems with Republicans or even some rank-and-file Democrats, but it is expected that he's actually going to be sworn in a real ceremony with the vice president, Vice President Cheney, back up here. And that will happen at some point this week.

So, this is certainly, given the indications we have gotten over the past couple of days, not a surprise, but it's certainly a big turnaround for the Democratic senators, who want this over.

BLITZER: And to underscore that turnabout, I want you to listen, I want our viewers to listen. Only a few weeks ago, the senior senator from Illinois, the number-two Democrat in the Senate, Dick Durbin, he said this.

Listen to this, Dana.

(BEGIN VIDEO CLIP) SEN. RICHARD DURBIN (D), ILLINOIS: I think the Illinois General Assembly should enact a law as quickly as possible calling for a special election to fill the Senate vacancy of Barack Obama. No appointment by this governor under these circumstances could produce a credible replacement.

(END VIDEO CLIP)

BLITZER: All right, so what's changed since then?

BASH: Political problems, big, big political problems for the Democrats with that decision.

And the bottom line is that Rod Blagojevich, the governor of Illinois, called the bluff of the Democratic leadership and pretty much everybody privately agrees that that is the case now.

So, they had to try to figure out a way around it. And basically what happened today, Wolf, and we should tell our viewers, is that lawyers for Roland Burris came here to Capitol Hill. They had a private meeting with the secretary of the Senate and the parliamentarian and they presented some new documentation.

And that is documentation that does have -- one document that has the signature of the secretary of state of Illinois, one that does have the governor. And that is a way that the Democratic leadership was able to get through this political problem. It's basically kind of procedural hocus pocus that they engaged in to tend this.

I have just got to just tell you one quick anecdote. I was talking to a senior Democratic senator this morning about this issue and I was talking to him getting into the elevator. And this senator said, look, when you're dealt a losing hand, you skip to the end. And that is precisely why you have seen this turnabout inside the Democratic leadership. And they're going to seat Roland Burris later this week.

BLITZER: When you are dealt a losing hand, you quickly fold. And that's what they apparently did.

All right, Dana, thanks very much.

Well, let's get used to hearing that name, Senator Roland Burris.

Let's go to Jack Cafferty. He's got "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Bernie Madoff, Wolf, accused of stealing $50 billion from investors, will be allowed to remain free on bail, thanks to the misguided sense of justice of U.S. Magistrate Ronald Ellis.

Well, he's not exactly free. Madoff's under house arrest in his $7 million Manhattan penthouse apartment while he awaits trial. I hope he can suffer through.

Last month, Madoff allegedly confessed to masterminding a $50 billion Ponzi scheme that cost countless victims their life savings and badly damaged many of the nation's charities. Today's decision came after prosecutors charged that Madoff violated the terms of his bail by sending millions of dollars worth of jewelry to family and friends in order to keep it out of the reach of his victims.

Now, people arrested for selling a few bags of dope in New York City are often sent to rot on Rikers Island until their trial. But Bernie Madoff is spending his days in his $7 million penthouse while his lawyers build his defense and his victims, many of them, wonder how they're going to pay their bills. Only in America.

Here's the question: Does accused $50 billion swindler Bernard Madoff belong in jail until his trial?

Go to CNN.com/caffertyfile and post a comment on my blog -- Wolf.

BLITZER: I suppose, if we did a poll on this, the answer would be about 99 percent say yes. But you know what? That's what happens.

CAFFERTY: Yes, the question is a bit of a ground ball. I'm just looking forward to some of the snarky answers we get.

BLITZER: And we will get some good ones, Jack.

Thanks very much.

Democrats have been waiting for more than a decade to have control of Congress and the White House, but could the so-called kumbaya moment be over? The Democrats' rough patch ahead.

And another Senate Republican now waving the white flag -- the climbing retirement rate among Republicans and what it says about the GOP right now.

And new information on a bold push by one of America's closest allies to attack Iran's nuclear facilities.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN breaking news.

BLITZER: And we're just learning that President Bush is asking the network television -- the television networks to preempt whatever they had planned for Thursday night. He wants to address the nation, a prime-time farewell address, as it's being called, to speak to the nation about what it feels like, what it means to him to be leaving eight years in the White House.

We're told he wants to speak from the East Room of the White House. That's one of the big rooms in the White House. And he will have a live audience there with him. And some of the folks whom he's inviting will have dramatic stories of courage to talk about. Thursday night, President Bush wants to have a farewell address to the nation from the East Room of the White House. We will have more on that story coming up.

Let's get back, though, to the president-elect, Barack Obama. He's now only a week and a day away from taking office. And he is finding his welcome to Washington may not be quite as warm as he expected from some of the politicians here in Washington.

Our national politics correspondent, Jessica Yellin, is watching the story for us.

The whole notion of this last chunk of the bailout money, $350 billion, causing somewhat of an element of concern, at least among some folks on Capitol Hill.

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: It really is, Wolf.

Just not that long ago, Obama came to town after his win and he was received like a hero. Every Democrat wanted to be seen with him. They were so excited about party unity, you will remember there was all this talk of passing a stimulus even before he took office, so he could sign it in his first week of the presidency.

But it has been anything but smooth going since he came to town last week. The president-elect's biggest-ticket item, the stimulus, Democrats are resisting his proposal on that. On release of the remaining Wall Street bailout funds that you're talking about, well, Democrats were immediately skeptical.

Then there was the mess-up when the Obama team tapped Leon Panetta to run the CIA, but forgot to tell Senate Intelligence Chair Dianne Feinstein first. She slapped them on the wrist. And then, of course, Congress has created this sideshow over whether Roland Burris should be seated. As Dana has reported, he will be. But Obama could have used all that time and attention paying mind to things like fixing our economic meltdown.

So, there's really nothing fatal here. Democrats are likely to fall in line in the end, but they are making it clear, Wolf, that they will not be a rubber-stamp for Obama's agenda.

BLITZER: You have been speaking to a lot of folks up on Capitol Hill, Jessica, and trying to explain at least some of these initial chilly reception on some of his proposals coming not necessarily from Republicans so much, but even from Democrats.

YELLIN: Right.

And, remember, these are Democrats. They are not known for falling easily into line. I spoke in particular a few minutes ago with Senator Kent Conrad, who is interesting because he's been one of the most outspoken critics of Obama's stimulus package on the Democratic side.

And it's noteworthy because he also was one of Obama's early supporters in the campaign. So, he's on his team. He just wasn't so pleased with all of the elements of the proposal. He explained that he thinks Democrats are feeling cautious after their experience with the Bush administration's fiscal policies.

He says, look, they got all kinds of representations were made that proved not to be true. And he said that wasn't done by this administration, but they have inherited a skeptical group of us, he says, because we have been burned. And he says, I want to make sure we get the biggest bang for our back.

I asked, did the Obama team create a problem by not involving Democrats in writing the stimulus? He said, look, if you want us in on the landing, you had better get us in on the takeoff. So, that's a measured yes, but the bottom line is, he thinks that the Obama team has done a good job of working this progress through. They think they're getting negotiations moving in the right direction, and this will all come together on Obama's new timeline, by Presidents Day, a rocky start, but not fatal.

BLITZER: Yes, well, we will see what happens.

All right, Jessica Yellin, thanks very much.

Today, the incoming vice president met with the president of Iraq. Vice president-elect Joe Biden visited Iraq, where he met with President Jalal Talabani and other Iraqi officials. Biden has been in the Middle East and South Asia over the past few days, visiting U.S. battle fronts.

Biden's son, Beau, by the way, is serving in Iraq right now with the Delaware National Guard. No word yet if the vice president-elect met with his son on this trip.

This just in: Senator George Voinovich of Ohio has just announced he won't be seeking a third term next year. The Ohio Republican was elected back in 1998, says it's time for someone else to represent his state.

Our senior political analyst, Bill Schneider, is working this story for us.

Bill, is there a larger message we're getting now from these Republican senators, these incumbents, saying, you know what, we're not going to seek reelection?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, it's not a lot of fun to be in the minority. And the prospects that Republicans will regain the majority don't look too good right now.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): Voinovich makes four. Four senators have announced they will leave the Senate next year, George Voinovich of Ohio, Sam Brownback of Kansas, Christopher Bond of Missouri, and Mel Martinez of Florida, all Republicans. Republicans have suffered two defeats in a row, 2006 and 2008.

It's no fun being in the minority, as this Republican strategist point out. RICH GALEN, REPUBLICAN STRATEGIST: And I think, for a lot of them, they are just saying, if I can't be in the majority and affect legislation, I'm just going to go home.

SCHNEIDER: Voinovich has often been an independent voice in the Republican Party, skeptical of tax cuts, critical of the war in Iraq, and initially opposed to the confirmation of President Bush's choice for U.N. ambassador.

SEN. GEORGE VOINOVICH (R), OHIO: Mr. Chairman, it is my opinion that John Bolton is the poster child of what someone in the diplomatic corps should not be.

SCHNEIDER: For 15 years, Bill Clinton was the face of the Democratic Party. Now it's Barack Obama. Who's the face of the Republican Party?

GALEN: Right now, I think Newt Gingrich would be as close as there is, but I don't think anybody can lay claim to that title.

SCHNEIDER: At his final press conference, President Bush had some advice for his party.

BUSH: This party will come back. And -- but the party's message has got to be that different points of view are included in the party.

SCHNEIDER: Compromise on principles? Not necessarily.

GALEN: Democrats proved you can have a set of principles without being exclusionary. Republicans have to do the same thing.

(END VIDEOTAPE)

SCHNEIDER: Republicans need to pick up nine or 10 Senate seats to regain the majority. The prospects don't look too good for the near future. Next year, Republicans will have to defend 19 Senate seats, including the four open seats. Democrats will be defending 17 seats -- Wolf.

BLITZER: Bill Schneider, with that report, thanks very much.

It appears -- it appears it could have caused a war between Israel and Iran. There are new details emerging right now regarding those reports that Israel wanted to attack deep inside Iran and go after its nuclear facilities. Israel reportedly asked the White House for one thing that President Bush rejected. We have details -- Brian Todd working the story.

And hold your phone. Something could soon happen that could severely limit how much you're allowed to talk on your cell phone. We will explain right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

(NEWS BREAK) BLITZER: Amid ongoing tensions in the Middle East, Israel reportedly wanted to attack Iran. But, apparently, when it asked for White House permission, it didn't get it. President Bush's answer was a so-called flat-out no.

And they will be on display on Inauguration Day, but they are under wraps right now. Still, you're going to be getting a sneak peak at some of the floats and decorations for Barack Obama's swearing-in, one week from tomorrow.

(COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM.

Happening now: He leaves behind a troubled economy, but some say President Bush's 11th-hour actions at least thawed frozen credit markets, at least a little bit. Did he do the right thing?

A new president, his inauguration, and at least a million people on hand to witness history, maybe, maybe many, many more. How do you ensure everyone's safety? Washington ways it is taking no chances.

And off the African coast, pirates aboard a hijacked tanker collect their booty, but when they make off with it, things go terribly and fatally wrong.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

For the fifth day, the Israeli military paused for a three-hour break from its assault on Gaza. It was to allow residents to pick up humanitarian supplies, that according to an Israeli official.

Also, the U.S. State Department says it's preparing to evacuate a group of 150 people, including Americans and their immediate family members, as the violence continues.

Meanwhile, we're also following reports of a war that could have erupted

Brian Todd has been investigating, looking into this story for us.

Brian, you have some details.

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, right, the Israelis have clearly been more and more worried about Iran's nuclear program, and they reportedly came up to the Americans last year with a plan to fly over Iraq with American-made armaments and strike at Iran's nuclear facilities. Now, the Israelis were rebuffed, but this has got many worried over what may still unfold.

(BEGIN VIDEOTAPE)

TODD (voice-over): New information on a bold push by one of America's closest allies to attack Iran's nuclear facilities. "The New York Times" reports of an appeal to the White House last year by Israel for bunker-penetrating bombs to strike underground at Iran's major nuclear complex at Natanz.

Former U.N. weapons inspector David Albright knows exactly what they would have hit.

DAVID ALBRIGHT, FMR. U.N. WEAPONS INSPECTOR: What are called the cascade halls where all the centrifuges are underground. And it's not just dirt. There's cement, layers of cement, layers of concrete between the surface and the building underground. And so you need special armaments to get through it all.

TODD: According to The Times, President Bush didn't say yes or no to Israel's request for those sophisticated bombs and for refueling equipment, but The Times reports when the Israelis asked the White House for permission to fly over Iraq on their way to Iran, they were rejected outright.

DAVID SANGER, "NEW YORK TIMES": They feared that if it appeared that the United States had helped Israel strike Iran using Iraqi airspace, that the result in Iraq could be the expulsion of American troops.

TODD: Although the Israelis didn't get the equipment or permission they wanted, according to The Times, Mr. Bush did share more intelligence with them on secret U.S. efforts to undermine Iran's nuclear program through industrial espionage. The Times says U.S. officials asked the paper to leave out details of that program, which The Times says it agreed to do.

Contacted by CNN, neither the White House nor the CIA would comment on The Times report. Israeli and Iranian officials we contacted also wouldn't comment. Iran has always maintained that its nuclear program is for energy and not weapons. Albright says if Iran's facilities were ever hit...

ALBRIGHT: It's not going to take a strike lightly and will seek retaliation. In the worst case, you could see Iran supporting the use of terrorists to strike back through Hezbollah, through Hamas.

(END VIDEOTAPE)

TODD: Or, Albright says, Iran could speed up its nuclear program. As he says, take on their own Manhattan Project and quickly get even closer to having a nuclear weapon than they are now, Wolf. He says they're maybe less than a year away from having the capability to make a nuclear bomb.

BLITZER: The clock is clearly ticking over there.

TODD: Right.

BLITZER: It's a very dangerous situation.

Brian, thanks very much.

All right. We're going continue to watch this story. I want to talk a little bit more about what's going on, not only involving the potential for a war between Israel and Iran, but a real war that's still going on right now between Israel and Hamas in Gaza.

Joining us now, our CNN world affairs analyst, William Cohen. He's president and CEO of The Cohen Group here in Washington -- the former defense secretary.

Did President Bush do the right thing last year, apparently, according to these reports, in saying no to the Israelis, you don't have permission to fly over Iraq and you don't have permission to use a U.S.-made bunker buster bomb to try to knock out some of those Iranian nuclear facilities?

WILLIAM COHEN, CNN WORLD AFFAIRS ANALYST: I think President Bush had an obligation to take into account what the consequences were going to be, assuming that the Israelis could, in fact, marshal an effective strike that could wipe out -- and that's questionable -- wipe out that nuclear program. The consequences to potentially our troops and Iraq and to other soft targets around that region in the world and other parts of the world could have been quite devastating.

So, he had to exercise the judgment. I assume he made the right call by saying that we were not going to participate in such an action.

BLITZER: But if these reports are true, that maybe less than a year before Iran has that capability ready to go, is it just a matter of time before the Israelis decide on their own to do what they've done in Iraq, what they've done in Syria, and take out nuclear-related facilities?

COHEN: Actually, what's quite interesting is I've had discussions with some of the leaders in the Middle East region, in the Gulf region. They would rather, if action is going to be taken, have it taken sooner rather than later, and they would rather have the U.S. take the action rather than the Israelis for their political purposes.

So, there is no one in that region that wants to see Iran go forward with a nuclear weapon. The real issue is going to be, once again, what role will China and Russia play in bringing additional pressure upon Iran to say, this is not acceptable? So far, Iran's been able to split them off from the U.N. Security Council with no effective action being taken. The longer this gets deferred, the more likely it is that someone, whether the Israelis and/or the United States, may be pushed to the point of looking at a military option.

BLITZER: And we'll see if President-elect Obama's strategy of more formal engagement, high-level engagement with Iran, makes a difference on this very sensitive point.

We have some new video just coming in only moments ago from what's happening in Gaza. Take a look at this. You can see flares that the Israelis are using over Gaza City right now and elsewhere in Gaza. And it underscores that as much as a lot of people would like to see a cease-fire, or some sort of truce develop, it hasn't happened yet.

COHEN: It hasn't happened yet. There are some pretty serious negotiations under way.

Egypt is very much involved in this. There are discussions with Turkey possibly being used as monitors along the border to prevent Hamas from getting resupplies of weapons coming through tunnels that have been dug.

So, there's a lot of negotiations under way. Hopefully this can come to a cessation of hostilities, and hopefully we can shut off the supply of weapons going in so that you would have an opportunity, at least, to have some kind of a unity government at some point in the future.

It's not going to be a two-stage solution, which I think it has to be, as long as you have a divided government among the Palestinians. You cannot have Fatah negotiating about Hamas or Hamas for Fatah. There's got to be a unity government.

A two-state solution is the only solution that's really a viable one. That's still possible, but its' going to take some serious negotiations by the Obama administration coming in.

BLITZER: Secretary Cohen, thanks for coming in.

COHEN: A pleasure to be with you.

BLITZER: Barack Obama will have a lot of people to answer to in the White House, including his mother-in-law. We're taking a closer look at what to expect now that Michelle Obama's mom is moving in.

Plus, inauguration centerpieces revealed. We have a sneak peak for you at the floats that will be on parade right here in the nation's capital one week from tomorrow. The massive operation behind them as well.

And later, a mayday call, a plane crash. Now the pilot has vanished. The mystery that has police investigating in three states.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: When the Obamas move into the White House next week, there will be a new addition to 1600 Pennsylvania Avenue, what we're calling the first mother-in-law.

Our Carol Costello is following the story for us -- Carol.

CAROL COSTELLO, CNN ANCHOR: Yes, Wolf, the first mother-in-law is moving in. At least temporarily.

Marian Robinson, Mrs. Obama's mother, will move into the White House to help her daughter with her daughters, Sasha and Malia. Mrs. Robinson is 71 years old and has cared for the girls while their parents campaigned.

She doesn't enjoy the limelight, but will give up her cozy Chicago bungalow for the big White mansion at 1600 Pennsylvania Avenue. The Obama transition team tells us the move could be temporary or permanent.

No doubt about this, though. Grandma's efforts will be much appreciated.

(BEGIN VIDEO CLIP)

MICHELLE OBAMA, BARACK OBAMA'S WIFE: There is nothing that makes me rest more now that I have to work than to know that my kids are being loved and cared for by someone who is teaching them values and discipline and giving them a little extra candy every now and then.

(END VIDEO CLIP)

COSTELLO: This will not be a first. Harry Truman's mother-in- law lived in the White House. But it was not a happy experience.

She often belittled President Truman, telling her daughter he made some really bad decisions. Truman stuck it out though because, you know, it's dangerous to criticize your wife's mother.

As for Marian Robinson, she obviously has a warm relationship with Barack Obama. But she is known for playing by her own rules. You know the Obama only allow their little girls to watch TV for an hour. Well, grandma thinks that's a bit extreme. She often lets the girls stay up late.

And she doesn't much adhere to the Obamas' healthy eating habits rule. She says, hey, if you're going to eat fried chicken, rolled in rich cracker batter and fried to a crispy golden brown. It's much better that way -- Wolf.

BLITZER: Carol Costello, thanks very much.

And here's to you, Mrs. Robinson. Good luck in the White House.

You don't have to wait until January 20th to enjoy some of the flavor of the inaugural parade. A sneak peek available right now.

CNN's Samantha Hayes has been touring the company that specializes in presidential inaugurations.

Sam, what did you find out?

SAMANTHA HAYES, CNN CORRESPONDENT: Well, Wolf, this company is really good at doing big events. They do trade shows and custom exhibits. They do grand openings. But their specialty is presidential inaugurations.

(BEGIN VIDEOTAPE)

HAYES (voice-over): Before they float down Pennsylvania Avenue, the official inaugural floats are conceived and constructed just outside of Washington, D.C., in this Maryland warehouse.

UNIDENTIFIED MALE: There are actually seven acres under roof here, 365,000 square feet.

HAYES: Stages, backdrops, it's all created here by Hargrove, the company that's been building inaugural floats for 60 years.

UNIDENTIFIED MALE: This is one of the largest carpentry shops on the East Coast.

HAYES: Earl Hargrove is the man behind it all. His first inaugural contract was for President Truman, who requested a carriage pulled by mules.

EARL HARGROVE, HARGROVE INC. FOUNDER: They got up there at the corner and got confused and went left. And let me tell you, that was one heck of a pileup of mules there for a few moments. But we got it straightened out and they ended up going in front of the White House and made the president happy.

HAYES: They've made vice presidents happy, too. Dick Cheney's Wyoming float was made to order.

UNIDENTIFIED MALE: They wanted scenes and symbols of Wyoming, and specifically wanted a full-standing stuffed buffalo. They wanted a trout stream, they wanted the bronco buster, which is a symbol of Wyoming. So we had to literally talk to every taxidermist west of the Mississippi to find a big, full-mount-standing buffalo.

HAYES: Somewhere in the warehouse is a float for President-elect Barack Obama.

(on camera): What are you doing on the Hawaii float?

UNIDENTIFIED MALE: I can't tell you.

HAYES: Not a word, huh?

We can show you this one, the American flag float, which has made several appearances over the years.

UNIDENTIFIED MALE: They're all tweaked, they're all going to look a little different than they have before.

(END VIDEOTAPE)

HAYES: And so the next big challenge is getting everything they've built and constructed from that Maryland warehouse to here in Washington, D.C. And Wolf, that's a process that involves loading up 100 tractor-trailers, and it's going on right now.

BLITZER: And we can see the construction behind you on the north lawn of the White House as well.

Sam, thanks very much.

By the way, all 240,000 tickets to the Obama inauguration are now spoken for. Today, planners began releasing the color-coded tickets to members of Congress, who will then distribute them to constituents. The colors correspond to a specific seating area on the Capitol grounds, or a standing area on the National Mall, along with the suggested metro subway stop to arrive there.

Security gates open at 8:00 a.m. Eastern on January 20th. The swearing takes place just before noon Eastern. If you can't get there, you'll watch us cover it here, right here on CNN.

President Bush offers Barack Obama some advice. It concerns keeping you safe.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The most urgent threat he'll have to deal with and other presidents after him will have to deal with is an attack on our homeland.

(END VIDEO CLIP)

BLITZER: Might the president privately be telling Barack Obama about his own experiences battling terrorists?

And will sparks fly? Hillary Clinton's secretary of state confirmation hearings, they start here in Washington tomorrow. Republicans might be tough on her, but the Democrat in charge of the committee could be as well. That would be Senator John Kerry, the brand new incoming chairman of the Foreign Relations Committee.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Confirmation hearings start tomorrow for secretary of state nominee Hillary Rodham Clinton. She'll go before the committee chaired by Senator John Kerry, who wanted the job, as you know, for himself. Will that hurt her chances?

Joining us now in our "Strategy Session," Democratic strategist Jamal Simmons and Republican strategist and CNN contributor Alex Castellanos.

A cute story on Politico.com today. "Kerry wanted to be president. Then Clinton wanted to be president. Then Kerry wanted Obama to be president. Then Obama became president."

"Then Kerry wanted to be secretary of state, but Obama wanted Clinton to be secretary of state. This all sets the stage for Tuesday's confirmation hearing, where the back-and-forth will be finely parsed for any evidence of recriminations."

What do you think? Any recriminations, Jamal, between John Kerry and Hillary Clinton tomorrow?

JAMAL SIMMONS, DEMOCRATIC STRATEGIST: I think unlike the Republicans, the Democrats are not going to be rubberstamps for President Obama. But I connected with John Kerry's senior aide today, who literally laughed when we talked about this story, when the story came up. What he said is, expect the hearings to be fair, expect them to be reasonable, and then expect Senator Clinton to be treated with all appropriate respect.

BLITZER: I don't think the Democrats are really going to give her a rough time, but will the Republicans, the Republican members of the Foreign Relations Committee, ask some tough questions?

ALEX CASTELLANOS, REPUBLICAN STRATEGIST: The return of partisan bickering, oh, we've missed it so. We may get a little bit of that, even though the country, I think, is so united right now and wants to see this president succeed, wants to move things along quickly. We'll probably see less than we'd expect, but there are so many legitimate questions that need to be asked of the Clintons.

Half a billion dollars in philanthropic contributions that the Clinton Foundation have received from the Saudi Arabian government, from Saudi businessmen, from people with questionable interest in Kazakhstan, with tremendous mineral deposits important to the global economy. These are things that the secretary of state's going to have to be dealing with. You know, quid pro quo here, these things need to be resolved and aired.

SIMMONS: This is a second of a little flashback I'm just having right here. I feel like it's 10 years ago. But this is the most picked-over couple in American politics.

I do think what will happen when they get in front of this hearing tomorrow is we'll probably go back over some of these things. The Republicans won't be able to resist themselves. But the American public is ready to move on, ready to focus on the future, ready to deal with some of the big challenges that the next president will face. And the secretary of state will help him face those challenges.

And no one really thinks that this is going to do anything to derail Senator Clinton. Just a little bit of political voyeurism here.

BLITZER: You know, we did hear some advice from the outgoing president for the incoming president today, and it got dramatic at one point.

I want you to listen, Alex, to this.

(BEGIN VIDEO CLIP)

BUSH: The most urgent threat that he'll have to deal with and other presidents after him will have to deal with is an attack on our homeland. You know, I wish I could report that's not the case, but there's still an enemy out there that would like to inflict damage on America. Americans. And that will be a major threat.

(END VIDEO CLIP)

BLITZER: It sounds as if he's got intelligence suggesting that, God forbid, some sort of plot or plots are afoot. CASTELLANOS: Well, part of the process of transition is briefing the president-elect. And many Americans, many of us, we don't appreciate what's been done on our behalf to keep this country safe from any attack for seven years after 9/11. And there must be a considerable amount of things, thank heavens, that have been done.

But there's one person on this planet that's going to know what's been done, and that's Barack Obama. He's learning that now. It's going to be interesting to watch the change in tone, if there is one, from a man who's going to understand the depth and the gravity of the threat that we face and what President Bush has actually done to keep us safe for seven years.

BLITZER: As president-elect, he's already getting those daily intelligence briefings that the sitting president of the United States receives, and I assume a lot of that information is pretty chilling.

SIMMONS: Oh, I assume that it is. I mean, the one thing for the president of the United States is that you have to protect the people of the United States. You have to protect American assets.

And I think, as George Bush said rightly, there will probably come a point when Barack Obama goes in the Oval Office and everybody else walks out, the door closes, and he sits at his desk and he goes, wow. You know, it's all on his shoulders.

And speaking as someone who's familiar with some of the discussions last week, I understand when all the presidents were together at the White House, a big chunk of that lunch was about foreign policy. So -- and security. So I think this is going to be a major topic for President-elect Obama.

BLITZER: No doubt about it. A lot of responsibility. We wish him only the best of luck. The challenges are enormous.

Guys, thanks very much.

With eight days to go and counting, President Bush defends his economic actions.

(BEGIN VIDEO CLIP)

BUSH: If you were sitting there and heard that the depression could be greater than the Great Depression, I hope you would act, too. Which I did.

(END VIDEO CLIP)

BLITZER: Did the president of the United States do the right thing? We're examining the consequences so far.

Also, Britain's Prince Harry puts his foot in his mouth. The royal damage control over racial slurs caught on video.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Today on our Political Ticker, Congress is catching up and joining the digital age, launching an official YouTube presence.

Our Internet Reporter Abbi Tatton is here.

Abbi, what's going on?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, you'll remember in the final days of the 2008 election, Barack Obama and his team were posting online videos to YouTube at a rate of about one an hour. Well, today, the U.S. Congress is officially noting the importance of online video, with official YouTube channels launched from both the House and the Senate.

Some of the things you're going to find on there, Senate Majority Leader Harry Reid up there, picking out literally from a cowboy hat winners of inauguration tickets this weekend. House Republican Whip Eric Cantor asking for online feedback about the economy. Bottom left-hand corner there, you'll see Ohio Congressman Tim checking to see how many friends he's got on Facebook.

Until recently, there were rules on Capitol Hill that restricted members of the House and Senate from posting on to outside Web sites, but those rules have now changed. Many -- both sides of the aisle did so anyway, but with this new official YouTube presence, YouTube hopes that this will provide a window for people into what's happening on Capitol Hill.

But these lawmakers first will have to launch the channel. So far, near about a third of lawmakers have one.

BLITZER: It's a new world out there for them.

TATTON: Absolutely.

BLITZER: We'll watch.

Abbi, thank you.

Let's go back to Jack. He's got "The Cafferty File" -- Jack.

CAFFERTY: You know, it occurs to me that that would be a good way to tell, proof positive, that you have absolutely no life, which is if you choose to go on YouTube and watch those morons in Washington, D.C., do whatever it is they do, it's time to get counseling then.

The question this hour is, "Does accused $50 billion swindler Bernie Madoff belong in jail until his trial?" A magistrate ruled today that he will be allowed to remain in his $7 million penthouse apartment.

Stephen writes, "No. Bail is designated to prevent flight risk and danger to the public, not revenge." Charlie in New Mexico says, "Come on, Jack. We all know if you steal enough, you don't go to jail. Steal a $500 car, you go to jail. Steal $50 billion, ruin the lives of thousands, you will never spend a day in the slammer. The rich and politically connected are above the law."

Rose in Arizona, "Of course he belongs in jail. He admitted his actions, and for him to have the gall to send jewelry to family and friends is absurd. It belongs to the people that he swindled. The action of the court and the judge are unforgivable."

L. writes, "At the risk of sounding trite, jail's too good for him, but it will do until he goes to hell."

John writes, "Oh, Jack, I'm sure this last little mistake about sending millions in jewelry and money to family and friends has taught Mr. Madoff a lesson. Why, he might even have found God by 7:00 tonight. You don't suppose he has access to a computer in his penthouse, do you? And I bet he doesn't know a thing about transferring funds from one account to another."

Jerry in Florida says, "There are probably a million inmates in the U.S. that are there for stealing less than $5,000, and this worthless jerk stole billions, not to mention that there have been two suicides because of people who lost their entire life savings. And this piece of garbage is allowed to live in a $7 million penthouse."

And Brian in South Carolina says, "They need to lock him in a cell, and then throw away the cell."

If you didn't see your e-mail here, you can go to my blog at cnn.com/caffertyfile, and look for yours there among hundreds of others -- Wolf.

BLITZER: Not a lot of support for Bernard Madoff. Right, Jack?

CAFFERTY: Not -- no, sympathy there.

BLITZER: None at all. All right, Jack. Thank you.

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