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THE SITUATION ROOM

Obama Breaks With Bush Terror Tactics; Michelle Obama's Agenda

Aired January 22, 2009 - 18:00   ET

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


WOLF BLITZER, CNN ANCHOR: To our viewers, you're in THE SITUATION ROOM.
Happening now: President Obama vows to fight terrorists on the moral high ground -- this hour, his dramatic break with the Bush administration's policies and its treatment of terror suspects.

Also, see the president's super-secret, super-expensive BlackBerry for yourself. The amazing device costs about $3,000. Wow. It will let him stay plugged in, though.

And new this hour, Michelle Obama tries to move beyond all the buzz about her inauguration wardrobe. Don Lemon, standing by, he's going to take us inside and show us what the first lady is focusing in on right now -- all of that and the best political team on television.

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

President Barack Obama says on his watch, the United States no longer has to make a false choice between our safety and our ideals, a direct quote from him. He's moving aggressively on several fronts today to overhaul the war on terror and to put his stamp on national security.

Our White House correspondent, Dan Lothian, is standing by. He's got the full story on what the president did today, his second full day in office.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That's right, and Mr. Obama saying that these orders today will make America safer. But it really is sort of a broad approach. There's still a lot of details to be worked out.

(BEGIN VIDEOTAPE)

LOTHIAN (voice-over): President Obama used his pen to make a clean break from the Bush policy on the war on terror, signing three executive orders that will uproot the Guantanamo Bay prison facility and its detainees.

OBAMA: The message that we are sending around the world is that the United States intends to prosecute the ongoing struggle against violence and terrorism. And we are going to do so vigilantly. We are going to do so effectively. And we are going to do so in a matter that is consistent with our values and our ideals. LOTHIAN: Obama has ordered Gitmo closed within a year. A senior administration official says a group made up of the attorney general, who has yet to be confirmed, the secretary of state and defense and others will determine where the detainees should be sent and how they will be prosecuted.

In his first briefing, Press Secretary Robert Gibbs said the president relied heavily on his military experts before deciding to shut Gitmo down.

ROBERT GIBBS, PRESS SECRETARY: He believes that with this, we've made our security stronger.

LOTHIAN: Obama's also banning torture techniques and requiring all U.S. personnel to follow the U.S. Army Field Manual while interrogating detainees.

GIBBS: The president believes that torture is wrong. And we've taken steps today to make sure that those beliefs are upheld.

LOTHIAN: And all detention policies will now be reviewed to avoid future mine fields when it comes to how detainees are handled.

But House Republican Leader John Boehner has questions about how these executive orders will play out, where the detainees will go, how they will eventually be brought to justice.

REP. JOHN BOEHNER (R), MINORITY LEADER: And I'm concerned that some will be let go too soon, could end up back on the battlefield.

(END VIDEOTAPE)

LOTHIAN: And in what is a first for a U.S. president, Mr. Obama will be getting daily economic briefings.

Now, as you know, Wolf, presidents typically get national security briefings. And this kind of goes to show how this administration feels that national security and the economy are really on par -- Wolf.

BLITZER: It's very smart to do that.

All right. Just moments ago, the president of the United States, Dan, walked into the White House Briefing Room. You were there. We showed our viewers the video. We heard a little bit of what he said. He said it looks a lot smaller in person than it does on television. How did it go?

LOTHIAN: Well, that's right. He didn't just only walk into the Briefing Room, but he decided to go through the area where all the reporters' offices are, upstairs. Then you have a downstairs area where our office is. He decided he wanted to take a tour of all of the reporters' offices.

As you heard earlier, he was talking about how he didn't think that it was that small. It's pretty tight in that area. He was in that hallway. Of course, everybody was packed in there. He came by. He shook my hand. I asked him how things are going. He said that he's enjoying it very much. Another reporter asked the president if he was getting a chance to work out. He said that he was, that he was working out.

He found a small gym up on the third floor of the White House. I asked him if he had played any basketball at all, and he said, no, it's too cold outside to play basketball.

The president also said that he was very proud of Robert Gibbs and that he gave him a fist pump after his briefing today, so the president making this unexpected tour, not only around the Briefing Room, but through all of the offices of the reporters' of the White House -- Wolf.

BLITZER: I think Robert Gibbs got off to a pretty good start. Thanks very much, Dan.

Dan Lothian is our White House correspondent.

The secretary of state, Hillary Clinton, is sending a message of her own today to her staff and to the entire world. She says it won't be easy to bring new muscle to the State Department, and she will need a lot of help.

(BEGIN VIDEO CLIP)

HILLARY RODHAM CLINTON, U.S. SECRETARY OF STATE: This is going to be a challenging time. And it will require 21st century tools and solutions to meet our problems and seize our opportunities.

I'm going to be asking a lot of you. I want you to think outside the proverbial box. I want you to give me the best advice you can. I want you to understand there is nothing that I welcome more than a good debate and the kind of dialogue that will make us better.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

BLITZER: She got a rousing reception when she walked into the State Department today.

Let's go to our foreign affairs correspondent, Jill Dougherty.

Jill, it was pretty amazing, when you think about her, you know, history, what happened, and now she's going to be running U.S. diplomacy.

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Yes, it really is. I mean, it's quite astounding.

And the reception was very, very good. And you have to kind of immediately think, how is she going to fit into this foreign policy structure that the president has? Because, after all, he has some very heavy hitters. I mean, we have two of them who were named envoys and special representatives today. George Mitchell, the former senator, peacemaker in Northern Ireland, peacemaker to a certain extent in the Middle East, he's going to be the new special envoy to the Middle East. You also have Richard Holbrooke, who is going to be named as the special representative to Afghanistan and Pakistan.

And they will all be jockeying for position. So, it will be interesting to watch.

BLITZER: And you will be watching it for us, Jill. Thanks very much.

Team Obama now taking charge across Washington. The president's Cabinet secretaries are moving forward, big-time, with some major goals, huge promises to keep.

Our national political correspondent, Jessica Yellin, is here.

Let's talk about a little bit health, Health and Human Services, Tom Daschle, the new secretary.

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: That's right.

Health care reform will be Tom Daschle's first priority, Wolf. And top administration officials say he will get under way with that in late February or early March. But there's a number of other initiatives he can cut costs -- use to cut costs and reform the system.

That includes supporting a move to electronic medical records. The administration says that could help reduce paperwork and streamline the system. Daschle has also personally come up with ideas of his own, creating, for example, a federal health board that would review and decide which treatments work best and which should be reimbursed by the government.

Another Daschle initiative might be having the HHS negotiate Medicare drug prices to get them lower, and then something President Obama emphasized in his inaugural address, this idea of restoring science to its rightful place. The Obama administration thinks there was political interference in science during the Bush administration. And they want to change that -- Wolf.

BLITZER: And he's going to have an office in the White House, too, as you know, in addition to the office at HHS.

What's going on at the Energy and Labor Departments?

YELLIN: Well, there's a lot of work that has to begin. The Energy Department is tasked with supporting the development of alternative energies, so, wind, solar, geothermal energies.

But you might be surprised by this. The secretary, too, has also said he supports development of nuclear and coal plants as well. And he will promote the development of plug-in or electric hybrid cars. Now, in the Labor Department, looking over there, well, with all these job losses, they are going to focus on providing more job training to American workers, especially for so-called green jobs. And the secretary-designate, Hilda Solis, says she wants to focus on jobs training for returning veterans.

Now, it's still rocky over at those agencies, Wolf. Two of those secretaries have not yet been confirmed. But you did mention that Tom Daschle is going to be -- this new White House Office of Health Care Reform. We understand Obama will sign the executive orders for that maybe tonight or tomorrow morning.

BLITZER: All right, good for Tom Daschle. We wish all of these secretaries a lot of good luck, their missions important, indeed. Thank you, Jessica, for that.

Jack Cafferty is once again joining us for "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Every president gets a honeymoon period. Some are shorter than others. But with an approval rating in the 80s, President Obama has a lot of political capital to spend and presumably a good long time before he runs out of goodwill.

That being said, he's in a precarious position right from the get-go. We're in the midst of an economic crisis that no one seems to have a firm understanding of. And there are heated debates already about the best way to proceed when it comes to things like bailouts and spending programs and tax cuts, et cetera.

Then there are the wars. Pull out of Iraq, step it up in Afghanistan sounds good, right? What if Iran comes into Iraq through one door as we're leaving through another? We haven't been attacked in seven-and-a-half years, but terrorism is still a fact of life. Global warming, health insurance, pick something you like.

Nevertheless, the new president's off to a good start, and this time we appear to be in the hands of someone less inclined to shoot from the hip. But even President Obama's coolness under fire will be tested at some point, either by domestic politics or foreign affairs.

So, here's the question. Where's President Obama likely to encounter the most difficulty early in his presidency? Go to CNN.com/caffertyfile and post a comment on my blog.

BLITZER: Thank you very much, Jack. Jack Cafferty will be back shortly.

Some accused the Bush administration of torture. Now President Obama wants to make one thing very clear.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This morning I signed three executive orders. First, I can say without, exception or equivocation, that the United States will not torture. (END VIDEO CLIP)

BLITZER: The president drawing a bold line in the sand. You're going to hear him explain why he reversed other Bush administration policies today in his own words. That's coming up.

And Michelle Obama has an Ivy League degree, in fact, two of them, and a powerhouse resume. So, some people are angry at all the attention on her hair, her makeup and her dresses. What's going on? Don Lemon standing by.

And want to see what the president was doing moments before becoming president? We have some private and revealing behind-the- scenes pictures.

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: President Obama joined Hillary Clinton over at the State Department today to welcome new additions to his diplomatic team. That would be former Senator George Mitchell, tapped as a special envoy to the Middle East, and former U.S. Ambassador to the U.N. Richard Holbrooke, now named as a special representative to Afghanistan and Pakistan.

Listen to Mr. Obama right now at length talking to State Department staffers about their global mission.

(BEGIN VIDEO CLIP)

OBAMA: I have given you an early gift, Hillary Clinton.

(CHEERING AND APPLAUSE)

OBAMA: You -- in her, you will have a secretary of state who has my full confidence. And I want to thank Chairman Kerry and the Senate for acting swiftly to confirm her, because we have no time to lose.

My appearance today, as has been noted, underscores my commitment to the importance of diplomacy and renewing American leadership. And it gives me an opportunity to thank you for the services that you perform every single day.

Sometimes I think the American public doesn't fully understand the sacrifices that you and your families make, the dedication that is involved in you carrying on your tasks day in, day out.

And I know I speak for Joe Biden, as well as everybody else on this stage, when we tell you that we are proud of you. You are carrying on a vital task in the safety and security of the American people.

And part of what we want to do is to make sure that everybody understands that the State Department is going to be absolutely critical to our success in the years to come, and you individually are going to be critical to our success in the years to come. And we want to send a signal to all kinds of young people who may be thinking about the Foreign Service that they are going to be critical in terms of projecting not just America's power, but also America's values and America's ideals.

The inheritance of our young century demands a new era of American leadership. We must recognize that America's strength comes not just from the might of our arms or the scale of our wealth, but from our enduring values. And for the sake of our national security and the common aspirations of people around the globe, this era has to begin now.

This morning, I signed three executive orders. First, I can say without exception or equivocation that the United States will not torture.

(CHEERING AND APPLAUSE)

OBAMA: Second, we will close the Guantanamo Bay detention camp and determine how to deal with those who have been held there.

And, third, we will immediately undertake a comprehensive review to determine how to hold and try terrorism suspects to best protect our nation and the rule of law.

The world needs to understand that America will be unyielding in its defense of its security and relentless in its pursuit of those who would carry out terrorism or threaten the United States. And that's why, in this twilight struggle, we need a durable framework.

The orders that I signed today should send an unmistakable signal that our actions in defense of liberty will be just as our cause and that we, the people, will uphold our fundamental values as vigilantly as we protect our security. Once again, America's moral example must be the bedrock and the beacon of our global leadership.

We are confronted by extraordinary, complex and interconnected global challenges: the war on terror, sectarian division, and the spread of deadly technology. We did not ask for the burden that history has asked us to bear, but Americans will bear it. We must bear it.

Progress will not come quickly or easily, nor can we promise to right every single wrong around the world. But we can pledge to use all elements of American power to protect our people and to promote our interests and ideals, starting with principled, focused and sustained American diplomacy.

Another urgent threat to global security is the deteriorating situation in Afghanistan and Pakistan. This is the central front in our enduring struggle against terrorism and extremism. There, as in the Middle East, we must understand that we cannot deal with our problems in isolation.

There is no answer in Afghanistan that does not confront the al Qaeda and Taliban bases along the border, and there will be no lasting peace unless we expand spheres of opportunity for the people of Afghanistan and Pakistan. This is truly an international challenge of the highest order.

And that's why Secretary Clinton and I are naming Ambassador Richard Holbrooke to be special representative for Afghanistan and Pakistan. Ambassador Holbrooke is one of the most talented diplomats of his generation. Over several decades, he's served on different continents and as an outstanding ambassador to the United Nations.

He has strengthened ties with our allies, tackled the toughest negotiations, and helped deliver a hard-earned peace as an architect of the Dayton Accords. He will help lead our effort to forge and implement a strategic and sustainable approach to this critical region.

The American people and the international community must understand that the situation is perilous and progress will take time. Violence is up dramatically in Afghanistan. A deadly insurgency has taken deep root. The opium trade is far and away the largest in the world.

The Afghan government has been unable to deliver basic services. Al Qaeda and the Taliban strike from bases embedded in rugged tribal terrain along the Pakistani border. And while we have yet to see another attack on our soil since 9/11, al Qaeda terrorists remain at large and remain plotting.

Going forward, we must set clear priorities in pursuit of achievable goals that contribute to our collective security. My administration is committed to refocusing attention and resources on Afghanistan and Pakistan and to spending those resources wisely. And that's why we are pursuing a careful review of our policy.

We will seek stronger partnerships with the governments of the region, sustain cooperation with our NATO allies, deeper engagement with the Afghan and Pakistani people, and a comprehensive strategy to combat terror and extremism.

We will provide the strategic guidance to meet our objectives, and we pledge to support the extraordinary Americans serving in Afghanistan, both military and civilian, with the resources that they need.

These appointments add to a team that will work with energy and purpose to meet the challenges of our time and to define a future of expanding security and opportunity.

Difficult days lie ahead. As we ask more of ourselves, we will seek new partnerships and ask more of our friends and more of people around the globe, because security in the 21st century is shared.

But let there be no doubt about America's commitment to lead. We can no longer afford drift, and we can no longer afford delay.

(END VIDEO CLIP)

BLITZER: President Obama speaking earlier today over at the State Department.

There were slip-ups, there were stumbles for the first time. So, the president took the oath of office a second time. But there's a little controversy still about that.

Plus, the first of its kind, the president gets a high-tech, highly secure device with a pretty hefty price tag. We will tell you about his new BlackBerry.

And two Ivy League degrees and a resume to match -- why some are frustrated that coverage of Michelle Obama seems to be about all frills and fashions.

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

(COMMERCIAL BREAK)

BLITZER: By now, everyone knows that the president loves his BlackBerry. He used to walk around with two of them. He was determined to keep it, even in the White House. And guess what? He's got a new high-tech device that allows him to stay in touch.

What's the latest, Brian?

BRIAN TODD, CNN CORRESPONDENT: Well, it looks, Wolf, like at least some of those security concerns about this new device have been addressed. And it looks like the president is getting an upgrade.

(BEGIN VIDEOTAPE)

TODD (voice-over): It's official. The new president won't have to kick his tech habit.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: The president has a BlackBerry through a compromise that allows him to stay in touch with senior staff and a small group of personal friends in a way that use will be limited and that the security is enhanced.

TODD: Published reports say the president's new device could be the Sectera Edge, made by General Dynamics. It's not available to the public. And the company says the $3,300 portable has to be approved by the National Security Agency before government officials can use it. Why?

A General Dynamics official took us through the capabilities of this personal digital assistant, or PDA.

MICHAEL GUZELIAN, GENERAL DYNAMICS: The device has -- is two BlackBerrys in one. It's an unclassified PDA that can go out to a Web site, like Weather.com, or check flights. And, then, with one push of a button, you switch over to a classified PDA, which would allow you to access secret e-mail or secret Web sites.

TODD: Phone calls are made by pressing that telephone button. But hit the button for the red background, and it's a top-secret phone call. We e-mailed the NSA, asking whether it approved the Sectera Edge for Mr. Obama's use. The agency referred us to the White House, which wouldn't say which device the president has. Press Secretary Robert Gibbs didn't say whether Mr. Obama would communicate with his entire staff with his BlackBerry, but did say why he thought he should have one.

GIBBS: He believes it's a way of keeping in touch with -- with -- with folks, a way of doing it outside of getting stuck in a bubble.

(END VIDEOTAPE)

TODD: Now, to concerns about security and warnings that we have gotten that no device is hack-proof, the General Dynamics official said the NSA wouldn't have certified any device that was so easily hacked, Wolf. So, they're pretty confident about it.

BLITZER: I would love to get his e-mail address.

TODD: Absolutely.

BLITZER: Then we could send him some e-mail, and we could be in touch, too.

(CROSSTALK)

TODD: I'm sure he will take it.

BLITZER: I suspect we're not going to get that.

All right, thanks, Brian, very much.

The president has corrected the chief justice's high-profile flub. We're going to take you inside the do-over of Mr. Obama's oath of office.

On her first days as first lady, Michelle Obama shows she's fashion-forward, but is there too much talk about her clothes?

And truly remarkable images of the inauguration. We're about to take you behind the scenes, behind the scenes of President Obama's big day, pictures you will want to see, right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

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

Happening now: oath of office do-over. President Barack Obama gets sworn in again after the Inauguration Day flub. But why were TV cameras kept away?

In the spotlight, America's new first lady, Michelle Obama, but some say much too much attention is being paid to her appearance -- what they want talked about instead.

And bowing out, Caroline Kennedy, she's leaving behind, though, some big questions about why she won't be taking over Hillary Clinton's Senate seat -- all of this, plus the best political team on television.

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

But, first, the do-over of the oath of office.

Let's go to Deb Feyerick. She's working on this story. They had to do it a second time -- Deb.

How did it come about?

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, two things are really going on here with this second swearing-in.

First, lawyers really wanted to quash any possible conspiracy theories that Barack Obama was somehow not president simply because the chief justice switched around the word "faithfully" while administering the oath of office.

But, also, there was a question of who got into that ceremony and who got shut out.

(BEGIN VIDEOTAPE)

FEYERICK: Unlike the first swearing-in, with the massive crowds and wall to wall cameras, the second swearing-in was totally subdued -- recorded for history by a White House photographer and a grainy voice recorder.

JOHN ROBERTS, CHIEF JUSTICE OF THE UNITED STATES: I will faithfully execute the office of president of the United States.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: I was there. But it was far easier to get tickets for this one.

FEYERICK: But having promised transparency by the administration, many questioned why the majority reporters had been shut out at such a rare event -- putting the new White House press secretary on the defensive.

UNIDENTIFIED MALE: You know, sort of to transparency, why didn't you show the world this?

GIBBS: We think it was done in a way that was up front and transparent.

FEYERICK: But why re-do it in the first place, since it seemed such a small thing on such a big day -- misplacing the word "faithfully".

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: And I will execute...

ROBERTS: The of -- faithfully, the president -- the office of president of the United States. OBAMA: The office of president of the United States faithfully.

FEYERICK: The question surfaced almost instantly.

(BEGIN VIDEO CLIP FROM YOUTUBE/FOX NEWS CHANNEL)

UNIDENTIFIED MALE: I have to say, I'm not sure that Barack Obama really is the president of the United States.

(END VIDEO CLIP)

FEYERICK: And the Internet world was buzzing.

DOUGLAS BRINKLEY, PRESIDENTIAL HISTORIAN: If they didn't do it over again, you would have started getting into the conspiracy theory school. The blogosphere was starting to explode that Obama wasn't a real president.

FEYERICK: After considering it and on advice of the White House counsel, President Obama had his first official do-over.

GIBBS: Out of abundance of caution, Chief Justice Roberts came last night to re-administer the oath.

(END VIDEO TAPE)

FEYERICK: Now, Constitutional experts say it's crazy that anyone would actually file a lawsuit questioning President Obama's legitimacy as commander-in-chief.

But why take even the slightest chance?

And in case you're wondering, no, President Obama will have to re-sign any executive orders signed prior to the second swearing-in -- Wolf.

BLITZER: Thanks very much, Deb Feyerick, for that.

President Obama, by the way, joins an exclusive club -- very exclusive -- presidents who've had to redo their swearing-in ceremonies. Only two others have.

Back in 1981, Chester Arthur was sworn in in New York by the state's chief justice after President James Garfield's assassination. But two days later, Arthur redid it in Washington to establish a federal record.

In 1923, after President Warren Harding died of a heart attack, Calvin Coolidge was sworn in by his father in Vermont. But questions about his father's not only being a notary, not a federal official, caused Coolidge to retake the oath of office here in Washington.

Don Lemon is taking a closer look at the new first lady of the United States. And it's fascinating to see what's been going on yesterday and today and some controversy that's coming up.

DON LEMON, CNN CORRESPONDENT: Yes, it is a controversy, because all you hear about, Wolf, the dress, the dress -- what she wears.

But you know what, until just a couple days ago, Michelle Obama's resume was even beefier than her husband's.

And some people are wondering why all this focus on the frills?

(BEGIN VIDEOTAPE)

LEMON (voice-over): Michelle Obama, first lady or the new it girl?

Page after page of an Internet news search of her name -- the first few hundred articles all about her clothes. And a whole lot of Americans aren't happy about that obsession.

UNIDENTIFIED FEMALE: It's completely superficial.

UNIDENTIFIED FEMALE: I would like to see the media definitely emphasizing the community and cultural aspect of who she is.

LEMON: So why the focus on frills and fashion for a woman who has led a most substantial life -- Princeton University, Harvard Law School and a resume that rivals her husband's?

First lady historian and author, Carl Anthony.

CARL ANTHONY, HISTORIAN, NATIONAL FIRST LADIES LIBRARY: And I think it's the lack of balance which is dangerous, because it's in these early days that that persona gets set. And oftentimes the media doesn't depart from that.

LEMON: However, if the White House is ready to roll out the serious side of Michelle Obama, it's hard to tell.

(on camera): All right. It's called the first lady's press office.

UNIDENTIFIED FEMALE: You've reached Mrs. Bush's press office. Please leave your name, number and a detailed message.

LEMON (voice-over): Oops, a little update needed.

White House spokesperson Robert Gibbs says so far, Mrs. Obama appears to be taking it all in stride -- focusing first on making sure her daughters are settled into the White House.

GIBBS: I know the family has moved now three times in only a few weeks. But if you know them and you know their family, they -- they've had a routine for a long time. This is a monumental testament to Michelle.

(END VIDEO TAPE)

LEMON: And, Wolf, I checked with the first lady's press office just before I went on the air and it still says Mrs. Bush on the answering machine. BLITZER: They've got -- they've got to fix that.

LEMON: They've got to fix that.

BLITZER: But I love the fact that her first priority, understandably, are those two daughters, as it should be.

LEMON: Yes. Two daughters, as it should be. She said for the next couple of days, at least -- weeks -- she will have no public schedule possibly, just to make sure those -- those girls get acclimated to Washington.

BLITZER: Very smart.

All right, don't leave. We're going to use you some more.

Don Lemon, a good report.

A financial rescue plan gets top priority at the White House.

(BEGIN VIDEO CLIP)

GIBBS: We have to do everything in our power -- and Congress does, too -- to get that package moving, to get that money into the economy.

(END VIDEO CLIP)

BLITZER: The new White House press secretary says the president will receive a daily briefing on the economy, just like his intelligence briefing.

Is that merely symbolism or substance?

What's going on?

Plus, new behind-the-scenes pictures of Barack Obama -- private moments on Inauguration Day. We're going to give you a sneak peek right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: We're back with the best political team on television.

Joining us once again, Don Lemon and CNN political contributor Dana Milbank of "The Washington Post," and Tara Wall, the deputy editor of "The Washington Times" -- the deputy editorial page editor, I should say.

TARA WALL, "WASHINGTON TIMES": Actually, it is deputy editor.

BLITZER: Oh, you are now deputy editor?

(LAUGHTER)

BLITZER: All right. Thank you for correcting me. DANA MILBANK, CNN CONTRIBUTOR "WASHINGTON POST": A promotion.

BLITZER: Congratulations on the promotion.

Tara, let me star with you then, because you're a deputy editor right now.

(LAUGHTER)

BLITZER: He's going to get -- the president of United States -- not only a daily intelligence briefing...

WALL: Yes.

BLITZER: But now a daily briefing on the economy. I think that's pretty smart, given the enormity of what's going on.

Why has it taken so long?

Isn't this a good idea?

WALL: Well, I do think it's a good idea. And I think part of it, too, though, is the push-back that you're seeing from Republicans in Congress. This is not going to be an easy pill to swallow. It's not going to be as easy as he thought to get through.

So I think between the Congressional Budget Office saying that, you know, all that money is not going to get out there -- less than 40 percent they're saying. In addition to now, you know, Republicans saying the stimulus package isn't so stimulative and it's -- and it's, you know, veering off further and further from what Obama originally said, I think that he -- the fact that he's going to have his daily briefing is probably mandatory in light of the dynamics that we're facing and the push-back that he's getting.

KING: And Larry Summers, his chief economic adviser, a former Treasury secretary, presumably is going to do that briefing.

MILBANK: He is. And I think that's the significance rather than the briefing itself. Obviously, a president is always being told what's going on with the economy.

But Summers is really the 800-pound gorilla in the room there. And the question is, is this daily access to the president, always having his ear, going to sort of push Tim Geithner out of the picture a bit?

I think that will be an interesting dynamic going forward.

BLITZER: It's interesting that, you know, he's -- he's an intellectual, Barack Obama. And he wants to absorb as much as he can. He's really curious about all this stuff.

LEMON: Yes, he is really curious about that. That's why he wants to keep -- you know, keep his BlackBerry, because he wants to stay in touch with the American people. And I think this is absolutely warranted now that he gets this briefing, because you heard Robert Gibbs today saying $825 billion...

WALL: Twenty-five billion.

LEMON: It's going to be more...

WALL: Two 2 trillion.

LEMON: ...than that.

WALL: Yes.

LEMON: So -- you know, and that was huge. So yes, he needs to be plugged in -- Wolf.

BLITZER: What did you think of him having to redo the oath of office?

WALL: Well, I think it was a little ridiculous, honestly. I mean come on.

LEMON: You would be the...

(LAUGHTER)

LEMON: You would be criticizing...

(CROSSTALK)

WALL: No. No, I think...

(CROSSTALK)

LEMON: ...that he's not the president.

WALL: I think...

LEMON: Come on, Tara.

WALL: No, honestly, I think he bowed to the pressure of the bloggers. And, you know, granted, I understand he wants to have the pulse of his constituents. But legally, Robert Gibbs himself said, legally we knew it was fine. Everything was fine.

So, you know, why do it?

MILBANK: I think they were trying to solve that one potential headache of somebody filing a lawsuit and wound up creating another one.

They didn't have cameras in there.

WALL: They didn't have the bible. You know, he didn't have to...

MILBANK: It made it look like they were sneaking him off there in the dark of night and now he's got to...

BLITZER: They didn't try to hide it, but they just didn't let the (INAUDIBLE)...

LEMON: They didn't announce it in advance.

BLITZER: Is it just reporters who care about that?

WALL: Yes.

BLITZER: Or do you think the American public...

(CROSSTALK)

BLITZER: ...Dana, really cares?

MILBANK: I suspect the American public is not primarily concerned with how many times and whether he said the right order of the oath. But, really, all we care about is the press, Wolf.

LEMON: I disagree. I think...

(LAUGHTER)

LEMON: I think they would like to have seen the videotape of him. I would have.

WALL: Well, from a strategic communications standpoint, I can understand. I've been on both sides. I mean my experience has been television news. And, of course, as a television newscaster, I'd want to see the video.

But from a strategic standpoint, communications-wise, having been a former spokesperson, you know that that's not the video -- or at least they know that's not the video they want out there on YouTube or to be seen. They want...

UNIDENTIFIED MALE: The do-over.

WALL: They want to craft it. They don't want the do-over on video. They want the appropriate video out there, which is the actual swearing-in. The rest, because they had to, at least, you know, say that they redid this -- give some type of indication how it went down and put it on pictures. And this...

BLITZER: Dana, I was pretty surprised last night when we heard officially that Caroline Kennedy was withdrawing her name for consideration as Hillary Clinton's successor as a senator from New York.

MILBANK: Yes, what a crazy story. She was withdrawing, then she wasn't, then all of a sudden she was again.

And everybody today is saying, did she jump, was she pushed?

It sounds like she jumped, maybe fearing that she was going to be pushed here, where people are still sifting through this. But it really still sounds like that probably was her Senate seat, except something -- personal issues lurking up here (INAUDIBLE). BLITZER: Although Governor David Paterson, as all of us know, he's a pretty independent guy. And, you know, he may have been under a lot of pressure to just give it to Caroline Kennedy, but he not necessarily was going to succumb to that pressure.

LEMON: Yes. He told us on Monday that he hadn't decided. But I mean let's be honest about this. Regardless, if he would have had a fight on his hands, I think, from the people, because she was behind in the polls. I think the latest poll was 31 to 24. It was Andrew Cuomo, the state attorney general.

So I think that the odds were not in his favor for public support if he picked her.

BLITZER: It's pretty interesting.

Do you think she'll sort of disappear now, as she tried to do most of her adult life?

Or, even though she's not going to be the senator, she'll become a public figure out there and maintain the option of going into politics?

WALL: Well, I personally think that's part -- that was part of it. That's the dichotomy. I mean she is a very personal -- personal person. She likes her privacy. And I don't think she realized, putting herself out there, how much she was really going to have to put herself out there.

So I think that she'll go back to doing the things that she does very well, which is humanitarian efforts and that kind of thing -- fundraising and all -- and being a lawyer.

But I don't see, in the long run -- not the short or long run -- of her returning to any interest whatsoever in running for public office.

BLITZER: Hillary Clinton, when she ran into New York State, she managed to deal with a rough and tumble New York media. It wasn't that easy for Caroline Kennedy, given her lack of involvement. She tried to be away from the spotlight all of those years.

MILBANK: No. She had several stumbles along the way. And, of course, the New York press is not the easiest to deal with...

LEMON: It was tough for Hillary Clinton, too, in the beginning.

MILBANK: It absolutely was.

WALL: Right.

MILBANK: And now maybe she just didn't have...

WALL: But she's a fighter...

MILBANK: ...the fortitude to stick with it. WALL: I don't think she had the fight.

MILBANK: That said, you know, her uncle is ailing right now and I'd be surprised if we don't see more Kennedys in public life again.

BLITZER: All right. Because you've got to have the fire in the belly...

WALL: That's right.

BLITZER: ...and apparently she didn't have it.

Guys, thanks very much.

Let's check in with Lou to see what's coming up at the top of the hour.

What are you working on -- Lou?

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Wolf, thank you.

We're reporting tonight on President Obama's promise to make moral values the bedrock of U.S. foreign policy.

But is the president putting political correctness ahead of national security?

We'll have complete coverage of that issue, as well.

Also tonight, much more on why Caroline Kennedy declared she's no longer interested in the Senate seat vacated by our new secretary of State. We'll be telling you all about that and the rough and tumble New York media.

And new evidence of the government's utter failure to manage the huge bailout of Wall Street. You won't believe what Merrill Lynch and its former CEO, John Thain, were doing as the company demanded billions of dollars of taxpayer money -- and got it. We'll have the very latest for you on that.

And the very latest on a gun rights case in Wisconsin that could affect gun owners all across this country.

Join us for all of that, all the day's news at the top of the hour -- Wolf, back to you.

BLITZER: All right, Lou.

See you then.

Thank you.

Candid shots from inside Barack Obama's inner circle just before he was sworn in as president. We're about to take you behind-the- scenes. We have exclusive photos from our sister publication, "Time Magazine." You'll want to see it. And this...

(BEGIN VIDEO CLIP)

JEANNE MOOS, CNN CORRESPONDENT: You know who you should send one of these to?

UNIDENTIFIED MALE: Please.

MOOS: Obama's barber.

(END VIDEO CLIP)

BLITZER: Our own Jeanne Moss has a look at Moost Unusual piece of Obama memorabilia. And you'll see that right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Let's go right back to Jack for The Cafferty File -- Jack.

CAFFERTY: The question this hour is, where is President Obama likely to encounter the most difficulty early in his presidency?

Frank in Pennsylvania says: "He'll face the biggest challenge from his own party. The Democrats have been the loyal opposition for so long, it only knows what it's against, not what it's for. The leadership change that our country needs is not yet complete. We need to see a new chapter of Congressional leadership elected to move us forward."

Daniel in Indiana says: "Congress, that's where the most difficulty will come from. We have a Congress that's used to fighting just for the sake of fighting. I have little faith in Harry Reid or Nancy Pelosi pushing bipartisanship. I do think they'll continue to push division, as will the Republicans."

M.A.C. Writes: "It looks as if one area of difficulty might be the press corps. Why are they whining so much about the fact that even though they got pictures and audio on the oath redo, they weren't given a complete video? Much ado about nothing, in my opinion."

Earl in Florida: "The unemployment situation without a doubt the most important and difficult task at hand. Creating jobs is paramount -- gainfully employed homeowners who take pressure off home foreclosures while simultaneously stimulating the economy. The world's problems can wait until we get our financial house in order."

Keietta writes: "His problem will undoubtedly begin in his own backyard, with individuals who want to continue dividing the lines between parties. It's already started with the Republicans holding up the confirmation of the president's nomination of attorney general."

Arthur writes: "President Obama will inevitably have to deal with the fact that, as he says, the economy will get worse before it gets better. People tend to have a selective memory, especially when it comes to their wallets. And when this economic crisis deepens, he'll have to answer for its cause."

Jeff in Payson, Arizona

"Rush Limbaugh, Glenn Beck and the nuts at Fox Noise."

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.

BLITZER: We will do exactly that, Jack.

See you tomorrow.

Thank you.

And you might expect Barack Obama is hair to be turning gray. It is.

But green?

Jeanne Moss has a Moost Unusual look at a piece of Obama memorabilia.

(BEGIN VIDEOTAPE)

MOOS (voice-over): He just became president and already he has a statue.

(BEGIN VIDEO CLIP, COURTESY JOSEPH ENTERPRISES)

UNIDENTIFIED MALE: Introducing Chia Obama.

(END VIDEO CLIP)

MOOS: Yes, that Chia.

(BEGIN VIDEO CLIP, COURTESY JOSEPH ENTERPRISES)

UNIDENTIFIED MALE: There's a new pet.

(END VIDEO CLIP)

MOOS: Joining all the other Obamabilia -- from the Barack in the Box, to condoms, you can now place your order for the terra cotta Obama.

(BEGIN VIDEO CLIP, COURTESY JOSEPH ENTERPRISES)

UNIDENTIFIED MALE: Hail to the chi-chi-chi-chi-chief.

(END VIDEO CLIP)

OBAMA: I notice that I've been -- I've been getting gray.

MOOS: Yes, well, now you're going to be getting green. The Chia plant is part of the mint family.

(BEGIN VIDEO CLIP, COURTESY JOSEPH ENTERPRISES)

UNIDENTIFIED MALE: Each Chia Obama comes with a Chia seed pact.

(END VIDEO CLIP)

MOOS: Chia Obama works just like a Chia pet.

(BEGIN VIDEO CLIP, COURTESY JOSEPH ENTERPRISES)

UNIDENTIFIED MALE: Soak your Chia, spread the seeds, keep it watered and watch it grow.

(END VIDEO CLIP)

MOOS: Just like the Chia Homer Simpson, Chia Obama will grow as much as an inch-and-a-half of hair, says company V.P. Michael Hirsch.

(on camera): The president of the United States is going to have an afro.

MICHAEL HIRSCH, V.P. JOHNSON ENTERPRISES: He's going to have a Chia-fro.

MOOS (voice-over): He'll look a little like he did back in high school. Chia Obama comes in two poses -- determined or happy. You can preorder one for $19.99, but they won't be mass produced until spring. Of course, the Chia's hair dies in a month or so, but you can always replant.

HIRSCH: And you can use other seeds, as well.

MOOS (on camera): Pot -- could he be a pothead?

HIRSCH: Don't know.

MOOS (voice-over): And guess who the next Chia could be?

(on camera): So no plans yet for Chia Hillary?

HIRSCH: In the works.

MOOS (voice-over): The Chia folks are the same ones who brought us...

(VIDEO CLIP)

MOOS: Too bad they couldn't combine the two and he grows hair. That would make it the clapper Chia. The Chia pet is already in the Smithsonian. Now a Chia Obama is in the White House.

(BEGIN VIDEO CLIP, COURTESY JOSEPH ENTERPRISES)

UNIDENTIFIED MALE: Can you grow one?

Yes, you can.

(END VIDEO CLIP)

MOOS: Jeanne Moos, CNN, New York.

(END VIDEO TAPE)

BLITZER: Thank you, Jeanne.

Billions of people saw Barack Obama being sworn in. But only a handful have seen these behind-the-scenes pictures of Inauguration Day.

Guess what?

We're about to show you these pictures. You'll see them first right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

We're going to do something remarkable right now. We're going to take you behind-the-scenes with some really excellent pictures.

Callie Shell of "Time Magazine," our sister publication, is here.

Callie, you really have unbelievable access to the president of the United States.

I want to show our viewers some of the pictures in the new issue of "Time Magazine".

Now, turn around. Take a look at this picture.

Where was he?

What was he doing?

CALLIE SHELL, "TIME MAGAZINE" PHOTOGRAPHER: The large photograph?

BLITZER: Yes.

SHELL: This was in the Blair House on the second floor the day before the inauguration. And he was doing some last minute changes to his speech.

BLITZER: His inaugural speech?

He was practicing it?

SHELL: He was practicing.

BLITZER: He had a podium there for practice.

SHELL: Well, the podium, I think, is actually more so they can judge the height and where everything is supposed to go. I mean he knows how to speak at a podium. So I...

BLITZER: And the casual attire, indeed.

SHELL: ...so he was just doing his last minute -- you know, he did his own speech.

BLITZER: Revisions.

SHELL: And he's...

BLITZER: And they let you take some pictures.

SHELL: And they let me take some pictures.

BLITZER: Take a look at this next one. We're going to put another one up there.

Now, this one, it looks like he's rehearsing. But tell me what he's doing there.

SHELL: He is -- the staff person had come into a whole new room on the -- in the Senate. And Michelle -- they were showing -- he -- the president and first lady, what was going to go on outside. So he was practicing where the hand goes and basically how to hold -- keep your hand low enough so the thousands of cameras can actually see you and what's going on.

And that's Michelle's mother in the background.

BLITZER: Mrs. Robinson.

SHELL: Mrs. Robinson. And, you know, so the basic walk-through is just so -- it goes off smoothly, you know, right when you walk out.

So he's basically just making sure...

BLITZER: (INAUDIBLE).

SHELL: You can see my face, his hands.

BLITZER: He did that part right. The chief justice didn't necessarily do right...

SHELL: Right.

BLITZER: ...with the actual words.

All right. Let's go to the next...

SHELL: That's right here.

BLITZER: ...next picture, Callie.

Look at this. We see two presidents standing there.

SHELL: Yes. This... BLITZER: Where were they?

SHELL: This is in the foyer of the White House. And they had -- the families had come together in the Blue Room. The outgoing president always greets the incoming president. They had had coffee and tea. And they were getting ready -- the ladies had walked -- had already gone out to the car.

So they were -- you know, both had their coats. They had decided let's wear our coats. And they're -- I just liked it because they're -- you know, different parties, different people. And they're just doing the same thing.

BLITZER: And we can see that the new president is taller than the old president.

All right. Let's take a look at the next picture you got.

Here he is. It looks like he's getting ready to walk out on the podium, right?

SHELL: He's -- yes. This is the doorway before he would walk out and make his speech to a million people. And I think, you know and you get so used to making these speeches and the only way you can have a moment to yourself is to close your eyes for two seconds and just take it all in. And I think he was...

BLITZER: And you captured that moment.

SHELL: ...very comfortable (INAUDIBLE).

BLITZER: And I want to show you one more picture and -- because I love this picture coming up, the president and his wife and daughters.

SHELL: OK. This is in -- also in the foyer of the White House. And they had just come down from the residence real quick after the -- walking through the parade. And they're taking the girls out to watch the parade. And Sasha had taken off her shoes and had been running around. And so the first lady was doing what every mom does...

BLITZER: Helping out.

SHELL: ...trying to get her out -- ready. And Malia is asking questions about the White House.

BLITZER: We've got to leave it right there. Callie, good work.

Thanks very much.

SHELL: Thank you for having me.

BLITZER: That's it for us today.

Let's go to Lou in New York -- Lou.

DOBBS: Thanks, Wolf.

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