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Obama Will Warn Economy is in Serious Crisis; Voluntarily Evacuations Urged for 25,000 People Near Tacoma; Israel, Hamas Delegations in Cairo to Discuss Cease-fire Plan; Bush Covered for Just 10 Years

Aired January 08, 2009 - 09:00   ET

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

HEIDI COLLINS, CNN ANCHOR: A plea from the president-elect. Live this morning. Barack Obama on why Congress must pass his stimulus plan. And what's in it for you?
Plus, northwest under water, melting snow and heavy rain leads to record floods.

It is Thursday, January 8th, everybody. I'm Heidi Collins and you are in the CNN NEWSROOM.

Your money, his priority. This morning, President-elect Barack Obama delivers what his aides call a major speech on the nation's grim economy.

Brace yourself for dire warnings of what is ahead.

CNN national political correspondent Jessica Yellin is with us now with more details on all of this.

So, Jessica, what are we going to learn today?

JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: Well, Heidi, today, Obama will predict that unemployment around the nation could reach 10 percent or higher and that household income will plummet unless Congress passes his massive stimulus plan.

He also believes the government can spend almost $800 billion and still avoid waste.

(BEGIN VIDEOTAPE)

YELLIN (voice over): On the economy, no happy talks from the incoming president.

BARACK OBAMA, PRESIDENT-ELECT OF THE UNITED STATES: We have an economic situation that is dire.

YELLIN: He's trying to build public support for a stimulus that could cost as much as $800 billion. But don't worry about waste. He promises discipline.

OBAMA: We must scour this budget, line by line, eliminating what we don't need or what doesn't work. YELLIN: Today, he named a spending watchdog. Nancy Killefer will take the new role of chief performance officer. She'll decide which programs are worth funding over the long term, but the stimulus is a different story. To work, that money has to go out the door fast.

Even supporters say that leads to waste.

REBECCA BLANK, SR. FELLOW, BROOKINGS INSTITUTION: You know, whenever you try to spend a lot of money fast, you know, some of it is going to be spent in ways that you might not put it there if you were being a little bit more thoughtful and taking a little bit more time.

YELLIN: Possible examples from this list of ready-to-go projects compiled by the nation's mayors, a $20 million Minor League Baseball museum, a $4.8 million polar bear exhibit, $500,000 for environmentally friendly golf courses in Dayton, Ohio.

The mayors insist projects like these will jump start the economy.

UNIDENTIFIED MALE: We must invest where we get the greatest return.

YELLIN: And some economists say a little bit of waste is worth it, if it gets the economy back on its feet.

BLANK: If the objective is money spent in the economy that's going to create demand and buy services from businesses and stimulate consumer spending, it probably matters a little less that those are the most thoughtful projects.

(END VIDEOTAPE)

YELLIN: You know, Heidi, when he gives that speech, do not expect him to reveal the final number for the stimulus plan or really too many more details than we've already heard.

The idea today is to persuade folks that the nation does need a stimulus. For example, one of the lines they released early, Obama will say this will add to the -- budget deficit in the short term but he'll say equally certain are the consequences of doing too little or nothing at all.

That's just two hours from now.

COLLINS: Yes. It's hard to look at one without the other, that's for sure.

All right. CNN's Jessica Yellin, I know you'll be watching this speech closely, as will we. Thank you, Jessica.

The Obama transition is working with Democrats in Congress to hammer out the stimulus bill but here are some broader points now for you to look at. It's expected to cost somewhere around $800 billion. The timeline for it to be signed into law has slipped now to mid February at the earliest.

And here are some of the things it will include. Tax cuts for businesses and middle class workers, money to help states dealing with their own financial crises, federal help with Medicaid programs, and other operating costs, and a huge share will go toward building infrastructure like roads and bridges.

We want to make sure you remember to stay with us for our live coverage of Barack Obama's speech on the economy. Once again, it is scheduled for 11:00 a.m. Eastern, 8:00 Pacific. And you can see it right here on CNN.

Retail giant Macy's, the latest country -- to deal -- to announce cutbacks. It's going to close 11 stores, in fact, after one of the weakest holiday shopping seasons in decades. Nearly a thousand employees will be affected by the closures.

And at the bottom of the hour we're going to check in with CNN's Susan Lisovicz for the opening bell on Wall Street.

If you're not worrying about the economy, you can worry about the weather. Rain and melting snow causing historic flooding in the Pacific Northwest.

In Washington state, they are dealing with all that water, plus mudslides and avalanches. Voluntary evacuations recommended now for about 25,000 people near the Tacoma area. Not everybody is getting out, though. Those that are staying behind are sandbagging to protect their homes against the rising waters.

And throughout the state, dozens of highways had to be closed.

On the other side of the country, this mess in Boston. Certainly no fun driving in all of this. Snow, sleet, and ice and drivers had to deal with treacherous conditions, of course.

This probably will not shock you. Lots of crashes to talk about. Highway officials say crews were out dumping sand and salt on those roads.

CNN meteorologist Rob Marciano has been watching it all. And boy, not very nice in those places, that's for sure.

(WEATHER REPORT)

MARCIANO: Oklahoma/Florida tonight, big game, national championship on the line. Who you got going?

COLLINS: I heard we -- your predictions were already.

MARCIANO: You know, I'm -- I'm catching a lot of getting grief, too, because if you live in Georgia here, Heidi, we should -- I guess in theory going for the SCC and rooting for Florida. But there's, you know, there's a big difference between living in Georgia and rooting for Florida. I think a lot of folks would -- would -- and they've also been talking a lot of trash talk. COLLINS: Yes.

MARCIANO: You know, Tebow thinks he can cut up the -- you know, big 12 defense. We're going to see. We're going to see tonight.

COLLINS: Yes. We -- we were going to see tonight. I like how you look so tough over there.

MARCIANO: Yes.

COLLINS: Excellent.

(LAUGHTER)

MARCIANO: With the makeup and the tie and -- yes.

COLLINS: Yes. I didn't say it. You did.

(LAUGHTER)

COLLINS: All right, Rob. Thank you. We'll check back later on. Obviously, a lot going on in the weather department as well today.

And now to new developments in the Mideast crisis. Here is what we know. At least four rockets slammed into northern Israel from southern Lebanon early today. Two people slightly injured.

The Lebanese government condemned the attack and said it is investigating. Israeli forces returned fire across the border and urged residents to stay near shelters.

U.N. forces patrolling southern Lebanon stepped up their watch after the exchange of rocket fire.

Meanwhile, Israeli diplomats arrived in Cairo today for talks on ending the now 13-day-old Gaza offensive. Egyptian media reports two Hamas representatives are in Cairo to, quote, "listen to the Egyptian plans."

And we're going to be checking in with Cal Perry in Beirut in just a few moments about that story. And meanwhile, for all the very latest developments in the crisis in the Middle East, just log on to our Web site at CNN.com.

Flexibility and the IRS. Well, you may not think those words actually go together but something is different this year.

(COMMERCIAL BREAK)

ANNOUNCER: News as it develops as only CNN can bring it to you. See for yourself in the CNN NEWSROOM.

COLLINS: At least four rockets slammed into northern Israel from southern Lebanon early today. The rockets fell near the city of Nahariya in northern Israeli.

Nahariya is a popular tourist town on the Mediterranean coast just south of the Lebanese border.

CNN's Cal Perry joining us now from the Lebanese capital of Beirut.

So, Cal, tell us a little bit more about who is responsible for these -- these rockets.

CAL PERRY, CNN CORRESPONDENT: Well, we're still unsure who exactly is responsible for firing the rockets but what we do know is Hezbollah most likely did not fire the rockets.

We heard from the prime minister's office condemning both the rocket strike into Israel and the retaliatory strike that is going to brought it down all of a sudden. Lebanon's southern -- that border between Israel and Lebanon is already basically a DMC, a demilitarized zone.

And the Israelis have artillery along that border, pre-sighted on targets. All they have to do is find that point of origin where the rockets came from. That's what they fired back on.

Now the Information Ministry here in Lebanon says they spoke with Hezbollah and that is, of course, the biggest Shia militia group here in Lebanon. And quite frankly, it's one of the biggest Arab armies in the world.

The big concern being that if Hezbollah had fired those rockets, this could open up another front to the war that's going on in Israel between the Israelis and Hamas, but, at this point, it looks like Hezbollah was not involved, that they did not have anything to do with it, that it was most likely some kind of a Palestinian splinter group.

Important to remember that there were over 400,000 Palestinians living in 12 camps across Lebanon. At this point it looks like it was an isolated event. People here really in the Lebanese capital in the past eight hours taking a deep breath and hopefully things will stay quiet-- Heidi.

COLLINS: These Palestinian splinter groups, though, do they typically have the weaponry and the power to be able to launch rocket attacks like this?

PERRY: Well, they certainly do not have the same capabilities that Hezbollah does and it was almost an immediate indication when we woke up and we heard that four rockets had been fired into northern Israel from southern Lebanon.

It was almost a clear indication that this was not Hezbollah, because Hezbollah, as you will remember in the 2006 war, does not fire one, two, three or four rockets. They fire rockets by the dozens.

In December, I will say, just before Christmas, the Lebanese Army found about eight to a dozen Katyusha rockets that they believe were sort of being held by one of these Palestinian groups. They dismantled those rockets so certainly they do have the capability to do rocket attacks like this, one to -- one here, one there. But certainly nowhere near close to Hezbollah.

The other thing to remember is in southern Lebanon, you have 13,000 troops from UNIFIL that are there to create a buffer zone to try to make sure that this does not happen.

Now what we understand from the Lebanese government is that they are going through southern Lebanon right now to try to find out who actually fired these rockets to keep that from happening again, Heidi.

COLLINS: All right. We know you're following closely. Sure do appreciate it. Live from Beirut, Cal Perry for us this morning.

Thank you, Cal.

What to do now with Rod Blagojevich. A judge could release federal wiretaps today of the Illinois governor. An Illinois House panel is considering impeachment, as you know, wanted to hear the recordings as part of its investigation. They'll also hear from Roland Burris this afternoon.

And meanwhile Senate Democrats may be warming to the idea now of Burris taking a seat. Majority leaders met with Burris yesterday. They now say it could be up to the Illinois Supreme Court to make the decision for them.

Now back to Burris in Illinois today where he'll still face that House impeachment committee we just mentioned. He's likely to face tough questions about his dealings with Blagojevich and his choice as senator.

CNN's special investigations unit correspondent Drew Griffin has more.

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN SPECIAL INVESTIGATIONS UNIT CORRESPONDENT (voice over): Republicans in Springfield want Burris to explain how he got the appointment from Illinois' tainted governor.

Records are beginning to reveal state contracts, political contributions and even a job for the governor's wife that at least raised questions by Republicans that Burris may have paid to play.

JIM DURKIN (R), ILLINOIS STATE HOUSE: I want Mr. Burris to, under oath, talk about that, about exactly when his interest in this seat, you know, when he became interested in the seat, how back it went to, who did he talk to, and exactly the communications that went back and forth between him and the governor, and any type of documentations which he may have given to the, to the governor.

GRIFFIN: The governor stands accused, but not yet indicted. In an investigation focusing on the use of public office for personal gain, including allegedly trying to sell the U.S. Senate seat vacated by President-elect Obama.

Illinois Republicans want to know if Burris was paying to play. Their possible evidence? State records show Roland Burris and his lobbying firm contributed more than $20,000 to Governor Blagojevich's political campaigns. Two years ago, Roland Burris hosted a thousand a plate fund-raiser for the governor.

Burris' consulting firm won nearly $300,000 in state contracts over the last four years. And just this September, the governor's wife, Patty Blagojevich, was hired in an $80,000 a year job with the Chicago Christian Industrial League where Burris' lobbying partner is a board member.

Yesterday, in a press conference, Burris said his selection had nothing to do with money or a pay-to-play scheme.

ROLAND BURRIS, ILLINOIS DEMOCRATIC SENATORIAL APPOINTEE: Certainly no pay-to-play involved because I don't have no money.

GRIFFIN: Drew Griffin, CNN, Atlanta.

(END VIDEOTAPE)

COLLINS: Putting the transition in motion. A Senate committee begins the first confirmation hearings in about 45 minutes for that man, one of President-elect Barack Obama's cabinet choices in the seat today.

Tom Daschle is the choice for secretary of health and human services. The former South Dakota senator is expected to field questions on President-elect Barack Obama's health care plans.

The confirmation hearing for secretary of state nominee Hillary Clinton is scheduled for next Tuesday.

Also on Capitol Hill this morning, the grim realities on the nation's economy. The chairman of the Senate Budget Committee calls it, quote, "an absolutely fiscal disaster."

Among the bleak numbers, yesterday's estimate that the federal deficit will reach $1.2 trillion. That's 2 1/2 times the record that was set just last year. That number and the other dire measures come from the Congressional Budget Office. Its acting director appears next hour before the Senate panel.

Concerns about the global economy are weighing on markets around the world. In Asia, Japan's Nikkei stock average fell more than 3.9 percent. Hong Kong's Hang Seng index sank more than 3.8 percent. And in Europe, the news is only a little bit better. At last check, markets in Britain, France and Germany were all down more than 1 percent.

A kinder, gentler IRS -- that kind of gets your attention, right? Well, the agency is promising to bend some of the rules this year for Americans struggling to pay their tax bill.

And here with all of the details, CNN's personal finance editor, Gerri Willis, who's joining us now from New York.

So, Gerri, really? A kinder...

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: I know.

COLLINS: ... and gentler IRS?

WILLIS: Yes, imagine the IRS is showing its softer side, I guess you could say.

Just this week, Commissioner Doug Schulman told reporters that guess what? The IRS has been given authority to work in a more gentle way with people who owe back taxes.

Now let's take a look at, first, who the IRS plans to help. If you have recently lost your job, and we know those -- the numbers of those folks is mounting. If you rely on Social Security for income. Many of you have had some unexpected medical costs. The IRS is targeting you with some help on taxes.

Now just what will the IRS do for you? Well, they're going to allow you to skip an installment payment. Let's say you've been paying on the installment plan which a lot of people do when they get behind. They're going to allow you to skip a payment.

They are suspending collection efforts and they are waving late fees. They're not going to hound you. You're not going to get phone calls, letters from the IRS if you're late with your taxes.

So those are two very big changes. And you know, people out there struggling with a lot of bills right now. Of course, your taxes are just one of them. And they will be coming up again in April, Heidi. I know a lot of people out there will see this as very good news, indeed.

COLLINS: Yes, I think so. And people are -- you mentioned, going to have to pay their taxes, though. I mean they're just not going to forgive...

WILLIS: This isn't...

COLLINS: ... this sort of debt?

WILLIS: No. It's not a free pass. The IRS will collect back taxes. They're just going to do it more slowly. And frankly, if you want to get the help you have to show that you're actually trying to pay those taxes. You have to make what they call a good faith effort.

Go to the IRS Web site, IRS.gov, and set up an installment plan if you're behind right now on last year's taxes. People do this all the time. You write your own letter saying how you intend to pay those taxes. It's easy to do. And, you know, the IRS allows you to do this because, ultimately, they just want to get their money sometime and now they are being even more patient with what they want to get.

COLLINS: So they're not really doing it because they care and love us? They just want their money? WILLIS: Well, you know, sure. Yes, Heidi. Live in that world.

COLLINS: OK.

(LAUGHTER)

COLLINS: I like it.

All right, Gerri, thanks so much. Appreciate it.

WILLIS: My pleasure.

COLLINS: A winter emergency across Europe. Families left without heat. Victims of an ongoing struggle over natural gas.

(COMMERCIAL BREAK)

COLLINS: Bitter cold across parts of Europe again today, making the need to resolve the natural gas crisis there even more immediate.

Countries having to do without, after Russia's largest energy company shut down its supply pipeline. Urgent meetings today offer some hope on that.

CNN's senior international correspondent Matthew Chance is joining us now live from Moscow with the very latest.

So what's the change here? Something good could happen?

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, certainly as you mentioned, there is hope that some kind of resolution could be reached but there's no resolution yet, even though all the parties in this, Russia's gas monopoly, Gazprom, the Ukrainians, the Europeans as well being involved, are sitting down trying to negotiate some kind of settlement.

But there is still fundamental differences between the various parties and there are still no gas flowing through those crucial pipelines that run from Russia across Ukraine, into western Europe.

Now, Heidi, the knock-on effect of that is extremely serious. But thousands of people are living in Europe, many of those countries, particularly in the old eastern block area still heavily dependent on gas from Russia, are literally freezing and temperatures around 14 degrees Fahrenheit, one of the coldest winters in Europe for several years.

These countries, these people don't have any gas, natural gas for heating or for cooking. And so it's incredibly difficult for them at this point.

COLLINS: What are they doing, Matthew? I mean I -- I don't know. Are they getting together in shelters somehow? Is there any where they can go to find heat in the meantime?

CHANCE: Well, it depends which country they live in. Some countries have some strategic reserves which they are tapping to top off the reserves but in those eastern countries, it's very serious, indeed.

People have been lining up outside shops to try and buy electric heaters. They've been burning wood and burning old shoes, I saw in one report...

COLLINS: Wow.

CHANCE: ... on the news agencies. And so people are in really desperate straits, particularly the young and the old, of course, are always most affected in wintertime.

COLLINS: Of course. Live from Moscow this morning, our Matthew Chance.

Matthew, thank you.

He has seen graphic images while covering the war, but nothing could compare or prepare him. A Gaza cameraman for the scene he saw right at home.

(COMMERCIAL BREAK)

ANNOUNCER: Live in the CNN NEWSROOM, Heidi Collins.

COLLINS: Concerns about the job market sent the Dow down nearly 250 points yesterday. And today, those same fears linger.

But will a major economic speech by President-elect Barack Obama soothe investor worries?

That's the question today. Susan Lisovicz is on the floor of the New York Stock Exchange with a preview of the trading day.

Hi there, Susan.

SUSAN LISOVICZ, CNN CORRESPONDENT: Good morning, Heidi.

Well, it's going to take a lot to soothe Wall Street today. Right now, stocks set to open lower. The Dow losing more than 200 points yesterday.

President-elect Barack Obama expected to seek support for a $757 billion stimulus package later this morning. His prepared remarks show -- he'll say that if we don't do something dramatic, the recession will linger and unemployment could reach double digits.

Just about an hour ago we learned the number of people continuing to receive unemployment benefits remains above 4.5 million. Even so, new jobless claims unexpectedly fell last week.

Meanwhile, Dell is cutting 1900 jobs in Ireland and Chinese computer maker Lenovo is cutting 2500 positions. And many jobs in the retail sector are in question. Stores across the country, today, releasing sales figures for the critical month of December. Wal-Mart, which had been a stand-out in the recession, missed expectations with a 1.7 increase, percent increase. And at least it's an increase, but it did cut its forecast for the quarter.

Macy's, which also operate Bloomingdale's posted a 4 percent drop in sales and says it's closing 11 underperforming stores. Women's retailer New York and Company is closing up to 50 stores.

So, obviously, we'll be watching retail, the retail sector today.

Ringing the opening bell, you notice those cowboy hats, Heidi?

COLLINS: Yes. Yes.

LISOVICZ: Professional...

COLLINS: Those are the bull riders.

LISOVICZ: Professional bull riders. More than 100 million viewers apparently tune in each year to professional bull riding programming competitions, including the Built Ford Tough Series. And the Discovery Tour, Heidi, which is designed specifically for entry level contestants.

COLLINS: Oh, there we go! Let's try it!

LISOVICZ: Well, who needs a mechanical bull? We could get on the real thing.

COLLINS: I'm sure. I love the irony, though, of the bull riders there...

LISOVICZ: Yes, bull riders. We haven't seen enough of them.

COLLINS: ...ringing in the bell.

LISOVICZ: Yes. And the official bull spokesperson, mascot, whatever, Buckshot, is outside. Too big to get inside. We haven't seen enough of them.

(CROSSTALK)

COLLINS: All right. Hopefully, we can get a shot of that a little bit later on.

LISOVICZ: Yes. And the bears are in force in the first minute of trading, by the way. We're seeing the three major averages each down at least a third of a percent.

Heidi?

COLLINS: OK. All right, well, we'll keep our fingers crossed, anyway. Susan, thanks so much.

LISOVICZ: See you later. COLLINS: Lots of weather problems coast-to-coast today. Rain and melting snow causing widespread flooding, mudslides and avalanches in Washington State. Voluntary evacuations now recommended for some 25,000 people near the Tacoma area. Not everybody getting out, though. Those staying behind are sandbagging to protect their homes against the rising waters. Throughout the state, dozens of flooded streets and highways were closed, including Interstate 5, which authorities say could be closed for four days.

Moving to the southeast now. A heavy rain causing flooding, road closures and power outages there. In the Atlanta area, people dealing with a double whammy. First, rain caused some creeks to overflow and then when the rain stop, high winds knocked down trees and power lines. Thousands of people lost electricity. But Georgia power says most of it is back on it this morning.

Then to the Carolinas, more violent weather. High winds there also knocked down trees and power lines. Utility officials say thousands of people are still without electricity this morning in places like Greenville, Spartanburg counties in South Carolina.

Rob, what is going on?

(WEATHER REPORT)

COLLINS: Yes. Rob, I just want to bring this up, because while we have you, because we're getting some pictures in. Back to Washington now, real quickly, from our affiliate there, KIRO. Apparently, this is some sort of rescue operation that's going on. We've been talking all morning long now, and for a couple of days, in fact, about some of these rushing waters and the flooding there, Rob.

It's kind of a deja vu from a couple of weeks ago when we had that water main break but, obviously, for a different reason here. And you can see how fast that current is moving. Boy, not exactly sure where this is taking place other than Washington State. We're trying to get some details. But Rob, just remind us quickly, if you can, sort of the headline from what is happening in Washington?

ROB MARCIANO, AMS METEOROLOGIST: Well, they got a ton of rain yesterday. This looks like somewhere near the mountains. Obviously, swift water rescue happening right there with the guy trying to get into that car on. It's got to be near some sort of river. And -- but it looks like, in that canyon, a slice of that hillside was cut through. You can kind of see how the land gave way there. So this is probably some sort of either...

COLLINS: Yes, they are telling me Mason --

MARCIANO: ...same cold -- or a mudslide of some sort that let this water down.

COLLINS: OK, yes. If you're familiar, you know, with the State of Washington or curious about where we're talking about, what I do have is Mason County, Washington. So we're going to continue to follow this story here. Boy, it is moving very, very quickly. I have no idea how many people are in that car right now, but we are trying to get more information. And we will check back on that story. And with you as well, Rob. Obviously, a lot is developing on the weather front today so appreciate that. Thank you.

MARCIANO: OK.

COLLINS: A quick update now on the crisis in the Middle East. Israel taking fire from a new direction this morning. Four rockets fired from southern Lebanon landed near the northern Israeli City of Nahariya causing two minor injuries there. Israel did fire back. Lebanon condemned the attacks and promised to investigate.

Israel said it would stop military action in Gaza for three hours today to allow humanitarian aid to get in, but during the truce, large explosions could be heard in central Gaza. On the diplomatic front, an Israeli and Hamas delegations are in Cairo for separate meetings on cease-fire plan as brokered by Egypt and France.

Meanwhile, despite Israel opening the Gaza border to allow humanitarian aid through, there are still problems. CNN's Karl Penhaul joining us now on the phone from the Rafah border crossing in Egypt.

And Karl, I know you've been there for a couple of days. Tell us what you know at this point.

VOICE OF KARL PENHAUL, CNN VIDEO CORRESPONDENT: That's right. We've been here nearly a week. And in the course of that week, by this time of day, we normally would expect to see between 15 and 20 wounded people, Palestinians, being brought across the treatment to Egypt.

Today so far, we have only seen three ambulances that's come across, and most of those from very close proximity to the Rafah border crossing. We asked an ambulance driver why that was, and he us told us -- the ambulance driver, Muhammad Ahmed (ph), from the Rafah area and he said that ambulances cannot come from further north from Gaza City or from other parts of Gaza, he says, because, he says, that Israeli soldiers and Israeli tanks are blocking the passage of ambulances.

He says that he has had communication by a walkie-talkie with his colleagues, and he said it has just proved impossible for them to transit the length of Gaza to bring those wounded out through border crossing and in to Egypt for treatment.

At the same time, we also know two Norwegian doctors who have been giving treatment to the wounded in Gaza City, and they are also trying to make their way back into Egypt. But they set out from Gaza City, we are told by their colleagues, at 1:00 local time. It is now gone 4:00 local time, and they have still not arrived here at the border. That's normally a journey that would take only 30 minutes. So far, it's taken them in excess of three hours.

And again, we are told by a spokesman for the Norwegian aid group that those doctors work for that they have been stopped at numerous checkpoints along the way by Israeli soldiers. And so again, a similar problem as to what has happened in the past when ambulance drivers, the Palestinians say that the Israelis are targeting the medical services. We also know, of course, that the International Committee of the Red Cross has put out a statement warning both sides to respect the neutrality of medics and ambulances.

Heidi?

COLLINS: Yes. But we certainly hope that happens. Our own Karl Penhaul reporting for us live from the Rafah border crossing there. We will stay in touch with him as well.

A freelance cameraman captures pictures of the conflict in Gaza, including one image that will stay with him, he says, for the rest of his life. CNN's Michael Holmes reports.

(BEGIN VIDEOTAPE)

MICHAEL HOLMES, CNN INTERNATIONAL CORRESPONDENT (voice-over): At a Gaza hospital, doctors try to revive a victim of the violence, their efforts in vain. Twelve-year-old Mahmoud (ph) is dead.

Recording the tragedy, Mahmoud's own brother, freelance cameraman Ashraf Mashrawi (ph), determined, he says, to show the world the human cost of this conflict.

A short time earlier, Ashraf had been filming other, less personal images of the war -- the incoming missiles, the damage they do. And then he got a phone call. The family home had been hit by a rocket fired, says the family, from a pilotless Israeli drone.

After the vain efforts of the doctors, Mahmoud is taken home, cradled in the arms of a grieving family. Ashraf continues to film. The family, he says, wants the world to know how his little brother died.

The family says they felt their home was safe -- no reason for it to be hit from the air. Ashraf says there were scores of women and children here. And, after days of being cooped up in the crowded home, Mahmoud and his 14-year-old cousin, Ahmad (ph), were allowed to play on the roof, now pockmarked by shrapnel and spattered with blood. Both boys were killed.

UNIDENTIFIED MALE: Israeli plane targeted them with a small rocket for them, just for them, and killed both of them.

HOLMES: The simple goodbyes to a lost child begin in the car, on the drive to the cemetery, itself a dangerous journey. There is little time in this war for ceremony, preparation even brief itself. Just hours after play turn to death, Mahmoud is laid to rest.

Michael Holmes, CNN.

(END VIDEOTAPE)

COLLINS: Israeli says it does not target civilians and says it is unaware of this incident.

President-elect Barack Obama delivering a message you don't want to hear. This morning, he delivers a major speech on the nation's grim economy. Among his dire warnings, a recession could linger for years if decisive action is not taken.

Stay with us for live coverage of Barack Obama's speech on the economy. It is scheduled for 11:00 a.m. Eastern, 8:00 Pacific. You, of course, can see it right here on CNN.

On Capitol Hill, Barack Obama is just hours away from being elected president. You heard that right. Next hour, the last step in the official process gets under way. The House and Senate will come together in a joint session. Their job to formally count the electoral votes from the November election. And when it's over at 1:00 Eastern, Obama will be the 44th president of the United States, pending his inauguration.

President Bush will become the first ex-president not to have secret service protection for life, and that's causing concern for those who feel he could be a target. CNN's Brian Todd now with the story.

(BEGIN VIDEOTAPE)

BRIAN TODD, CNN CORRESPONDENT (voice-over): George W. Bush will soon join the ranks of ex-presidents. But unlike the others, under a law passed by Congress, he'll be the first former president whose Secret Service protection will expire after 10 years.

WILLIAM PICKLE, FORMER SECRET SERVICE AGENT: That law is going to have to be changed. I would hope it's changed. The future President Bush -- or former President Bush -- I think he is a very, very -- at very serious risk.

TODD: The law was changed by Congress in the 1990s to lower the cost of protecting former presidents. But that was before 9/11 and America at war with terrorists.

DAVID BRINKLEY, PRESIDENTIAL HISTORIAN: So our current president, I think, is certainly a target.

I mean, when you look at the -- the war he's taken on against al Qaeda and terrorists around the world, there is nothing they'd rather do than have him as a trophy -- a tit for a tat.

TODD: It's no idle threat. When ex-president George Bush traveled to Kuwait in 1993, an assassination plot against his motorcade was discovered.

PICKLE: One of the vehicles that was to be in the president's -- the former president's motorcade -- had been taken and it had essentially been stripped of all lining and interior and had been completely filled in with explosives.

TODD: It was believed to be on Saddam Hussein's orders, which Mr. Bush's son remembered years later when making the case to remove the Iraqi dictator.

BUSH: This is the guy that tried to kill my dad at one time.

TODD: A White House spokesman now says President Bush is confident that if circumstances require it, a future administration will extend the security coverage for him beyond the expiration date.

(on camera): A secret service spokesman tells us his agency will proceed as instructed by Congress and that in 10 years take a look at the Intelligence and make a recommendation.

Brian Todd, CNN, Washington.

(END VIDEOTAPE)

COLLINS: It's the presidential guest house. So why was the incoming president kept out this week? Mystery solved.

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UNIDENTIFIED ANNOUNCER: This is CNN. The most trusted name in news. Now back to the CNN NEWSROOM.

COLLINS: A protests over the police shooting of an unarmed van at a train station turned violent last night in Oakland, California. Reporter Ken Wayne of affiliate KTVU has the story.

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KEN WAYNE, KTVU CORRESPONDENT (voice-over): Authorities shut down the Lake Merritt Station as the crowd surged toward downtown. Police and riot gear fired tear gas to try to break up the demonstration. The demonstrators reached the intersection of Broadway and 14th Street, half a block from city hall. A line of police officers kept the crowd from moving toward the Civic Center. For a time there was standoff and some demonstrators lied in the street to show their solidarity with a slain BART victim.

UNIDENTIFIED MALE: People need to know that the police were wrong with what they did so I'm going to lay here.

WAYNE: Police on loudspeakers told the crowd there would be arrest of people if they didn't leave. Moments later, another small street fire erupted later and police made their move to push the crowd back. The crowd surged down 14th Street, smashing car windows along the way. Another vehicle was set on fire.

UNIDENTIFIED MALE: Step away from the car.

WAYNE: Store windows were shattered. One woman tried to defend the violence.

UNIDENTIFIED FEMALE: We live a life of fear and we want them to be afraid tonight. We want them to understand we will mobilize. We are a community and we are a voice.

(END VIDEOTAPE)

COLLINS: The transit police officer resigned yesterday before he was to be interviewed by investigators. That allows him to exercise his Fifth Amendment right against self-incrimination if he so chooses.

Sickened by Salmonella. Dozen of states on alert now for the mystery outbreak.

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COLLINS: A nationwide Salmonella outbreak has spread to 42 states. Nearly 400 people are sick. But health officials still don't know how it's being spread. As many as 50 cases are being reported in California and Ohio, and seven people were hospitalized in Michigan. The CDC is investigating, but they haven't released a full list of all of the affected states. We'll stay on top of that one for you.

Meanwhile, as women get older, they get less sleep. CNN's Judy Fortin explains now why and what you can do about it.

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JUDY FORTIN, CNN MEDICAL CORRESPONDENT (voice-over): Val Holford is a new mom, which means she doesn't get much sleep.

VALERIE HOLFORD, SLEEPLESS MOM: My friend told me when I was pregnant that I would never sleep as soundly as I did before I became a mom. And I didn't believe her at the time, but she was so right.

FORTIN: With her son, Tristan, in the teething stage, she says she hasn't had a full eight hours sleep in month.

HOLFORD: Jumpy, jumpy, jumpy.

FORTIN: Like most moms, she feels her child's needs come first, and she neglects her sleep. And that's the problem.

DR. THOMAS LORUSSO, NORTHERN VIRGINIA SLEEP DIAGNOSTIC CENTER: When you don't sleep well, you generally don't feel well. So a fatigue is a big issue -- accidents, cognitive impairment. And now there's some indications that people that have insomnia increase their weight over time.

FORTIN: According to sleep experts, although American women average more sleep per night than men, their quality of shuteye isn't as good. That's because many suffer from broken sleep and insomnia, and as women age, sleep becomes an even bigger problem.

LORUSSO: Part of this is related to some of the unique things that occur in a women's lifetime. For example, their child-bearing ages, when they're pregnant. And then we have the menstrual cycle, that obviously can cause problems with sleep.

FORTIN: In their 30s, many women are new at parenting, and children can disrupt sleep patterns. In some cases, those sleep patterns can stay with mothers even after their little ones are sleeping soundly.

LORUSSO: There's something called psycho physiologic insomnia, which often will be triggered by some initial poor sleep habits. This pattern becomes established, and it's very difficult to break it.

FORTIN: In their 40s and 50s, women's metabolism slow down. Sometimes causing weight gain. Those extra pounds can lead to sleepless nights.

LORUSSO: Weight gain in particular is a real problem with sleep apnea.

FORTIN: And hormonal changes can cause disruption in sleep.

LORUSSO: When women reach 50 and progesterone levels drop, there is a significant increase, more frequent awakenings during the night and the sleep becomes fragmented.

FORTIN: For better sleep, doctors recommend women limit food and drink, especially alcohol, a few hours before they go to bed. And add exercise, preferably in the morning to your routine. For new mothers like Val, try to eliminate stress by getting back into a regular sleep pattern as the baby begins to sleep through the night.

Judy Fortin, CNN, Atlanta.

(END VIDEOTAPE)

COLLINS: Focus on Barack Obama, and his speech this morning on the economy. Next hour, a closer look from our CNN money team and our veteran reporters in Washington.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I definitely don't want to be in the city.

UNIDENTIFIED MALE: Pretty much everybody says they're going to stay out of town, if at all possible.

UNIDENTIFIED FEMALE: My kids have four days off, I have four days off, I may just go skiing.

(END VIDEO CLIP)

COLLINS: With the inaugural invasion just days away, many Washingtonians are planning their get-away. One South Carolina golf resort is trying to lure them, offering an inauguration package deal. Sounds good.

The Obamas checked in at a Washington hotel, because early check- in was denied at the Presidential Guest House. CNN's Jim Acosta reports now on the Blair house mystery.

(BEGIN VIDEOTAPE)

BARACK OBAMA, PRESIDENT-ELECT OF THE UNITED STATES: I just want to thank the president for hosting us.

JIM ACOSTA, CNN GENERAL ASSIGNMENT CORRESPONDENT: It didn't come up on camera at the presidential power lunch, but it's been a Washington mystery for weeks.

ALLAN LICHTMAN, PRESIDENTIAL HISTORIAN: It's like a big splat of egg in the face of the Bush administration for it to come out this way.

ACOSTA: An official hotel for guests of the White House, the Blair House is supposed to be available to the president-elect on January 15th. With the girls starting school on the 5th, the Obamas had asked for an early check-in but the Bush administration said the house was already booked, and wouldn't provide details.

DANA PERINO, WHITE HOUSE PRESS SECRETARY: I think that's three questions you already asked.

UNIDENTIFIED REPORTER: And consideration that these children are going to go to school, why not plan them come?

PERINO: Thank you.

ACOSTA: As it turns out in addition to a few events already slated for the Blair House, there was a mystery guest.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Somebody said don't you -- you and John Howard appear to be so close. Don't you have any differences? And I said yes, he doesn't have any hair.

ACOSTA: Who's not a mystery anymore. Former Australian Prime Minister John Howard will be staying there on January 12th to receive the Presidential Medal of Freedom.

LICHTMAN: He was one of the world leaders when he was in power, who was most staunchly behind the Bush administration's war in Iraq.

ACOSTA: The coalition of the willing?

LICHTMAN: He was one of the very few of the really willing.

ACOSTA: But it's still not clear why there wasn't enough room at the inn for the Obamas. The 70,000 square-foot complex is actually bigger than the White House. There are 119 rooms, 14 guest bedrooms, 35 bathrooms, four dining rooms, dry cleaning facilities, an exercise room and a fully-equipped hair salon.

LICHTMAN: There's room at the Blair House for John Howard and an entire Australian rules football team, as well as the Obamas.

ACOSTA: Washington writer and socialite Sally Quinn says an executive order should have been issued.

SALLY QUINN, "THE WASHINGTON POST": If I had been the Bushes, I would have said, you know, mi casa su casa. Of course, we would love to have you and your children stay there. ACOSTA (on camera): For now, the First Family is staying at the up-scale Hay Adam's Hotel. A spokeswoman for First Lady Laura Bush says she believes the Obama family is, quote, "very understanding" about the scheduling conflict. The Obama transition team has its own statement that can be summed up as no worries. Translation, he's got bigger fish to fry.

Jim Acosta, CNN, Washington.

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