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The Situation Room

Obama Picks Attorney General; Bush Administration Under Scrutiny; Cardinal: Obama "Apocalyptic"; Manual Recount in Minnesota; Huckabee Slams GOP Candidates

Aired November 18, 2008 - 17:00   ET

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

WOLF BLITZER, CNN ANCHOR: I'm Wolf Blitzer. You're in THE SITUATION ROOM.
We're following the breaking news this hour -- sources now confirming to CNN that President-Elect Barack Obama has asked Eric Holder to become the attorney general. Holder was a deputy attorney general during the Clinton administration. He would become the first African-American to hold the nation's top law enforcement job.

Our chief national correspondent, John King, he's been working the story. He's here, together with Fran Townsend, our homeland security adviser, who actually worked with Eric Holder. Fran, stand by for a moment.

But, John set the stage for us. This a huge, huge appointment.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: A very significant choice by President-Elect Obama. We are told that he has asked Eric Holder to be his attorney general. They're waiting for the vetting to be done, the legal reviews, the background checks. But he has said he would like him to be his attorney general. We are told by very good Democratic sources that Eric Holder has said he would be honored to take the position. He would be the first African-American attorney general serving the first African-American president.

Wolf, why did they do this? Eric Holder has worked in the building as the deputy attorney general. He also was a U.S. attorney. He was a judge at one point here in the District of Columbia. And his first job at the Justice Department was in the public integrity section.

So they believe he knows not only the building, which has had management problems in the past, but system -- the U.S. attorney system, which has a morale crisis at the moment, although most Democrats even praise the current Bush attorney general, Mike Mukasey. They didn't like John Ashcroft and they didn't like Alberto Gonzales. So they believe he has the trust of the president, which is critical. And they believe he knows the system and can manage the department, which is a huge bureaucratic problem, in many cases.

BLITZER: Managing the Department of Justice is a huge job. And a lot of people believe he really did the management when Janet Reno was the attorney general and he was the deputy attorney general. But on a day to day basis, he was running much of that department. Fran, you worked with him. You worked in the White House for President Bush as the homeland security adviser. But in an earlier life, you worked with Eric Holder. What was that about?

FRANCES FRAGOS TOWNSEND, FORMER BUSH HOMELAND SECURITY ADVISER, CNN NATIONAL SECURITY CONTRIBUTOR: Well, I was the head of the intelligence office of policy and review that did the surveillance that happened --

BLITZER: At the Department of Justice?

FRAGOS TOWNSEND: That's right. And that office reports to the attorney general through the deputy attorney general. Eric Holder and I worked together. He has --

BLITZER: He was your boss.

FRAGOS TOWNSEND: He was my boss. And he a terrific reputation. People really liked, respected, admired him. As John has told you, he spent his career devoted to the Justice Department. He's known for his sense of fairness, his sense of ethics.

And I think that this is -- it's a wonderful pick. And I think it will be very well-received by people not only in the Justice Department here in Washington, but U.S. attorneys' offices and prosecutors around the country.

BLITZER: Because a lot of people think he'll be pretty aggressive in going after crime not only, you know, really ugly crime, but white collar crime, Wall Street-related crimes and those kinds of matters.

FRAGOS TOWNSEND: Oh, absolutely. And I expect his time in the public integrity section -- he's not afraid to take on tough cases, tough defendants, high profile cases. He will not shrink from that. And the president-elect can expect very good advice from Eric.

BLITZER: He supported Barack Obama for the Democratic presidential nomination, not Hillary Clinton, even though he served during the Clinton administration. But you're already hearing some sniping, some criticism saying, you know, why are all these Clintonites now being brought back if this was a president who promised change.

KING: Especially on the legal side of the equation, if you will. You make a key point. He did support Barack Obama from the beginning. He was a legal adviser to the campaign. He was a prominent supporter. He helped outreach and raise money in the legal community. He also served on the vice presidential selection process. So he has the trust of the president-elect of the United States. That's critical if you're going to serve in the Justice Department.

But you're right, Greg Craig, we are told, a former Clinton White House lawyer, will come in as White House counsel. Ron Klain, who was Al Gore's chief of staff, worked at the Justice Department, as well, is coming in as Vice President-Elect Biden's chief of staff. So on the legal side of the equation --

BLITZER: And Rahm Emanuel. Don't forget.

KING: Rahm Emanuel coming in as the chief of staff, not a lawyer, but -- but somebody with a very critical -- perhaps the most critical of the jobs we've mentioned here at the White House. So there are a lot of familiar Clinton faces there. I think when you see the rest of the team filled out, and Hillary Clinton on the on-deck circle, if you will, possibly the secretary of state. When you see the rest of the equation filled out, I think you will get more of a balance.

Just one quick point about Eric Holder. No question about his legal background and his credentials. If there is a question in town that will come up at the confirmation hearings, it is his political judgment. Remember, he was involved in the last minute pardon of Mark Rich, the fugitive financier. That came up at the very end, in the final hours of the Clinton administration. And he told President Clinton at the time he was neutral, leaning in favor of that pardon. President Clinton said that's the reason he signed off on it, that he thought -- took that as a blessing from Eric Holder.

Eric Holder has since said that was a mistake, he should have taken more time and studied that --

FRAGOS TOWNSEND: Wolf, I was there that day.

BLITZER: The day of the pardon?

FRAGOS TOWNSEND: The day of the inauguration, the day that Eric Holder got the call from the White House. It was not early in the morning, it was mid-morning. Eric literally, when he got the phone call, was put in a very difficult position. He was not given a lot of time to be able to really vet it through the Justice Department. I was one of the people he called that morning in the intelligence office. I suggested he check with the criminal division and the pardon attorney. But, you know, in truth, it's an unfair criticism of Eric.

KING: I was -- right.

FRAGOS TOWNSEND: He was put in a horrible position. He did exactly what he should have done. And while I agree with John, it will come up, it really is a nonstarter.

BLITZER: So when you were told, you know, check this out, what did you do? I mean did you sign off on it?

FRAGOS TOWNSEND: No. Well, what happens, Wolf, is that he was doing was checking to see did I have it -- did my office have any equities in that decision or any --

BLITZER: What do you mean? What does that mean, equities?

FRAGOS TOWNSEND: Well, whether or not my office had any information that would suggest one way or another what position Eric should take for the Justice Department. I was in the intelligence office. We were doing surveillance law. So I didn't have anything. I really had no input at all.

But Eric -- my point is Eric was doing what he should have done before he advised the White House -- very difficult to try to and gather information on the morning of the inauguration.

BLITZER: When do you think these announcements are going to be made public?

KING: They wanted to do the economic team and the national security team before Thanksgiving. They're having some issues. Some of it's vetting. Some of it is an internal debate over who, for some of those economic jobs. They want to get some of it done by Thanksgiving. If they -- they said if they can't get it done by then, the first week of December.

BLITZER: Soon enough.

KING: Soon enough.

BLITZER: Guys, thanks very much.

Weeks in advance of the change of leadership in Washington, human rights groups are already calling on the president-elect to go after his predecessor's administration. At issue specifically, methods used to interrogate suspected terrorists in U.S. custody.

Our justice correspondent, Kelli Arenas, is looking into this story for us -- Kelli, what's going on here?

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Well, Wolf, those groups say that the U.S. tortured terror detainees and the only way to prevent it from happening again is to make sure that those who are responsible pay the price.

(BEGIN VIDEOTAPE)

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: But tonight --

ARENA (voice-over): Barack Obama may be looking toward the future, but some human rights groups are urging the president-elect to look back and investigate whether the Bush administration is guilty of war crimes.

DEVON CHAFFEE, HUMAN RIGHTS FIRST: There have been, most likely, criminal acts that have been committed and that the next administration has a responsibility to investigate those acts.

ARENA: Specifically, she's talking about the way the CIA interrogated alleged terrorists. She says President Bush OK'ed torture and insists that Barack Obama should consider criminal prosecution.

DANA PERINO, WHITE HOUSE PRESS SECRETARY: This president has said that we did interrogate terrorists. And we did so to protect the country from possible imminent terrorist attacks. We did not torture.

ARENA: Obama told an interviewer that he doesn't want his first term consumed by what some would consider a partisan witch-hunt. But he says that he will ask his attorney general to review the Bush administration's legal decisions.

(BEGIN VIDEO CLIP)

OBAMA: I've said repeatedly that America doesn't torture. And I'm going to make sure we don't torture.

(END VIDEO CLIP)

ARENA: The government admits that at least three top Al Qaeda operatives were waterboarded -- or made to feel like they were drowning -- a technique the CIA says it no longer uses. Officials say other detainees were kept awake for days, forced to stand for hours or exposed to extreme cold. Human rights groups say none of it should be allowed. Intelligence experts say that would be a mistake.

FRAGOS TOWNSEND: Some of these tools will be rarely used. But it doesn't mean you don't want to have them for that rare instance where your experts and advisers tell you that it might be effective in thwarting a plot and saving American lives.

(END VIDEOTAPE)

ARENA: When it comes to protecting the United States, those who have been on the front lines say that Obama should consider two things, Wolf -- what's appropriate and what's effective -- back to you.

BLITZER: Probably pretty good advice, Kelli. Thanks very much.

Let's go back to Jack. He's got "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN CORRESPONDENT: Wolf, the election is receding in the rear view mirror for most of us. But in three states -- Georgia, Alaska and Minnesota -- there are Senate races that are undecided still. Georgia has a run-off scheduled for December 2. And Alaska and Minnesota are both near a resolution.

Now, the Alaska race is of particular interest because it involves a convicted felon, Senator Ted Stevens. Stevens, you may recall, was found guilty in October of seven -- count them -- seven counts of concealing more than $250,000 in personal gifts. He was the first sitting senator to go on trial in more than 20 years and the fifth in history to be convicted of a crime -- seven of them, actually. But the arrogant Mr. Stevens decide to run for re-election anyway, sending the message that a convicted felon's place is in the United States Senate.

And in the days following November 4th, Stevens held a slight lead over his opponent, indicating that about half of the electorate in Alaska doesn't care that their senator is a convicted felon. He's running against the mayor of Anchorage. Now his lead has disappeared. The mayor has pulled in front a little bit. There are about 24,000 absentee ballots left to be counted. A few more could come in tomorrow. But until that's all sorted out, Stevens remains a member of the U.S. Senate.

Republican Senator Jim DeMint of South Carolina is among those who wants Stevens out. But some of his buddies in the Senate want to wait and see. They want to see whether he actually wins another term before they have to go on the record and vote on whether or not to expel him. They don't want to be on the record voting to expel a criminal unless they are absolutely forced to do so. Isn't that nice?

Here's the question: If Ted Stevens of Alaska is re-elected in spite of seven felony convictions, should the Senate expel him? Maybe the way to word the question is will the Senate expel him? That's maybe an open question.

Go to CNN.com/caffertyfile and post a comment on my blog. It defies description, this situation in Alaska.

BLITZER: Stuff happens, Jack. That's what happens on Capitol Hill, as we know it. Stand by -- Jack Cafferty.

Some of the stories we're working on this hour.

Barack Obama and the Catholic Church -- a cardinal unleashes a blistering rant about the president-elect. We'll take a closer look at the hot button issues where they agree and disagree.

Also, there are new developments in one of the closest Senate races in recent memory. The stage now is set for a manual recount up in Minnesota.

Plus, Mike Huckabee's new tell-all book -- he unloads on some of his former Republican presidential rivals. Is he trying to settle some old scores?

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

(COMMERCIAL BREAK)

BLITZER: Aggressive, disruptive and apocalyptic -- those surprisingly harsh words being used against the president-elect of the United States, Barack Obama. Even more surprising considering the source -- a Roman Catholic cardinal.

CNN's Brian Todd is working the story for us. What's this one all about -- Brian?

BRIAN TODD, CNN CORRESPONDENT: Wolf, this cardinal told me he wants to make sure that his words are not taken out of context. But he is not backing down from some very strong criticism of Mr. Obama, specifically over his willingness to sign pro-choice legislation when he becomes president.

(BEGIN VIDEOTAPE)

TODD (voice-over): Swept into office with help from the Catholic vote, Barack Obama now finds himself the target of harsh criticism from a Vatican cardinal. James Francis Stafford, former archbishop of Denver, said this recently about Obama's support for abortion rights.

(BEGIN AUDIO CLIP)

CARDINAL JAMES STAFFORD, APOSTOLIC PENITENTIARY, THE VATICAN: His rhetoric is post-modernist and marks an agenda and ambitions that are aggressive, disruptive and apocalyptic. Catholics weep over these words. We weep over the violence concealed behind the rhetoric of our young president-to-be. What should we do with our hot, angry tears of betrayal?

(END AUDIO CLIP)

TODD: We reached Cardinal Stafford in Rome. He didn't want our phone conversation recorded, but said he believes his remarks can be misunderstood. He says his take on the word apocalyptic is different from common Western references to the end of the world.

In his understanding, he says, apocalyptic means resistance to what calls the divine and natural laws on reproduction and the preservation of human life.

He says he does believe Obama's stance on abortion rights condones violence toward unborn children. Cardinal Stafford told us he does not speak for the Vatican.

Contacted by CNN, a Vatican spokesman would not comment on his remarks. The Obama transition team also had no comment.

President-Elect Obama won the Catholic vote by a solid 9 points over John McCain. But analysts say American Catholics have at least one key disconnect with the church.

WILLIAM GALSTON, BROOKINGS INSTITUTION: Many Catholics who are opposed to abortion believe that birth control through means other than the so-called rhythm method are perfectly legitimate and that when the Catholic hierarchy took such a firm position against the acceptability of birth control, that it began to undermine its own moral authority.

(END VIDEOTAPE)

TODD: But Cardinal Stafford held firm. When we asked him about American Catholic support for Mr. Obama at the polls, he said he doesn't understand how a Catholic voter could look favorably at the president-elect when "he is hostile to the life of an unborn child."

Again, no response from Obama's team to this cardinal's remarks -- Wolf.

BLITZER: So when you spoke with the cardinal, did he express regret about anything?

TODD: He says he does not regret anything. But he wants to make sure that we understand that this is not a political thing with him. He said he has -- he himself has come out critical against Mr. Bush -- President Bush -- for the war in Iraq, for interrogation programs, etc. So he says this is not any kind of a political message. He just firmly believes in, you know, the anti-abortion message that he always espouses and he thinks Barack Obama goes directly against it.

BLITZER: Brian, thanks very much for that story. Brian Todd reporting.

Obama and the Catholic Church do agree on some hot button issues, including opposition to the war in Iraq, greater access to health care and a more equitable tax code. But they strongly disagree on embryonic stem cell research, abortion rights, as Brian noted, and civil unions for gay couples -- all of which Obama supports. The Catholic Church opposes.

A manual recount in a very tight, hotly contested U.S. Senate race in Minnesota -- that's now going forward. The final hurdle was cleared today for the process to determine who actually won -- Republican Norm Coleman or the Democratic challenger, Al Franken.

CNN's Mary Snow is in St. Paul, Minnesota right now getting ready for that recount. What happened today -- Mary?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, basically a state canvassing board ruled that this race was way too close to call. So starting tomorrow morning, there will be a manual hand recount of some 2.9 million ballots. And the board says it hopes to get answer about who won this race by the middle of December.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: All in favor please signify by saying aye.

UNIDENTIFIED PEOPLE: Aye.

UNIDENTIFIED MALE: Opposed, same sign.

SNOW (voice-over): And with that, a Minnesota panel ordered an official recount in the hotly contested Senate race between Republican incumbent Norm Coleman and Democratic challenger Al Franken.

Despite a flurry of legal challenges, the secretary of state says there won't be a delay in starting the count Wednesday.

MARK RITCHIE (D), MINNESOTA SECRETARY OF STATE: Every person who spoke said out loud they would -- the recount will go forward. And we want the recount to go forward. We are excited. People used that word excited. So tomorrow morning, 8:00 in some place, 9:00 in others.

SNOW: Coleman holds a razor thin lead with 215 votes, but the Franken teams claims there were absentee ballots that should have been counted but weren't. Lawyers filed a legal brief to get them counted, saying some of the ballots were rejected as a result of administrative errors.

UNIDENTIFIED MALE: They have a right to have official mistakes corrected and their votes counted, not later, but now.

SNOW: The Coleman team disagrees.

FRITZ KNAAK, ATTORNEY FOR COLEMAN CAMPAIGN: But there's no cause to include additional ballots, which is being requested here, in that recount process.

SNOW: The panel says it will meet next week to consider the absentee ballot issue. In the meantime, the recount will get underway at a roughly 107 sites around the state.

At stake, Democrats need a victory to achieve a 60 seat filibuster-proof majority.

Also at stake, Minnesota is trying to keep his its reputation intact, so it will no longer be the butt of jokes by late night comedians.

(BEGIN VIDEO CLIP)

JAY LENO, HOST "THE TONIGHT SHOW": It turns out Minnesota is an old Indian word that means Florida.

(END VIDEO CLIP)

SNOW: And while there were several references to the Gore-Bush recount of 2000, Minnesota's secretary of state hopes his state won't be remembered as another Florida and says he's confident the recount won't be interrupted by major court actions.

(END VIDEOTAPE)

SNOW: And the man in charge of the recount has himself come under fire. Minnesota's secretary of state, Mark Ritchie, is a Democrat. Republicans have questioned his objectivity. But he's not making these decisions alone. He's a part of a panel that is a bipartisan panel that includes four judges -- Wolf.

BLITZER: Mary Snow in St. Paul. And she's going to stay there and watch this story unfold. So how does Minnesota handle a recount of some 2.9 million votes?

We checked with the secretary of state's office. They are all paper ballots. Election officials at more than 100 sites sift through them ballot by ballot and sort them by candidate.

When the voter's intent is unclear, the ballot goes to a separate other file. Al Franken and Coleman may each choose a representative to watch the recount at each site. And that person may challenge an election official's call on an unclear ballot. Disputed ballots go to St. Paul, where the state canvassing board makes a final ruling. The board hopes to finish all of this by December 19th. So get ready for this recount.

The tension behind-the-scenes on the campaign trail -- former Republican presidential candidate Mike Huckabee now talking about it openly and blasting his former rival, Mitt Romney. James Carville and Kevin Madden are standing by live to talk about this and more. Plus, gays in the military and major changes potentially in store for the controversial Pentagon policy.

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

(COMMERCIAL BREAK)

BLITZER: Zain Verjee is monitoring some important stories incoming into THE SITUATION ROOM right now -- Zain, what's going on?

ZAIN VERJEE, CNN CORRESPONDENT: Wolf, Wall Street surprised someday today with a final hour rally, with the Dow closing up 151 points. But that was tempered by some bad news. National home prices plummeted by a record 9 percent in the third quarter. The National Association of Realtors reports that four out of five states saw the median price of a house fall. The national median is $200,500. The steepest declines were noted in three California regions.

Ken Griffey, Jr. is used to hitting it out of the ball park, but now he'll be hitting it out of the country. Secretary of State Condoleezza Rice today named the major league home run king as a public diplomacy envoy. He joins other famous Americans like Olympic skater Michelle Kwan and baseball great Cal Ripken, Jr. Envoys travel worldwide promoting America's image.

And, Wolf, get ready for some Thanksgiving express lanes to ease holiday stress. That's the White House term for the military air space it will open up again to commercial airlines during the Thanksgiving holiday. This year, in addition to the East Coast, more traffic lanes in the sky will be available in the Mideast, Southwest and the West Coast, including Los Angeles and Phoenix -- Wolf.

BLITZER: Zain, thanks very much. That will be good for Zain, because she's going to be flying a lot, I know.

All right, inside the Clinton vetting process -- why it's taking so long -- the pros and cons of Barack Obama naming her secretary of State. We talk about that and more with the long time Clinton friend, James Carville. He's standing by live.

And former Republican presidential candidate Mike Huckabee is blasting his former presidential rival, Mitt Romney, in a brand new book. Romney's former press secretary, Kevin Madden, he's here. We'll talk about that. He's standing by live, as well.

And will Sarah Palin become the next ex-candidate to land a huge book deal? How much could she get for her campaign tell-all?

We'll tell you right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

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

Happening now, taking aim at former rivals -- onetime Republican presidential hopeful Mike Huckabee takes on his 2008 opponents one by one in his brand new book. Is it a first shot aimed at a run in 2012?

And she was a big gun in the Obama campaign. Now Senator Hillary Clinton is considered a heavy favorite for secretary of State. We'll talk about that with Clinton ally, James Carville.

And a Clinton Pentagon policy for gays in the military could be on its way out. Will "Don't ask/Don't tell" die under Barack Obama?

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

He's well-known for his one-liners and congenial demeanor, but Mike Huckabee, the former Arkansas governor, the former Republican presidential candidate, pulling no punches when talking about his fellow former GOP candidates in his brand new book, "Do the Right Thing."

Our senior political analyst, Bill Schneider, is standing by -- Bill, is this all about settling scores?

What's going on?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, it is partly, Wolf. But it's also about setting a direction for the Republican Party's future.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): Oh, the things Mike Huckabee says about his Republican rivals in his new book, "Do the Right Thing."

Huckabee calls Mitt Romney "anything but conservative until he changed the light bulbs in his chandelier in time to run for president." The two had been bitter rivals in Iowa, where Huckabee's surprise victory helped derail the Romney campaign.

GOV. MITT ROMNEY (R), FORMER PRESIDENTIAL CANDIDATE: You know, Mike, you make up facts faster than you talk and that's saying something.

SCHNEIDER: About Fred Thompson, Huckabee writes, "His amazingly lackluster campaign reflected just how disconnected he was with the people." Huckabee reserves his strongest criticism for libertarians whom he calls the real threat to the Republican Party, smug, inside the beltway fiscal conservatives who demand absolute purity on taxes and government.

MIKE HUCKABEE (R), PRESIDENTIAL CANDIDATE: I'd like to be the kind of president that's more concerned about the people on Main Street, not just the folks on Wall Street. And we need that kind of republican running and that kind of republican winning. I would never forget who the boss really, really is.

SCHNEIDER: In his book, Huckabee promotes a populist conservative that defends traditional social values but also acknowledges a role for government, not a government that simply shut its eyes or ears to crushing human needs when those needs had gone unnoticed. If Huckabee runs for president in 2012, he could face competition for the populist conservative vote from Sarah Palin.

HUCKABEE: I think that she brought a lot of energy to the ticket early on and it was helpful to kind of bring the base together.

(END VIDEOTAPE)

SCHNEIDER: Palin, like Huckabee, had a popular following, but faced criticism from inside the beltway conservatives. Now what does Mike Huckabee say about Palin in his book have well, we checked the index. Nothing at all. Wolf?

WOLF BLITZER, CNN ANCHOR: More to say on that subject. Stand by. Bill, appreciate it.

Tomorrow by the way, the former Arkansas governor and the former presidential candidate, Mike Huckabee, will be here in THE SITUATION ROOM. You can about part of the interview. This is what you do, submit your video questions at ireport.com/situationroom, and we'll try to get some of your questions to Mike Huckabee tomorrow.

Let's talk more about Huckabee's tell-all book. For that, we're joined by democratic strategist and CNN political contributor James Carville and republican strategist Kevin Madden who was a senior aide to Mitt Romney's presidential campaign. Guys, thanks very much for coming in.

He really slams your former boss, Kevin. What do you think?

KEVIN MADDEN, REPUBLICAN STRATEGIST: Well, look, Wolf, I was very surprised by the small mind nature of the criticism. I think that Governor Romney has always shown himself to be somebody who tries to rise above that acrimony and instead look at the big things. Quite frankly, we're a party that has to focus on the big things. So Mike Huckabee, in the interest of, I think, selling some books and stirring up some controversy took aim with criticisms and finger pointing at good men like Governor Romney, Fred Thompson, Gary Bauer and others. These are men who are going to be a big part of building at party back up and moving the party forward. That's where our focus is on, the big things. Not the small little criticisms and finger pointing that was in this book.

BLITZER: As a political strategy, James, you're one of the best political strategists out there. Looking forward to 2012, this smart on the part of Mike Huckabee to go out there and blast his republican rivals?

JAMES CARVILLE, DEMOCRATIC STRATEGIST: Boy, I don't know. But I kind of like a guy that attacks republicans and wants to help the middle class. He seems like my kind of guy.

Look, I think right now, he's a colorful and he was funny in the campaign. He kind of relates to certain people. And you know, he's a good salesman. He's out there selling some books. I mean changing light bulbs in chandeliers an that kind of stuff is interesting. I suspect he's going to sell a few books here. But does this help him in the Republican Party? I don't know. That's a -- MADDEN: If James likes it, Wolf, it's not good for republicans.

CARVILLE: That's probably true.

BLITZER: What about Sarah Palin she's obviously got a future out there. We're now seeing these stories that she could get $7 million for her book about the campaign, a book she might be preparing. Is that realistic, James? You know something about books or unrealistic?

CARVILLE: I think that's high. I mean, looks, she's got a deep following out there. There's a lot of people that really care about her. $7 million advance for Sarah Palin, I don't think that's going to happen. That wouldn't have happened in a really good economy. In fact, I could be proven wrong, but that seems kind of high.

MADDEN: That's a lot of money.

BLITZER: But we're talking at least a 7-figure deal, right?

CARVILLE: Oh, yeah, there's a lot of space between 57-figure deal and $7 million, but I didn't think it will be $7 million and her book will do well, too.

BLITZER: Could it become a major best seller? Kevin, what do you think?

MADDEN: Well look I think so. I mean if there's one thing that people who sell books know they have a built-in audience. Sarah Palin was a very dynamic figure on the campaign trail for John McCain. She has a great following that has already been -- she was an instantaneous celebrity on the campaign trail. So I think that $7 million that book company will make their money back and then some off Sarah Palin.

CARVILLE: You know, Wolf, I bring up a point here, this is interesting for the republicans is the two most interesting people were Mike Huckabee and Sarah Palin. And I think that's part of the republican problem is that, you know, neither one is sort of embraced by Washington republicans or Wall Street republicans. I doubt if either one could win a nomination but they were the most fascinating two candidates out there.

BLITZER: There they're both pretty intriguing, that's the word you're groping for, I think.

CARVILLE: Intriguing, thank you.

BLITZER: Intriguing. There's no doubt about that. Speaking of intriguing, Hillary Clinton, rather intriguing herself, James. Where does this stand based on what you're hearing in the murky world of leaks or whatever, secretary of state?

CARVILLE: I think that they once asked Ray Charles what's the worst thing about being blind. He said you can't see. I think the obvious is probably the right answer is President Clinton, I think I said it on this show or Sunday morning, you know, that Senator Clinton is not married to Todd Palin. President Clinton has a lot of different things he's involved in humanitarian efforts around the world. He's got a lot of the friends. This stuff has to be worked through. People are making an effort to work through. We should know pretty shortly whether this is going to happen or not.

BLITZER: How do you see this unfolding, Kevin?

MADDEN: I find it interesting there isn't a higher level of dissatisfaction among a lot of republicans against Hillary Clinton's potential nomination.

BLITZER: So far, most of them have been saying nice things about her.

MADDEN: I think they have because more republicans would rather see a Hillary Clinton world view at the State Department than we would a Nancy Pelosi type world view at the State Department. And I think that what you're going to see is republicans rather than offering just knee jerk opposition to a person, instead, we're going to work very hard to build around our ideas on where we think our diplomacy ought to be going around the world and articulate our opposition based on the big issues rather that be just a personality.

CARVILLE: There's a lot of democrats who think this is a terrific idea. This one included, but there are things that have to be worked out. And hopefully, it will get worked out and well know pretty soon.

BLITZER: Tell us what this says, James, from your perspective of Barack Obama as the next president of the United States, his willingness to reach out to Hillary Clinton and say you know what, we may have fought a fierce battle to get the nomination, but I want you to be my top diplomat?

CARVILLE: I was impressed with it. I thought it was -- and I think the reason is if you just think about it, she would make a terrific secretary of state. The secretary of state has got a lot of, there's a lot of stuff that has to get done really fast and world is pretty excited about this. I hope that people sit down and get this worked out so this can happen. I mean just as an American, I'm very excited, would be excited about having her be my secretary of state. I think it does say something about Senator Obama that he's willing to reach out and bring people like that into his administration. I suspect we'll see him bring more Republicans and this will be the most bipartisan administration we've ever seen.

BLITZER: It says to me and maybe to you, this is a guy with a lot of self-confidence?

MADDEN: Absolutely. Let me give credit where credit is due. First of all, this is very good politics. It helps broaden Barack Obama's appeal amongst a constituency, his democratic constituency. I also think it indicates a certain level of political maturity that he's willing to a give a broad portfolio of policy to someone who has always been seen as his achieve rival. That shows he nose what he's doing on some of this. BLITZER: It's a pretty amazing develop as you see the history unfold and you see people about to come in, assuming she gets that job as the secretary of state, when you say republicans he's going to bring in republican, James, are you hinting he'll ask Bob Gates to day on at the pentagon?

CARVILLE: I don't know that and I wouldn't be in a position to hint that. But I do think and I hear this and I hear it from people that would be in a position to know, that he's very committed to having not only some republicans in his cabinet but also to have some republicans in the agencies. And I think as you know, Wolf, I spent a lot of time overseas and you've covered a lot of it and many places have like a coalition government. I don't think that's possible for us, but it would somebody, he wants to form something along those lines, but where you have some republicans in the administration that are in positions of real influence.

BLITZER: Yeah, he said on "60 Minutes" interview he definitely will have a republican, maybe more in his cabinet. We'll see what happens, guys. Thanks very much for coming in.

Barack Obama's campaign is over, but the fund-raising isn't. He's still asking for cash this time for the transition and the inauguration. How much does it all cost?

And President-Elect Barack Obama weighing his options for tackling an unpopular Clinton era policy involving don't ask don't tell, gaze in the military. We're taking a closer look at what he has in mind to replace that policy.

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

(COMMERCIAL BREAK)

BLITZER: Barack Obama is the president-elect but he still needs to raise cash this time for the transition and for his inauguration. It certainly is not cheap. CNN's Christine Romans has the story.

Christine?

CHRISTINE ROMANS, CNN CORRESPONDENT: Wolf, the Obama transition team says we can expect an announcement on how they'll pay for the inauguration some time next week. Good government watch dogs are hoping the president-elect will ban corporate cash.

(BEGIN VIDEOTAPE)

ROMANS: He raised a stunning amount of money for the general election, more than $639 million in campaign contributions. Now, the president-elect's challenge to raise more cash tour for his transition and inauguration.

CRAIG HOLMAN, PUBLIC CITIZEN: I really do hope Obama sticks by his principles and does not accept corporate money, does not accept money from lobbyists and places a very, very low ceiling on the amount of money he would accept from individuals to pay for his inauguration. ROMANS: Public Citizen says companies spend that cash to buy influence. There is about $10 million of taxpayer funds to pay for the transition but experts say that's not enough. Presidents tap private money and corporate cash to cover the difference. President- Elect Obama taking pains to keep lobbyists out of his transition and forgo corporate cash but has not specifically outlined his intentions for the inauguration. President Bush raised a record $42.8 million mostly from corporate donors for his second inauguration. To address potential conflicts of interest, Bush limited corporate donations to $250,000 each. Obama could decide to accept corporate donations but impose tighter limits.

DAVID LEWIS, VANDERBILT UNIVERSITY: I think past presidents have had to raise lots of private money to do these things and I think he's actually got a good resource base of donors who are willing and probably will give money for both the transition effort but inauguration as well.

ROMANS: Make no mistake, even without corporate cash, the Obama fund-raising machine has been a force. After a record haul and win on Election Day, team Obama was quickly soliciting more money, here raising money for the DNC.

(END VIDEOTAPE)

ROMANS: Any money leftover from the general election campaign funds can be used for the transition but many say the Obama fund- raising machine should have no trouble raising more money. Wolf?

BLITZER: Quite a machine indeed. Christine, thank you very much.

We've heard Barack Obama say he's using one of America's grit presidents as a guide. But how much can a president today learn from Abraham Lincoln? We're exploring that coming up.

Rarely seen video of Barack Obama roasting his brand new white house chief of staff and his ties to Hollywood.

SEN. BARACK OBAMA (D), PRESIDENT-ELECT: I used to think that Rahm was slightly abrasive because he's short and funny looking and I met his brother who is tall and good looking but also abrasive and annoying.

(COMMERCIAL BREAK)

BLITZER: The country in crisis turns to a Midwestern lawmaker who rose from obscurity, that was Abraham Lincoln, but now it's Barack Obama. CNN's Samantha Hayes is looking into the parallels between the 16th president and 44th president of the United States. What are you finding out, Samantha?

SAMANTHA HAYES, CNN CORRESPONDENT: Wolf, times are certainly different. We're talking about 150 years between their presidencies but the two men not only share similar personal and political backgrounds, they may also share an inspiration for the way they lead. (BEGIN VIDEOTAPE)

HAYES: His path to the white house started here, Springfield, Illinois, a place of great significance to Barack Obama because of a man he has long admired.

OBAMA: People who love their country can change it. That's what Abraham Lincoln understood.

HAYES: Obama and Lincoln came from poor families and rose from obscurity in Illinois and were elected to the presidency in hard times. In his victory speech, Obama reached out to the republicans in the name of Lincoln.

OBAMA: As Lincoln said to a nation far more divided than ours, we are not enemies, but friends.

UNIDENTIFIED MALE: It is almost a new personification of the old Lincoln mandate with malice toward none with charity for all binding up the nation's wounds.

OBAMA: Obama recently talked with former democratic rival Hillary Clinton about becoming secretary of state. Historians say it worked for Lincoln who made one time rival William Seward his secretary of state. But Lincoln's greatest strength was to appeal to all Americans as the civil war waned, a vision that Obama shares.

UNIDENTIFIED MALE: The times could not be different, but Obama's administration at least he hopes is a time of making peace rather than war. And yet, the country was divided then, and it is divided now.

HAYES: And that challenge will likely be on Obama's mind as he takes the oath of office January 20th on the steps of the capitol where looking down the mall, he will see the memorial to the man who inspired him.

(END VIDEOTAPE)

HAYES: It is important to mention though while Lincoln's appointment of the rival kept his political enemies close, they were also problematic and some left in the first term which may be a signal for Obama to perhaps proceed with caution.

BLITZER: He is a cautious guy. Now, as we know, there is the Lincoln bedroom in the white house. There it is. It is a beautiful, beautiful shot. You are hearing what might happen in the Obama white house as far as the Lincoln bedroom is concerned.

HAYES: Well, Obama has had a tour of the white house even before he became president-elect and he says that in the Lincoln bedroom there should not be a flat screen TV and when you come as a guest, you should read to Gettysburg address or the proclamation, and not watching Sports Center.

BLITZER: Well, maybe they should leave it on THE SITUATION ROOM or CNN and they could have history understood folding as they are getting the pleasure to stay in the Lincoln bedroom. Sports Center not so good, but CNN, very good.

All right. Let's check in with Jack Cafferty. He's go the Cafferty File.

Jack?

JACK CAFFERTY, CNN CORRESPONDENT: That is the most shameless plug I have ever heard.

BLITZER: Under the theory that if you don't promote yourself, who will do it?

CAFFERTY: Someone wrote it on a wall one time. The question of the hour is if Ted Stevens of Alaska is re-elected despite seven felony convictions will the senate expel him?

Debbie in San Marcos writes, "Of course they should expel him. Are our expectations for our public servants really that low? If they are, maybe we deserve what we get."

Jeff writes, "If Alaska wants to be represented by a corrupt convicted felon, who are we to argue with that? It's not like the people of Alaska weren't informed that Stevens was convicted on multiple counts of corruption. Personally I'd be embarrassed to be represented by someone like Ted Stevens but I'm not an Alaskan. Maybe they have different standards than I do." Ooh.

David writes, "Let me get this straight, if you are convicted of a felony, you cannot vote, but you can be elected to the senate? Something is wrong with the system."

NB writes, "In our company, if you are convicted of a felony, you are terminated, no severance, no benefits, and no pension, and now, what was the question about the convicted felon Senator Ted Stevens of Alaska?"

Rob in New York writes, "He's a felon. How could he even run for office? And what kind of an idiot would vote for a felon? Is there something in the drinking water in Alaska? That explains why they think Sarah Palin is so wonderful. It is the water supply."

John in Ottawa, Kansas, "Expulsion should not be his only punishment. Why not require him to be a lead dog for an Iditarod team."

And Sherry in Ohio writes, "They should expel him but he won't win. God is not going to leave any doors open for Sarah Palin to plow through."

If you didn't see your email here, you can go to my blog at CNN.com/Caffertyfile and look for yours among hundreds of others. Wolf?

BLITZER: All right. Jack, thank you.

He is the next White House chief of staff, and Rahm Emanuel has some not so secret Hollywood connections.

OBAMA: Some of you know that Rahm's brother Ari is the model for the lead character on the big hit on HBO "Entourage," but what you may not know is that Rahm is an inspiration for that other HBO character Tony Soprano.

BLITZER: Not necessarily a joke but there really is a TV character based on Emanuel. We will have the details of Rahm Emanuel. Standby.

Plus, American automakers want congress to keep them from catastrophic collapse. Stay with us here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Ties between Washington and Hollywood may be a bit stronger in the Obama white house. Turns out that the chief of staff Rahm Emanuel has not-so-secret connections to Hollywood. Our entertainment correspondent Brooke Anderson has the details.

Brooke?

BROOKE ANDERSON, CNN ENTERTAINMENT CORRESPONDENT: Wolf, President-Elect Barack Obama and his white house chief of staff Rahm Emanuel go way back. Obama has even taken light hearted digs of the brass card charging man from Illinois and his Hollywood connections.

(BEGIN VIDEOTAPE)

OBAMA: I used to think that Rahm was slightly abrasive because he is short and sort of funny looking, and then I met his brother, Ari, is a Hollywood agent and tall and good looking and also abrasive and annoying.

ANDERSON: Barack Obama roasting Rahm Emanuel three years ago at an epilepsy awareness event taking aim at his tinsel town ties as seen on YouTube's

OBAMA: Some of you know that Rahm's brother Ari is the model for the lead character on the big hit on HBO "Entourage," but what you may not know is that Rahm himself is an inspiration for that other HBO character Tony Soprano.

ANDERSON: The Soprano reference was a joke but in reality Emanuel who used to work for Bill Clinton is said to have been a model for "West Wing's" deputy White House chief of staff.

And the fast-talking Ari Geld on "Entourage."

PETER BART, DAILY VARIETY: They're really close brothers and their styles are similar and they are unrelenting aggressive.

ANDERSON: So has the Hollywood portrayal of the Emanuel brothers given any indication as to how Rahm will run the white house?

BART: I think that "West Wing" inspires ideas and speculation, but I think that it is impossible to predict people's behavior how they will behave under moments of stress. The main thing about Rahm is his forcefulness and his attitude.

RAHM EMANUEL: Well, the chief of staff, I won't get in front of the president.

ANDERSON: But from the sound of it, he will surely have his back.

UNIDENTIFIED MALE: He doesn't have a grudge. That is what he pays me for.

(END VIDEOTAPE)

ANDERSON: Both Rahm and Ari are fiercely motivated and abrupt. In February, Ari had advice for his brother and all of the other democratic superdelegates, follow the will of the voters. Writing on a Huffington Post blog he said, letting my brother dictate my life since he determined whether he got the top or bottom bunk in our bedroom back in Chicago. Wolf?

BLITZER: All right, Brooke, thanks very much.