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Obama Makes Case for Economic Plan; Electoral College Votes Counted; Illinois Legislature Considers Impeachment for Blagojevich; Is Race an Issue in Illinois Senate Seat Scandal?

Aired January 08, 2009 - 13:00   ET

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

TONY HARRIS, CNN ANCHOR: CNN NEWSROOM continues right now. You ready -- to rock?
KYRA PHILLIPS, HOST: Yes. I was having a little issue. Speaking of technology, I'm having a mike issue. Yes. That -- is that all right? Is that centered? You like -- you like my new necklace?

We've got to go.

(BEGIN VIDEO CLIP)

PHILLIPS: Think big, act fast, and brace for the worst if we don't. The president-elect declares war on the economic meltdown, 12 days before he takes office.

For the man who wants Obama's Senate seat, a hot seat. Roland Burris faces Illinois lawmakers investigating the governor who appointed him.

(END VIDEO CLIP)

PHILLIPS: And hello, everyone. I'm Kyra Phillips, live at the CNN world headquarters in Atlanta. You're live in the CNN NEWSROOM.

Well, you heard it right there. Political drama. We have that for you, but we also have porn. I have your attention now, don't I? Now, the other stories that will have you wagging your tongue, raising your hands, shaking your head. Wall Street got rescued; why not the red light district? That's right. The porn industry now wants its own bailout.

Plus, this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: He said he just was addicted to spending. And he liked the social status that it was giving him.

(END VIDEO CLIP)

PHILLIPS: Thou shalt not steal, and thou shalt not get a vasectomy with stolen money. Police say that's what one former church official did, and that's not all. You know you want to hear more, and you will. But first, it wasn't the White House, and they didn't play "Hail to the chief." But there's no mistaking that the presidential vibe around the president-elect's economic crisis speech. You heard a litany of losses -- jobs, homes, savings, hopes -- with an urgent call for dramatic action. And if you missed our live coverage just a couple hours ago, stick around, because we're playing the address, start to finish, next hour in the CNN NEWSROOM.

In the meantime, let's bring in our Jessica Yellin. She's in Washington.

Jessica, what did you learn from the speech?

JESSICA YELLIN, CNN CORRESPONDENT: Well, we learned two things, really, Kyra. One, there's not just one president at a time when it comes to the economy. Because today Barack Obama really used his bully pulpit to sell his stimulus plan.

And two, frankly, he's not afraid to shock taxpayers with a grim picture of how much worse, he says, the situation will get if Washington does nothing.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT-ELECT OF THE UNITED STATES: Manufacturing has hit a 28-year low. Many businesses cannot borrow or make payroll. Many families cannot pay their bills or their mortgage. Many workers are watching their life savings disappear. Many, many Americans are both anxious and uncertain of what the future will hold.

I don't believe it's too late to change course, but it will be if we don't take dramatic action as soon as possible.

(END VIDEO CLIP)

YELLIN: Now, the president-elect did not put a price tag on the stimulus, because right now his team is still trying to reach an agreement with Congressional Democrats.

Instead, he talked in broad terms, appealing in part to fiscal conservatives, by vowing to spend the money wisely, and then explaining where some of the money will go. A huge chunk of it, $300 billion, would be in the form of tax cuts to small businesses and middle-class families, even support for the unemployed. That piece of the package is designed to have the most immediate impact on the economy.

Now, other elements, like new spending on roads and bridges, making federal buildings and homes energy efficient, that takes longer to get moving and would have a slower effect.

Now, again, all of this is a sales pitch. It is ultimately up to Congress to decide how that money will be spent. And Obama's team is working on that, getting them on board with them -- Kyra.

PHILLIPS: All right. Jessica, thanks so much. And this happens to be a very big day for the 44th U.S. president, right up there with November 4 and January 20. Right now, as we speak, a joint session of Congress is actually counting the votes of the Electoral College. And as we all know by now, they are the votes that matter.

Candy Crowley watching this, I guess, peculiar piece of Americana. Right, Candy? Now, when we talked earlier on the phone, you said Mr. Obama really has not been the president-elect since November.

CANDY CROWLEY, CNN CORRESPONDENT: This makes it official. I mean, this is -- you know, in the Constitution, Congress has to do this, and that is count the electoral votes.

Listen, we all know how it's going to come out. Let me just take the suspense out: 365 to 173, Barack Obama wins over John McCain. But this is something they have to do.

It looks very much, I think, if you see that picture, it's going to look a lot like a State of the Union address. The president pro tempore of the Senate, which is Dick Cheney, is supposed to preside. If he's not there, we will see Senator Robert Byrd, the longest- serving member of the Senate. He from West Virginia. So it is pro forma, but it is also what makes it legal.

PHILLIPS: And also, too, I mean, the Electoral College. How many times have we had to do Electoral College 101? Because nobody really understood what it was. Now we're looking at it. Here it is in action.

CROWLEY: Right.

PHILLIPS: This is our history. This is democracy at work.

So there's another little factor that we should probably talk about, and it's that faceless elector. Now, that can kind of throw a wrench into this whole process.

CROWLEY: Is that the best term? I love that. Faceless elector.

And now we can see that Cheney, in fact, will be there. I think that was him going by there. Maybe not.

PHILLIPS: We could rerack.

CROWLEY: I'm sorry. Dick Cheney.

So, in any case, yes, faceless electors. There haven't been much of those, but basically, that's someone who does not cast his electoral vote the way his state voted.

In recent history, the last time we saw that was in 1969 when a North Carolina elector voted for George Wallace instead of Richard Nixon. So there was a big challenge to that. And the Senate and the House went into their separate places and voted on it. And in fact, that electoral vote for George Wallace was allowed to be cast.

So in order to get any more challenges from those faceless electors, you have to go back to 1877, which as we all know, was the Hayes/Tilden race.

PHILLIPS: Oh, yes. You know that so well.

CROWLEY: Absolutely.

PHILLIPS: You remember the year 1877. It was a fine year, wasn't it?

CROWLEY: That's -- that's why God made researchers.

PHILLIPS: Amen. One thing we know from that year, maybe wine. OK. Candy Crowley, thanks a lot.

CROWLEY: Sure.

PHILLIPS: All right. Well, don't forget, because we're going to get some feedback on the Obama economic plan from Michigan Governor and Obama adviser Jennifer Granholm. That's at quarter past the hour right here in the CNN NEWSROOM.

And then later at the top of the hour, we're going to actually replay the president-elect's address, if you missed it. And our Frank Sesno will weigh in after that. He's always got great stuff to say and great insight.

Well, no Illinois governor has ever been impeached, but Rod Blagojevich may end up being the first. The Illinois house panel investigating him appears headed for recommending his impeachment now.

And the panel's out, actually, with a new draft report. We saw it on a Web site. And it's saying that there's reason to believe that Blagojevich abused his power and recommending impeachment. But there's been no final committee vote. I know, it's a little confusing.

But the governor is accused of trying to sell President-elect Obama's Senate seat, you remember, to the highest bidder, but has repeatedly refused to step down.

So that brings in state representative, Jack Frank. He's actually on the special committee that we just mentioned that's investigating Blagojevich. He joins us now from Springfield.

Jack, good to see you. We actually saw this announcement on the Web site. We appreciate you joining us a bit at the last minute. Why don't you tell me right now how it got to this point, why you are supporting the impeachment of Rod Blagojevich?

JACK FRANK, ILLINOIS STATE REPRESENTATIVE: Well, it's clear the governor could no longer lead. And the state is just falling apart. He's led us to the abyss. And we can't get anything done. We can't pass the jobs bill. We have many people that are unemployed. Our roads and bridges are falling apart. We're not paying our bills to our providers.

So that way people who need our services most, such as Medicaid patients, aren't getting doctors, because the doctors can't take any more patients, because they're not getting paid. Pharmacies aren't taking Medicaid prescriptions, as well.

When we tried to borrow money recently to pay some of our bills, it cost us an extra $26 million, because we've been downgraded by Moody's because of our governor's recent arrest.

So it's just an absolutely mess. It's clear that the governor is incapable of leading. He can't even talk to the legislature anymore unless he's talking using his paid criminal attorneys. His chief of staff has resigned. His deputy government has resigned. His own lawyer has resigned.

It's an under siege mentality, and we really need to take the government back now before any more harm comes to our citizens.

PHILLIPS: OK. So you're talking about issues with his leadership capability and that nobody, basically, or a lot of people are not believing in him any more. But have you actually heard all the tapes that apparently have him talking about selling Barack Obama's Senate seat?

FRANK: No, we haven't. And a judge is supposed to rule on that in about an hour, as a matter of fact.

PHILLIPS: So in an hour, it's possible that you could get permission to listen to all those tapes?

FRANK: Absolutely. I don't think the tapes -- certainly, they're -- they would help if we had them, but they're not necessary. Because we've had so much information.

I've been pushing for the impeachment of this governor for about eight months now, and I believe that we do have enough information and evidence prior to his arrest. Certainly, the tapes would help, if we needed to play those at the trial in the Senate, but if you look at the governor's history, what he's done to this state, he's spent millions of dollars on a flu vaccine that he knew we did not need and would never be imported. But he bought it anyway so he can get the press box.

PHILLIPS: OK, Jack. I want to get this in, too, because we're going to obviously follow what happens here in the next hour. Maybe it's possible we can bring you back in an hour. So I want you to stay in touch with us once we wrap up here.

But at 4 p.m. today, Roland Burris is also going to be appearing in front of you. And our investigative reporter, Drew Griffin, has solely been able to recover these records that are starting to surface revealing state contracts, political contributions, even a job for the governor's wife, that may show that Roland Burris may have paid to play here. So I'm curious. When he comes before you, because he's saying he's squeaky clean, he's not tainted, he's in no way tied to any sort of corruption or anything illegal when it comes to Rod Blagojevich or his actions. What are you going to ask him? What do you want to know from Roland Burris?

FRANK: Well, I just think we need to talk about the culture of corruption, which is so endemic here in the state of Illinois. Don't you find it curious that the -- the governor who's been accused of selling this same Senate seat is still allowed to make that appointment? It's obvious that we need to have an election, be able to give confidence back to the people.

I think Mr. Burris is going to have to answer all those questions that you just brought forward. I'd be shocked, though, quite frankly, if there was any pay to play with Mr. Burris, because he was not on the short list. His name only surfaced after the arrest.

PHILLIPS: Interesting. All right. Jack Frank, don't mean to put you on the spot, but I'm going to have you stay there, talk to our bookers, because I'd love to find out what happens in an hour, if that's OK. Or at least bring you back tomorrow, if that sounds good.

FRANK: You got it. My pleasure.

PHILLIPS: All right. Jack, thanks so much.

FRANK: Thank you.

PHILLIPS: As I just mentioned, just under three hours from now, the Illinois impeachment panel will hear from Roland Burris, the man tapped by Rod Blagojevich to fill President-elect Barack Obama's Senate seat. Jack Frank is right there, going to head that committee.

Senate leaders initially refused to seat Burris because of the cloud of scandal hanging over the Illinois governor, but now, they seem to be warming up to him a bit.

And for his part, Burris denies any improper ties to Blagojevich, but that's not stopping the questions. Here's what we want to know. Did Roland Burris pay to play in the Senate seat scandal?

Plus, the race factor. People are talking about it. But does it even deserve discussion? That's the question. Some civil-rights activists certainly think that it does. One in particular, CNN's Louise Schiavone introduces us to.

(BEGIN VIDEOTAPE)

LOUIS SCHIAVONE, CNN CORRESPONDENT: For NAACP chairman Julian Bond, the Senate's rejection of Roland Burris this week was all too familiar. Here is Julian Bond, sitting out his own swearing in to Georgia's legislature in 1966.

JULIAN BOND, CHAIRMAN, NAACP: In 1966, I endorsed a statement opposing the war in Vietnam. The members of the Georgia house where I was expected to be seated objected to this and said that I couldn't believe in the statement and take the oath of office, be a legislator. I had won the election. I was old enough, and I lived in Georgia. But they disagreed, and they voted to put me out.

SCHIAVONE: With a full-out campaign by Martin Luther King Jr.

REV. MARTIN LUTHER KING JR., CIVIL RIGHTS LEADER: When Julian Bond will be back in that state legislature.

SCHIAVONE: And the authority of the Supreme Court ruling, Bond ultimately took his seat and is somewhat incredulous that similar images are still alive four decades later.

Senate Democratic leaders say long-standing procedure, not racism, accounts for the standoff.

SEN. HARRY REID (D-NV), MAJORITY LEADER: Roland Burris, one of the first things he said to us, "Hey, this is nothing that's racial. I understand that." So a lot of people tried to make this a racial issue, but Roland Burris has not.

SCHIAVONE: The charge that the Illinois governor wanted to sell the Senate seat made Democratic leaders suspicious of the Burris appointment, but Bond suggests...

BOND: Well, you have to ask yourself what were they thinking, or were they thinking at all, when the whole Democratic Caucus in the Senate, including then-Senator Obama say, "Let's not seat this guy." Didn't one of them say, "This is going to look bad"?

SCHIAVONE: The NAACP say the Burris appointment is legitimate, and he should be seated. The Congressional Black Caucus has said the same.

REP. DONALD PAYNE (D), NEW YORK: Many times when decisions are made without it being thought through clearly, you tend to find yourself in a very embarrassing and difficult positions.

SCHIAVONE (on camera): The question could move soon to the Senate rules committee where the chairman, Senator Dianne Feinstein, has already said she believes Roland Burris should be seated.

Louise Schiavone for CNN, Washington.

(END VIDEOTAPE)

PHILLIPS: All right, again. Let's ask the question. Just how much of a factor is race? After all, the man that Burris was tapped to replace has gone on to become the nation's first African-American president. But then again, that currently leaves the Senate with no African-American members.

Let's bring in Warren Ballentine, host of the nationally- syndicated "Warren Ballentine Show." He just got off the air.

Warren, you know, now we have the race card on the table. Does it deserve to even be there in this case?

WARREN BALLENTINE, RADIO TALK SHOW HOST: Well, Kyra, it's going to be a factor because of this reason and this reason only: because of what Blagojevich did -- him and Harry Reid talked about -- prior to the arrest of Governor -- or the complaint filed against Governor Blagojevich.

If this tape comes out that Harry Reid said not to bring in Jesse Jr. or Danny Davis or Emil Jones because they were African-American, then race plays a huge issue here. But of course it's going to play a small issue here, because there are no African-American senators. And as Julian Bond said, what were they thinking about when they first took on this of saying, "No, we don't want you"?

PHILLIPS: Right. Because there is -- the type of thing where senators said, "OK, no way." If Rod Blagojevich is going to name somebody, they're tainted, we're not letting them in. They're not going to take the Senate seat.

Uh-oh, Rod Blagojevich, he picked an African-American. We can't look racist here. We better negotiate. We better figure out what to do. We better let the senator, if he is, you know, pretty much squeaky clean, we better let him come in and become the senator. Otherwise, we're going to look like racists.

BALLENTINE: Well, I don't necessarily think they think like that. I think what they did, you know, is that they're lawyers. They went back and looked at it and, constitutionally, he has every right to be seated. There's no reason, constitutionally, that this man should not be seated.

And honestly, this was Governor Blagojevich sticking it to the people of Illinois, because honestly, he should have just -- if he really wanted this man to have the seat, he could have stepped down for two weeks, let Pat Quinn appoint this guy, and it wouldn't have been an issue at all. But he's sticking it to the American people and to the people of Illinois.

PHILLIPS: And he's probably -- he's watching all this, saying, "Aha. See, that's exactly what I wanted to see happen."

Now, let me ask you another question while I have you. The Congressional Black Caucus. Will it become irrelevant, now that there's a black president of the United States?

BALLENTINE: Well, you know, I've got to tell you, you know, when I hear people ask that question, I kind of smile and always say to myself, "Well, you know, we've had members of Congress. We've had black senators. But we still have had issues that need to be dealt with in the black community."

So just because Barack is the president, that doesn't mean that everything's going to change in these communities and these poor areas around the country. Children trying to get into colleges, the Congressional Black Cause. You're still going to need areas where people can have, in case something goes wrong, in Congress, let's be honest.

You know, under the Republican administration, you know, people like Billy Graham and others, they thrived under that. They didn't have to go nowhere, because they had their people in office. I think this is a way where everybody can come together and work together. But I don't think they necessarily will be phased out or need to phased out. I think they need to be highlighted instead of phased out.

PHILLIPS: Warren Ballentine, always great to talk to you. Thanks so much.

And keep in mind that we still have to answer the second question that we asked. Did Roland Burris pay to play in the Senate seat scandal? That's where I talked about our special investigations unit. It takes a closer look at that. Straight ahead Drew Griffin bring us our special report.

Also, we're going to talk with our senior legal analyst, Jeffrey Toobin. He's going to weigh in on that.

Now, 13 days of fighting in the Middle East now. The situation is still grim. We're going to follow up on that. And the United Nations main humanitarian aid group has halted its activities in Gaza after two weeks, because its workers were being killed. We're going to have a live report.

Also, planning for your financial future. What kind of risk- taker are you? Well, we all took -- my entire team took Ali Velshi's test right here in the NEWSROOM. We're going to tell you what we learned about ourselves. We're all risk-takers, so to speak, but when it comes to our money, we'll talk about it.

(COMMERCIAL BREAK)

PHILLIPS: Well, state of the economy from the man we hired to fix it. Barack Obama says, hey, it's not too late, but it won't be quick, and it will be hard. We're going to hear from a governor who's on the front lines and in Obama's inner circle, as well.

(COMMERCIAL BREAK)

PHILLIPS: All right. Well, recovery and reinvestment. That's what the president-elect is calling his economic rescue plan. Recovery being the goal. Reinvestment, well, you know what that means.

(BEGIN VIDEO CLIP)

OBAMA: That's why the overwhelming majority of the jobs created will be in the private sector, while our plan will save the public- sector jobs of teachers, police officers, firefighters and others who provide vital services.

(END VIDEO CLIP) PHILLIPS: Now, for governors, jobs are a life and death priority. And that's doubly true for the governor of Michigan, Jennifer Granholm. Few, if any, states have suffered worse or longer in the economic meltdown than hers. She's an adviser to the Obama transition team, and she joins me now, live from Washington.

Governor, good to see you.

GOV. JENNIFER GRANHOLM (D), MICHIGAN: Thank you, Kyra. Thanks for having me on.

PHILLIPS: Let's talk about -- you heard the speech. Tell me where exactly you can reinforce what the president-elect wants to do.

GRANHOLM: Well, I think the first thing to reinforce is a sense of urgency: how important it is for people on the street, everyday citizens, to realize that help is on the way and to feel that.

So for in Michigan, for example, we've got an almost 10 percent unemployment rate because of the contraction in the auto industry and the manufacturing sector.

What he talked about today was jobs. Investing in people and in their training, and putting them to work in a whole new sector of the economy, which is the new energy sector. That, for us in Michigan and in other states across the country, is music to our ears.

But he also said, of course, that he'll help people to make sure that we have unemployment benefits for them, that while we go through this period of restructuring of our national economy and reinvigorating of it, that they're not going to -- they aren't cut off of health care, that there are safety nets for them. So it was a very, very important and bold speech today.

PHILLIPS: All right. And you talk a lot about job loss and the loss of money and businesses that are in trouble. And looking at "Forbes" magazine, back on December 17, there was a pretty critical commentary that was printed about your leadership there in the state. The writer said that "Governor Granholm presides over the state with the second-highest unemployment rate in the country, the fifth highest taxes. Michigan also has the fifth-highest rate of foreclosure starts and the lowest rate of attracting new residents. During much of the past decade, when the U.S. economy was growing at a healthy rate, Michigan's was faltering. The lowest rate of attracting new residents. And during much of the past decade, when the U.S. economy was growing at a health rate, Michigan's was faltering."

Tell me what you can do, in light of that criticism, that's going to help this country, help your state and be -- how will you be a good adviser to the president of the United States?

GRANHOLM: Well, clearly, Michigan's troubles are because we have been a state that has focused for 100 years on automotive manufacturing. We have 12 times the automotive manufacturing employment of any other state in the country. And of course, trade agreements impact that. The global shift in manufacturing jobs impact that.

That's why it's so important for us to have a partner in the White House, somebody who's going to fight to keep jobs in America, somebody who's going to fight to create jobs in America, somebody who's going to help us to diversify. Adding a whole new sector to our economy in Michigan is exactly what we are doing. For the past seven years, we have been investing and creating new sectors of our economy, like in life sciences, like in alternative energy, advanced manufacturing, homeland security and defense. Those are the things we've been focused on.

But you know, a governor, any governor of any state -- and the governors that I was with today will tell you -- don't have much leverage when it comes to making huge policy changes that are more appropriately impacted by the federal government.

PHILLIPS: OK, then what -- then what can you do? Now that you're saying you've got the right president in there...

GRANHOLM: Right.

PHILLIPS: ... and this is a president that's going to give you support, how is that going to allow you to change things around in your state? Because as you know, it's your auto industry. It's everything that happens there in your state that's affecting so much of what we're going through right now.

GRANHOLM: Absolutely. And that's why -- you know, governors can't print money. The federal government has many more resources than states do. We have to have balanced budgets, and we are not allowed, constitutionally, to invest in the same way the federal government is.

And so that's why, when President-elect Obama says that he is going to invest, it gives states like Michigan, but every other state, as well, the ability to invest in job creation in ways that we just simply don't have at the state level. Gives us the ability to protect citizens, as well, to fight for our citizens and their health care and their unemployment insurance, and allows us, really, to reshape what we have had, especially in Michigan, which is such a reliance on one sector. Diversification is key.

Phillips: Diversification. Great point. We've got to say education, because Obama mentioned education in his speech, as well.

And I've got to tell you, the story circulating on Web sites there throughout Detroit, and this one just broke my heart. A Detroit elementary school teacher is now asking for donations of toilet paper and light bulbs to keep the school functioning. It's happening at the Academy of Americas. He says that your district is grappling with more than $400 million budget deficit, is on the verge of being assigned an emergency financial manager by the state.

You've got to do something about education, as well, not just jobs. But the future. That's your children. And this is a school that needs donations of toilet paper. GRANHOLM: That's exactly right. And this is exactly why what Senator -- President-elect Obama's plan allows us to do is to invest in that longer-term strategy. Short-term, we need jobs; long-term, we need employees. And that means investing in these workers of the future, which is education.

Our goal is to double the number of college graduates in Michigan. But you can't do it if you no resources to be able to make those investments, allowing us to keep teachers in the classrooms, to not have class sizes of 35 or 40, to make sure that we can invest in having buildings that have broadband technology, libraries that bring knowledge to kids. That is all part of his plan.

After the speech that he gave, he brought all the governors back and he said, I think, the five best words that I've heard come from the federal government since I've been governor, which is "help is on the way." That is music to our ears.

PHILLIPS: Show me the money. That's the other three [SIC]. Show me the money. Governor...

GRANHOLM: Well, it's not so much "show me the money." It's show me the help for our people. It's all about the people.

PHILLIPS: And we'll be monitoring, state by state, what you're doing, how you're advising the government. Governor Jennifer Granholm, sure appreciate your time.

GRANHOLM: You bet. Thanks, Kyra.

PHILLIPS: You bet. Once again, you can see Obama's economic speech at 2 p.m. Eastern. We're going to actually re-air it for you in its entirety. That's 11 a.m. Pacific right here in the CNN NEWSROOM.

Now, a church finance director directs the church's finances right into his own account. Holy moolah, right? Does that seem like a bad idea? Well, wait until you see what he invested it in.

(COMMERCIAL BREAK)

PHILLIPS: Well, let's get you caught up now on what's happening in Gaza. A United Nations aid group has stopped delivering food and supplies there. Why? Well, U.N. Secretary-General Ban Ki-Moon says that Israeli troops fired on a relief convoy during the three-hour truce, killing two workers. So that's the relief until the Israeli military can actually guarantee their safety.

Now, the Red Cross says Israeli troops fired on one of its aid convoys, too, but nobody was killed.

CNN's Ben Wedeman says that he could hear the explosions and gunfire during that truce window. Israel says if Hamas fires on its soldiers during the truce, it will respond.

Also today, militants in Lebanon fired rockets into northern Israel. Two Israelis had minor injuries there. And two Israeli diplomats are in Cairo now to talk about a possible cease fire. We're following that for you.

Now, Palestinian medical sources put the body count at 763, with more than 3,200 wounded, we're told. And there's a lot of people who need food and medical supplies, so the U.N.'s decision to stop relief deliveries looks like a big step backwards. We want to check in now with CNN's Paula Hancocks. She's right there on Israel's border with Gaza to bring us up to date -- Paula.

PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: Well, Kyra, it's certainly a devastating move for 1.5 million residents of Gaza. Something like a million of the residents were relying on humanitarian assistance of some description, and about three-quarters of a million were relying on the U.N. aid agency in Gaza for food.

Now, we saw during that lull earlier today that many people came just to get the absolute basics -- flour, milk, sugar, rice -- from the U.N. distribution center, but that won't happen again until the U.N. can get a guarantee of safety and security for its own staff from the Israeli military. Now, John Ging, the head of UNRWA, was addressing the U.N. just a little while ago, and he said that this was not an individual occurrence.

This is not just when a truck driver was killed and two injured after being fired upon, but many of its convoys after it had given the Israeli military its coordinates. It was clearly marked the U.N. It was given the green light by Israel. But was still fired upon by Israeli military, saying the coordination had lost all credibility, according to John Ging.

And of course, this comes after a U.N.-run school -- in fact, two were fired upon by Israeli military over the past few days, killing 40 on one occasion. So, devastating news for the residents of Gaza -- Kyra.

PHILLIPS: Paula, thank you.

Straight ahead, so, are you depressed about this economy and not feeling too frisky? Well, pornographers feel your pain, too, and they want your tax dollars. You're not going to believe this one, folks.

(COMMERCIAL BREAK)

PHILLIPS: Well, we've spent a lot of time this hour talking about race and the controversy over who should succeed Barack Obama in the Senate. And race issues aside, there is a general agreement that Roland Burris is qualified, but Burris can't escape his ties to the state's embattled governor. CNN's Drew Griffin takes a look.

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN SPECIAL INVESTIGATIONS UNIT (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 raise questions for Republicans that Burris may have paid to play.

REP. JIM DURKIN (R), ILLINOIS 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, 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 governor.

GRIFFIN: The governor stands accused, but not yet indicted, in an investigation focussing 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 campaign. Two years ago, Roland Burris hosted a $1,000-a-plate fundraiser for the governor. Burris's consulting firm won nearly $300,000 in state contracts over the last four years.

And just this September, the governor's wife, Patti Blagojevich, was hired in an $80,000-a-year job with the Chicago Christian Industrial League, where Burris's 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 (D), ILLINOIS SENATE APPOINTEE: There's certainly no pay to play involved, because I don't have no money.

GRIFFIN (on camera): Illinois Republicans say that vague answer is exactly why they want Roland Burris under oath, answering questions about his relationship with Governor Blagojevich. That expected to take place late this afternoon in Illinois.

Drew Griffin, CNN, Atlanta.

(END VIDEOTAPE)

PHILLIPS: Well, he's been in state politics so long, it would be unusual if Roland Burris did not have at least some ties to the Illinois governor, right? But are their connections enough to keep Burris actually out of the Senate? Let's talk with Jeffrey Toobin. He's our senior legal analyst.

I mean, just sort of looking at what Drew has uncovered, Jeffrey, can you answer that question for us? Is there enough there? Are those connections that you just listened to enough to keep him out of that Senate seat?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Well, I think they are certainly enough to require him to answer questions. I think it is entirely appropriate for him to talk about all of his conversations with Blagojevich about this seat. Did those conversations take place in connection with any sort of discussion about campaign finance contributions or jobs for his wife or anything like that? It's extremely unlikely, frankly, that this is going to impact the Senate nomination because he is already chosen for the Senate. It looks like he's going to be welcomed by the United States Senate, so he'd have to be impeached by the United States Senate. That seems like it's not going to happen, and based on this evidence, it doesn't seem like it's justified, but it certainly merits further investigation.

PHILLIPS: OK, so legally, how do you prove pay to play?

TOOBIN: Well, this is one of the problems with bribery cases in general, particularly when it comes to campaign contributions, because there is always an element of exchange in a contribution. If I give a campaign contribution to a senator because I believe he'll lower taxes, and he says, you bet I'll lower taxes, that's not a bribe. But if the tapes are, as the transcripts reflect that they are, the degree of explicitness, when Blagojevich says, I will not approve $8 million for a children's hospital unless I get $50,000 in campaign contributions, that kind of explicitness I think is criminal, if that's what the government can prove.

PHILLIPS: Final thought. Your gut here. What do you think is going to happen?

TOOBIN: I think Blagojevich is on his way to being impeached, and Burris is on his way to being a United States senator for least the next two years. I don't know what Blagojevich really accomplished by putting Burris in office, except sticking it everybody -- Obama and the Senate.

But it's not going to help his legal situation. And he's still in desperate trouble, and it looks like today, the impeachment process is really going to get ramped up.

PHILLIPS: All right. We'll track it. And I'm going to take that one quote: If he is impeached, and Burris goes to the Senate, I'll say you said so. That's our headline.

TOOBIN: All right. And if I'm wrong, forget it.

PHILLIPS: That's right -- we'll forget you ever said it. Jeffrey Toobin, thanks.

Twelve days ahead of his swearing in, President-elect Barack Obama pleads with Congress to quickly pass his plan to get the economy back on its feet. In a speech today, the president-elect said without dramatic action that the recession could drag on for years.

Our financial guru, Ali Velshi, joining us now with his take on his speech. He's in the middle of his CNN radio show in New York. Ali, tell me what you think.

All right, we're going to work on that. Actually, maybe I could put words into his mouth here. OK, so he hears me, but we don't hear him. That could be kind of scary if I try to put words in his mouth. All right, we're going to try and work on that audio, find out what he's talking about there on his radio show.

While we do that, let's go ahead and talk about what we're going to see after the break. And that is going to be record-setting snowfall. Tens of thousands of people in Washington State are now heading to higher ground as heavy rain melts the snow. Our Chad Myers warned us of this and warned us of exactly what we are seeing right now: Floodwaters rising. This rescue we will follow.

And also, going beyond the drugstore. All the alternative medicines that you take, are they safe for your kids? Elizabeth Cohen's got the lowdown in this week's "Empowered Patient." Stay with us.

(COMMERCIAL BREAK)

PHILLIPS: All right, this is what Ali says, right here. He's going to give us our money back. Can we hear you now?

ALI VELSHI: CNN CHIEF BUSINESS CORRESPONDENT: I can hear you.

PHILLIPS: Give me my audio back. Give me my audio back. Ali says give me my hair back and I'll give you your money back.

VELSHI: You can hear me now.

PHILLIPS: Yes, I can hear you now.

VELSHI: All right. I heard you asking me --

PHILLIPS: Yes, what did you think of Obama's speech?

VELSHI: I think that Barack Obama's speech was such a departure from the speech of an incoming president. You know, normally, when you've won the presidency in such a historic election, it's all about elation and optimism. This was about how dire the situation is and how much worse it could possibly get.

This is not the talk we normally hear from a president who is the cheerleader in chief of the economy. This is the talk you are hearing from a president who wants you to understand and wants Congress to understand this is bad, it could get worse. He talked about years of recession if they don't intervene.

It's a bit -- it's a warning. It's a shot across the bow to Congress to say please don't drag your feet on this one. This economy needs massive stimulus, a lot of money, and even then we might still be in trouble.

PHILLIPS: OK. But does anything stand out when it -- because, I mean, taking a look at your book, "Gimme My Money Back," we joke around, but that's what we want. We want our money back. We don't want to have to -- we want to know how to invest. We want to know if we can trust this economy. We want to know --

VELSHI: Trust is what stands out to me.

PHILLIPS: OK.

VELSHI: He said the word "trust." He talked about reviving trust in Washington and in Wall Street. You always hear -- I think every election you hear about trust in Washington. Now, it really matters because you lost your money on Wall Street, and Washington was supposed to protect you, and it didn't.

And by the way, after a lousy year in the markets, then we had this Madoff scandal, so the average American is completely frightened of what's going on in the markets. And Barack Obama talked about reviving trust and confidence. And about my book, you know what? My book is written for people who have run away from the markets for good reason. They've been frightened by it.

PHILLIPS: All right. And you also have a test that we can take. And we did this yesterday. So what I did was, I had my whole team take the test. I took the test, too. It's your risk-tolerance test. And all you have to do is go on to the Web --

VELSHI: You were bragging to me yesterday...

PHILLIPS: What's that?

VELSHI: ... you were bragging to me yesterday that you -- I'm a very high-risk investor based on my own test, and you said that you're a high-risk person. Right?

PHILLIPS: Well, here's how I came out. It says right here, what portfolio is right for you? And it says based on my responses, the high-risk, moderately aggressive growth portfolio is the best model for me. So, what do you think?

VELSHI: Well, you know, you are one step -- most Americans fall into the moderate, which is one step less risky than you are. I'm one step riskier than you are. The largest component in your risk tolerance is your age and time to retirement.

And since I'm older than you, I don't know why I'm riskier than you. So, somewhere in that question range, there was something that you answered. There are seven questions. You can do it in less than five minutes. Everybody can take this test. You can go to cnn.com/living.

PHILLIPS: And here it is here. I've actually it up on the Web site. So, go ahead and talk about it. I'm going to kind of flip through this so folks can see the Web site.

VELSHI: Yes, and the first question there, and it always is, is how old are you? How long will it be before you need your money? And those are really the ones that are weighed very heavily. If you go to any financial adviser, they will ask you similar questions. You might have more questions or fewer, but you don't invest a cent without knowing what kind of investor you are.

So, my test showed me to be very high-risk. I have five categories that go very high-risk, high-risk, moderate, low-risk and very low. Very low is typically for people who are in retirement.

But in truth, Kyra, there are an infinite number of risk possibilities across the spectrum, and the trick is that you can invest no matter what your risk profile is. You can always try and get the most return, the highest return for your risk profile. Most people think I'm either in the market or I'm out of the market. I'm either in stocks or I'm in bonds.

That's not true. There many, many different combinations. And as you can see, that pie chart had eight different categories for you. That's what I want to try and get across to people. Invest in some commodities. Invest in some U.S. stocks. Invest in some international stocks.

You look like you're taking the GMAT or something. What's going on there?

PHILLIPS: (LAUGHTER) No, I was seeing if Robert could get a shot of our team because I was tallying up, you know, I had the whole team take the test. And out of the entire team, three people came up very high risk. Ten people came up high risk. One moderate risk and one very low risk.

And then -- (LAUGHTER) -- if you put -- I didn't know this was coming up. There's the overall risk factor of our team. So what do you think? If I've got ten high-risk folks out of --

VELSHI: I'm thinking that it's a -- if we had kids, I hope they come out with your looks.

PHILLIPS: I would say that would be risky. That would be very high-risk.

VELSHI: That would be high risk. That would be a very high-risk proposition.

PHILLIPS: All right, Ali. "Gimme My Money Back." Order his book. It's fantastic. You even have fun online. Thank you, Ali.

VELSHI: Good to talk to you, Kyra.

PHILLIPS: Oh, boy.

Well, it was definitely bound to happen sometime. We were talking about all that heavy rain. And it's already started melting a record-setting snow pack. So, mudslides, avalanches, they are now actually starting to engulf homes and highways. As you can see here in Washington State, we were getting this in just a few moments ago.

Flood warnings also in place along two dozen rivers in the western part of the state, and voluntary evacuation orders include at least 25,000 people now. It's a 20-mile stretch of bitter -- or busy interstate, rather, Interstate 5 that has been shut down. Authorities there say that it may not reopen for days. And then three major east- west routes across the Cascade Mountains are actually impassable because of avalanches. Anyway, we've got Chad Myers over there tracking everything for us in the Weater Center. You know what, Chad? This is exactly what you predicted yesterday, and we got the video in overnight and all morning.

CHAD MYERS, CNN METEOROLOGIST: We've had 10 to 12 feet of snow, and then yesterday, six to eight inches of rain on that snow. Well, what's going to happen? That snow's going to either slide down in a big slush slide, which are very dangerous because they're very heavy and destructive. Or it's all going to run off, and we're going to have flooding like we do. And that's what we're going to have.

Now, the the good news is, the rain's over. The temperatures are going to cool down a little bit. That may at least slow down some of the run off. How? Because it actually freezes the runoff on the way down the mountain. So, you may not get as much water down the mountain right now, but it's there. I mean, there is just tons of water up above here that eventually is going to have to make its way all the way down to the Pacific Ocean.

Avalanches and mudslides. This is a huge event. The avalanches that we've already seen, according to the Department of -- DOT in Washington, 28 already so far. Little ones, but they are expecting much, much bigger avalanches and mudslides throughout the day today all the way into tomorrow -- Kyra.

PHILLIPS: All right, Chad, thanks.

Well, these days, alternative medicines used by almost 40 percent of American adults, and an estimated 1 in 9 children. So, maybe you've been wondering if some of these things could help your kids. Well, in this week's "Empowered Patient," Elizabeth Cohen actually has some tips on what does work.

(BEGIN VIDEO CLIP)

ELIZABETH COHEN, SENIOR MEDICAL CORRESPONDENT: So many of us these days are using alternative medicine. Whether it's a chiropractor or herbs or vitamins.

But many parents have wondered is alternative medicine safe for my child. Well, I asked some experts about this, and they said that some alternative medicine really shouldn't be used by kids, but that there are some approaches that have been shown to be safe and effective in various studies.

So, let's take a look at three approaches that these doctors recommend. First of all, if your baby has colic, which is miserable for the baby and for the parents, chamomile tea sometimes works. You make it, then cool it down.

Also, fish oil for asthma or eczema. Omega-3 fatty acids are anti-inflammatories. Also, teens these days, a lot of teens are on antidepressants. Sometimes the herb St. John's Wart can work as well.

Now, the key here is finding a pediatrician to help you wade through all of this. That can be heard to do. There aren't a whole lot of medical doctors who know much about alternative medicine. But in our column this week, we give you two Web sites where you can put in your city, and it will lead you to pediatricians in your area who know something about alternative and complementary medicine.

You can find that column, it's up right now, on cnnhealth.com.

(END VIDEO CLIP)

PHILLIPS: Well, a church money man accused of lifting the lord's loot. And you won't believe the ballsy way he spent some of it. Watch out for lightning bolts, dude.

(COMMERCIAL BREAK)

PHILLIPS: Well, one thing that we learn in this news business, the truth is stranger than fiction. And more bizarre, messed-up and unbelievable. Sometimes all we can say is, what the -- check out the older guy here with glasses. Tearing up the dance floor on New Year's Eve.

Well, he's helping the singer with "Papa was a Rolling Stone." The lyrics, wherever he laid his hat was his home, and when he died, all he left us was alone. OK, you ready for the rub? Authorities in Polk County, Florida, say the balding dance machine here had shot and killed his 93-year-old father just hours before. The scene short on remorse but long on irony. Sixty-three-year-old Robert Farley is charged with first-degree murder. Not dancing now.

And talk about stimulating the economy. The porn industry says its sales are sagging, so it wants your tax dollars. "Hustler" founder Larry Flint and "Girls Gone Wild" creator Joe Francis have put out a press release saying the porn industry needs a government bailout. That's right, a government bailout. What the --

(BEGIN VIDEO CLIP)

JOE FRANCIS, CEO, "GIRLS GONE WILD": It's not that we are under the impression that the porn industry needs a bailout, but we thought that we would get in line with everybody else. I think there's a lot of lawmakers out there that would like to prove a point.

(END VIDEO CLIP)

PHILLIPS: Francis says, hey, jobs are at stake. But the chances of the government bailing out the porn industry, none to none.

Well, to a man just charged in Indiana, we can only say, oh, snip. The former church finance director allegedly billed a vasectomy, among many other things, to the ministry that he worked for. In all, he's accused of stealing $276,000 from their cawpers. Church members say they will turn the other cheek to a point.

(BEGIN VIDEO CLIP)

MIKE BONNER, BOARD MEMBER, LAKEVIEW WESLEYAN CHURCH: And we've learned a lot about what an annual review of your finances is as opposed to what an audit is. He's asked the church to forgive him. And we have forgiven him. Yet he must suffer the consequences of his actions.

(END VIDEO CLIP)

PHILLIPS: The guy moved out of state just a few months ago. I probably would, too. Police have faith, though, that he'll return this week to face those nine felony charges.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT-ELECT OF THE UNITED STATES: If nothing is done, this recession could linger for years.

(END VIDEO CLIP)

PHILLIPS: Tackling the recession with taxpayer dollars. The president-elect makes his case, and he's not holding back. It's his most presidential speech to date, and you'll hear the whole thing.

(BEGIN VIDEO CLIP)

ROLAND BURRIS (D), ILLINOIS SENATE APPOINTEE: The only thing I regret is not being able to walk on that floor with my colleagues and be sworn in.

(END VIDEO CLIP)