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CNN NEWSROOM

Sens. Biden, Clinton Say Farewell to Senate; Roland Burris Sworn In To Senate; Illinois State Pol Says It's Wrong, But Citizens Want To Move Forward, Focus On Obama

Aired January 15, 2009 - 14:00   ET

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


KYRA PHILLIPS, CNN ANCHOR, CNN NEWSROOM: Good thing the family's plan has unlimited text for 30 bucks a month. Otherwise dad figured he would owe AR&R about 3,000 bucks.
Next hour of CNN NEWSROOM starts right now.

(BEGIN VIDEO CLIP)

PHILLIPS (voice over): Roland Burris' road to the Senate. What a long, strange trip it's been. Two weeks ago it looked like the Blago link would block him. Today he takes the oath of office.

Sounds like a broken record. Staggering new numbers on '08 foreclosures, despite the government's steps, 1 in 54 families put on notice last year.

(END VIDEO CLIP)

PHILLIPS: Hello, everyone. I'm Kyra Philips live in the CNN World Headquarters in Atlanta. And you are live in the CNN NEWSROOM.

The next hour is full of hellos and good-byes in Washington, Biden, Burris, plus brrr across the country, foreclosure numbers that will take your breath away. Plus some college students we've been talking to all week. They're joining us live. As you know, they've reported about their road trip through history as they travel to D.C. to witness history. Today, they're in the house.

And later, I'll have a gordita, some guac, and a spouse, please, to go. Taco Bell thinking outside the bun, and outside the altar.

We begin this hour with Roland Burris' transition to power. It was relatively quick, if not painless. Today, though, just moments from now, the man appointed to the president-elect's old Senate seat will take the oath of office. It happens barely two weeks when Senate Democrats vowed never to see anyone chosen by Illinois Governor Rod Blagojevich, who allegedly wanted to sell the Senate job to the highest bidder. Well, the Senate backed down after Burris testified before the Blagojevich impeachment committee and the Illinois supreme court signed off on his paperwork. Let's go ahead and listen in.

(LIVE FEED, IN PROGRESS)

DICK CHENEY, V.P. OF UNITED STATES: And they will be printed in full in the record. The senator designate will now present himself at the desk, the chair will administer the oath of office.

(APPLAUSE)

CHENEY: Raise your right hand. Do you solemnly swear that you will support and defend the Constitution of the United States against all enemies foreign and domestic, that you will bear true faith and allegiance to the same, that you take this obligation freely, without any mental reservation or purpose of evasion, and that you will well and faithfully discharge the duties of the office on which you are about to enter, so help you God?

SEN. ROLAND BURRIS, (D), ILLINOIS: I do.

CHENEY: Congratulations.

BURRIS: Thank you, Mr. Vice President.

(APPLAUSE)

(BURRIS SIGNS BOOK)

(APPLAUSE)

(END LIVE FEED, IN PROGRESS)

PHILLIPS: Senator Roland Burris, where one story sort of comes to an end, there's still another story continuing on in Illinois. That's the impeachment front. Illinois lawmaker Jack Franks is one of the case managers who will help try Blagojevich in the Illinois state. He's watching events in Washington today from Woodstock, Illinois. He also watched the swearing-in there of Senator Roland Burris.

I guess, Jack, we should start with what's happening right now. This is something that you were very concerned about. You felt that Roland Burris was tainted because he was tied to Rod Blagojevich. He's now taking that Senate seat. What's your reaction?

REP. JACK FRANKS, ILLINOIS STATE LEGISLATOR: Well, Blagojevich has the last laugh. Senator Reid and Senator Durbin, that's not their fault this happened. They tried to get the governor to do the right thing. Senator Reid's from Nevada, he's a gambler, so he tried to bluff the governor by saying we'll not seat anybody you send us. But the governor had nothing to lose, so he went all in and Mr. Burris was a willing accomplice. The blame rests squarely on our governor and Mr. Burris, who let this happen. It created this situation.

PHILLIPS: Aside from the drama, aside from everything that led up to this point, when you look at Roland Burris' record, as a leader, as a former Illinois attorney general, how do you think -- well, what's your confidence level, I guess I should say, with regard to him as a senator in the state of Illinois?

FRANKS: Well, we need to move forward, because we're facing some of the biggest crises in a generation. And I believe that Roland Burris will rise to the occasion. I think he has to take this job very seriously. I'm very happy that Illinois is being represented by two Senators now. And the circumstances of the appointment are very unfortunate, but now it's time to move on. So I think if he's quiet, he sits down and he listens to Senator Durbin, he'll be all right.

PHILLIPS: Let's get back to the impeachment front. What is next for Rod Blagojevich and how are you playing a part?

FRANKS: Yesterday he was served that, the trial will start on January 26th. The senate changed the rules yesterday. All the other impeachment proceedings had always been case managers through the house. Yesterday they decided to have simply a prosecutor. So the house counsel will be the sole prosecutor in this impeachment.

My role will be that of adviser, as well as a witness, in the impeachment proceedings, dealing with the audit, and the problems that the governor had with the efficiency initiatives, the flu vaccine debacle, and possibly the Loop Lab school.

PHILLIPS: So, I'm curious. Are you going to put your hat in the ring for governor of Illinois?

FRANKS: I want to get rid of one governor at the time and we'll worry about that as it goes forward. I think we have a very serious job to do in Illinois. I think the confidence of our citizens has been shaken to the core. And we need to restore their confidence.

At a time when we should be celebrating our favorite son's ascension to the leader of the free world, we're bogged down in very unpleasant things in Illinois. But I think we'll have a brighter day very soon.

PHILLIPS: I have a feeling you and I will be talking very soon. Representative Jack Franks, appreciate you calling in.

FRANKS: Thank you.

PHILLIPS: Among other things, Burris' swearing in means the Senate will again have an African-American member, exactly one member, just to be blunt here. That membership of congressional -- the congressional caucus, the black caucus, actually is what we are going to talk about coming up next.

We are also going to take a quick break. Sorry about that. I had a couple of people talking to me. And we'll take a quick break and we'll be right back.

(COMMERCIAL BREAK)

PHILLIPS: All right. Well, the man in line to be the first African- American attorney general says that water boarding is torture, Guantanamo Bay is on borrowed time, and a hugely controversial pardon decision in 2001 made him a better lawyer. Eric Holder is in the witness chair before the Senate Judiciary Committee, which isn't wasting time on small talk.

(BEGIN VIDEO CLIP)

SEN. PATRICK LEAHY, (D) CHRM., JUDICIARY CMTE.: Do you agree with me that water boarding is torture and illegal?

ERIC HOLDER, ATTORNEY GENERAL NOMINEE: If you look at the history of the use of that technique, used by the Khmer Rouge, used in the Inquisition, used by the Japanese and prosecuted by us as war crimes, we prosecuted our own soldiers for using it in Vietnam, I agree with you, Mr. Chairman, water boarding is torture.

LEAHY: Do you believe that other world leaders would have the authority to authorize a torture of United States citizens if they deemed it necessary for their national security?

HOLDER: No, they would not. It would violate the international obligations that I believe all civilized nations have agreed to in the Geneva conventions.

(END VIDEO CLIP)

PHILLIPS: Now, outgoing AG Michael Mukasey, and Alberto Gonzales before him, refused to say whether they considered water boarding torture.

Also facing confirmation hearings today, Susan Rice for U.N. ambassador, Ken Salazar for Interior secretary, he too will be giving up a Senate seat, and then Mary Shapiro for head of Securities and Exchange Commission and Janet Napolitano, for secretary of Homeland Security.

Well, senators come and senators go, that's for sure. Going today is the six-term Democrat from Delaware who just nine days ago was sworn in for a seventh term, Joe Biden. Five days from now, Biden will take the oath for his new gig as vice president. He'll then be president of the Senate. Are you still with me?

Hillary Clinton has been the junior senator from New York for only eight years and a New Yorker for not much longer than that. And with confirmation as secretary of state pretty well assured, Senator Clinton delivered a farewell speech right after Biden's.

(BEGIN VIDEO CLIP)

SEN. JOE BIDEN, (D-DE) VICE PRESIDENT-ELECT: Although you've not seen the last of me, I say for the last time, and with confidence in all of you, optimism in our future, and a heart with more gratitude than I can express - I yield the floor.

SEN. HILLARY CLINTON, (D-NY) SEC. OF STATE NOMINEE: Ten years ago I asked the people of New York to take a chance on me; to grant me their trust and their votes. And in the years since as our economy has grown more interconnected and the world more interdependent, I have worked to keep faith with my fellow New Yorkers.

(END VIDEO CLIP)

PHILLIPS: And at the White House tonight, a farewell from President Bush, just five days before he leaves office. He gives his good-bye address to the nation, about six hours from now. He's expected to express thanks to the country for allowing him to serve, wish the next president well, and outline what he sees as the big challenges ahead.

Now, you'll want to see it right here on CNN to hear what President Bush has to stay in his farewell address. It's coming up 8:00 p.m. Eastern Time.

Well, it seems like there are foreclosures everywhere you look at this point. New numbers now offer the hard evidence, 2008 was one of the worst ever. And a big vote on the bailout. Will senators deny the president-elect his first request?

And he's a civil rights hero. They knew him as a friend. Former neighbors of Medgar Evers looked to the future after all the hard work of the past.

(COMMERCIAL BREAK)

PHILLIPS: The man who would become the nation's first black attorney general took time during today's confirmation hearing to talk about the battle for civil rights. Eric Holder praised his late sister-in- law and her courageous role in American history.

(BEGIN VIDEO CLIP)

HOLDER: One of those who served on the front lines of the struggle for equality was my late sister-in-law, Vivian Malone Jones, who integrated the University of Alabama in 1963. In an atmosphere of hate almost unimaginable to us today she and fellow student, James Hood, faced down Governor George Wallace, and in the presence of then-Deputy Attorney General Nicholas Katzenbach, they enrolled in that great university.

In very the next day NAACP leader Medgar Evers was gunned down in his driveway in Mississippi. But Vivian never considered backing down. She went to class, despite the ever-present danger, later saying simply that she decided not to show any fear.

(END VIDEO CLIP)

PHILLIPS: Someone else who showed no fear was the manner Eric Holder mentioned, civil rights activist Medgar Evers. John Zarrella has been spending time with some of the people who knew him best --John.

JOHN ZARRELLA, CNN CORRESPONDENT: Kyra, the man who lived in this house was rapidly making a name for himself in the civil rights movement when he was murdered right here where I'm standing. I had an opportunity to sit down with some of the people who knew him. And we talked about what he meant and what Barack Obama means.

Now, let me warn our viewers, there is language you may find objectionable.

(BEGIN VIDEOTAPE)

ZARRELLA (voice over): Sitting around the dining room table.

CORA HART CATCHINGS, FRIEND OF MEDGAR EVERS: They told us that they didn't serve niggers and we had to move on. So we just sit there. We didn't move. And they called the police. And the police came, so they carried us, and hauled us off to jail.

FRED DOUGLAS MOORE CLARK, SR., FRIEND OF MEDGAR EVERS: We spent a week or so in the city jail and then to the county jail where they threatened to hang us.

ZARRELLA: They all survived to tell their personal stories. But not the man whose house, now a museum, we sit in. Not the man they called friend, they called neighbor, Medgar Evers.

CLARK: I just could not figure out how he had the courage to do what he was doing.

ZARRELLA: Evers worked tirelessly registering African-Americans to vote in Mississippi.

UNIDENTIFIED FEMALE: Edgar did more for the state of Mississippi than any other civil rights advocate.

ZARRELLA: The house had no front door. Evers believed it was safer to enter from the side under the carport. But in June 1963, an assassin's bullet still found him. Evers' friends say he can rest easier now. The change he died for has produced a president.

UNIDENTIFIED MALE: Medgar would say as to Obama, well done, brother.

ZARRELLA: Evers' friends say the Obama presidency can be a pivotal moment in history for young African-Americans.

UNIDENTIFIED FEMALE: For our boys, our boys to see Obama as president of the United States of America, is an incentive, that is an incentive.

UNIDENTIFIED FEMALE: You know, and give them hope to see that, you know, this man made it to the white house. Surely I can make it to a decent job.

ZARRELLA: They know hope alone is not enough to ensure jobs, education.

UNIDENTIFIED FEMALE: We need to have a plan to help. We can't just say, we got hope. We got the president. We need to do something.

UNIDENTIFIED MALE: We are not going to have things solved just because he was elected. Like she said, it's a long row that we have to hoe.

ZARRELLA: But it's a row filled, they say, with optimism.

(END VIDEOTAPE)

ZARRELLA: The key now these one-time foot soldiers of the civil rights movement say is to turn all that optimism into opportunity - Kyra.

PHILLIPS: John Zarrella, thanks so much.

Now just when you think we've come a long way, it looks like we've taken a step back. A University of California study shows that black and Hispanic school kids are more segregated from white kids now than they have been in years. Researchers say there are several factors at work here, including a decreasing percentage of white students and increase in neighborhood segregation.

The first black president on the way, the first black attorney general, unconfirmed, but likely, and the one and only black U.S. senator sworn in moments ago. We want to know what all this means for and to the Congressional Black Caucus. Is there still a need for a caucus of black lawmakers? And if so, what should its goals be?

California Congresswoman Maxine Waters has been a member of the CBC for a long time. She joins me now live from Capitol Hill.

Good to see you.

REP. MAXINE WATERS, (D-CA): Good to see you. How are you?

PHILLIPS: Very good. Are we all set there? We got the mic? Yeah, there we go. You look good.

WATERS: I'm a little crooked here.

PHILLIPS: That's all right. You're live now.

WATERS: OK. Thank you.

PHILLIPS: I know they're stepping in front of you and trying to get you situated. But that's OK, it makes it more casual, right?

WATERS: Oh, I don't know. If it's OK with you, it's OK with me.

PHILLIPS: I tell you what, Congresswoman, while you get situated there, I'm going to go ahead and ask you a couple of questions.

WATERS: Yes.

PHILLIPS: Let's start with Roland Burris. I wanted to ask you, I didn't get a chance to ask you before, is every black politician that is sworn in automatically a member of the Black Caucus?

WATERS: No. The person must join. They must want to be a member of the Black Caucus. And of course, we hope that Roland Burris will join the Black Caucus.

PHILLIPS: All right. And was the Caucus behind Roland Burris becoming the senator of Illinois?

WATERS: Yes, absolutely. As you know, we developed a letter that explained our support. And we dispatched it to Reid and to everybody else. And we made the legal argument about why he should be seated. We pointed out that he had been appointed by the sitting governor, no matter, the governor had been accused. The fact of the matter is, he was the governor who was going about his daily duties, signing bills, and other gubernatorial responsibilities. You could not isolate out this one responsibility and say, you can do all the other things as governor, but you can't appoint. And so that was the basic point.

Then, of course, there was the issue of whether or not the secretary of state would sign his papers. The supreme court decided that. And said that that was just ministerial, and it didn't matter whether he signed or not.

PHILLIPS: Well, OK, yeah, so in setting those points aside, in addition there was this talk of reverse racism, Congresswoman, that if he wasn't allowed to take that seat, there was a concern, oh, boy, we better make sure he gets the Senate seat. He's black. There's no black senators. We're going to look like a bunch of racists if we try to keep him out.

WATERS: No, that was not a concern of the Black Caucus. You heard one legislator from Illinois who made a statement about racism. The Congressional Black Caucus never talked about racism. The press wanted very much to turn it into a racist argument. But we knew we had the law on our side. We didn't have to deal with anything except the law.

PHILLIPS: Well, we definitely didn't want to turn it into a racist argument.

WATERS: Not you, necessarily, but --

PHILLIPS: We were just covering all the angles out there.

There were others who really did try to play the race card on that. We didn't.

PHILLIPS: Obviously, this is a whole new era we're moving into. We want to move away from the race card. We want to talk about quality and effective leadership, which brings me to the Black Caucus. For 40 years, it's been extremely effective for black leaders. Basically it's been the black power bunch there in Washington.

So I want to ask you, there's been talk that maybe the Black Caucus may not be need. Maybe it will be less effective because now there's a black president of the United States. What's your feeling? Does the Black Caucus --

WATERS: Well, again, that's -- you know, the media and pundits who make up those kind of theories. You have not heard any real discussion by any real politicians who understand what it means to have power. Of course, the Congressional Black Caucus is very much need. Not only do we have members of the caucus who have powerful committees, think about it, Charlie Rangel is the head of Ways & Means, the most powerful committee in the Congress of the United States. John Conyers, the Judiciary Committee. We have Benny Thompson, the head of our Homeland Security Committee. And then we have Ed Towns from up in New York who does oversight. And so these are very powerful positions.

Twenty members of the Congressional Black Caucus head subcommittees. We're very, very important to this institution. We're very much needed to talk about the gaps, the gaps in sensitivity to those issues that are concerning the least of these. We are very much -- still have to deal with whether or not there are equal opportunities for all Americans. We are very much needed to help this country get on a completely equal footing. And so we're needed, and will be need for a long time to come.

PHILLIPS: California Congresswoman Maxine Waters. It will be interesting to watch how the Black Caucus does work alongside the first African-American president of the United States.

Congresswoman, thanks for your time.

WATERS: You're very welcome.

PHILLIPS: Well, they're finally here. Check out these fine young journalists from San Jose State; all of them vying for each one of our jobs. We're going to give it to them. They've been on the road for days. They're tired. But they've seen history. They've seen where it's happened and they're heading to the next place, of course, the inauguration. They're in the house. We'll talk about what they've learned about their country.

(COMMERCIAL BREAK)

PHILLIPS: The road to the inauguration started in San Jose, went through Memphis, Mississippi, Alabama, and today they're here in Atlanta. San Jose State journalism students who have been touring the South's civil rights landmarks are in the house to tell us about what they've learned.

As you know, if you've been paying attention, we've been talking to them every single day. Today they actually joined our morning meeting.

Bianca, I talk to you on the first day. What did you think of that morning meeting?

UNIDENTIFIED FEMALE: This morning's meeting?

PHILLIPS: Yes, what did you think?

UNIDENTIFIED FEMALE: It was fun.

PHILLIPS: Were you enlightened? Did you expect the editorial process to be like that?

UNIDENTIFIED FEMALE: It reminds me a lot, on a very smaller scale, what we do at school, but it's something that is inspiring and it makes me motivated.

PHILLIPS: Good. Well, you guys, of course, we told you how you've all inspired all of us. It's been cool to watch you all sort of, I guess take the role of all of us, as you're making your way to the inauguration.

Kachet, you were the reporter yesterday, right, when you guys were in -- where were you? KACHET, JACKSON-HENDERSON, SAN JOSE STATE STUDENT: Birmingham, Alabama.

PHILLIPS: It's hard to keep up with you guys. All right, you were in Birmingham. And you caught up with civil rights leader, Fred Shuttlesworth, right? OK. How was that? What moved you about that time with him?

JACKSON-HENDERSON: Well, it was a truly humbling experience. You read books, you see movies, and you follow his work. But to actually be in the room with the man that made a difference, that was the thinking head of so many different demonstrations during the time, so many attempts on his life with beatings and bombings of his home. It moved me to tears.

PHILLIPS: Wow.

JACKSON-HENDERSON: I shook his hand.

PHILLIPS: And he doesn't think -

JACKSON-HENDERSON: And told him thank you.

PHILLIPS: Oh, you did?

JACKSON-HENDERSON: I told him thank you and I explained a little bit about what the trip was about.

PHILLIPS: And he doesn't speak, right?

JACKSON-HENDERSON: Right.

PHILLIPS: What exactly happened?

JACKSON-HENDERSON: Well, he had suffered a mild stroke, recently.

PHILLIPS: OK.

JACKSON-HENDERSON: And it has slowed some of his speech down a little bit. He does get some words out. And, you know, he seemed very happy and pleased with the fact that we were embarking on this trip.

PHILLIPS: Of course, you talked to his voice, his wife. Let's go ahead and take a listen to part of that interview.

(BEGIN VIDEO CLIP)

SAPHIRA SHUTTLESWORTH, REV. SHUTTLESWORTH'S WIFE: Fred Shuttlesworth was the one who was behind the scenes designing the strategies for the most part.

(END VIDEO CLIP)

PHILLIPS: She should give herself a little more credit. Always takes a strong woman behind the strong man, right? Ladies?

(LAUGHTER)

PHILLIPS: Yeah. She moved you as well, yes?

JACKSON-HENDERSON: Yes. She has so much love for her husband, and for his legacy. Since the reverend has - his health has declined, she has taken it upon herself to make sure that his legacy is not forgotten. He is still here with us thankfully. He was on the front line for most of the civil rights movement along with King and Abernathy. And thankfully Shuttlesworth is still here with us. She's just making sure he's getting as much honor and recognition as he can while he's still here to enjoy all of this.

PHILLIPS: We have it all, we have broadcast, we have print, photographers, which leads me to Derrick and Carlos. You guys picked -- each of you picked two of your favorite photos.

Yes.

PHILLIPS: So, let's go ahead and bring up the first two. Derrick and Carlos, you guys can tell me who took this one?

CARLOS MORENO, SAN JOSE STATE STUDENT: I took that one. That one is very -- I really like that shot.

KYRA PHILLIPS, CNN ANCHOR, NEWSROOM: Who's in there? Why it means a lot to you.

MORENO: She's hugging Reverend Kiles. And on the side was Janine.

PHILLIPS: Oh. So Bianca, why don't you pass the mike over to one of the gals. Why don't you tell me what that was like to embrace -- OK. We've gone to the second photo. So hold on, I'll take you back there in a second. Is this your other photo Carlos? Tell me about this one.

MORENO: This was taken at the Burning (ph) market outside Money, Mississippi.

PHILLIPS: Where Emmett Till allegedly whistled at a white woman and lost his life for that.

MORENO: Exactly. And that man there is Jamaal Jay Lewis (ph).

PHILLIPS: They want to turn it into a museum, right, the grocery store?

MORENO: Yes, they do.

PHILLIPS: Is this your photo Derek?

DEREK SLIDER, SAN JOSE STATE STUDENT: This is a photograph taken at the 16th Street Baptist church in Birmingham. And it represents what we've been doing on this trip. We've been meeting, interviewing, taking photographs, video shots of the individuals involved in the civil rights movement. The courageous woman on the left is Miss Kristen Bunton (ph). And she lived in Birmingham at the time of the infamous church bombing in 1963. PHILLIPS: Wow.

SLIDER: I'll never forget what she told us all. She described her experience of racial segregation. The importance that the movement was nonviolent and not in her wildest dreams would she ever imagine the election of a black president. Now she can tell her grandson, look, with preparation, you can overcome and the sky's the limit.

PHILLIPS: You know what, professor, I see -- I should introduce Michael Cheers. Dr. Michael Cheers. This is amazing. We've got white, Asian, black, Hispanic. We've got the whole rainbow here. This must have been -- this is education in action. This must have been incredible for you as their professor to do this and to watch them just moved by history and also, taking them to the inauguration. Another incredible moment in history.

PROF. MICHAEL CHEERS, SAN JOSE STATE UNIVERSITY: Right. I'm just so happy to have had the guidance of spirit to give me the idea to come up with the idea for this trip. And the fact that we have diversity of -- among our student body, which represents the diversity of the United States of America. To get the students out of their comfort zones, to get them out of the classroom, to put them in some difficult situations where they have to produce content on a daily basis, on this sometimes -- not always --

PHILLIPS: We put you guys through the wringer. We gave you deadlines, didn't we?

CHEERS: The best of conditions is what we trained them to do. And I'm just so proud of all of them. They've been troupers.

PHILLIPS: It was professors like you that made a difference in my life and I'm here today because of my professors and so, one of you I know is going to end up taking my job. Just give me a few more years, OK. I need to save a little more money with the bad economy. San Jose students here, majoring in all forms of journalism. Thank you so much, guys. We want to talk to you when you get to the inauguration, debrief, sound good? Thanks, guys.

We're going to also continue to follow them all the way to Washington. You can also track them whenever you would like also. Just go to ireport.com. You can follow their journey. You can see their pictures, you can check out their stories. They've been working with us and it's been awesome.

The hard numbers tell the sobering story, foreclosures skyrocketed in 2008. One analyst even compares the home losses to a tsunami. Gerri Willis is going to join us with some advice for all of us that are facing the worst right now in this housing crisis.

(COMMERCIAL BREAK)

PHILLIPS: Let's talk about your money, your job, the economy, new claims for jobless benefits actually climbed even higher than expected last week. First-time requests for unemployment insurance jumped to 524,000. Analysts had expected about half a million new claims. Meanwhile,several more big name companies have announced layoffs, including Google, the pharmaceutical giant Pfizer and mobile phone maker Motorola. In just about two hours, the Senate plans to vote on a measure that would deny the Obama administration the second half of the bailout stash. That's $350 billion. For its part, the House is unveiling a stimulus package crafted in conjunction with the president-elect worth $825 billion over two years. It's two thirds spending and one third tax cuts and highly subject to change. As for the bailout, well, critics of how the first half was spent by the Bush administration are loathe to OK the rest. If both houses say no, the incoming president can and may begin his term with a veto.

For the financial sector, multi-billion-dollar losses and writedowns have been the hallmark of this recession. But today, JPMorgan Chase surprised Wall Street, saying it actually made money last quarter. Susan Lisovicz at the New York Stock Exchange with all the details. Hey Susan.

SUSAN LISOVICZ, CNN CORRESPONDENT: Hi, Kyra. The credit crisis really came to a head last fall. Now we're seeing the ramifications of that. Specifically, how some of the biggest banks fared during that time. JPMorgan Chase managed to make some money. $700 million last quarter. That beat Wall Street's estimates. Still earnings plunged nearly 80 percent from the year earlier. JPMorgan also set aside an extra $4 billion for possible loan losses and said it may have to take even more writedowns if the economy continues to weaken, which the bank says it expects. Kyra?

PHILLIPS: Well, could this be a sign that other banks might finally be making some money?

LISOVICZ: Well, that certainly would be the hope. But that is probably not the reality, Kyra. JPMorgan is considered to be in a stronger position than its rivals. This is the institution that bought both Washington Mutual and Bear Stearns last year. They were on the verge of collapse. Now their fear is that banks might need more Federal funding. Several reports say Bank of America might get another multi-billion dollar bailout from the government to help it absorb losses at Merrill Lynch. Shares of B of A are down right now 15 percent. That's off the lows of the session. Citigroup meanwhile is down another 10 percent. It's expected to post a multi-billion dollar loss tomorrow. The Dow industrials, though, despite B of A and Citigroup is up, up 10 points. So we're reversing the selloffs that we saw for most of the session. The NASDAQ, meanwhile, is up more than 1 percent. We're starting to see some strength in tax retails, a $2 drop in oil certainly helping out. Kyra, back to you.

PHILLIPS: Good news. Thanks, Susan.

LISOVICZ: You're welcome.

PHILLIPS: It's hard to believe, but the wave of foreclosures sweeping the country seems to just keep getting worse. Foreclosure filings last year jumped 81 percent over 2007, according to a new survey. CNN's personal finance editor Gerri Willis is in New York with more on these dismal numbers. We have a little good news, bad news, good news, bad news, Gerri.

GERRI WILLIS, CNN CORRESPONDENT: I try to find the good news. I found none in this report. Let me give you the basics here. You just mentioned it, foreclosures totaling $3.1 million last year. That is up 81 percent from 2007, up 225 percent from 2006. These are just atrocious, never seen before. We've got so many people who have either in default or losing their homes altogether. It's a range of definitions of what constitutes foreclosure. But as you know, the areas, the parts of the country that have been hit the most is really the sun belt, Nevada, Florida, Arizona, states in the south, states in the west. You find the most problems there in Nevada, one in 14 homes in foreclosure. And Kyra, I have to tell you, one of the numbers that I learned in interviewing people about this report, some 70 percent of the houses, mortgages on banks' books, these are homes that they've taken back, have yet to hit the market. So you can imagine what that's going to be like when those houses get on the market. They become part of the inventory. It's just another leg down for the economy.

PHILLIPS: What's your advice to people facing foreclosure?

WILLIS: Well, look, if you're late on your loan, first job, call your lender. Not all are responding to consumer requests frankly, but this has to be a first step if you're in trouble. Many of the nation's lenders are putting together programs right now to help home owners who in trouble. Now if that doesn't work, you should appeal to one of the many national programs out there. I want to show you some phone numbers here. Hud.gov can be reached 800-225-5342 that is and then of course, the Department of Housing and Urban Development, You can also call the Home Ownership Preservation Foundation at 888-995- HOPE.

And if you're having financial problems, maybe you're just worried about losing your home or maybe you're not even at the brink of foreclosure yet, call the National Foundation for Credit Counseling. They can get you a counselor, talk you through the problems, their phone number 866-845-2227. And one thing to understand here, in most states, not Georgia frankly, but in most states, time is on your side. Foreclosures typically take a year or longer to run their course. And that means you have time, time to try to get a new loan, a modification of your existing loan, some peace of mind. Use that time wisely. Contact your lender. Get a new loan.

PHILLIPS: Gerri, thanks.

WILLIS: My pleasure.

PHILLIPS: The UN Secretary-General says that he's outraged by today's Israeli shelling of the UN relief headquarters in Gaza. The Israeli prime minister is apologizing but he says Israeli forces attacked because militants had opened fire from the UN site. Ben Wedeman entered Gaza territory today. He joins me now on the phone from Rafah. Ben, can you give us a feel for what it's like inside on the ground there in Gaza?

All right. Ben, are you with me? BEN WEDEMAN, CNN CORRESPONDENT: Yes, I am, Kyra.

PHILLIPS: I know it's tough communications there via Gaza. But you finally got in there, you're on the ground. Tell us what's going on.

WEDEMAN: Right now in Rafah where we are at the southern end of the Gaza strip, it is very quiet. We can hear overhead an Israeli drone. Earlier we did hear some jets flying overhead. Bombing not in this area, but it seems in the border areas between Egypt and Gaza. In this area, the streets are utterly abandoned. There's nobody out there. Electricity, not everywhere, but in the block we are, there is. But all the stores which earlier there were a few stores that were open. They're all now closed. It's a very eerie silence here in Rafah. I'm told by people here that it's actually the quietest day they've had in quite some time. They said that yesterday and the day before, there was intense Israeli bombardment of the border area. But they say that so far today, it has been quiet. Kyra?

PHILLIPS: We'll continue to check in with you. Ben Wedeman there from Rafah, appreciate it.

You could be outside just a few minutes and put your life at risk. We're going to get the latest on that cold weather that's breaking records from the Canadian border all the way to the Gulf coast.

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PHILLIPS: Chad Myers, you're one busy man today.

(WEATHER REPORT)

PHILLIPS: They first checked their eyes. Then they checked the address and what do you know, the check was for real. A cheery big surprise when they got a big check from the president-elect and his wife.

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PHILLIPS: A bizarre police case tops the (INAUDIBLE) file as it's a policeman who stands accused. Houston cop Richard Butler is in some pretty hot water. A woman says that he helped her out in a domestic disturbance by driving her drunk husband to a friend's house. But then she says Officer Butler returned and had nonconsensual sex with her. He now faces felony charges, has been removed from duty and internal affairs is investigating.

A shock for the parents of a California teen when they saw her cell phone statement. Last month she sent, ready for this, 14,528 text messages. This kid needs to start doing something else with her time. That's almost 500 a day, or one every two waking minutes. Good thing the family's plan is unlimited text for 30 bucks a month. Otherwise dad said he probably would owe AT&T about 3,000 bucks.

For better, for worse, for here or to go, yes, you're looking at the couple who got hitched at Taco Bell. They exchanged vows in a booth while customers just kept on ordering their tacos. It's not like they work there or even met there. They actually met online. And they both just love Taco Bell. So there. And this happened in Normal, Illinois, by the way.

You know his work, you might not know his past. The story behind the artist behind those Obama posters. Why he was already an urban legend.

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PHILLIPS: Clearly it couldn't be real. It was a check made out to the United Way of Galveston, Texas, from Barack and Michelle Obama. After all, they've got a few other things on their mind these days, right. But when the director deposited it, well, it cleared. The money will go to help victims of hurricane Ike. So, hey, watch your mailboxes. You never know when you're going to get some mail from the chief.

And he was once known as a protester and a graffiti artist, a poster child of controversy, you might say, now Shepard Fairey is the man behind an iconic image of President-Elect Barack Obama. Ted Rowlands has his story.

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SHEPARD FAIREY, ARTIST: This is the official inauguration poster.

TED ROWLANDS, CNN CORRESPONDENT (voice-over): On one hand it makes perfect sense that Shepard Fairey was chosen to create the official Obama inauguration poster. After all, he's the artist behind this image of the president-elect that became synonymous with the Obama campaign. On the other hand, picking Shepard Fairey could be seen as controversial.

FAIREY: I'm an artist with a somewhat sordid past in terms of doing street art that some people considered illegal.

ROWLANDS: Fairey is a street art legend. If you live in an urban area, chances are you've seen his work and there's a good chance it was put up illegally. By his own account, Fairey has been arrested more than a dozen times. Go to youtube and you can find videos of him in action. So how did this guy get hooked up with Obama?

FAIREY: When he announced he was running for president, I thought, I would love to lend my talents in support of his campaign in any way possible.

ROWLAND: He says he contacted the campaign. They gave him an unofficial go-ahead to submit work and he came up with this.

FAIREY: The original image that I did said progress. And the campaign got in touch with me after that had been out for about a week and said, do you mind using hope? We like the word hope.

ROWLANDS: The hope poster was an instant hit. After that, he made change, then vote.

FAIREY: I received a letter from Barack Obama thanking me only a month after creating the hope poster, saying thank you for lending your support to -- your artistic support to my campaign.

ROWLANDS: The Smithsonian is adding his Obama art to the permanent collection at the National Portrait gallery and "Time" magazine commissioned Fairey to create its person of the year cover.

FAIREY: A lot of people feel like they're spectators in a democracy for big business and power brokers and that's just not the case. This proves that that's not the case.

ROWLANDS: Fairey's latest work, the inauguration poster, will be featured at several official inaugural events. And who knows, it may end up on a few street corners as well. Ted Rowlands, CNN, Los Angeles.

(END VIDEO TAPE)

PHILLIPS: I'm Kyra Phillips. We'll see you back here tomorrow. Rick Sanchez is going to take it from here.