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CNN NEWSROOM

Interview with Virginia Governor Bob McDonnell; Obama Wins Reelection; Dow Drops 200-Plus at Open; House Balance of Power; The Latino Vote

Aired November 7, 2012 - 09:00   ET

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


(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: A huge victory and four more years. President Barack Obama wins re-election, and in the end, it wasn't even close.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: You made your voice heard. And you made a difference.

UNIDENTIFIED MALE: With a gracious concession, Republican challenger Mitt Romney made a humble request of both parties.

MITT ROMNEY, (R) FORMER PRESIDENTIAL CANDIDATE: To put the people before the politics.

JOHN KING, CNN ANCHOR: No Republican has ever won the White House without Ohio.

UNIDENTIFIED MALE: In the end, the battleground state of Ohio put the election out of reach.

WOLF BLITZER, CNN HOST, "THE SITUATION ROOM": The President of the United States defeats Mitt Romney.

UNIDENTIFIED MALE: But the nation remains a House divided.

BLITZER: The House stays in Republican control.

UNIDENTIFIED MALE: As the balance of power holds firm on Capitol Hill, a call for unity.

OBAMA: We remain more than a collection of red states and blue states. We are and forever will be the United States of America.

UNIDENTIFIED MALE: This morning we have every issue covered. Can the White House and Congress work together to fix the economy? Will the partisan gap now close? With the Empire State building bathed in blue light, this much is clear.

BLITZER: Let the world know that 11:18 p.m. on the East Coast of the United States, we projected this win, the re-election of Barack Obama for another four years.

(END VIDEO CLIP) KATE BOLDUAN, CNN ANCHOR: We want to welcome our viewers here in the United States and around the world. I'm Kate Bolduan. Good morning if you're on the West Coast, it's 9:00 on the East Coast, 6:00 out West.

It was one of the most divisive presidential elections in recent history, yet Barack Obama rolls to victory, gobbling up battleground states and burying Mitt Romney in a windfall of electoral votes.

Obama says the next four years is about rallying together. Listen here.

(BEGIN VIDEO CLIP)

OBAMA: Our economy is recovering. A decade of war is ending. A long campaign is now over.

(CHEERS AND APPLAUSE)

And whether I earned your vote or not, I have listened to you. I have learned from you. And you have made me a better president. And with your stories and your struggles, I return to the White House more determined and more inspired than ever about the work there is to do and the future that lies ahead.

(CHEERS AND APPLAUSE)

(END VIDEO CLIP)

BOLDUAN: More determined and more inspired, but some are calling it a status quo election. The same president will face the same balance of power on Capitol Hill. Democrats keep control of the Senate. Republicans hold majority in the House.

For much more on how it all went down, I'll go to John Berman who's pulling double, triple, quadruple duty today?

JOHN BERMAN, CNN ANCHOR: I lost count, Kate. Good morning to you.

BOLDUAN: Good morning.

BERMAN: Great to see you. You know, President Obama waking up this morning with 303 electoral votes in his pocket, and a chance for more depending on what happens to Florida. But the popular vote, much, much closer. The spread there may be a point or two. So the question is, what kind of mandate is this?

I'm joined by White House correspondent Dan Lothian, who is in Chicago this morning.

It's a pretty narrow margin when we're talking about the popular vote, Dan. How might this affect how he governs?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Talking to one Democrat who told me that the President really has to work harder at being more inclusive, at bringing people together. That's something that you've been talking about all morning. And we heard the President also reflect on during his victory speech. The President has to reach out not only to Democrats but also to Republicans. But there are some big challenges as the President looks to shift the way that he governs because the balance in power has not changed at all. And there are some looming issues that the President has to address very quickly, like the fiscal cliff.

The one thing that's different, though, in this -- in the next four years as opposed to the last four is that the President doesn't have another election to worry about. He doesn't have to be watching the polls. So that gives the President a little more flexibility. But as we have been hearing, there are some Republicans who are already talking about not being flexible.

So we do expect that there will be some big challenges ahead as the President tackles things like immigration and tries to deal with the fiscal cliff -- John.

BERMAN: All right, Dan Lothian in Chicago, thanks very much.

One of the things the President said in his speech last night is he actually looks forward to sitting down with Mitt Romney to talk about the future and how to go forward.

As for Mitt Romney, you know, he was so confident of victory yesterday. At one point he told reporters he only had a victory speech prepared. And as the night went on, he was actually reluctant to concede because he wanted to see how the results in Ohio finally came in. When he did finally speak it was after 1:00 a.m. in the morning and it was a very gracious Mitt Romney in Boston. Let's listen.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), FORMER PRESIDENTIAL CANDIDATE: The nation, as you know, is at a critical point. At a time like this, we can't risk partisan bickering and political posturing. Our leaders have to reach across the aisle to do the people's work. And we citizens also have to rise to the occasion.

We look to our teachers and professors, we count on you not just to teach but to inspire our children with a passion for learning and discovering. We look to our pastors and priests and rabbis and counselors of all kinds to testify of the enduring principles upon which our society is built. Honesty, charity, integrity and family.

We look to our parents, from the final analysis everything depends on the success of our homes. We looked at job creators of all kinds. We're counting on you to invest, to hire, to step forward.

(END VIDEO CLIP)

BERMAN: Mitt Romney's family, his wife and his sons, joined him on stage along with the Ryan family for a last campaign goodbye.

You know, defeat is one of the most complicated emotions in politics. It's so interesting to watch. Mitt Romney, I thought, handled it very well -- Kate.

BOLDUAN: And a very difficult speech to deliver for anyone. Thank you, John.

Now that President Obama will stay in the White House another four years, the question is, what will he be able to accomplish? The status quo -- the status quo of power on Capitol Hill remains. Will this hurt the country? Help the country?

The panel is here to help me answer all these questions.

Hilary, first to you. I mean, President Obama, it's the first day of his second term, so to speak, today. What does he need to accomplish -- what can he accomplish to be successful in a second term in your view?

HILARY ROSEN, CNN POLITICAL CONTRIBUTOR: Yes, so there are big issues, obviously, on the agenda. First up is -- first up is the budget. We've got, you know, climate change issues that we incurred after Hurricane Sandy. We have immigration, which is still at a stalemate. We have education reform. Those are big, important issues that have historically received some bipartisan support.

You know, I do think that the President is going to have to live the words he spoke last night, which was that we are going to have to listen to all of the people and bring people together. That's probably going to start with him. He's going to have to make more of a personal effort in engaging members of Congress, engaging Republicans than some people think that he has. And I think I'm hopeful about that.

BOLDUAN: Erick, I think that's something where you and Hilary would agree. It would start with the President.

ERICK ERICKSON, EDITOR-IN-CHIEF, REDSTATE.COM: Yes, I absolutely think so. It is going to have to start with the President. But, you know, let's not forget. Let's go back to 1996. And a lot of these same conversations were happening in '96 and then suddenly they were able to balance the budget than it is in 1998. Will they this time? Yes, I actually it's probably going to guys like me on the right who were the ones sitting on the sidelines for a lot of it, whether we want to or not.

I think you're going to see John Boehner and Mitch McConnell trying to cut some deals headed into the next four years. Whether or not they can, though -- I don't know, look at what happened with Senate Republicans. They had a very, very bad night. Senate Republicans. And it wasn't just the two major conservatives who got smacked. A lot of the recycled Republicans who the -- interestingly felt were the safe picks, got the stump last night.

BOLDUAN: Yes. I think there's a lot of lessons to be learned that we kind of need to all choose for you this morning. But John, I mean, the Romney campaign clearly dealing with an election hangover today. Where do they go from here? That's the big question. JOHN AVLON, CNN CONTRIBUTOR: Well, there -- that billion dollar start-up is done. I mean, you know, stick a fork in it, shut it down. Pull the phones out of the walls. The question is what the Republican Party will do after this loss.

BOLDUAN: Right.

AVLON: What is their takeaway? Look, John Boehner having a press conference today to talk about the fiscal cliff. This is an issue where the President does need to lead. And there's some clear things that need to be dealt with. The fiscal cliff, sequestration, a bipartisan plan on deficit and debt. Modeled after Bowles-Simpson or the gang of six. These are areas where there is broad agreement. The question is, whether Republican leadership will continue to embrace intransigents or whether they will feel that their own legacy, as well as the good of the country requires reaching out and finding compromise.

BOLDUAN: And Christine, finally people are starting to talk about fiscal cliff other than you.

CHRISTINE ROMANS, HOST, CNN'S YOUR BOTTOM LINE: I know.

(CROSSTALK)

ROMANS: They've been talking about it. At 3:30 this afternoon, we'll hear from John Boehner, what he has to say about it. but now put the marker out there and get moving. The President is also going to have to very, very signal where he is on this. And this is one of those things where not everybody is going to get everything they want. But they have to give up something.

Everyone has got to give up something or everyone is going to give up everything, you know, I know it's highly complicated. But that's exactly what it is. I mean this is an all-or-nothing ordeal here. Congress got us here. Some blame the leadership of the President. They all have to fix it.

I know that they haven't been talking even really about talking yet on the Senate side. They have one meeting, do you think, John, that there -- behind the scenes there's deal making going on that we don't know about or is it just silent?

AVLON: Look, before the election really heated up --

ROMANS: Haven't started. Yes,.

AVLON: -- there was talk about trying t come up with some plan to at least kicking the can. So we're the country who didn't know what the fiscal cliff. But now we know the results of the election, I think this big -- this outcome is the best for coming up with a deal. Because there's no reason to kick the can. A lame duck should be productive.

BOLDUAN: All right. All right, stand by, guys. Lots more to go. What does President Obama's victory mean going forward? We're just starting that conversation now and we'll talk about that with Virginia's Republican Governor Bob McDonnell, he's standing by live, next.

(COMMERCIAL BREAK)

BERMAN: You're looking at the Obama victory celebration last night. And one of the states that really made that victory possible was his big win in the battleground state of Virginia. The President won 51 percent of the vote there. He took the urban areas, also some suburbs just west of Richmond. But most importantly the suburban areas right around New York City. You see Fairfax County over there.

It wasn't just the President who picked up a win in Virginia. Former Governor Tim Kaine, he won the battle of governors in Virginia, beating another former governor and former senator George Allen there. This, with the help of outside spending was the most expensive race in the nation. These results in Virginia both for Senate and president came in quite late and our very own Kate Bolduan was up all night in Virginia covering the action there -- Kate.

BOLDUAN: It was a late night but an exciting night for all of us, John. Bob McDonnell is the Republican governor of Virginia, and was -- and has been a very strong surrogate for Mitt Romney during his presidential campaign.

Governor, thanks so much for getting up and joining us this morning.

GOV. BOB MCDONNELL (R), VIRGINIA: Sure. Thanks, Kate.

BOLDUAN: No problem. Over the weekend you predicted a razor thin win for Mitt Romney. Have you spoken to Governor Romney after his loss last night?

MCDONNELL: Well, I was -- I was obviously wrong. No, I have not spoken to Governor Romney. I spoke with the Senator Allen. And it was a tough night. I thought Mitt Romney and Paul Ryan were very good men, would have been good leaders. But the President, you know, we're in a poor economy, did a very good job articulating his message and having a very good ground game, they beat us on the ground. And I thought we'd win, close, we close loss. Half the margin of 2008 but they did a good job.

BOLDUAN: Let's talk specifically about your state, Virginia. A key swing state. You were on CNN "STARTING POINT" the morning of the election, just yesterday morning. And you were asked by Soledad what signs you'd be looking for of a Romney win in Virginia.

I want to remind you of what you said even though I'm sure (INAUDIBLE). Listen here.

(BEGIN VIDEO CLIP)

MCDONNELL: Now I would look for the beltway counties around Washington, D.C., Loudon, Fairfax, and Prince William. If Governor Romney were to win, let's say Loudon County and Fairfax, and Prince William County and hold his own and stay close in Fairfax, to me that would be a great signal that he's going to win the state.

(END VIDEO CLIP)

BOLDUAN: And as I mentioned in those counties last night. Prince William County which went for Obama.

MCDONNELL: Right.

BOLDUAN: Essentially the same percentage than it did in 2008. He all of those counties that you mentioned, what would you say are the big lessons that you learned about your state from this loss for Romney last night?

MCDONNELL: Well, there was a piece of good news. And as we won eight out of the 11 congressional races, Kate, in Virginia. So at the more local level, Republicans did very well. but overall we've got more work to do up in the northern Virginia beltway area.

I was fortunate to do well up there in 2009. But those are the greatest number of independent voters who will vote the issue and vote the person as opposed to the party. And we're losing the exchange up there, as you see in Fairfax, Prince William and Loudon.

So, we've got to do a better job and explaining to people why the conservative view of America is better for them and their pocketbook. And we apparently didn't do it well enough. But we'll get better.

BOLDUAN: Yes, many lessons learned from last night, obviously.

I want to bring in John Avlon, one of our contributors with a question -- John.

AVLON: Governor, you're a broadly popular governor of a swing state. You're also associated with the social conservative wing of your party.

Here's my question. What lessons should the Republican Party take from the loss of people like Akin and Mourdock, the states that Mitt Romney won double digits, but those in part because of their social conservative positions on abortion lost a split-ticket voters voting against them. What lessons do you take? Is it a problem of politics or is it a problem of policy?

MCDONNELL: Yes, I don't think there's any surprise that the Republican Party is pro-life. I'm pro-life. The Democratic Party is pro-choice.

But a couple of candidates that lost made mistakes in how they communicated their pro-life position. And you can't do that. So, that's -- it's more of a -- I don't think people will hold deeply held beliefs against you as long as you're right on the issues. The big issues they care about, jobs, economy, energy, spending, debt.

So, we made some mistakes. I can tell you, you know, look at nationally, we're at 30 governors now. That's 60 percent of America's governors probably, pick up one or two more in Montana and Washington state.

So, at the local level, our folks are doing well, that are pro-life and fiscally conservative. But we have to do better at the national level, the Presidential races.

BOLDUAN: All right. Governor McDonnell, thanks so much for your time this morning -- Republican governor of Virginia.

MCDONNELL: OK.

BOLDUAN: Much more to come. We're just about 10 minutes from the opening bell on Wall Street. Christine Romans is standing by for that for sure.

And it could turn into a very big day for anyone invested in the markets. We'll see how they're reacting the day after the Presidential election.

Our special coverage continues.

(BEGIN VIDEO CLIP)

OBAMA: Whether I earned your vote or not, I have listened to you. I have learned from you. And you've made me a better president. With your stories and your struggles, I return to the White House more determined and more inspired than ever.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BERMAN: It is a first for the great state of Massachusetts. The commonwealth elected its first female U.S. senator. Democrat Elizabeth Warren defeated incumbent Republican Scott Brown and was really one of the most closely watched races of the campaign.

She got 54 percent of the vote. Brown got 46 percent. The Harvard law professor takes back the seat once held by long-time Massachusetts Senator Ted Kennedy.

And this morning, she credited her victory to the grassroots efforts in the Bay State.

(BEGIN VIDEO CLIP)

SENATOR-ELECT ELIZABETH WARREN (D), MASSACHUSETTS: Massachusetts is a very special place. This one was grassroots all the way. These were people who showed up in living rooms and kitchens and school auditoriums, who held signs, who called neighbors, who really made this happen.

And they saw this race as a race about what kind of a people we are, what kind of country we're going to build and they wanted to be part of it. And they made it happen yesterday.

(END VIDEO CLIP) BERMAN: Warren's Senate seat was one of two picked up by the Democrats last night.

Let's go back to Kate for more now.

BOLDUAN: Thanks, John.

U.S. markets are just moments away from opening, just minutes from opening bell. It will be the first glimpse of what investors think of President Obama's re-election and really the balance of power in Congress that will probably weigh heavily on investors' minds this morning.

Main Street this morning wanting to find out how Wall Street is digesting the Obama win. We've got the opening bell covered like no one else.

Christine Romans, anchor of "YOUR BOTTOM LINE", is here with me.

Christine, what are you seeing so far? What are you expecting?

ROMANS: So, yesterday, markets rose. And today, futures are telling us markets are going to come down. They're going to give it all back. You've got Dow futures down about 120 points, S&P 500 futures down as well.

Right now, you know, the headlines in business world are Obama wins second term. What's he going to do about the fiscal cliff? It's the same make-up of Congress basically, it's the same president, it's status quo. There hasn't been any movement at all during the election on fiscal cliff. So, that's still looming. That's a big problem for markets, for business and for global growth.

Also, the E.U. president made some comments about concerns about unemployment in the European Union. So, there are some concerns about Europe's growth and stability. That's weighing on markets this morning.

But mostly, people are talking about the election and where we go from here. We know that John Boehner is going to have a press conference at 3:30. That's going to be very big.

BOLDUAN: Laying down a marker.

ROMANS: And important, too. That's right. And what the President does in response to that is critical. What the gang of eight do with that in the Senate absolutely critical. And what this House is going to do to get this fiscal cliff fixed, to overuse the word.

I can't tell you how critical it is. The thing about the fiscal cliff and to people who may not understand exactly what it is -- it is huge, huge spending cuts. All at once with huge, huge tax increases.

Every family would see their taxes go up on average $3,500, every family would feel it. It would mean closed factories, it would mean, you know, it would mean a recession, according to the Congressional Budget Office.

BOLDUAN: Right.

ROMANS: Everyone wants to avoid that.

BOLDUAN: Even though -- it's status quo kind of everywhere. We've got status quo in the House, status quo in the Senate, status quo in the White House. Does that not provide any confidence for investors?

ROMANS: Well, look, they need to get together and talk about real debt reduction and deficit reduction and getting our spending in order, right? So the fiscal --

(CROSSTALK)

BOLDUAN: There's still a big question mark out there.

ROMANS: They could kick the can on the fiscal cliff in the very term, but still have this big problem of spending more than we bring in, right? You can fix in the short term your huge deficits to a degree by going over the fiscal cliff but at what cost? I don't think any politician wants that on their head, especially if they're running for re-election.

BOLDUAN: Yes, absolutely. We're watching it closely.

Christine Romans, keeping her very close to me. We're just minutes away with, moments away, to remind you, from the opening bell. We'll have right after the break.

Stay with us.

(COMMERCIAL BREAK)

BOLDUAN: Once again, we want to welcome our viewers in the United States and around the world. I'm Kate Bolduan, joined here by a big group of friends here this morning. They're joining me again.

We're waiting for the opening bell that will be ringing any moment. We're watching it very closely.

And so is our Alison Kosik. She's at the New York Stock Exchange this morning.

Alison, what are you hearing from traders on the floor right now?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: First of all, expect stocks to sell-off at the open. The bell is going to ring in about two minutes.

Expect the Dow to drop at least 100 points. And part of the reason isn't just because of the election. Part of it is because of European Central Bank President Mario Draghi made some comments today, saying the euro crisis is beginning to affect Germany's economy. And the big deal there is because Germany has really been the checkbook for the euro crisis these days and the fact that now it's being said out loud that Germany's economy is feeling the effects, is being hurt by this, that is spooking the markets.

Look, the other reason you're seeing the drop is because of the election, reaction because of the election, reaction because of what's coming next. Now, the focus for Wall Street, Kate, is on the fiscal cliff, Congress and President Obama. They've got two months, 55 days to deal with those tax increases and federal spending cuts, a deal has to be reached. Wall Street sees it this way, to avert possibly a recession as the Congressional Budget Office has said, and a spike in unemployment rate.

One analyst telling me that if a resolution isn't reached with the fiscal cliff, that stocks will plummet and the economy will drown in quicksand.

So, that is certainly all spooking the markets today -- Kate.

BOLDUAN: And we're watching, as we're preparing for the bell to ring any moment now. You said you're seeing a sell-off, you're seeing a drop. But also, correct me if I'm wrong, stocks are up overall in the Obama presidency in his first term, right?

KOSIK: And that's a good point. You know, it's funny as we've been talking up until the election about the fact that a Romney win would have been something Wall Street would have cheered because Romney was seen as pro-business, more pro-Wall Street.

But, yes, if you look back at the actual numbers, you want to look at this -- the stock market really has really had a great run in the first four years of the Obama presidency. The Dow is up 60 percent since President Obama took office on January 20th, 2009. The broader S&P 500, which traders see as a better indicator of Wall Street, Kate, is up 60 percent. So, sure, President Obama has had a good run on Wall Street.

As we heard the opening bell rings, and we'll wait for the numbers go ahead on the ticker -- Kate.

BOLDUAN: All right. Let's watch this very closely and let's bring in the team to digest it all.

Christine, first to you, we're watching this happened, and you had the same expectation?

ROMANS: I do. It was funny because Van Jones over is rolling his eyes at me, thinks I'm overstating the importance of the fiscal cliff.

Look, no one thinks we're going to go over the fiscal cliff. It's how you fix it. It's how you fix it. And that's what really spooks Wall Street because they don't have confidence that they're going to fix it in a way that's going to bring confidence back to American businesses.

If you just push it off six more months, push off the status quo six more months, who's going to build a new factory if you don't know if we're going to be in this position again six months from now. So, they've got to fix it and signal how we're going to start living within our means again as a country. BOLDUAN: And Dana Bash can attest to this.

ROMANS: Don't tell me that. Don't tell me that.

BOLDUAN: With these fears in mind, right, Dana?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: That's exactly right. Look, John Boehner is a negotiator, if nothing else. He laid down the marker last night before we even officially called the House for Republicans saying that they are not going to do anything long term and that there's no way they're going to raise taxes.

On the other hand, you have Democrats telling us privately -- I think maybe even saying it publicly today -- there's no way the President is going to go back on his campaign promise this time and he's going to hold firm on raising taxes for the most wealthiest Americans.

How are they going to do that in 53 days? I just don't see it.

BOLDUAN: They love a deadline, though. You know that.

BERMAN: One interesting name in here. Paul Ryan, a guy who was central to all of these discussions for so long. What's he going to do during this whole debate?

ROMANS: You can see the Dow is down 126 points now 143. Wall Street loved, loved Mitt Romney and Wall Street does not like Barack Obama for president. It doesn't.

But remember yesterday stocks were up more than 100 points. We'll take that back today and we'll see where you go from there.

This is really though the status quo. And there are still concerns about Germany and Europe. So, we'll wait to see if all these losses here hold the rest of the day.

BOLDUAN: I think John's point, your question is a key one. We have Paul Ryan, who has become not only a huge figure within the Republican Party, he was a vice presidential candidate. Is he just going to go back now and be House Budget chairman? That's a big deal on Capitol Hill.

(CROSSTALK)

BOLDUAN: I'm going to take heat for that.

ROSEN: He was as strident as could be on the campaign trail and didn't talk compromise at all. So I don't know that he's going to go back and suddenly become a different person.

But I think Christine raises a really important point about the business community, sort of third leg of this important budget stool that has not really played in my view in a very productive way in this campaign. They obviously spent a huge amount of money on Mitt Romney. They bet wrong. The business leaders of this country coming together to talk in a productive way about the need for balance here. There's like this group, Fix the Debt, which is a number of business leaders who are saying stop with this ideology. We need a mix of revenue and budget cuts.

ROMANS: And look at Simpson Bowles for a guide.

ROSEN: Maybe go back to Simpson-Bowles. But some of those things. Business leaders can pull themselves out of politics and be a little more proactive in solving this crisis.

VAN JONES, FORMER WHITE HOUSE ADVISER: I think that's right. I think it's very important. This is one of those things where the wrong word can lead to the wrong mindset and the wrong outcome. The word cliff is making people go crazy.

It is not a cliff. It's not like the very next day taxes are going to go up. The appropriations target change, things begin to move in a certain direction.

But we should not be stampeded as Americans into doing reckless things or dumb things because a small group of Congress people kicked the can down the road to the debt. There is an opportunity to finally do the right thing.

Here is how we're going to deal with the budget, how we're going to deal with debt and deficit. We're going to have to create jobs. Growing our way out of the economy is the opportunity here.

And so if we put ourselves in a situation where we start cutting programs that we need, taking a wrecking ball to Medicare, for instance, which was one of the agenda items here, this country didn't go "broke", quote-unquote, helping grand mom too much with Medicare. It was the Bush tax cuts and the Bush wars.

We're going to have to have a real conversation about how to grow the economy. And this cliff is forcing a level of alarmism and bad thinking. We should not be stampeded into a bad deal or sketchy deal. We need to have a good deal.

BOLDUAN: Well, Ross, come on this, because do you think Republicans -- and, Erick, jump in on this as well -- do you think Republicans are taking -- their takeaway from this election that they're going to change their position? I mean, John Boehner is laying out a marker. Same place where House Republicans have been previously.

ROSS DOUTHAT, NEW YORK TIMES: Right. But the difference is that the President Obama just won re-election.

BOLDUAN: You think that will change the mind-set, though?

DOUTHAT: The fact that -- look, in the previous set of budget negotiations, the President had less leverage because he hadn't won re-election. And now, if we just do nothing, taxes will go up. And even though that's a loss for the country, it is -- as you can tell from listening to Van -- a big policy win for Democrats.

And so there will be lots of Democrats who are willing to sort of play a little bit of chicken here and I think House Republicans know that. And, look, Obama and Boehner came very close to a dole that would have raised $800 million in revenue last time. Obama has a stronger hand to play. Boehner is a negotiator.

Obama doesn't have to campaign for re-election. I would expect one set of -- a can kicking for the next six months and then some sort of deal. But, you know, we're talking about this as a status quo election. In a sense, it is.

But the status quo is favorable to liberalism now in a way that it wasn't a year ago because the President has won re-election. You will get tax increases of some kind. I guarantee it.

BOLDUAN: Erick, jumped on this, because as we watch, you know, as we're watching the markets still in the opening minutes here, do you think this sends a message as we're looking at this, to House Republicans specifically? The intersection of politics of this election and --

(CROSSTALK)

ERICKSON: I think we're now, what, down 178. It sends a message to the Republicans that the markets don't like the President. That's how they'll interpret it.

We have had 18 debt and deficit commissions since 1981. We were at $900 million in national debt in 1981. We are at $16 trillion.

(CROSSTALK)

ERICKSON: It's not going to work. They're going to be kicking the can down the road.

ROMANS: Can we say something about the market and the President though? The market actually really loves this president because stocks were up 75 percent. The business community doesn't like what they see going forward.

BOLDUAN: They don't like Washington.

ROMANS: They don't like the President's policies on bank reform. They don't like the President's policy -- they don't like Obamacare. But the market has stocks, 401(k) investors have done very well over the past four years if you didn't dump out of the bottom. That's a whole other story all together.

BASH: And this puts Hilary's point about the business community getting more involved in a productive way, that has been happening quietly. I'm told a big group of major CEOs from the west coast, from tech community, they came in. They had meetings with everybody on Capitol Hill very quietly, like big, big names. And I'm told that at least on the Democratic side they said thank you, but where have you been? BOLDUAN: Remember the debt ceiling?

ROSEN: And companies like Procter & Gamble in John Boehner's district, those companies who end up calling for balanced approaches in this budget can end up having more influence than maybe even the President with John Boehner.

BOLDUAN: All right. Stand by, everybody.

The Democrats maintain control of the Senate as you all know, by winning some pretty close races. We'll show the new balance of power in Congress.

(BEGIN VIDEO CLIP)

SHASTA DARLINGTON, CNN CORRESPONDENT: I'm Shasta Darlington in Sao Paulo. And Brazilians are happy this morning, that's because Obama is a very popular man here. Just last month, in local elections, a number of candidates changed their name to Obama to get more votes. The government on the other hand is less engaged, that's because of the economy. The United States used to be Brazil's main trading partner. Now, it's China.

LEONE LAKHANI, CNN CORRESPONDENT: I'm Leone Lakhani at a breakfast election in Abu Dhabi. Now, people in the Middle East don't like to wake up early. But this lot has been here through the night way before sunrise just to watch those election results coming in. I mean, the U.S. ambassador was here a few minutes ago, saying he felt like he was in a Vegas casino. He didn't know what time it was.

VLADMIR DUTHIERS, CNN CORRESPONDENT: I'm Vladmir Duthiers in Lagos, Nigeria. Big excitement across Lagos last night, watch parties all across the city, everybody breathlessly waiting to see who would be the President of the United States.

Now, Barack Obama has always enjoyed popularity here in Nigeria, perhaps not as much as he does in Kenya where he was a favorite son, but people here have always supported the President. And it was no different last night.

During a mock election, Barack Obama carried the day here in Lagos. He won 254 votes to Mitt Romney's 35 votes.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BOLDUAN: New York Stock Exchange, the bell ringing just a little over 10 minutes ago. Everyone is watching the markets and how they are reacting to this new day. President Obama winning a second term.

I want to go over to Alison Kosik who is at the New York Stock Exchange with a guest.

Hey there, Alison.

KOSIK: Hi, Kate.

It is an ugly start to the day on Wall Street, the day after we found out that President Obama is re-elected. The Dow right is now down 179 points. But you know what? The election is not the only reason we're seeing the Dow plunge.

I'm with Alan Valdes. He's an analyst with DME Securities.

What's going on with the markets today?

ALAN VALDES, ANALYST, DME SECURITIES: Well, you know, you're right. We're back to business as usual. It's the European woes weighing the market down. Draghi made a statement this morning, where Germany looks weaker than they expected going forward. That brought the futures right down. We were up coming into the market early this morning. But once that statement out of the E.U., that was lights out.

KOSIK: So, if the market was up before that statement, then the market is not necessarily unhappy about President Obama back in.

VALDES: Not at all. I mean, the market was up this morning before that statement. So this downward drift has nothing to do, really, about the election. I mean, we're back to square one. We were up 130 yesterday. We're down 170 today.

It's like the election. It's a nonevent. It's back to square one.

KOSIK: Now that Wall Street is looking forward to the fiscal cliff, when all those spending cuts and tax hikes could go into effect, what worry is there for Wall Street?

VALDES: That is the worry. I mean, the financial cliff looks more front and center now with the Obama election. Obama has never really been able to go across the aisle and work with the Republicans, which he will have to do, to sort out this financial cliff. And that doesn't look too good right now. So, that also is weighing on the market.

But as for the moment, it's all about Draghi.

KOSIK: What's the likelihood that some sort of compromise, some sort of deal is going to be reached with the fiscal cliff? Because the CBO says that could send us back into a recession. It could make the unemployment rate spike again.

VALDES: Sure. Financial cliff this time around would take us into a deeper recession than before and would really, really be a big problem. I think even our politicians, as convoluted as they are, will get together and work this out. They're going to have to. It's that simple. They really will have to.

And we're looking for a president now that maybe will become like a Bill Clinton, come more to the center, work with the Republicans, be more pro-business, which we really need. We need a pro-business president right now. We're hoping he goes more center. KOSIK: OK. Thanks, Alan Valdes of DME Securities.

Kate, I'll throw it back to you.

BOLDUAN: Alison Kosik at the New York Stock Exchange watching it all for us. Alison, thank you so much.

So, as that market analyst says, politicians will get it done and will work together on this fiscal cliff issue. In the end, that is a major question. It also has us looking at balance of power in Congress. John Berman has more.

BERMAN: You just heard it from Wall Street. What Washington wakes up to this morning, gridlock potentially, status quo. Everything stayed the same. Democratic president, Republican House, Democratic Senate.

Dana Bash with the balance of power.

BASH: That's right, Wall Street clearly is not liking it; maybe they've been watching what's happened or not happened for the past several years. And this is a perfect example.

Check this out, the House looks a lot like it did yesterday before the election. Very similar Republicans still have a pretty big majority. Democrats still pretty behind.

But look at these white seats here. These white seats represents the fact that there are still a number of seats out. We're still watching these races that are too close to call.

Let's look at the Senate where there was a lot of drama. Again, status quo, the Democrats are still in charge by a couple of seats.

But look at those two white seat there, John. Those are two outstanding races and perhaps among the most dramatic Senate races. And let's take a walk over here to see what exactly we're talking about.

First, Montana, it's too close to call right now. We just don't have enough information to tell us whether or not Jon Tester the incumbent Democrat will go on to win re-election against Denny Rehberg. And same for North Dakota, Heidi Heitkamp is in the race for her life against Rick Berg.

I think what's interesting about these two races is that they're both very, very red states, with -- these are Democratic seat and they're both holding on right now. It just goes to show you that if there was a Republican wave, if Mitt Romney probably did better, we wouldn't be talking about this.

BERMAN: You know when Kent Conrad retired from North Dakota Republicans thought they had nearly a sure thing in there.

BASH: Absolutely, they did. But what they didn't know is that the Democrats would find Heidi Heitkamp to run and she ran pretty much on every issue against the President. BERMAN: Now there were a number of Democratic pickups already.

BASH: There were and we'll talk about a couple of those that are most interesting. If we can bring them up, there you go, Massachusetts, the marquee senate race. If you're a Massachusetts guy, so you, of course, are watching this closely.

Scott Brown who really shook up Washington a couple of years ago when he won in this blue state. He was defeated by Elizabeth Warren, who raised a lot of money from liberals around the country.

And Indiana, this is probably one of the biggest heartbreaks for Republican, or many of them last night. But this is a big one because the Democrat, Joe Donnelly a moderate won this seat he beat Richard Mourdock. And Richard Mourdock was a Republican who beat a long time incumbent Republican in the primary Richard Lugar, you remember.

He did it with some Tea Party backing but -- and he was going to likely win until a couple of weeks ago when he said in a debate that perhaps pregnancy as a result of rape was a gift from God. He plummeted in the polls even in these red states with a lot of conservatives, even conservative women.

BERMAN: One of two races where the issue of rape came into play, both lost by Republicans. Of course, Todd Akin losing in Missouri with Claire McCaskill --

BASH: Exactly.

BERMAN: -- keeping a seat which was no one thought she could keep.

BASH: No one -- she was the most beatable Democrat as far as Republicans were concerned and they just didn't have even close to a win there.

BERMAN: And it's going to be so frustrating for each party. Because of course Senate terms are six years long. So when you screw up and you pick the wrong candidate you have to live with it for a long time.

BASH: Exactly and the head of the campaign committee that is in charge of elected Republicans put out a really dire statement saying last night saying that his party has to recalibrate and re-jigger what they're doing on how they approach things because they blew it from his perspective two cycles in a row.

BERMAN: All right, Dana Bash with the balance of power. Thanks so much.

So what were the secret ingredients, what were they to an Obama win last night? We're going to talk about the coalition he built four years ago and to what extent it stacked together this time.

Stay with us.

(BEGIN VIDEO CLIP) BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: I'm Ben Wedeman in Cairo. News of Barack Obama's victory came too late to make it into the morning papers here in the Egyptian capital. This in fact was the only newspaper with the American President on its cover and it does say that Obama is approaching victory in his attempt for a second term.

Most Egyptians seem to prefer Barack Obama over Mitt Romney. Many of them saying they felt the Republicans are simply too pro Israeli.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: I'm Reza Sayah in Rajo Pindi, Pakistan where the U.S. elections got heavy coverage on Pakistani television the results aired live on dozens of channels.

Four years ago, many here supported Mr. Obama. Not the case this year. Many wanted change. They wanted Mr. Romney. And that's because they still don't like U.S. policy in the region, especially the drone strikes.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

AL GOODMAN, CNN INTERNATIONAL CORRESPONDENT: I'm Al Goodman in Madrid. Spaniards closely follow the U.S. presidential race especially because Spain was mentioned during the campaign as a big problem among European nations suffering an economic crisis. The jobless rate here is more than 25 percent. So, many Spaniards are pleased President Obama was re-elected. He said the world can't let Spain sink.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: It doesn't matter whether you're black or white, or Hispanic or Asian or native American, or young or old, or rich or poor, able, disabled, gay or straight. You can make it here in America if you're willing to try.

(END VIDEO CLIP)

BERMAN: That was the President's victory speech in McCormick Place in Chicago last night.

Meanwhile other elections around the country, all kinds of history made. In Wisconsin, the first woman elected to the Senate and the first openly gay member anywhere elected to the Senate. Tammy Baldwin defeated former Governor Tommy Thompson there 51 percent to 46 percent in Wisconsin. And earlier she spoke to CNN. (BEGIN VIDEO CLIP)

TAMMY BALDWIN (D), SENATE-ELECT, WISCONSIN: Well, what I would say in terms of crashing through that glass ceiling is, you know, if you're not in the room, the conversation is about you. If you're in the room, the conversation is with you. And that does transform things.

But as I said last night, I didn't run to make history. I ran to make a difference. And my campaign was about the struggle of the middle class, retirement security for seniors, doing right by our veterans when they return home from war. That Wisconsin selected me to face those challenges is historic, but I think it was much more about confronting the very significant challenges that our nation faces right now.

That was Senator Elect Tammy Baldwin of Wisconsin. That was one of the most expensive senate races in the country. She and Tommy Thompson raised more than $20 million combined -- Kate.

BOLDUAN: -- so much John.

President Obama can credit the Latino vote for helping him win a second term. He captured seven of every 10 Hispanic voters. CNN Espanol's Juan Carlos Lopez is following the story.

But let's begin first with national political correspondent, Jim Acosta, who is in Boston for us and he has been following the Romney campaign for what seems like, probably an eternity for Jim.

JIM ACOSTA, CNN NATIONAL POLITICAL CORRESPONDENT: Hi Kate.

BOLDUAN: Hey, there, Jim. So Jim, talk to me specifically about the Latino vote and its impact.

ACOSTA: Yes.

BOLDUAN: Romney was obviously never able to motivate Latinos to support him.

ACOSTA: That's right.

BOLDUAN: Is that the big takeaway for him when you look at really Obama won them in big numbers last night.

ACOSTA: yes, I think there are two big takeaways from what happened, Kate. It obviously is the Hispanic vote. The first thing though, I do think that the auto bailout issue for Mitt Romney was a big problem in the state of Ohio. I was talking to some Republican sources in that state as this race was winding down and they were first saying well, we think we're going win by three or four points and then right before the election, they were saying it's going to be close, very close.

And there are some indications that the reason why they were going to Pennsylvania is because it was a similar state to Ohio, demographically, but it didn't have the baggage of the auto bailout. So that's -- I think that's one big takeaway.

The other issue like you said is the Hispanic vote. I talked to Al Cardenas who is the head of the American Conservative Union last night, Cuban-American, one of the prominent conservative leaders outside of people who are in political office. He's a political operative but very influential in the Republican Party.

And he said listen, the Republican Party has to change when it comes to dealing with Hispanics. It cannot continue to alienate the fastest growing demographic group in this country. And he said that that's got to be the mission for the Republican Party over the next four years.

And you know, when you hear from Marco Rubio and he said this repeatedly during the Presidential campaign, that the Republican Party has to find a different way to talk about immigration reform, that is not just the canary in the coal mine. That is the Cuban American in the Republican Party in the United States Senate. And it's somebody that they probably ought to listen to and I think that is also the big takeaway from what happened last night.

And Kate, do I have a few seconds here. I just want to say while I'm on live television before I go away and probably take a long vacation with my family, I want to thank my producer, Matt Hoy, who did a tremendous job on the campaign trail with me over the last year and a half. All of our photojournalists who have been out in the field working tirelessly. And our Romney campaign embed political producer, Rachel Stripe (ph), who did an amazing, amazing job following this campaign from start to finish.

She was in New Hampshire when all of it got started, followed it all the way to the end and she did an incredible job. And I just want to say that I'm very grateful to those folks and the folks back at our CNN political unit who did an incredible job keeping us on TV all the time.

So anyway, there is my shameless plug.

BOLDUAN: Not a shameless plug at all -- Jim.

ACOSTA: I offered a chance to talk about the Latino vote but I wanted to sneak that in there without asking anybody's permission. Hope it's ok.

BOLDUAN: Well said Jim. Everyone here in the studio was cheering you on and applauding, both Rachel and Matt Hoy there are amazing producers. And everyone has worked tirelessly on this election and we applaud you, especially too. Jim Acosta's done a fabulous job for us.

Let's get back to the Latino vote because we're going to keep moving with the news though. And I want to go over to our Juan Carlos who helped anchor -- who anchored CNN Espanol coverage of the election last night. And who clearly is burning the midnight oil this morning.

Juan Carlos, I want to talk about the comments that Marco Rubio made, but first let's talk about the fact that back in September, you will remember that President Obama he told Univision that his biggest failure he thought is that he hasn't gotten comprehensive immigration reform done. But he also said that it wasn't for a lack of trying or desire.

Does that -- in order to maintain the Latino vote that he won so big last night -- does that have to be his number one issue going forward? What is the Hispanic community looking for from President Obama in a second term?

JUAN CARLOS LOPEZ, CNN ESPANOL: I think this issue of the Hispanic vote is a wake-up call for Democrats, for Republicans and for the way that Hispanic issues and Hispanic influence in politics are covered. I say this because there were two conversations that were meant to be private but became public that I think highlight that both Democrats and Republicans understand the challenges ahead.

President Obama speaking with the "Des Moines Register" said that if he was to win re-election, it would be because Republicans had pushed Latinos away with their rhetoric and that immigration reform would be his priority in the second term. Now, he understands that Democrats have to talk the talk and walk the walk and that's something that is still lacking.

Now, with Mr. Romney, remember, back in September when we heard about this fund raiser where he made the comment about the 40 percent, there was another comment Mr. Romney made that didn't receive a lot of attention, but he said and I'm quoting, he said "We can capture women's vote, we're having a much harder time with Hispanic voters. If the Hispanic voting bloc becomes as committed to the Democrats as the African-American voting bloc, then we are in trouble as a party and I think as a nation."

That's what Mr. Romney said. So he was aware of the challenge. And we'll see.

Senator Rubio said last night. He congratulated the President and he said his party has to find a way to find common ground with the immigrant community and with the Latinos. There are a lot of points where there are commonalities, so it's just speaking to them in a different way and maybe this will be one of the paths that opens the possibility of immigration reform.

BOLDUAN: Juan Carlos Lopez, thank you so much, Juan Carlos. We'll see you soon. Our special coverage continues right now.

BERMAN: We welcome our viewers here in the United States and around the world. I'm John Berman and this is a special edition of CNN NEWSROOM.

It was the President re-elected last night winning a victory bigger than many people thought he would win -- 303 electoral votes in his pocket with a possibility of still more to come.