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Obama Cabinet Picks; Tim Geithner Tapped for Treasury Secretary; Dow Rallies Up Some 500 Points

Aired November 21, 2008 - 16:00   ET

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

WOLF BLITZER, CNN ANCHOR: Happening now, the breaking news we're following. There are major surprises involving Barack Obama's cabinet. Some of the biggest political names are being mentioned for some of the most important posts.
Also, he might be saying, "Mac is back." John McCain's back at his day job, but why is he avoiding some reporters and keeping a relatively low profile? Stand by.

And you're happy about lower gas prices, but will you be sorry in the near future? Financial guru Suze Orman is standing by live with some advice on that, how to find a job, and what jobs appear to be safe, other jobs not so safe.

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

We begin with the breaking news. The cabinet secretaries who will be responsible for creating jobs and fixing the battered economy, improving America's reputation around the world could also be close to officially being named. The breaking news involving a potential commerce secretary, a treasury secretary, and a secretary of state, what they may look like under a Barack Obama administration.

Let's get the latest, first of all, from our White House Correspondent Ed Henry. He's following the transition in Chicago.

What is the latest, Ed?

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, let's start with the secretary of state. Three sources close to the transition say that will Senator Hillary Clinton is on track to be the secretary of state, that that is the choice from President-elect Barack Obama here in Chicago. They say that announcement is going to come after Thanksgiving.

Now, "The New York Times" is reporting in the last couple of hours that Senator Clinton has accepted it, as basically told associates she's going to accept it. But I can tell you that the Obama camp is saying that's going a little too far, that this is not quite a done deal yet. They still insist it's on track, there are good signs, but it is not a done deal yet.

And a statement just came out in the last few moments from Senator Clinton's office as well saying, "They're still in discussions which are very much on track. Any reports beyond that are premature." I can tell you though, meanwhile, on the national security front, two sources close to the transition tell CNN that retired Marine General Jim Jones is in line to be the national security adviser in the White House, a very senior post. A former supreme allied commander for NATO in Europe, obviously a very powerful military leader who is somebody that Barack Obama wants to bring in as national security adviser. That, too, is not a done deal but is in line, that he is the choice, and he has indicated privately he would accept it.

And finally on commerce secretary, two sources close to the transition telling CNN that Bill Richardson, the New Mexico governor, is under serious consideration for that, that he's also being looked at for other posts, like the Interior Department, but that he is under serious consideration for the Commerce Department. The back-story there though is there is great disappointment by Bill Richardson, according to some of his associates, that he is not getting the secretary of state job.

You'll remember that he endorsed Barack Obama over Hillary Clinton, even though he's very close to the Clintons. He faced a lot of criticism from Clinton allies because of that. And I'm told that privately, Bill Richardson thought that meant he would be secretary of state. He's not, but he may be in line for commerce secretary -- Wolf.

BLITZER: Ed, stand by.

I want to get a little analysis of what's going on, because it's dramatic stuff going on.

Take a look at the Dow Jones Industrial Average right now. It's up almost 500 points, presumably on word that the Obama cabinet is beginning to take shape right now, especially a potential treasury secretary. A lot of investors were anxious to know who it might be.

Let's bring in the best political team on television.

And we also want to welcome our viewers in the United States and around the world who are joining us.

Gloria Borger is here in THE SITUATION ROOM. Paul Begala is here, as well. David Gergen is joining us from Boston.

Gloria, first to you, Timothy Geithner, he's the president of the New York Federal Reserve. He's now I guess expected to become the treasury secretary. This according to "The Wall Street Journal."

GLORIA BORGER, CNN SR. POLITICAL ANALYST: Well, yes. And we've been told by two sources close to the transition that we are on the right track to believe that Tim Geithner would become the next treasury secretary.

This is all like a mosaic, Wolf. And I think as soon as they get the Hillary Clinton piece in place, then these other jobs will become very clear. One of the problems I was told with Larry Summers, another top contender for the treasury job, is that he was a very high profile member of the Clinton administration.

BLITZER: He was the treasury secretary.

BORGER: And they don't want to recreate that. However, at this point, I was told that we are on the right track by these two sources to believe that it's Tim Geithner of the New York Fed.

BLITZER: All right. Well, let's learn a little bit more about Tim Geithner right now.

Allan Chernoff, you've been covering him. You know what's going on over there.

Who he is exactly? Because he's a fresh name to a lot of our viewers in the United States and around the world.

ALLAN CHERNOFF, CNN SR. CORRESPONDENT: A fresh name to a lot of people, but certainly not at the Treasury Department. Tremendous experience over there, indeed.

He joined Treasury back in 1988. He has worked under five different treasury secretaries. He himself was the undersecretary for international affairs from '99 to '01. So he's got lots of treasury experience, lots of international experience.

As well, he worked at the IMF. He has studied Japanese, he has studied Chinese. He's lived in those two countries. And most important of all right now is the fact that, as president of the New York Fed, he is the Federal Reserve's point person with the financial markets, with the banking system, with Wall Street.

He knows Wall Street intimately, but he is not a product of Wall Street like the current treasury secretary, Hank Paulson, who came out of Goldman Sachs. And Paulson has been criticized for being partial to Wall Street. The fact is, that Geithner knows the markets very well, and you see the response that we've gotten today -- Wolf.

BLITZER: And you certainly saw the reaction, as you say.

Ali Velshi has been watching the markets.

It's been a roller-coaster over these past several weeks. But today, upon word that Geithner is likely to become the next treasury secretary, we saw a huge rally in the final hour of trading, closing now around 500 points up.

ALI VELSHI, CNN SR. BUSINESS CORRESPONDENT: Yes, 6.5 percent on the Dow. It was remarkable.

When rumors started trickling out, we went from a Dow that was down into sort of a not entirely sure, and then it started to go up. And as more and more reporting was out there about Timothy Geithner being the likely appointee for Treasury, you saw that gain.

And this is close to the session highs. It was up about 520 points at one point. But remember that when markets are this low, even when they start to surge up, you will always have people taking that opportunity to sell stocks. So there are a whole bunch of people who are looking for the next rally into which to sell. That's why you saw it go down a little bit.

But while we're above the next support level, we're above 8,000, this is the confidence that people needed, that the team is solid. Tim Geithner was always at the top of this lists, and the idea that it is likely to be him is instilling a great deal of confidence in a market that is desperate for leadership -- Wolf.

BLITZER: At least there's some indication now where the Obama administration is moving on the Treasury Department front.

Suze Orman is standing by. We're going to be talking to her and getting some practical advice. That's coming up shortly.

So Suze, stand by for a few moments.

Paul Begala and David Gergen are here.

Paul, before we continue on Tim Geithner, as important as that is, it looks like your good friend Hillary Clinton -- it looks increasingly, even though they're saying it's not a done deal, like it is a done deal.

PAUL BEGALA, DEMOCRATIC STRATEGIST: It's a lot closer to a done deal than it was a few days ago. You know?

I mean, I was on the Larry King show Wednesday night and I said it was a coin toss then. I think it's more than a coin toss now.

If you look at the statements that the Obama transition has put out, that Senator Clinton has put out, they're parallel. Right? So these two are clearly talking to each other all the time. In fact, I do know that the senator and the president-elect have spoken several times, and each time, I think, each has come away more impressed.

Look, they took the measure of each other in that campaign and they came away with some grudging respect. Now I think the grudges are gone, and I think each of them looks at the other and thinks, boy, that's actually somebody I'd like to work with.

So I think this is moving on the right track. Everything I hear says wait until Thanksgiving, you know, but the two things they say are the obstacles are falling, and wait until after Thanksgiving. And I do think we do owe the president-elect time to put his team together.

This is getting out there very quickly, more quickly than any transition I can remember. Let's give him time until Thanksgiving to make the final choice and the final announcement.

BLITZER: These are critical decisions that could affect the four years of his administration, maybe even eight years if he's re-elected in 2012. David Gergen, Bill Richardson, the governor of New Mexico, I think it's fair to say he probably wanted to be the secretary of state. And now there are reports suggesting he's going to be perhaps the secretary of commerce.

Is it fair to say this is sort of a consolation prize for the New Mexico governor?

DAVID GERGEN, CNN SR. POLITICAL ANALYST: I think it's fair to say, Wolf, that Barack Obama is putting together an all-star team that is actually much more glittery and more powerful than anybody might have imagined only a few weeks ago. And for people like Bill Richardson, who is obviously qualified to be secretary of state, there is simply not quite enough room there, you know, in these positions. And so they're looking for something else.

It is, in effect, a consolation prize, but it's also a recognition of his talents. I wouldn't be surprised before it's over to see him go back into the energy area where he was secretary once before and really try to get -- and be the captain on trying to get a big energy Bill through, which would be a major accomplishment. But yes, I think it is.

I'm impressed by two things that have come out of this beyond the all-star quality. The national security team that is shaping up -- if Jim Jones is truly going to be the national security adviser, that's another heavyweight coming in. They needed that.

Once you get Hillary Clinton and presumably Bob gates or possibly Chuck Hagel at Defense, then you need a heavyweight at NSE to coordinate and bring it together. And to have a former military person, a former military Marine general there, also helps you enormously in figuring out how to deal with Iraq both as a substantive matter and as a political matter back home -- how to deal with Iran, all these other things.

So I think he's got an extremely good national security team that's shaping up. And at Treasury, I happen to be a Larry Summers fan. But Larry will be the first to tell you that Tim Geithner is a stellar appointment.

He is -- I remember back in the Clinton days, both Bob Rubin and Larry Summers used to tell me, you've got to get to know this guy Tim Geithner. He's a rising star. This guy's going to be -- he's going to have a huge impact in this country over time. And he has grown into that.

If you go around Wall Street -- Ali Velshi will tell you this. I have never met a person on Wall Street who doesn't speak of him with enormously high regard. I do think it has a lot to do with the rally today.

BLITZER: Yes. Well, the markets loved the news, 500 points nearly, going up.

Paul Begala, you worked with them. You remember Larry Summers when he was the treasury secretary at the end of the second term of the Clinton administration. Tim Geithner worked for him as a deputy over there at the Treasury Department. So I guess this -- a lot of people were saying Geithner, Summers, maybe Paul Volcker, the former chairman of the Federal Reserve.

What do you think about this decision? Because I know you're a big fan of Larry Summers, too.

BEGALA: I'm a great admirer of Larry Summers. I think he's (ph) a great treasury secretary.

I think this new president wants to reach out as broadly as he can. Add one thing to that national security team that David mentioned, Jim Jones, General Jones, four-star Marine general, endorsed John McCain. And so that's -- I'm not saying he's a partisan Republican, but that's a very good sign again that you're reaching out to someone who endorsed your opponent to bring him in. And that team of economic advisers he's reached out to in the transition has been very broad and impressive.

I do think that stylistically, if not even substantively, Geithner is somebody sort of created in Barack Obama's image. You know, he is younger.

BLITZER: He's the same age. He's 47.

BEGALA: He's young fur a treasury secretary, very international in his background and approach. Very impressive. Yes, and not somebody who yells and screams up and down the hall.

And yet, has a depth of experience. Served under Presidents Reagan, Bush I, Clinton, and Bush II. Not a bad breadth of experience.

BORGER: And I think while we may wait for Hillary Clinton, although that is not clear at this point, I think you're going to see a formal announcement of the treasury secretary. And I was told possibly one other high level member of the economic team very quickly.

BLITZER: We'll watch it together, guys. Thanks very much. Don't go too far away, Gloria, Paul, David Gergen. We're going to continue with the breaking news.

I want to check in with Jack Cafferty though right now. He's got "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Not now, maybe later. That's pretty much what Congress told the big three U.S. automakers yesterday. Executives from Ford, Chrysler and GM appearing on the Hill two days this week, all but begging for federal aid, say they need a $25 billion bridge loan just to stay in business through the end of the year.

Well, it turns out Democratic leaders want to know exactly what they're going to do with that cash before they push through any legislation that would give it to them. House Speaker Nancy Pelosi said yesterday, "Unless they show us the plan, we cannot show them the money."

So Congress will return next month to consider this $25 billion loan if and only if the auto companies come up with a viable recovery plan to present to them by December the 2nd. It's interesting that Congress all of a sudden wants detailed plans for the auto industry. Since they forked over the $700 billion for the financial institutions, there has been virtually no congressional oversight with what's been done with that money. But that's a different story.

Here's the question. What should the automakers agree to do in order to secure government aid?

Go to cnn.com/caffertyfile. You can post a comment on my blog -- Wolf.

BLITZER: Jack, thank you.

When she talks, millions of people listen. Financial guru Suze Orman, she is here live with some advice on how to find a job. And I'll also ask her why lower gas prices maybe may not be such a good thing.

Also, John McCain, he's back at his day job in the U.S. Senate. But what's life like for him right now? We go behind the scenes.

And is it the start of the campaign to elect Sarah Palin to high office? Some conservatives will air TV ads praising her and telling her one thing -- thank you.

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

(COMMERCIAL BREAK)

BLITZER: We're continuing to watch the breaking news, the potential for a new secretary of the Treasury, the announcement -- at least the report -- that Timothy Geithner is now the leading candidate, might become the next treasury secretary. That encouraged a rally on Wall Street. The Dow Jones industrials closing up about 500 points. A lot of analysts suggesting largely as a result of that calming influence that he might bring to the Treasury Department.

Let's talk about this and a lot more, what it means for your money, with the financial expert Suze Orman. She's the host of "The Suze Orman Show" on CNBC.

Suze, thanks very much for coming in.

SUZE ORMAN, HOST, "THE SUZE ORMAN SHOW": Any time, Wolf.

BLITZER: All right. What was your reaction when you heard that Timothy Geithner, the president of the New York Federal Reserve, is expected to now become, at least according to "The Wall Street Journal," the next treasury secretary? A lot of investors on Wall Street seem to like that. ORMAN: Well, my reaction is an interesting one in that all day long, if you watched the markets, it was up a little, down a little, up a little, down a little. And now, as you saw, it closed up 500 points. But at the same time, I don't know if you looked at gold, but gold also closed up almost 5.5, 6 percent, as well.

So we have this dichotomy going on here. And while the markets may be recovering, maybe people feel good today about it, Wolf, there is a very, very big difference in the stock market versus the economy. And I will still stick by my prediction here that the economy is in a lot of trouble, that, you know, unemployment is still going to skyrocket, real estate is still not doing anything.

You know, so therefore, we have to be very careful here. And a 500-point rally today, just because of the announcement of something, doesn't give me enough grit to sink my teeth into say, oh, we're OK now.

BLITZER: So if people have some cash that they've been holding on the sidelines right now, they're nervous -- the T-bills are safe, as we all know, the insured money markets are safe, as we all know, but should they be buying stocks right now, or should they still lay low for the time being?

ORMAN: It depends who they are. If they happen to be like the majority of people that actually have credit card debt, they don't have an eight-month emergency fund, they need to not be investing that money and to be taking that money and keeping it safe and sound, or paying down their credit card debt.

If, however, as I've always said, if they have 10 -- preferably longer -- 10, 20, 30, 40 years on their side, they're putting money into a 401(k), a retirement account, and they're doing it every single month, then there's nothing wrong with buying stocks now. As I said on "LARRY KING LIVE" last night, even myself, at the end of the market yesterday, I went in and I bought some very high-yield dividend-paying stocks.

So I think that the way you play this market is with stocks or exchange-traded funds that are giving you very high yields, 5 percent, 7 percent. There are some out there with 9 percent. If they have good cash positions, and they're not going to cut their dividend, you are far better off getting a dividend of 5 to 9 percent than putting your money in a money market fund or a money market account that maybe is going to pay you 1 percent or half a percent in the next few months, if you're lucky.

BLITZER: You mentioned that even if the stock market stabilizes a little bit, the economy looks like it's going to be in bad shape for some time to come, and there's going to be increasing job losses out there. Which jobs? Because a lot of our viewers are nervous not only about their jobs, but their loved ones, their friends' jobs. Which jobs are relatively safe right now and which jobs are not very safe?

ORMAN: Yes. You know, it's very hard to know. Obviously, all throughout the automotive industry. You know, General Motors had a layoff in Ohio just a few days ago. You have all kinds of institutions today, corporations, sales, publishers, QVC, you name it, across the board they have had layoffs. So I'm not sure that there's any field that is actually safe today if people are having to cut back.

If the corporations are having to pull down their budgets, which there are, there are layoffs really happening across the board, which is why we have to be very, very careful. And even though you saw a stabilization in the market today, I just want to be very clear about this, Wolf. I still believe in the long run -- and I hate to be pessimistic -- listen, nobody wants this market to go up more than I do, nobody wants the economy to be OK more than I do -- but in the long run, I am still very afraid we have not seen the lows of this market.

They probably will continue to go lower in the long run. So I'm asking everybody to still be very, very careful. And if you're going to invest, just invest little amounts of money, so as it does go down possibly in the future, you can buy more at a cheaper price.

BLITZER: A lot of the statistics out there are awful, but the price per barrel of oil is about $50. It was $150 a barrel not that long ago. That's good news. Also, the inflation, that there is no inflation, for all practical purposes right now.

So there is some silver lining. There's some good news out there, as well.

ORMAN: Yes. You know, you have to look at it.

I'm driving around and I'm seeing on the gas tank $1.89 a gallon, going, "Oh, my God." But here's what's so confusing, even to somebody like me. Why? Why is it at $50 a barrel when just a few months ago it was at almost $150? What made it go up that high, what's making it come down that low?

So there's also a place in everybody's portfolio right now if, in fact, you are investing in this market, that you might look at oil down here at $50. Gold, still relatively low. That there's still a place in everybody's portfolio for those two entities when you see them at these prices.

BLITZER: If you're looking at the economy a year from now, two years from now, some financial experts say, you know what? It's going to be bad for at least a year, maybe two years. And some pessimists saying maybe three years.

There's a new administration coming into office on January 20th with enormously high expectations out there. Realistically, where do you see the economy a year from now?

ORMAN: I don't see it any better. You know, as I told you, I thought that it would be until the year 2015 -- I may be the most pessimistic of them all -- until the economy has totally worked out everything that we have to go through, depending on what happens with the automotive. And we're now not going to know that until December, because God forbid they should have settled before they broke for a little bit here, Congress.

But until we realize what is happening with the automotive industry, that is a big thing. I can't wait to see what happens with Citigroup this weekend.

So these are two main things. We have financials that are still very, very weak. We have one of the largest industries in the United States still under pressure, the automotive industry. So I just have a hard time thinking that this is something, no matter what happens, that within one year it's going to be OK, two years.

I think this is a good two-year period. I will be very happy if President-elect Obama can absolutely within his first term get things on the right track, which obviously looks like he's doing very well at this point in time.

BLITZER: All right. Suze, stand by. You're going to be coming back in our 6:00 p.m. Eastern hour of THE SITUATION ROOM as well. And our viewers are sending in some iReport video questions for you. You'll be answering their specific questions, as well.

Suze, stand by.

And if you have a question you'd like to submit via iReport, go to ireport.com/situationroom. We'll use some of your questions for Suze Orman. That's coming up in our 6:00 p.m. Eastern hour right here in THE SITUATION ROOM.

A big day in the Obama transition. We're going to go back to Chicago for news on national security on this transition to power.

And more on the cabinet, including Bill Richardson potentially, Hillary Clinton, other choices for potential treasury secretary.

And a letter from Congress to the CEOs of the big three automakers in Detroit. What it says that the White House is blasting congressional leaders for.

And John McCain like you rarely see him. Our own Dana Bash has received some behind-the-scenes insight into what's going on in this, his first week back on Capitol Hill.

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

(COMMERCIAL BREAK)

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

Happening now, breaking news as far as the Verizon staff who accessed Barack Obama's cell phone records. Stand by. Some people were fired today. We're going to tell you how it happened, what's going on. Also, what was behind the Attorney General Michael Mukasey's sudden collapse during a speech last night? We've got the latest on his condition.

And Chicago feels the strain of protecting the president-elect. Some find being next door to Barack Obama's transition headquarters not necessarily good for business.

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

We're watching major developments right now involving Barack Obama's cabinet selections. The self-proclaimed agent of change could be eyeing some agents of muscular foreign policy at the same time.

Let's go back to our White House correspondent, Ed Henry. He's got new information on the national security portfolio.

Which is beginning to take shape apparently, Ed.

HENRY: That's right, Wolf. And what's fascinating is it's not just becoming a team of rivals, it's becoming a team of high-powered personalities that might be hard to manage.

(BEGIN VIDEOTAPE)

HENRY (voice-over): A power player on the world stage, a retired four-star general, and maybe President Bush's defense secretary, too. Even a former aide to Donald Rumsfeld is impressed with the national security team that President-elect Barack Obama seems to be putting together.

RAY DUBOIS, CSIS: You would have to conclude these are as credible and competent a set of individuals as you will get.

HENRY: Three transition aides tell CNN Senator Hillary Clinton. who supported the war in Iraq, is in line to be nominated as secretary of state. Two sources close to the transition reveal retired Marine General Jim Jones, who also backed the war, is the leading choice to be national security adviser.

Picking a military man could have the fingerprints of Brent Scowcroft, a retired general himself who was national security adviser in a Republican White House and is now providing is counsel to Obama. Scowcroft is close to current Defense Secretary Robert Gates, fueling speculation the man implementing President Bush's Iraq policy may stay on board.

The talk of so many hawks in senior roles is starting to alarm anti-war Democrats who nonetheless say they have faith the president- elect himself will drive the policy.

TOM ANDREWS, WIN WITHOUT WAR: He's a very skilled guy and I think he'll make the right decision, but for us, again, the bottom line is putting in people in place that are going to actually fulfill the mission, step one, get us out of Iraq within 16 months. HENRY: There's also the question of whether a so-called "team of rivals" can get combustible. Remember the first years of the Bush administration?

DUBOIS: These are individuals not lacking in ego. And it will be important that President Obama be able to manage those egos in a way that not only does the policy that he espouses get appropriately formulated and articulated, but most importantly, implemented.

(END VIDEOTAPE)

HENRY: Now senior Obama aides say they're confident they can keep all these high strung people together. And as for liberal concerns about the war, a senior Obama aide told meet the president- elect's views on the war in Iraq have not changed and will not change -- Wolf.

BLITZER: Ed Henry, stand by in Chicago. Let's get a little bit more now on what a State Department under Hillary Clinton might look like. Our State Department correspondent Zain Verjee is here in THE SITUATION ROOM.

What are your experts, your sources saying about Hillary Clinton as the next secretary of state?

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Well, you know, Wolf, she has star power. She's a real celebrity around the world. Many of them around the world, world leaders looking at her, they know her from her travels as first lady and they say that she does have the international credibility and she has been able to be drill down on some issues that were important to her as first lady as well as when she traveled as a senator. So they think it's good.

BLITZER: So what do they think? How effective can she really be?

VERJEE: Well, that's really a critical question because the only way she can be really effective as a secretary of state is if the president has her back, if there is a close relationship between her and Barack Obama. If she walks into a room with world leaders and people know that there is not that close relationship, she's not going to be taken that seriously.

No one's going to sit up and know that they're talking through her to the president. So that's a really critical relationship.

BLITZER: And I remember when she was the first lady during her husband's administration, she traveled all over the world speaking out forcefully on women's issues. And I assume that's going to be a major issue for her as secretary of state.

VERJEE: Yes, that was something that was really close to her heart and if past performance is any indication, women's issues are definitely going to be a big part of what Hillary Clinton may champion.

(BEGIN VIDEOTAPE)

SEN. HILLARY CLINTON (D-NY), SECRETARY OF STATE-DESIGNATE: My mother was born before women could vote. My daughter got to vote for her mother for president.

VERJEE (voice-over): Hillary Clinton has championed women's rights.

CLINTON: A woman who risked her life to bring slaves to freedom along the Underground Railroad. On that path to freedom, Harriet Tubman had one piece of advice, if you hear the dogs, keep going. If you see the torches in the woods, keep going.

VERJEE: She kept going as she ran for president, and will likely keep going if she returns to the international stage.

CLINTON: We weren't able to shatter that highest, hardest glass ceiling this time, thanks to you, it has got about 18 million cracks in it.

VERJEE: As first lady, she visited 82 countries. Her critics charge she claims too much foreign policy benefit from those trips, was never an inside player. But she did move past her ceremonial duties, meeting with women's groups and challenging the repression of women, most memorably her supporters say, in China in 1995.

CLINTON: It is a violation of human rights when women are denied the right to plan their own families. And that includes being forced to have abortions or being sterilized against their will.

VERJEE: The same women's empowerment message in her book "It Takes a Village." If she does become secretary of state, she would have to walk a fine line in countries like Saudi Arabia, a key U.S. ally, whose record on women's rights has come under fire.

During the presidential primary campaign, she rejected suggestions gender would hold her back in countries that don't take women seriously.

CLINTON: I have had many high level meetings with presidents and prime ministers in Iraq, Afghanistan, Kuwait, Pakistan, and many other countries. I believe that there isn't much doubt in anyone's mind that I can be taken seriously.

(END VIDEOTAPE)

VERJEE: Present and past secretaries of state Condoleezza Rice and Madeleine Albright have themselves shattered glass ceilings as women. They promoted women's rights around the world, really laying the groundwork that Hillary Clinton could build on.

BLITZER: Could be an exciting period ahead, as we all know. All right. Thanks very much, Zain Verjee reporting. Zain is going to be back with us.

He spent the past two years greeted by cheering crowds. Now it's much different life for Senator John McCain. Our own Dana Bash is following what he's doing in the Senate right now. She has more on what comes next.

And could there be a new role for Bill Clinton? Some even suggesting, alluding the possibility, would he be good to replace Hillary Clinton in the Senate? Would it be Senator Bill Clinton? Our "Strategy Session" with Paul Begala and Leslie Sanchez, they are standing by to weigh in right after this.

(COMMERCIAL BREAK)

BLITZER: A few weeks ago, Republican John McCain was just steps away from the presidency, potentially, but now he's back at work at his regular job. Our congressional correspondent Dana Bash is joining us now.

Dana, you covered him on the campaign. Now you're covering him in the Senate. Very different.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Very different, indeed. I got off an elevator the other day and bumped into him with just one aide. And it was definitely surreal, Wolf. But you know, a good example of the differences, there was a group of school kids who saw him and they starred cheering.

It was really evident that now that he is coming back as former Republican nominee, it is impossible for him to return to the Senate as just another senator, but watching him this week, it's clear that's exactly the image he's trying to project.

(BEGIN VIDEOTAPE)

BASH (voice-over): John McCain, racing through a marbled corridor in Congress, no aides, no security, no interest in talking to reporters right now.

SEN. JOHN MCCAIN (R-AZ), FMR. PRESIDENTIAL CANDIDATE: Thank you very much. I don't have any comment today. And I thank you very much for asking. Thank you. It's good to see you.

BASH: He ducks into his quiet Senate office, a world away from this.

UNIDENTIFIED MALE: The next president of the United States, John McCain.

BASH: Some half a dozen McCain confidantes we talked to insist he is determined not to dwell on what might have been as he tries to figure out how to be most effective back at his day job.

Steve Duprey was McCain's constant campaign companion.

UNIDENTIFIED MALE: He's bending over backwards to re-enter into the Senate and not come in like some former nominees have and sort of act like because they were the nominee, they're now sort of king of the hill. BASH: McCain did keep a stunningly low profile during his first week back. He attended Senate Republican meetings and lingered a bit after a classified briefing about Iraq. But he was absent from the debate over an auto bailout and not on the Senate floor to bid farewell to colleagues leaving Congress.

Yet, McCain was busy behind the scenes. Friends came by to check in. He met privately with the Spanish foreign minister, CNN was granted exclusive access.

MCCAIN: As you know, I met with the president-elect and we had a very good conversation. We'll work together.

BASH: As a presidential candidate, McCain liked to joke about his rocky relationships on Capitol Hill.

MCCAIN: My friends, I was not elected Miss Congeniality in the United States Congress again this year, I'm sorry to say.

(CHEERING AND APPLAUSE)

BASH: The GOP leader McCain often sparred with insists things are different now.

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: He is our most prominent senator, without a question. He is very popular in our conference.

BASH: That may be, but as McCain readjusts, he seems most comfortable doing it solo.

(END VIDEOTAPE)

BASH: Now, McCain's confidantes do insist that he means it when he says that he is looking forward to working with Barack Obama in areas where they have common ground, like climate change. And he is going to be here, Wolf, for a while to try at least if he has it this way.

They made clear inside the McCain camp this week that he intends to run for yet another term in the Senate. He's -- at the end of his term, he will have served 24 years, and in 2010, he wants to run for a fifth term -- Wolf.

BLITZER: All right. Dana, thanks very much. A behind-the- scenes look with Senator John McCain.

If Hillary Clinton becomes the next secretary of state, who will replace her in the Senate? You might not believe some of the names being tossed around already. That's coming up in our "Strategy Session."

And will the auto industry collapse or get $25 billion taxpayer money to stay afloat? We'll have the latest from Capitol Hill right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: So the Obama cabinet right now appears to be taking shape. The nominations being floated, Senator Hillary Clinton as secretary of state, Governor Bill Richardson as commerce secretary, other names out there as well, including Tim Geithner as the next secretary of the treasury. Joining us now in our "Strategy Session" are two CNN political contributors, Democratic strategist Paul Begala and Republican strategist Leslie Sanchez.

Is it too early, Paul -- it's never too early for us to speculate, if Hillary Clinton becomes secretary of state, which now looks increasingly likely, who might the governor, David Paterson, name to replace her and represent New York from -- in the Senate?

PAUL BEGALA, CNN POLITICAL CONTRIBUTOR: Yes, you know, the New York Democrats have a surprisingly strong bench. I mean, when you stop and think about it, there's a lot of very able members of Congress, Nydia Velasquez is a House member who is the chair of the Small Business Committee, would have a good, I think, economic message in that state.

Or Gregory Meeks, Kirsten Gillibrand, these are two rising stars in the congressional delegation there in New York. Nita Lowy, who is actually Hillary's home congresswoman.

BLITZER: What about Bill Clinton?

BEGALA: Well, I don't think you're going to see Bill Clinton in there. If you were to ask him, Wolf, he would say, you know, somebody has got to earn a living in this family. But other famous names, Bobby Kennedy and Andrew Cuomo, two of the most impressive people I know, the new generation of Democrats from long traditions of public service.

Maybe Tom Suozzi, who our viewers may not know. But he's the Nassau County executive, kind of a Republican part of New York, and yet a very popular Democrat there.

BLITZER: And Caroline Kennedy's name has been mentioned. And there's going to be pressure on the governor to name a woman to replace a woman. All right. Let's leave that for a moment.

Leslie, Bill Richardson, the governor of New Mexico, I'm sure he wanted to be secretary of state. But now there are suggestions he's going to be the secretary of commerce. What do you think?

LESLIE SANCHEZ, CNN POLITICAL CONTRIBUTOR: Well, I think it's an important step. I think it shows more about Obama than it does Richardson in terms of building a very strong, capable bench. What is interesting, there are two parts.

One, he has a tremendous amount of global experience and an international network that could show he really wants to jump start the global economy. I think it reinforces that. It's a very positive message. One the second side, he did a tremendous amount to bring in the Hispanic vote, seven states were affected with respect to Hispanics. And it could signal a strong retooling and a focus on the Western Hemisphere and Latin America. And I think that's what a lot of people hope for.

BLITZER: In Minnesota, Paul, that race seems to be getting tighter and tighter. Millions of ballots cast. And right now, the difference between the incumbent Republican Norm Coleman and Al Franken, what, only a little bit more than 100 votes. I know you were just out there. What do you see happening?

BEGALA: It is remarkable. You know, 2.9 million Minnesotans voted on Election Day. And the difference was something like 206 when they counted all the votes. Now they're doing this recount, it seems to be going at a very orderly process. I have to say, the Democrats are a little more optimistic than the Republicans if you judge by their public pronouncements.

Franken seems to be gaining each time they go through another county. It will take probably until December 16th, Wolf, before they get all of these ballots recounted and in many cases counted for the first time. So this is going to be closer to Christmas than Thanksgiving that we'll know.

But I Democrats in Minnesota are very, very happy right now, they're optimistic.

BLITZER: What do you think, Leslie?

SANCHEZ: You know, we're hearing it on both sides. I think they're being optimistically cautious on the Republican side and they're going to make sure that any of these provisional votes or ballots are accurate. I think they just want to look at it very skeptically but be very sure.

BLITZER: Do you have confidence in the system, Leslie?

SANCHEZ: I don't know if anybody has confidence in any system, Wolf. I mean, let's tell what people really think. I think a lot of people suspect foul play, so they just want to make sure it's measured, accurate, and instills faith that the system is correct.

BEGALA: I will say, Wolf, in that state, they appoint a canvassing board. And there are four, I believe, judges on it. The Coleman campaign, the Republican incumbent senator, has praised that board, as had the Franken campaign, the Democrat, so this is not Florida or my home state of Texas where sometimes...

SANCHEZ: Right.

BEGALA: ... we have these Texas shenanigans back in the LBJ days. But no, this is -- both sides, I think, have admirably praised the canvassing board that's overseeing this. And so, so far, so good.

BLITZER: If the Democrats were to win in Minnesota, Leslie, that would bring them up to 59, 59 in the Senate, Alaska going their way, as you know. Georgia probably for the Democrats much more problematic right now, Saxby Chambliss seems to have an advantage over the Democratic challenger Jim Martin.

SANCHEZ: Truthfully, Wolf, that's the tremendous amount of concern that you have on the Republican side. But I think until these votes are counted, they're waiting. Everybody is lobbying. They said, you know, they're going to look at what constitutes this Democratic coalition and see who Republicans can work with.

BLITZER: What about it, Georgia? I know you -- that's a state you've done some work in over the years, Paul?

BEGALA: You know, I think it's tough for the Democrat. Even Barack Obama, who is a great candidate, could not win Georgia. And even with Obama's help, Martin couldn't knock off Chambliss in the first round. But it could be, could be that it's this time the Republicans who are a little depressed.

You know, this has not been a very good time for Republicans. It's a very heady and exciting time for Democrats. The Democrats are pushing early voting again. It looks to be encouraging to them. And this is an interesting sign, the president-elect has made an ad, a radio ad for Jim Martin, the Democrat there. So he's putting his political capital on the line to help him even as he's busy trying to put his government together.

BLITZER: We'll watch all of these races, guys. Thanks very much. Sorry to be cutting you off, Leslie and Paul. Appreciate it.

BEGALA: Thanks, Wolf.

BLITZER: A late development from Capitol Hill right now, a letter from Congress to the big three automakers in Detroit. What it says that had the White House blasting congressional leaders.

And breaking news on the Verizon staff who accessed Barack Obama's cell phone records. You're going to find out how the security breach happened and what's next.

And the attorney general collapses at a public event. Our own Dr. Sanjay Gupta, a neurosurgeon, breaks it down for all of us. He's going to show us what may have really happened. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: The letter from Democratic leaders is on the way to the big three automakers outlining Congress's demand if auto -- the auto companies are willing to meet them. They're telling the automakers that Congress might visit the auto industry's request for a big bailout, but they are going to have to jump through some hoops to make it happen. Let's go to Kate Bolduan right now. She's working this story for us.

Kate, what's next? KATE BOLDUAN, CNN CORRESPONDENT: Well, here we go, Wolf. Well, following on their call for a detailed business plan, House speaker Nancy Pelosi and Senate Majority Leader Harry Reid, they've sent this letter to the auto executives, laying out some of the answers that they're looking for, which include how much money they have and how much they need to continue operations, and also how will a loan insure long-term viability?

They're also looking for them to provide specific measures to safeguard taxpayers' money and also present a plan that will address health care and pension obligations of their workers. Just some of the things that they're looking for. Listen here to a little bit from House Speaker Nancy Pelosi today.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), SPEAKER: I hope that our friends in Detroit and auto country will consider this good news, because it is. It's another opportunity for them to say to the American people, give us your money because we will put it to good use.

(END VIDEO CLIP)

BOLDUAN: Meanwhile, the White House strongly had rebuked Congress for leaving town without doing something for automakers. White House spokesperson Dana Perino accused Democrats of "mindless opposition" and ridiculed the idea of Congress being in the position to decide whether the big three deserve a loan saying: "How in the world are 535 members of Congress going to determine viability of a company? It's mind boggling. They can't even get together to pass a Mother's Day resolution."

Some strong words. Now a Democratic aide fired back saying, they're not asking anything more than a bank would of any business seeking a loan -- Wolf.

BLITZER: And, Kate, you're getting some new information on those corporate jets that these big three automakers have been using to take their executives around?

BOLDUAN: Yes, one new development here, Wolf. CNN has confirmed that General Motors in September got rid of two of their jets for cost-cutting measures, they say. And they're now in the process of cutting out two additional jets. Now, they insist that this is a cost-cutting measure, saying that it has nothing to do with the outcry that came after their CEO and two others came to Washington on those corporate jets.

BLITZER: Kate Bolduan on Capitol Hill, watching the story.

Let's go back to Jack, he has got the "Cafferty File" -- Jack.

CAFFERTY: What should the automakers do to agree to in order to secure this government aid? Chuck in Wisconsin writes: "They ought to immediately agree to meet 35 mile a gallon CAFE standards within three years, 50 miles per gallon in 10 years. They must agree to pay back the loans with interest, eliminate all corporate bonuses. I'm not getting one this year. Why should they?"

Charles in Michigan: "First they have to show they can market their product to the general public. These three yo-yos have shown they don't have a clue by flying into Washington, D.C., on three separate corporate jets. Start with getting three new CEOs."

Rick in Miami writes: "Send a memo to the union that the new rate of pay to tighten a nut on an assembly line is $8 an hour. It has mistakenly been set at $30 an hour and above for years. They would still be allowed to keep the fortunes they have built up through the years by being insanely overpaid, but starting tomorrow, it's over.

"The guy watering the flowers at the Wal-Mart garden center works just as long and hard and I'm sure he doesn't hold out for $100,000 a year. If the delusional union members don't like it, let them take their high school diplomas and dubious skills elsewhere. And good luck."

M.J.: "The question should be, can we afford millions more on unemployment?"

Susie in Tucson: "They shouldn't do anything. They should declare bankruptcy, work on building a smart industry with eco- friendly economical vehicles. While I have sympathy for the loss of jobs, surely this didn't happen just last week. It has been coming for years and nobody has done anything to change the direction of the industry. Sorry, but tough love is the best answer."

And Charlie in New Mexico says: "Given the present executive corporate culture and the unions' cost, I seriously doubt if anything will keep the big three afloat for very long. In the not-too-distant future, I fully expect my 2005 Chevy to be every bit as much of an orphan as my 1937 Packard."

If you didn't see your e-mail here, you can go to my blog, cnn.com/cafferty file, look for yours there -- Wolf.

BLITZER: Jack, thank you.

And to our viewers, you're in THE SITUATION ROOM. Happening now, breaking news. Barack Obama filling key roles in his upcoming administration. There are major developments in the search for the secretaries of the treasury, commerce, and state also.

An alarming breach of privacy involving the president-elect and his cell phone records, who was looking at them without permission and why?

And Al Gore is speaking exclusively to CNN about the historic election. He also talks about the outgoing bush administration, calling some aspects of it, and I'm quoting now, "unhealthy for the country."

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