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American Morning

Hillary Clinton Under Consideration for Secretary of State; Big Three Bailout Debate Rages in Congress; Spending the Bailout Bucks

Aired November 14, 2008 - 07:00   ET


KIRAN CHETRY, CNN ANCHOR: It's about 90 seconds before the top of the hour. Hillary Clinton may be up for a spot in Barack Obama's Cabinet. Two sources close to the Obama transition team say that Clinton is being considered for Secretary of State, which is fourth in line of the succession to the White House. But a Clinton source says that no one has contacted her. Stay tuned.
Also breaking now is wildfire that's spreading in the Celebrity seaside area near Santa Barbara, California. Dozens of homes, some of them worth millions, could be burned in the tiny town of Montecito. Many celebrities' estates are there, including Oprah's main residence. But the flames are not close to Oprah's home at this time. 2,500 people, though, have been ordered out and at least 1,000 homes are in danger.

Europe is now in recession for the first time since it introduced the euro. The European Union says that 15 nations that use the currency saw their economy shrink for two consecutive quarters, thanks to the credit crisis as well as oil prices dropping.

And back to our top story this hour. Senator Hillary Clinton, a possible contender for Secretary of State in the Obama administration. It's an appointment that could go a long way in healing the wound left over from a long and bitter primary season. Suzanne Malveaux is live for us this morning in Chicago.

And, you know, Suzanne, there's a lot of speculation about who might be named to some of these top Obama administration posts, and again, word this morning that possibly Hillary Clinton is looking at the Secretary of State position. What have you heard?

SUZANNE MALVEAUX, CNN CORRESPONDENT: And those close to her, Kiran, say that she's not going to dismiss this out of hand. But two sources close to the transitions team say that while they're considering her as a possibility. Those who I spoke with, who are close to the Senator, say she's aware of all this buzz, but that she has not been approached formally by the Obama team with this kind of offer.

A spokesman for the senator saying, look, all of this speculation, well, that is up for the Obama team to address here. They are not saying anything about this. But you may recall she was considered, at least there was a lot of buzz about the possibility of vice president, that position. That never happened. So we're all being a little bit cautious about this this morning. There's some other candidates as well that are being considered for this job that certainly have been talked about. New Mexico's governor, Bill Richardson, also, of course, Senator John Kerry -- Kiran.

CHETRY: What do you make -- what do you make of all the buzz that we're hearing this morning and yesterday anyway, because we weren't expecting, right, to hear any transition announcements this week from Obama?

MALVEAUX: You know, we've actually been hearing a little bit of this buzz in the last couple of days. But it's really kind of increased the volume a little bit because people really want to know what's going on here, what's going to happen.

We don't expect this announcement -- well, the secretary of state to happen today, perhaps in the weeks to come. What we are expecting, however, possible other announcements of folks that have been on the high -- the top list.

When it comes to press secretary, the communications director, Robert Gibbs, a possibility. Another one, David Axelrod. He's the chief strategist in the campaign, a loyalist, a Chicago insider, could be headed to Washington as a chief adviser for Obama. Those are the kinds of things that we expect could roll out today. But clearly, as you know, Kiran, all of the buzz, all of the speculation over Hillary Clinton.

CHETRY: Yes. And we shall wait and see. All right.

Suzanne, thanks.

JOHN ROBERTS, CNN ANCHOR: Well, choosing Senator Hillary Clinton would go a long way toward healing the wounds after that bruising primary battle where the two repeatedly clashed over international issues.

CNN's Zain Verjee is live in Washington for us this morning. And, Zain, as the first lady, Hillary Clinton, traveled all over the world, she obviously could bring a lot to the table as secretary of state.

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Yes. She could, John. I mean, Hillary Clinton is a celebrity worldwide. The Clintons are so popular.

I mean, the world does have a perception of happier safer times under President Clinton. There's also a huge amount of goodwill, John, around the world too, because of President Clinton's foundation, the Clinton foundation and the various projects he's initiated. So Senator Clinton, Hillary can bask in that. She's also done so much for women's rights, human rights all around the world, and she does bring a strong foreign policy knowledge to the table.

ROBERTS: OK. But then, let's go back over the primary campaign and some of the things that were said. And one of the glaring differences here, because they do have a lot of similarities in foreign policy. But one of the glaring differences here was policy on Iran.

When Barack Obama said that he would meet with the leaders of Iran, Syria, Venezuela and others without condition, she called that dangerously naive. So can you have a secretary of state who once called your foreign policies dangerously naive?

VERJEE: Well, that was way back when. Yes. In the debates, she did call him naive when he said he'd meet with America's foes without preconditions.

You're right. She did dismiss him, jumped all over him saying he's lacking foreign policy experience, doesn't have the credentials. But the fact of the matter is President-elect Obama is looking at reality. It's not the campaign anymore, and he has walked that back in saying that the groundwork needs to be set before he meets his adversaries.

There's really not that much difference now between the two of them. Both really believe the U.S. needs to reach out and cooperate and lead along with other countries to get thing done.

ROBERTS: But I mean, bottom line though, this is still all just a guessing game, right?

VERJEE: Yes, it is. I mean, one source close to the transition told me that Obama is not just looking at the individuals like Hillary Clinton for this, you know. But he's looking at things in teams. You know, how is state, defense, the U.N., everyone going to work together and be effective.

It's really kind of like a huge jigsaw puzzle, like three dimensional chess because you can't have it too skewed. You can't have too many senators. You need some women. You need some diversity.

You know, if somebody doesn't get one position, they may be kicked around somewhere else. And everyone is lobbying and jockeying really hard. So it's like that three dimensional chess and it's hard, which is why he's taking his time.

ROBERTS: Yes. As we've seen in past administrations including the present ones, sometimes those agencies have a little bit of friction between the two of them.

VERJEE: Right.

ROBERTS: Zain, thanks so much. Good to see you this morning.

VERJEE: You too.

CHETRY: You know, all this talk about who could possibly be in Barack Obama's cabinet. Well, if you want to get there, you really have to open up your closet. Any sign of a skeleton could get an applicant scratched right off the list.

CNN's Deborah Feyerick has a long list of questions in this vetting process. Some are calling it the toughest they've seen in years. DEBORAH FEYERICK, CNN CORRESPONDENT: Oh, there's no question about it. And the last thing that a president wants is unnecessary controversy. It's distracting. It breaks the momentum. So the Obama team is asking potential hires to do some serious soul searching that includes for your spouse and your kids.


FEYERICK (voice-over): Got a secret? If you want to work in the Obama White House, those doing the hiring want to know about it.

LARRY SABATO, DIR., CENTER FOR POLITICS UNIV. OF VIRGINIA: It's better to be thorough and careful than sorry later. And, you know, when you think about it, it's a privilege not a right to be a cabinet officer.

FEYERICK: The seven-page questionnaire for people seeking high level positions covers everything like who you know, whether you keep a potentially incriminating diary. Do you or any close family members own a gun? Have you ever broken the law? Traffic tickets under $50 not included. Your Internet aliases and links to your pages on Web sites like Facebook and MySpace, as well as personal blogs. The reasons says political observer Larry Sabato --

SABATO: A new president facing difficult problems like Barack Obama doesn't need unnecessary controversy.

FEYERICK: Remember what happened when President Bush named Bernie Kerik to head Homeland Security?

BERNARD KERIK, FMR. BUSH CABINET NOMINEE: It was something that I felt was just something I couldn't move forward on.

FEYERICK: Kerik had to withdraw his name, citing a nanny's questionable immigration status. President Clinton got blind sided when he tried nominating sitting judges who had also hired undocumented nannies. Even Sarah Palin's selection raised questions whether she'd been vetted closely enough.

For the Obama administration, the 63 questions cover character, loyalty, family ties and potentially unlawful behavior. The vetting process among the most intense ever. A reflection, his spokeswoman says, of Obama's desire to change the way Washington does business.

SABATO: If you want to be extremely powerful and influential in a new administration, you do have to submit to some indignities.


FEYERICK: Now, there are also questions about taxes, loans, present, even e-mail. And the final question covers any memory lapses, asking whether there's anything -- anything at all that could embarrass the applicant, their family and, of course, the president-elect.

CHETRY: So you're dishing all of this information. You're putting it out there if you're trying to get a job with this administration. Is that going to stay private?

FEYERICK: Well, that's a very good question because the thing is is that it's out there. And one observer pointed out that say someone resigns under bad circumstances, political operatives could leak those private details and that's pretty dangerous.

CHETRY: Wow. All right. Very interesting.

Deb, good to see you this morning.

ROBERTS: Well, breaking news right now. Dozens of homes destroyed in the hills near Santa Barbara. Right now, firefighters are trying to keep the flames from reaching to Tom Cruise and Oprah Winfrey estates. We're live on scene with an up-to-the-minute update for you.

Plus, dire straits in Detroit. The latest debate on how to spend the $700 billion bailout. Are Ford, GM and Chrysler next?

Seven and a half minutes now after the hour.


VOICE OF LESLIE HOLLIS, RESIDENT OF MONTECITO, CALIFORNIA: It is quite eerie because you can see the flames and the smoke and -- but so far we have not been evacuated. And we're just hopeful that the winds are not too strong and that the community is able to get a hold on this fire.

CHETRY: Well, breaking news this morning as thousands forced to evacuate in southern California. Take a look at these unbelievable pictures. There are flames across Montecito, as well as Santa Barbara. A huge brush fire covering more than 800 acres.

There you see it swallowing at least 70 homes, threatening a thousand more. Multimillion dollar mansions and some modest homes alike. Wind gusts during the overnight hours reached 70 miles an hour and this, of course, makes things worse for the firefighters.

Our Chris Lawrence is on the scene. He'll have a live report coming up in just about 30 minutes -- John.

ROBERTS: And breaking news this morning on the economic bailout. Many people on Capitol Hill and in the Motor City worried about America's big three automakers. Ford, General Motors and Chrysler. They want a piece of the $700 billion package, and that debate rages on in Congress.


SEN. CHRIS DODD (D), CHAIRMAN BANKING COMMITTEE: I would like to see us do something. Right now, I don't think the votes, I don't know of a single Republican who is willing to support. And you've heard Senator Shelby publicly speak out on his opposition of doing anything in the automotive area.

So I want to be careful about bringing up a proposition that might fail. In light of the fact the authority exist and under an Obama administration, there seems to be a greater willingness to deal with the issue.

SEN. MEL MARTINEZ (R), FLORIDA: I think we have to focus on that first. And the automobile industry had to rise on its own merit and the funding for that ought to come not out of this.


ROBERTS: Brianna Keilar is live on Capitol Hill this morning. And, Brianna, it's not looking like the Democrats have got the votes in the Senate to get anything done on this. So they're still going to push ahead with it?

BRIANNA KEILAR, CNN CORRESPONDENT: Well, Democratic leaders in the Senate and the House, John, say that is the plan. They say they want to move ahead with carving out a piece of the $700 billion bailout to help out automakers the same way they helped out financial institutions.

But Chris Dodd, who you heard there, the first sound bite we played, that is the key voice for Democrats. He was their key negotiator in the $700 billion bailout. And basically you could see he's spelling out in clear terms that a vote next week would basically be a vote for vote's sake. That it wouldn't be able to clear Republican opposition, in his opinion. But we're also hearing from a House Democratic aide who says the plan is to push forward but at the same time that aide saying if there's really no point in having the House vote, if this isn't going to clear the Senate, so you can see some growing sentiment here about, is there really a point in having a vote. So we're going to wait and see if this develops, of course, over the course of the day, John.

ROBERTS: Brianna, why are the Republicans so opposed to this plan?

KEILAR: Well, and that's sort of a distinction because they're saying, look, we're opposed to the plan but we're not opposed to helping automakers. You can hear Richard Shelby, who is a key Republican on the Senate Banking Committee. His opinion is that why should we help out automakers. These are missteps of their own that have got them into this crisis. But then, on the other hand, you hear Mitch McConnell, senate minority leader, who says we do want to help out automakers. This is just not the way to do it.

But to be very clear about it, this is a vulnerability for Democrats and Republicans because even though Detroit is the hub for the big three, auto suppliers, auto plants, they're in many states, they're in many districts. So many -- many representatives, many members of the Senate, John, feeling that they really have to come out, at least in some way to support automakers. They're just in disagreement about how to do it.

ROBERTS: All right. Brianna Keilar for us live on Capitol Hill this morning. Brianna, thanks.

And coming up in about 10 minutes time, we're going to hear directly from the chairman of the Senate Banking Committee, Senator Chris Dodd. He'll be joining us here live on AMERICAN MORNING.

CHETRY: Meantime, Christine Romans is here "Minding Your Business." So it looks less and less likely that automakers are going to get a bailout at least from this $700 billion plan.


CHETRY: What is plan B for them?

ROMANS: It doesn't look like there is a plan B, Kiran, and that seems to be what's the trouble here. I mean, this is an industry that has had a plan B for the past, what -- ten years or something, and a lot of different things have collided to make it really tough going. I mean, all three automakers have said that they've got to have -- got to have federal aid to survive. Even some of the foreign automakers saying that the big three need to get federal aid to survive.

The operating environment is just incredible, worse slump in about 25 years. Brianna mentioned about how this isn't just for the big three in Detroit. I mean, you're talking about three million jobs.

According to the Center for Automotive Research, some three million jobs dependent somewhere and another on the auto industry. You've got an auto supply industry that's in Indiana, Kentucky, Michigan, Missouri, Ohio and Tennessee. All the car dealerships around the country. You can imagine that the lobbyists especially for the car dealers, they've got, you know, they've got constituents all around the country, these congressmen do, that are saying, look, this is really important to us.

There's a case against the bailout though, and that's what you heard Mel Martinez talking about. You know, bad business decisions over the past few years. An inability to kind of make quick changes the way some of the other foreign automakers have. And legacy, costs, big rich contracts over the years that have, you know, lots of health care costs they have to pay out the retirees and the like.

So there's no simple answer but they want more money. And there was $25 billion in low interest loans that had been approved, but we're told that it's sort of caught up in red tape and wrangling. They haven't actually gotten that money yet.

There's $60 billion left of this TARP money that's bailout money. $60 billion left that this administration could assign to something else. But will they do it for this? Sounds like the White House is pretty cool on that. But there is that $60 billion that doesn't have to go back to Congress to spend.

But some people are saying they don't want money from the bailout to be spent on the automakers before homeowners are bailed out first and then where do you draw the line? Everyone is really hurting. The retailers, the automakers --

CHETRY: We got a lot of questions to ask Chris Dodd. The senator joins us --

ROMANS: Exactly.

CHETRY: Christine, thanks so much.

And memo to the president. How Barack Obama can fulfill his campaign promise and close Gitmo. They're still 250 detainees in limbo.

Also, soaking up the spotlight, Sarah Palin's press conference in Miami. What she said and why some of her colleagues at the Republican Governors Association maybe didn't like it so much.

You're watching the "Most News in the Morning."



UNIDENTIFIED FEMALE: What are you doing?



CHETRY: Wow. Checking out the most popular videos right now on First, it ain't easy being Bond. Daniel Craig on reprising his 007 role for "Quantum Solace." It's hitting theaters today. While filming this 22nd Bond film, Craig endured eight stitches, a severed fingertip, some bruised ribs. He's actually wearing an arm sling during one of our online interviews, but he wore it so well.

Next, a Tinseltown feud. Jennifer Aniston has some words for Angelina Jolie in the new issue of "Vogue" calling her "uncool and inappropriate" for talking about her affair with Brad Pitt. That's while Pitt was still married to Aniston.

Also, this amazing car chase caught on camera. Texas police were horrified as their suspect speeds the wrong way up a highway. The car clips a truck, it's T-boned by an SUV. But get this, the driver tries to keep going unsuccessfully.

And those are your top stories on

ROBERTS: Difficult to keep going while you've only got half a car. My goodness.

News is breaking on President-elect Barack Obama's transition to power. Sources telling CNN that Hillary Clinton is being considered for secretary of state. Our Randi Kaye looks at the ups and downs of this rollercoaster relationship.


RANDI KAYE, CNN CORRESPONDENT (voice-over): If it's true and President-elect Barack Obama is considering Hillary Clinton for secretary of state, my, how far they've come. Remember this?

SEN. HILLARY CLINTON (D), NEW YORK: Well, that hurts my feelings.

UNIDENTIFIED MALE: I'm sorry, senator. I'm sorry.

CLINTON: He's very likeable. I agree with that. I don't think I'm that bad.

SEN. BARACK OBAMA (D), PRESIDENT-ELECT: You're likable enough.

CLINTON: Thank you so much. I appreciate that.

KAYE: That was back in January at a New Hampshire debate. Not long after Clinton welled up at the diner and ran way with the primary. It got a whole lot uglier from there.

After Obama took South Carolina a few weeks later, Bill Clinton compared the victory to Jesse Jackson's primary victory there years earlier. Critics said the former president was injecting race into the race. Then Clinton accused Obama's campaign of playing the race card for political gain.

The gloves really came off in February just days before the Ohio primary. The Obama campaign had sent out mailings attacking Clinton on universal health care and the North American Free Trade Agreement. That prompted this, a visibly angry Clinton in Cincinnati.

CLINTON: So shame on you Barack Obama!

KAYE: In April, at another debate, Mrs. Clinton didn't hold back on Obama's relationship with William Ayers, an accused domestic terrorist who said an interview published on September 11th, he wished he'd set off more bombs years ago.

CLINTON: If I'm not mistaken, that relationship with Mr. Ayers on this board continued after 9/11.

KAYE: They were just getting warmed up. Two weeks later, Clinton unloaded about Obama's former pastor, Reverend Jeremiah Wright, during an interview on FOX.

CLINTON: I think it's offensive and outrageous.

KAYE (on camera): In June, Obama sealed the nomination and promised to help Clinton pay off her debt and all was honky dory. Kind of. Both sides needed some time to thaw out.

(voice-over): Then this show of unity in Unity, New Hampshire. He was the candidate, she was his ally. He needed her.

OBAMA: I know firsthand how good she is.

KAYE: By the time the Democratic convention rolled around in August, Clinton was on board big time.

CLINTON: We are on the same team. And none of us can afford to sit on the sidelines.

KAYE: Come January if Clinton joins Obama's administration, she won't be sitting on the sidelines either.

Randi Kaye, CNN, New York.


CHETRY: Dozens of homes on fire in California burning right now and firefighters are on the move. They're battling against some harsh conditions trying to save mountain cottages as well as multimillion dollar celebrity estates.

Our Chris Lawrence is on the scene. He's going to bring us an update.

Memo to the president. Closing Guantanamo.


UNIDENTIFIED MALE: Nobody wants them brought to their backyard.


CHETRY: A dire warning about moving America's most dangerous but least wanted.


UNIDENTIFIED MALE: Prison escapes, terrorist attacks.


CHETRY: You're watching the "Most News in the Morning."


CHETRY: Welcome back to the "Most News in the Morning." Hard times hitting Motor City and the Big Three automakers joining banks and lenders all jockeying for a piece of the $700 billion bailout. So how will your tax dollars be spent and where is the oversight that was promised.

Joining me now to talk about this is the chairman of the Senate Banking Committee, Senator Chris Dodd.

Thanks for being with us this morning. Are you there, senator?


CHETRY: All right. I only see some cars. Now I see you. All right.

Well, the administration abandoning its original blueprint for the $700 billion bailout, deciding against buying up the troubled assets, instead buying stakes in banks so that they would be more willing to lend again. But it's clear that this isn't the package that you and your colleagues voted on. Would you vote yes again?

DODD: Well, candidly, I wish they had done this in the first place. There were many of us here who felt the auction or the purchasing of these so-called toxic assets was not a terribly wise decision to begin with. That was the original proposal sent to Congress on September 19th, at 1:00 in the morning. And many of us thought that was the wrong approach, that this approach of taking the equity position made more sense.

Now having said that to you, I also think it's important that these lending institutions understand that as a result of this infusion, injection of money, not to mention the other things we've done to shore up these institutions, they bear a commensurate responsibility to start -- to let credit start flow. We write a check for $25 billion dollars.

CHETRY: All right. Let me ask just you a question there.

DODD: What are they doing?

CHETRY: Right. Let me ask you a question there. So part of this is that they got money and they were supposed to be oversight to make sure that they were doing what they were supposed to be doing with it.

DODD: Right.

CHETRY: Our business reporters are reporting that what they're doing instead is hoarding, in some cases buying up other banks, not freeing up the lending process. Do you guys have the oversight to force their hand?

DODD: Well, we should. And I hope if they don't start doing what they should be doing we clearly well. And the assumption was that banks only make money when they lend. Why are they being so reluctant? Why are they paying dividends? Why are they buying in some cases healthy institutions?

I don't mind them buying failing institutions that would make some sense. Why are they continuing to provide bonus in some cases here? It seems to me they need to understand it isn't $700 billion, by the way. If you take everything that's been done, totally, it totals about $5 trillion that have gone to financial institutions. And we want to know why they're not doing more and if they don't do more, then we'll have to mandate, I'm afraid.

But we're wasting time. They ought to be setting up committees that would identify creditworthy borrowers and get that money out the door. That would begin to unfreeze this clogged circulatory system that allows -- that's not allowing credit to flow.

CHETRY: Now in September when we had you on the show, you said I won't give a check for $700 billion for 41 days to this secretary or any secretary without safeguards build in. You called for accountability, transparency and oversight.

But as of today, Congress still hasn't filled that independent oversight post. That was one of the proposed things to prevent corruption and to prevent government waste. So what happened there?

DODD: Well, first of all, the General Accounting Office is there full time at the Treasury Department. That was one of the provisions to the bill.

Secondly, we're waiting for the administration to send up and I'll do a confirmation hearing this afternoon if they send me this inspector general post. And I'm told they're getting there maybe next week. We'll have someone up here. And I know the Republican and Democratic leadership there is a board, an oversight board. Names have been submitted, and they're going through the vetting process. So they're moving very quickly on that oversight function.

CHETRY: Is there a danger of being the boy who cried wolf. I mean, you had said that the air went out of the room after the treasury secretary said, you know, this is what we need to do now, or we're facing something no one wants to anticipate. Now we're days and even weeks passed that. Money has been given out. Some of it hasn't, some of it tied up in red tape and we don't seem to have gotten a clearer picture on what we need to do and what needs to start to happen to free up this credit market.

DODD: Well, it's beginning to move. Look had we not taken the steps we did in September, believe me when I tell you this problem would be a thousand percent worst. Many of those banks that testified before me yesterday probably wouldn't be there at the table. And so those who suggest that somehow the situation is worse I think are wrong. We're in a lot better shape today because of those steps. We could be in better shape in my view. Why aren't we doing more to mitigate the foreclosure problem? That is still the root cause of our financial difficulties. We have -

CHETRY: Should we even be talking about bailing out the auto industry when that help for the homeowner still hasn't really happened?

DODD: Well, no. We have to be careful about that. That's a good point. But the point we're making here is that we're still getting reluctance on the part of administration to deal with foreclosure mitigation. The automobile industry is very important. One out of every ten jobs in the country is related to the automotive industry. But clearly we shouldn't be writing checks without some clear conditionality of what's going to happen with that industry if they are going to change and get back on their feet again. So I'm hopeful we can do something. But I want to make sure that when we do it and we're going to do it carefully. By the way, the Treasury has the authority to step in and do some things here. They are reluctant obviously as I've said to do anything at all at this point.

CHETRY: Senator Chris Dodd, chair of the banking committee. Thanks for your time this morning.

DODD: Thank you for yours.

ROBERTS: 31 and 1/2 minutes after the hour. And here are this morning's top stories. AAA says gasoline prices down, down, down again to $2.15 a gallon. That's the average across the nation this morning. Nine states now have gas prices under $2. Space shuttle "Endeavour" is scheduled for lift off tonight, 8:00 p.m. Eastern. The shuttle and its seven astronauts are heading to the International Space Station with supplies to among other things a second bathroom and upgrade the kitchen.

Bombshell accusations at the FAA covered up safety threats in one of the country's busiest airport Dallas-Ft. Worth. The transportation department is accusing the FAA of intentionally misclassifying 62 cases of planes flying too close together between 2005 and 2007. Investigators say the agency was trying to protect air traffic controllers responsible for the close calls.

And like lava coming down a volcano. That's how one homeowner described the wildfire that has erupted in the hills near Santa Barbara. Multi-million dollar mansions and modest homes being swallowed up by flames. Oprah Winfrey's home is one of many in the star studded area. It's where she held a fund raiser for Barack Obama back in September. Our Chris Lawrence live on the scene for us this morning.

And Chris the flames are still flickering behind you there. I know that you've seen some pretty terrible sites up close and personal in the last few hours.

CHRIS LAWRENCE, CNN CORRESPONDENT: Yes. That's putting it mildly, John. Right now this minute the winds have died down and it's a bit cooler, but it's just too late, especially for that house right up there on the hill behind me, last bit of flames dying down as it literally just burned to the ground. And I got to tell you I've seen with my own eyes dozens and dozens of homes just like it. Completely engulfed in flames, burning to the ground. The firefighters tried to do what they could. But this fire just came so quickly and there were some things working against them as well. The terrain, there weren't a lot of places to build a fire line to stop the fire. And the fact that we haven't had a major fire in this area in about 30 years means it was so much fuel out there for this fire to build on. 12 hours ago, dozens of people I can tell you at least had homes that they do not have right now. This fire was incredibly strong and just a few hours ago we heard from one of the residents who was right in the middle of it all.


BILL OAKLEY, SANTA BARBARA RESIDENT: Always knew this area was very flammable with big trees. So, when the winds come up like this it gets everybody scared and on edge and there's not a lot of people around here that stood around when it was coming up the canyon.


LAWRENCE: And I can tell you just being close to those flames, just the incredible amount of heat and those embers, nothing like a camp fire. This is huge pieces of just flying fire, just shooting all over the place and throughout the night you could hear explosions because of that intense heat, cars and parts of homes just exploding throughout the night. John.

ROBERTS: Chris, every time these fires erupt we always hear there's so much fuel out there. How is it that all that fuel gets out there? Maybe they can't do prescribe burning in those areas but what you know about cutting down the brush? Who is responsible for all of that?

LAWRENCE: A lot of times, I've been in some areas like down in San Diego last year where the homeowners took it on themselves. A group of homeowners actually pitched in money and brought in goats of all things from Mexico across the border to take care of some of the brush. But it really depends on the area. You know some of these areas like this area, it hasn't burned in so long and while this is very much a desert climate, you know, we do get certain seasons where we get intense amounts of rain and when you have that it really feeds that brush and, unfortunately, that provided just a ton of fuel for this fire here.

ROBERTS: Chris Lawrence for us outside of Santa Barbara. Chris, thanks for that.

CHETRY: Close to 300 suspected terrorists locked up for years and we don't want them here or back on the front lines. So what are Barack Obama's choice if he closes Guantanamo Bay? Well, here's Kelli Arena with the latest "Memo to the president."


KELLI ARENA, CNN JUSTICE CORRESPONDENT (voice-over): Mr. President, so you want to close Guantanamo Bay and end what has become a black mark in the war on terror. The question is how?

COL. MORRIS DAVIS (RET.) FMR. CHIEF GUANTANAMO PROSECUTOR: Everybody is all foreclosing Guantanamo but nobody wants them brought to their backyard.

ARENA: Of the 250 men still locked up at Gitmo about a third have or will be charged. But most are in legal limbo. Critics charge the military commissions that will try them are flawed.

JENNIFER DASKAL, HUMAN RIGHTS WATCH: They need to be tried in a system that has credibility, years of experience dealing with terrorist cases and that's the federal court system.

ARENA: But some legal experts say the U.S. system isn't set up to handle defendants like Kai Sheik Mohamad (ph), who the government admits were water boarded and has been detained for years.

DAVIS: When the detainees were transferred to Guantanamo it was not a view towards prosecution it was a view towards collecting intelligence.

ARENA: We hear that you may considering setting up a new national security court for the most sensitive cases. But critics worry about creating a new legal system, and argue it is not necessary.

DASKAL: The federal court system has devised ways to deal with national security information.

ARENA: Then there's Guantanamo's least wanted list. Men who shouldn't even be there to begin with. Like the Uyghurs, the group of Muslims from southern China. The U.S. says they are no longer enemy combatants. The problem is no other country wants them except China that is which might mistreat them. And here's where it gets really tricky.

The next group, about 100 men are considered dangerous. Prosecutors don't have enough evidence to try them. You could let them go but according to the Pentagon, more than three dozen detainees who were released have gone on to fight against the U.S. and coalition forces. So then why not just move them to a prison in the U.S.?

DAVID RIVKIN, FMR. REAGAN ADMIN. LAWYER: The danger is prison escapes but also the possibility of terrorist attacks.


ARENA (on-camera): Sure there are a lot of proposals out there but they rely on goodwill mostly from our allies. And as far as the world it's been a you broke it you fix it issue. John, Kiran.

CHETRY: All right. And Monday's "Memo to the President" deals with Iraq. Michael Ware, our Baghdad correspondent on a possible exit strategy, when it could start and how many troops President Obama may need to keep in the country.

ROBERTS: Books, buttons, bumper stickers, if you want to make a buck. If you want to sell something just put the president elect's face on it. We'll look at the business of Obama coming up next.

Plus after two years of campaigning in a history making election do you feel a little empty? No polls to read. No campaign events to go to. No blogs to vent on. Well you may be suffering from the dreaded election withdrawal. 38 1/2 minutes now after the hour.


ROBERTS: Welcome back to the most politics in the morning with at least nine books in the works. Barack Obama is a hot commodity these days. But it doesn't stop there. Our Carol Costello live in Washington looking at some of those people who are in the Obama business and you can certainly see, Carol, that the Obama business is booming.

CAROL COSTELLO, CNN CORRESPONDENT: You're not kidding, John. It seems everybody is making a buck off of Obama. The obvious reason Obama sells because he's made history. But it's more than that. His campaign gave him a persona, an Obama brand and that's why Obama merchandise is hot.


COSTELLO (voice-over): That $700 billion bailout isn't doing much for the economy so far. But Barack Obama's face sure is.

Which one is going the fastest?

UNIDENTIFIED MALE: Anything with Obama's face on it.

UNIDENTIFIED FEMALE: I'll take that one.


UNIDENTIFIED FEMALE: This one that has hope on it.

COSTELLO: In New York City's Union Square vendors who make their Obama T's, Obama in the house, Obama jewelry, earrings and buttons made for pennies are cleaning up.

UNIDENTIFIED MALE: What was businesslike in the last week?

UNIDENTIFIED FEMALE: Crazy. Amazing. Insane.

UNIDENTIFIED MALE: what is your hottest seller?

UNIDENTIFIED MALE: The hope button.

COSTELLO: It's not just New York either. Obama merchandise mania is inescapable.

ANNOUNCER: Get both of these brilliant uncirculated Barack Obama 24 karat gold coins. At $29.95 value, yours for just $9.95.

COSTELLO: According to the "L.A. Times," nine Obama books are in the works. One industry insider calls it the biggest thing for publishing since Harry Potter. Professional collectors have never seen anything like this. Normally after a candidate is elected interest in paraphernalia disappears. Not this time. And often the Obama store.

UNIDENTIFIED MALE: If it has Obama on it, it will sell.

COSTELLO: He's not kidding. Those Obama earrings, they are hot, hot, hot.

"SARAH" MAKES OBAMA JEWELRY: A lot of people have bought the Obama earrings and I felt bad because I wasn't donating any of the money. I always wanted to go Peru and I think Obama won't mind if I actually use the money.

COSTELLO: If you think it's crazy to spend money on this stuff you're wrong. Mark Evans is a professional collector. He says creative well made items made by artists or street vendors could be worth their weight in gold some day.

MARK D. EVANS, PROFESSIONAL POLITICAL COLLECTOR: I'm looking for things that are not mass-produced and distributed all over the country. For example when I was in Denver we found buttons that were made by street vendors, artists, and those are the sort of things we look for.

UNIDENTIFIED MALE: Just show that off a little bit. There you go.


COSTELLO: It's amazing, isn't? So if you want to make money later with your Obama stuff, don't get anything mass-produced by the campaign. For example, this button. It's an Obama button and kind of cool but it's in Hebrew. But since its massed produced by the campaign it probably will be worth nothing 50 years from now. I'm going to pick up another button. Bear with me here. This button, it says O crap! And of course it's against Obama this button is said to be creative and it probably will be worth something in the future. Now what really will be worth something in the future, John, stuff like this. Unusual stuff.

I picked these up on the streets of New York because where else would you get something like this. They are condoms and this one is the Obama condom and it says use with good judgment. This will probably be worth something, I'm not kidding. And even the losers in the campaign, their paraphernalia will be worth something as well.

I'm going to hold up my Sarah Palin condoms. And it says on the front. Oh this is my John McCain condom. Old but not expired. Let me get you my Sarah Palin condom because it is my favorite. Here it is. This one says when abortion is not an option, Palin condoms. So there you go. If you find stuff like this, John, keep it.

ROBERTS: You know, I've passed by the guys that were handing those out not long ago. I noticed your hand starting shaking noticeably when you picked up the condoms. My favorite little piece of memorabilia is we did a piece with the flying saucer restaurant in the Raleigh Durham area and they sent us couple of pint glasses one with Obama's likeness and the other one with McCain's likeness. That's my favorite little piece of memorabilia.

COSTELLO: And you should keep that but t-shirts and stuff like that. T-shirts won't be worth anything. I don't care who makes them.

ROBERTS: All right. Carol Costello for us this morning. Hope you stop shaking. Thanks, Carol.

COSTELLO: I've never shown a condom on television before.

ROBERTS: It's a first for everything. 45 1/2 minutes now after the hour.


ROBERTS: Election depression.

UNIDENTIFIED MALE: Taking down the signs the other day is like taking down the Christmas decorations.

ROBERTS: Crazy for the campaign. Helping loved ones now deal with election withdrawal.

UNIDENTIFIED MALE: I went from breathing, living, talking, nothing but politics. And now it's been kind of, went down to nothing.

ROBERTS: You're watching "the most news in the morning."



CHETRY: Welcome back to the most politics in the morning. Speaking of politics now that the election is finally over are your feeling a little depressed? Well our Miles O'Brien could have your diagnosis, you might be suffering from election withdrawal and we've been your enablers. Miles.


MILES O'BRIEN, CNN CORRESPONDENT: Kiran and John after a two year campaign a lot of people are ready to get away from it all. But it's so hard.

DR. JOY BROWNE, PSYCHOLOGIST: Just figure out what about it you love?

O'BRIEN: Her name is Dr. Joy but her listeners aren't feeling much of it these days. The radio psychologist is offering a lot of free advice for PEBS, Post Election Blues Syndrome.

UNIDENTIFIED MALE: We won which was wonderful but taking down the signs the other day is like taking down the Christmas decorations.

BROWNE: We have a perfect storm of withdrawal, if you will. On one hand this ultimate high and then all of a sudden gone.

O'BRIEN: Making matters worse, the non-stop coverage turned on the sound bite from a historic political high to an equally epic economic low. Maybe we all need an emotional bailout. Two weeks ago we talked to some election obsessed I-reporters. It turns out when it comes to PEBS well the eyes have it.

UNIDENTIFIED MALE: I went from breathing, thinking, talking nothing but politics and now it's went down to nothing.

O'BRIEN: An obsessed Emily Richer drove half way across the country to volunteer for Obama.

EMILY RICHER, SUFFERING ELECTION WITHDRAWAL: It was like a national intimacy and now we're all going through relationship withdrawal.

O'BRIEN: And pity the poor comedy industry. It could be next to demand use a bailout.

We now continue our coverage of the terrible aftermath of Barack Obama's victory which has left Obama supporters across the nation with nothing to talk about and let's not forget the elephant or is it the donkey in the room; Poor pitiful us.

ALEXANDER MOONEY, CNN POLITICAL WRITER: It is a let down. We've been doing this for two years.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Am I sad the election is over? I know these sound bites have to be short, let me just put it this way, no.

O'BRIEN: But it is a long off season of is it?

PAUL STEINHAUSER, CNN DEPUTY POLITICAL DIRECTOR: The beauty of our business is we're already talking about 2012.

O'BRIEN: And then there's always that Minnesota senate election if you're in critical condition. But maybe Dr. Joy knows best.

BROWNE: Get a life.

O'BRIEN: So what you need to do to get a life is maybe find another hobby. I think I found a perfect thing for me. Back to you, John and Kiran.



ROBERTS (voice-over): Toxic gift cards, merry Christmas, that store you got a gift card from just went out of business.

UNIDENTIFIED MALE: Run, don't walk to that store and buy something quickly.

ROBERTS: The gift card gamble, what you need to know.

Plus big family drama in the life of the pregnant man, is there room for more? You're watching the most news in the morning.


ROBERTS: 55 minutes after the hour, back now to the most politics in the morning and with 67 days until Barack Obama takes the oath of office, Americans have soaring hopes and opinions of the incoming president. The new CNN opinion research corporation poll found that 70 percent of white Americans have a favorable view of Obama while 99 percent of African-Americans have a favorable view. So does that type of favorability ratings, for some unrealistic expectations especially in urban communities. I'm joined now by Newark, New Jersey mayor Cory Booker. Mayor, good to see you. Thanks for coming in this morning.

MAYOR CORY BOOKER, NEWARD, NEW JERSEY: Thanks for having me on.

ROBERTS: So when you take a look at those approval ratings that you got or his favorability ratings and you know, there's got to be expectations out there that he's going to fix everything from America's position in the world to the economy to the problems in the inner city. The bar is so high for him coming in. Can he meet those expectations? Can he possibly meet them?

BOOKER: Well I think the challenge for him is not to meet the expectations, but to translate into goodwill and the energy into collective action. No president at any time is going to solve all our problems. We got to have a president that challenges Americans to do more, to commit more, to be more determined in our collective efforts for our problems.

ROBERTS: So are some people destined to be disappointed?

BOOKER: You know, I think always - people who project all their hopes and dreams on to one individual are destined to be disappointed. But people who understand the history of America is about ordinary people doing extraordinary things in the cause of freedom and justice and our aspirations.

Those people are going to be more rewarded than ever before. And in my city, my message immediately after the election posted it on "The Huffington Post" and elsewhere is that now we who raised a record amount of money for our candidates, we who volunteered a record amount of hours, now have to can't stop, the campaign continues after the election, the campaign to change America continues and we have to get involved.

ROBERTS: Yes on that message of change, every president goes to Washington with a vow to change this today. I remember in 2000, George Bush said that he was going to change Washington, and they say that we're going to stay outside the bubble and we're not going to let that affect us. And inevitably they find out that Washington is a very difficult place to change although not impossible and they all got sucked into the bubble. Do you think that will happen to President elect Obama as well?

BOOKER: If you look at George Bush, he did change Washington, and I think a lot of the frustrations people have is with that change. He changed international policy, he changed trade policy. He changed a lot of policies that the Clinton administration put in place.

ROBERTS: But he didn't change the politics of Washington.

BOOKER: No, but the reality is as presidents impact players. If they come in with a focused agenda they can make a difference. And I saw eight years or more of politics becoming divided in nature. If Obama can do what we hope he can do, bring people together in Washington, get rid of the rancor and the divisiveness. I think he's going to be do some pretty extraordinary things.

ROBERTS: There's going to be a lot of political mouths to feed when he takes office on the 20th. I mean, you and 19 of your colleagues in New Jersey got together recently to talk about the amount of federal money, federal commitment that you're going to need for your particular cities, what do you need there?

BOOKER: Well, I think specifically we're in an economic crisis. And there's a win-win in this crisis. The big thing I believe is this nation needs desperately infrastructure support. We're already seen collapsing bridges and other infrastructure. This is an opportunity for America and in the same way that FDR did to make a massive investment in itself which will yield huge rewards in terms of building our economy.

ROBERTS: But we already got a trillion dollar deficit this year and may be more than a trillion dollars next year. Will there be the money to do that? BOOKER: Again, it's going to be a very difficult choice for Obama to make. If you invest properly, you can stimulate the economy, which ultimately will have pay down that debt. If you invest improperly and just waste money, then we're going to find ourselves in peril a year from now. I believe what Obama's doing with his transition team and everything I hear from his inner circle, is they looking to make the right investments so that America can get an ROI, return on investment.

ROBERTS: What are the things that most interest you. How does this change race relations in America? Obviously having an African- American at the top, doesn't solve all of the problems, but it certainly changes the equation?

BOOKER: It definitely does. And I hear celebrations from all quarters of our country. And what I hope it does is that we recognize that we as a nation are in progress and electing a black president doesn't in and of itself solve our problems, but it shows that if we focus as a nation on what our strength is which is our diversity, we're ultimately going to take steps towards this ideal - all of America is coming together and manifesting one.

ROBERTS: Mayor Cory Booker, it's good to see you in person. Thanks for coming in. Good luck as I know that you're going to have a lot of challenges in the coming months.

BOOKER: Thank you. I appreciate it.

ROBERTS: Appreciate it.

BOOKER: Thanks for having me on.