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Hillary Clinton Nominated as Secretary of State; How Baby Moshe Escaped Mumbai Attacks

Aired December 01, 2008 - 18:00   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.
President-elect Barack Obama says it's no accident that he tapped strong personalities for important Cabinet posts, including the just- announced members of his new national security team. Few can compete with Hillary Clinton in the ranks of big-name nominees ready and willing to go toe-to-toe with her future boss.

Our senior political correspondent, Candy Crowley, is covering the transition to power in Chicago. She's watching all of this going on.

It says a lot about this new president, his appointments last week on the economic front and today on the national security front.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Absolutely, it does. When you look at what really is a group of marquis names at least inside the beltway and those like Hillary Clinton outside the beltway, this is the mark of a president who seems quite confident as we approach the Obama era.

(BEGIN VIDEOTAPE)

CROWLEY (voice-over): It is a powerhouse collection of high intellect, diverse opinion and big ego. Exactly.

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: I think that's how the best decisions are made. One of the dangers in a White House based on my reading of history is that you get wrapped up in group think.

CROWLEY: Not a wallflower in the bunch. Nominated to be secretary of state, Hillary Clinton will be the public face of U.S. diplomacy. She promised to stand up whenever, wherever is needed.

SEN. HILLARY CLINTON (D-NY), SECRETARY OF STATE NOMINEE: After all, New Yorkers aren't afraid to speak their minds and do so in every language.

CROWLEY: Her nomination is a turn of events that would have been jaw dropping nine months ago when she said his foreign policy experience amounted to one speech, and he suggested hers amounted to having tea with ambassadors. Bygones.

OBAMA: This is fun for the press to try to stir up whatever quotes were generated during the course of the campaign.

CROWLEY: Clinton is part of the pragmatic centrist core of Obama's team, a group often more hawkish than Obama has seemed. It includes current Defense Secretary Robert Gates, with close ties to the Bush family. The man in charge of prosecuting the war now will help end it.

OBAMA: I believe that will 16 months is the right time frame. But as I have said consistently, I will listen to the recommendations of my commanders.

CROWLEY: Retired Marine General Jim Jones, whose position as national security adviser will put him inside the West Wing of the White House, closest to the ear of the president. Jones, a man who once said timetables for withdrawal from Iraq are not in the U.S. interests. Also nominated, Eric Holder, a top Justice Department official in the Clinton years who, if confirmed, would be the first African-American attorney general. Susan Rice, another Clinton administration official who signed up with the Obama campaign, now nominated to be the U.S. ambassador to the U. N.

Governor and former U.S. attorney in Arizona, Janet Napolitano, to head homeland security. She is the only one of the six who is not from the Washington or military establishment. They're old hands to advise a young president who not so long ago railed against the ways of Washington.

OBAMA: I will be responsible for the vision that this team carries out, and I expect them to implement it.

(END VIDEOTAPE)

CROWLEY: They are confident decisions, yes, but not without some risk. This could all work as brilliantly as Obama is planning, or it could eventually be that all of those outsized personalities can't fit into one room -- Wolf.

BLITZER: We will be watching very closely, Candy. Thank you.

The president-elect publicly offered his condolences today for the victims of the terror attacks in India and he promised that the United States would stand with India during this -- quote -- "dark time." He refused to say whether India might be justified in pursuing terrorists inside Pakistan. Listen.

(BEGIN VIDEO CLIP)

OBAMA: I think that sovereign nations, obviously, have a right to protect themselves. Beyond that, I don't want to comment on the specific situation that's taking place in South Asia right now.

(END VIDEO CLIP)

BLITZER: All right, let's get the latest on the investigation into the Mumbai massacre right now.

Our senior international correspondent, Matthew Chance, is on the scene for us.

What are we learning so far from authorities, Matthew? What are they saying?

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, the investigation is still very much, Wolf, in its early stages, but all the evidence that's been gathered so far according to the Indian authorities appears to point in the direction of Pakistan.

The one militant that the Indian security forces took alive has apparently, according to reports, said that he is a Pakistani national who was trained in Pakistan as part of a militant group there.

Pakistan, for its part, at least the government in Islamabad, has categorically denied any knowledge, any involvement in these attacks on India's commercial capital. Nevertheless, the government in Delhi, the Indians, have summoned Pakistan's top envoy, the high commissioner, and demanded that Pakistan take strong action against the groups that carried out this attack, again, Pakistan denying it, saying that they will cooperate with the Indians however they can to bring those responsible for this and for organizing these attacks on Mumbai to justice.

Meanwhile, here in India proper, Indians are blaming to some extent the central authorities for failing to intervene, for failing to have enough intelligence to stop these attacks taking place, that anger being compounded by newspaper reports here in the country suggesting that the intelligence agencies here had tipoffs that a spectacular like this would have happened up to a year ago.

BLITZER: All right, Matthew Chance.

Matthew chance is in Mumbai with the latest for us.

And just to be precise, authorities in India are blaming elements inside Pakistan, terrorist elements, specifically, but they're not blaming the Pakistani government, at least not yet, but the tensions clearly escalating between these two nuclear-powered rivals.

Britain lost the crown jewel of its empire, the subcontinent in South Asia, back in 1947, when two new nations were established, India, which is mostly Hindu, wedged between Muslim Pakistan and East Pakistan, which decades later gained independence as Bangladesh.

In the north lies the territory of Kashmir. Mostly Muslim, it had a Hindu ruler, though, who in 1947 sided with India. That immediately led to the first India-Pakistan war, which ended in a cease-fire. A second war was fought over Kashmir back in 1965. Since then, there have been skirmishes and showdowns along the cease-fire line of control, and the region has been plagued by bloody acts of terrorism.

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

JACK CAFFERTY, CNN ANCHOR: Wolf, it's official now. We're in a recession and we have been in one since December of last year, according to the National Bureau of Economic Research. That's their job, tell us when we're in a recession.

Any American could have told you we have been in a recession for the past year, but the government agency that's supposed to tell us these things just got around to it today. Government is great.

According to a new analysis of documented conducted by the Associated Press, the government was warned of the coming financial crisis and mortgage meltdown years before it happened. But the Bush administration ignored the warnings under aggressive lobbying and promises of stability that came from some of the same financial institutions that ultimately failed.

"Expect fallout, expect foreclosures, expect horror stories," one California mortgage lender wrote to U.S. regulators in January of 2006, almost three years ago. Some bank regulators proposed capping risky mortgages, providing clearer explanations of what mortgage- backed securities are.

But the regulators delayed putting any new rules in place for the mortgage industry until later that year. And, by then, it was too late. The meltdown was well under way.

The Bush administration has always been about trusting market forces and avoiding government intervention in the economy. The Associated Press points out that that philosophy ironically has ushered in the most massive government intervention since the 1930s. You betcha.

Here's the question. What does it mean that the White House and Congress failed to act earlier on warnings about the mortgage meltdown?

Go to CNN.com/caffertyfile and post a comment on my blog -- Wolf.

BLITZER: It means it's costing us taxpayers hundreds of billions of dollars right now.

CAFFERTY: Yes. And the bad guys who caused all this made tons of money and they're walking away rich while we bail out their banks and their -- and their financial institutions. Ain't government grand?

BLITZER: Yes. All right. I know. It certainly is.

All right, Jack, thank you.

Straight ahead: the child who survived a pure hell, but whose parents unfortunately did not. We're following the fate of that little boy whose parents were murdered by the terrorists in India.

President Bush does something he rarely does. He's talking about disappointment during his term. You're going to be hearing his new admissions. And can Barack Obama work smoothly with very strong and opinionated advisers? Listen to him explain his national security team picks, and you decide.

(BEGIN VIDEO CLIP)

OBAMA: I assembled this team because I'm a strong believer in strong personalities and strong opinions. I think that's how the best decisions are made.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: Some people are hailing them as brilliant picks. Others are wondering how they will get along in the end.

You just heard Barack Obama unveiling his national security team. We want to show you more of what he said today about Hillary Clinton in particular.

(BEGIN VIDEO CLIP)

OBAMA: I have known Hillary Clinton as a friend, a colleague, a source of counsel, and a tough campaign opponent. She possesses an extraordinary intelligence and a remarkable work ethic. I am proud that she will be our next secretary of state. She's an American of tremendous stature who will have my complete confidence, who know many of the world's leaders, who will command respect in every capital, and who will clearly have the ability to advance our interests around the world.

Hillary's appointment is a sign to friend and foe of the seriousness of my commitment to renew American diplomacy and restore our alliances. There's much to do from preventing the spread of nuclear weapons to Iran and North Korea, to seeking a lasting peace between Israel and the Palestinians, to strengthening international institutions.

I have no doubt that Hillary Clinton is the right person to lead our State Department and to work with me in tackling this ambitious foreign policy agenda.

CLINTON: By electing Barack Obama our next president, the American people have demanded not just a new direction at home but a new effort to renew America's standing in the world as a force for positive change. We know our security, our values, and our interests cannot be protected and advanced by force alone nor, indeed, by Americans.

We must pursue vigorous diplomacy using all the tools we can muster to build a future with more partners and fewer adversaries, more opportunities and fewer dangers for all who seek freedom, peace, and prosperity.

America is a place founded on the idea that everyone should have the right to live up to his or her God-given potential. And it is that same ideal that must guide America's purpose in the world today. And while we are determined to defend our freedoms and liberties at all costs, we also reach out to the world again seeking common cause and higher ground.

And so I believe the best way to continue serving my country is to join President-elect Obama, Vice President-elect Biden, the leaders here, and the dedicated public servants of the State Department on behalf of our nation at this defining moment.

(END VIDEO CLIP)

BLITZER: Though Barack Obama will certainly be surrounded by very strong and opinionated advisers, he's making it abundantly clear he's in charge.

(BEGIN VIDEO CLIP)

QUESTION: You've selected a number of high profile people for your national secure team. How can you ensure that the staff that you are assembling is going to be a smoothly- functioning team of rivals and not a clash of rivals?

OBAMA: Well, I think you heard Joe mention the fact that many of the people who are standing beside me are people who have worked together before, who have the utmost respect for each other. These are outstanding public servants and outstanding in their various fields of endeavor.

They would not have agreed to join my administration, and I would not have asked them to be part of this administration unless we shared a core vision of what's needed to keep the American people safe and to assure prosperity here at home and peace abroad.

I think all of us here share the belief that we have to maintain the strongest military on the planet, that we have to support our troops and make sure that they are properly trained, properly equipped, that they are provided with a mission that allows them to succeed. All of us here also agree that the strength of our military has to be combined with the wisdom and force of our diplomacy and that we are going to be committed to rebuilding and strengthening alliances around the world to advance American interests and American security.

And so in discussions with this entire team, what I am excited about is a consensus not only among those of us standing here today, but I think cross a broad section of the American people, that now is the time for us to regain American leadership in all its dimensions. And I am very confident that each of these individuals are not going to be leaving the outstanding work that they are currently doing if they weren't convinced that they could work as an effective team.

One last point I will make. I assembled this team because I'm a strong believer in strong personalities and strong opinions. I think that's how the best decisions are made. One of the dangers in the White House, based on my reading of history, is that you get wrapped up in group think and everybody agrees with everything and there's no discussion and there are no dissenting views. So I'm going to be welcoming a vigorous debate inside the White House.

But understand I will be setting policy as president. I will be responsible for the vision that this team carries out, and I expect them to implement that vision once decisions are made. So as Harry Truman said, the buck will stop with me. And nobody who's standing here, I think, would have agreed to join this administration unless they had confidence that, in fact, that vision was one that would help secure the American people and our interests.

(END VIDEO CLIP)

BLITZER: Barack Obama speaking earlier in Chicago.

Coming up: He was saved by his nanny, but left an orphan by terrorists. How baby Moshe, son a New York rabbi, survived the Mumbai attack that took the lives of both his parents.

And Barack Obama taps a team of rivals to defend America and make the country's case around the world. Can a retired four-star U.S. Marine Corps general keep them all on the same page? He speaks exclusively with our Jamie McIntyre today.

And Barack Obama has praise for at least one part of President Bush's foreign policy and vows to follow his lead after January 20. We will tell you what that is right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

(NEWS BREAK)

BLITZER: Barack Obama's facing some questions about his choice of Hillary Clinton as the next secretary of state, given his past criticism of her.

(BEGIN VIDEO CLIP)

QUESTION: I'm wondering whether you can talk about the evolution of your views of her credentials since the spring.

OBAMA: Well, I mean, I think -- this is fun for the press to try to stir up whatever quotes were generated during the course of the campaign.

(END VIDEO CLIP)

BLITZER: Is it much to-do about nothing, or will Clinton and Obama find themselves in disagreement? Stay tuned. We're going to assess.

And did the president-elect offer a veiled shot at the president, George W. Bush? The best political team on television is standing by.

And a toddler in tears, crying out for his mother, the mother he lost in the Mumbai massacre. We have new information about the child's remarkable escape with his nanny.

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

(COMMERCIAL BREAK)

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

Happening now: Just months ago, they were questioning each other's credentials. Now they're working together, Barack Obama and Hillary Clinton then and now. We will talk about that and more with the best political team on television.

Also, he's a familiar face at the Pentagon and now Barack Obama's pick to become the next national security adviser at the White House.

Our Jamie McIntyre has the first interview with General Jim Jones.

And a heart-wrenching story of survival -- how this toddler escaped from the Mumbai massacre, only to be left an orphan.

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

Barack Obama today named a national security team of rivals, but the president-elect is asking a former NATO commander to keep these personalities on track, naming retired Marine Corps General Jim Jones as his national security adviser.

Our senior Pentagon correspondent, Jamie McIntyre, has known Jones, covered him for many years.

And you had a chance to speak with him today as well, Jamie.

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: That's right, Wolf.

If you look at General Jones' public statements in the last year or so, you might think he's at odds with president-elect Barack Obama. But I talked to Jones today. And he insists that's not the case.

(BEGIN VIDEOTAPE)

MCINTYRE: Just over a year ago, under questioning from Barack Obama's future Republican rival, retired Marine General Jim Jones seemed clearly uncomfortable with an Obama-style Iraq withdrawal program.

GEN. JIM JONES (RET), NATIONAL SECURITY ADVISER-DESIGNATE: I think deadlines can work against us. And I think a deadline of this magnitude would be against our national interests.

MCINTYRE: But in a CNN interview, his first since being named Obama's national security adviser, Jones says, a lot has changed in the past 14 months.

JONES: The new SOFA agreements give us a pathway to -- to work in. And, so, I don't know of anything that would put us at odds. I think quite the contrary. MCINTYRE: Jones has always been a clear-eyed military commander. During his final inspection tour of Afghanistan in 2006, he warned of NATO's weakening resolve, and last year, recommended a pullback of U.S. forces in Iraq that mirrors the plan adopted by the Iraqi parliament.

Jones was never an enthusiastic supporter of the Iraq invasion. He warned fellow Marine Peter Pace privately it could be a debacle and advised Pace, as Joint Chiefs chairman, not to be a parrot on the shoulder of the Defense secretary, according to Bob Woodward's book, "State of Denial."

(on camera): Woodward also wrote that you -- that you consi -- that you thought to yourself, maybe you should resign in protest. Is that true?

JONES: We all have bad days. I mean there hasn't been a day in the Marine Corps -- I remember my first thought of resignation was in Vietnam. And I said why am I doing this? You know, you have bad days.

MCINTYRE (voice-over): But Jones tells CNN he's eager to serve again, as the man in charge of making sure two strong players, Hillary Clinton and Robert Gates, stay on the same page as their boss, Barack Obama.

JONES: He's looking for teamwork. He's looking for a consensus of opinions, but also diversity, if it's necessary. And at the end of the day, with major issues, he'll make the decision and everybody will salute smartly and carry it out.

(END VIDEOTAPE)

MCINTYRE: Barack Obama said today that he's a strong believer in strong personalities and strong opinions. Well, Wolf, he may have also found a strong referee in the form of former General Jim Jones.

BLITZER: All right. Jamie, thank you.

Jamie McIntyre watching the story.

A young survivor of the terror attacks in India has just arrived in Israel, along with the nanny who saved him and the bodies of his parents have just arrived in Israel, as well. Before leaving Mumbai, 2-year-old Moshe Holtzberg attended a memorial for his parents and wailed for his mother. It's difficult to listen to this, but he kept screaming "Ema! Ema!," which is mother in Hebrew.

This hour, we're also learning more about his remarkable escape from that attack on the Jewish center in Mumbai.

CNN's Drew Griffin has been getting these incredible details for us. And this heroic nanny really saved his life.

DREW GRIFFIN, CNN SPECIAL INVESTIGATIONS UNIT: Yes. When you think about it, Wolf, a nanny, untrained in any of this -- almost certainly the first time she's ever been under any kind of fire. We're being told that it is the Indian nanny who literally faced down these terrorists -- almost daring them to kill her, as she ran from that city's Jewish house with that baby in her arms.

(BEGIN VIDEOTAPE)

GRIFFIN (voice-over): It was moments after the attack Wednesday, the Indian nanny, Sandra Samuel, clutching the child who moments earlier had become an orphan. Two-year-old Moshe Holtzberg, crying but unhurt, was apparently overlooked when gunmen stormed the house, killing his parents, Rabbi Gavriel Holtzberg and his mother, Rivka and four others.

According to the spokesman for the child's great uncle, it was the quick thinking nanny in the moments of the attack who acted to save herself then the child.

ROBERT KATZ, EXECUTIVE DIRECTOR & V.P. MIGDAL OHR: As the siege upon the Chabad house began, the nanny locked all the doors and -- when she heard the commotion, and went to hide. They broke into the house. And she heard them running upstairs. And she heard Mrs. Hertz -- Mrs. Holtzberg, Rivka, screaming, "Sandra! Sandra! Help, Sandra!" GRIFFIN: The gunmen reportedly were going room to room, searching for targets. Samuel unlocked her door and according to Katz, dared the terrorists to stop her.

KATZ: Sandra the nanny came out of her hiding place, ran upstairs right away to where the Rabbi and Mrs. Holtzberg were and them shot dead in cold blood. The baby was standing there screaming hysterical, crying. And she literally picked him up and made a dash for the exits -- almost daring the terrorists to shoot her while carrying the baby.

GRIFFIN: With both his parents gone, Moshe is now being cared for by his maternal grandparents. But it is the great uncle who is expected to provide for his future. Moshe Holtzberg is the grand nephew of Rabbit Yitzhak Grossman, founder of the Migdal Ohr Orphanage -- said to be the largest Jewish orphanage in the world. Seven thousand children live on the orphanage's 100-acre compound in Northern Israel. Now, tragically, so, too, will Israel's newest orphan.

(END VIDEOTAPE)

GRIFFIN: And, Wolf, Rabbi Grossman was expected to meet that child and the nanny at the airport, where a short ceremony was planned. The funerals will take place in Israel -- later today in Israel.

And, Wolf, we're learning that the nanny will be granted some sort of visa or temporary stay in Israel so that the nanny can be with this 2-year-old during this tragic transition period in that child's life.

BLITZER: What a heartbreaking story this is. Drew thank you very much for sharing it with us.

Barack Obama is full of praise for his attorney general nominee.

(BEGIN VIDEO CLIP)

OBAMA: Let me be clear, the attorney general serves the American people. And I have every expectation that Eric will protect our people, uphold the public trust and adhere to our constitution.

(END VIDEO CLIP)

BLITZER: But in praising Eric Holder, is the president-elect also taking a shot at the Bush administration?

And is President Bush taking a shot at fellow Republicans? He says the failure of immigration reform is one of his big disappointments. Who is he blaming for that?

The best political team on television is standing by.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: If she wants to tout her experience by having visited countries, that's fine. I don't think that Madeleine Albright would think that Hillary Clinton was the face of foreign policy during the Clinton administration.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

OBAMA: I have no doubt that Hillary Clinton is the right person to lead our State Department and to work with me in tackling this ambitious foreign policy agenda.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

CLINTON: I don't think the president should put the prestige of the presidency on the line in the first year to have meetings without preconditions with five of the worst dictators in the world.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

CLINTON: Mr. President-Elect, I am proud to join you on what will be a difficult and exciting adventure in this new century.

(END VIDEO CLIP)

BLITZER: Barack Obama and Hillary Clinton -- former rivals, now the next president and the next secretary of State of the United States. She's at the center of the all-star Obama national security team that was unveiled today. Let's talk about this and more with our senior political analyst, Gloria Borger; and our CNN political contributors Dana Milbank of "The Washington Post" and Steve Hayes of "The Weekly Standard."

What do you think? Can they get their act together and work together? There were some strains in the campaign.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: You think?

They'd better. Wolf, it's a dangerous world. Hillary Clinton is somebody that Barack Obama clearly respects and admires.

And, yes, they had their differences, but guess what? He's the boss. And he's made that very clear. And I don't think I'm naive in thinking that they clearly discussed these issues when he interviewed her for the position. And she understands he's the guy running the place.

BLITZER: What do you think, Dana?

DANA MILBANK, CNN CONTRIBUTOR, "THE WASHINGTON POST": Well, he said change was coming. I think, clearly, the change has come, first of all, to Barack Obama, as you've seen from the clips you've just played. But he's getting rave reviews for this so far. Obviously, the risk is down the road, whether this deteriorates.

But certainly everybody from Rush Limbaugh all the way to -- and the far left has been quiet about it, unexpectedly. So he's really gotten away with it.

BLITZER: It's pretty amazing, when you think about it, this team -- I haven't heard a mainstream Republican complain about it at all, because Gates is in there -- Robert Gates, the Defense secretary. General Jones is going to be the national security adviser. They seem to like it.

STEPHEN HAYES, SENIOR WRITER AT "THE WEEKLY STANDARD": Yes. I think if you're sitting there and you're a mainstream Republican, this is as good as you could have hoped for. I mean I don't think anybody is going out and celebrating. They clearly have policy differences with Barack Obama and what his administration wants to do. But given the team and given the other possibilities, I think Republicans are pretty happy.

BORGER: And General Jones is somebody who will have Barack Obama's ear. Hillary Clinton -- he can talk to Hillary Clinton. They're close. They like each other. He's also close to Bob Gates, whom Hillary Clinton is not so close to.

So he is a brilliant choice, I think, to kind of manage all of those relationships as the chief foreign policy adviser in the White House with Barack Obama.

(CROSSTALK)

BLITZER: Yes, go ahead. HAYES: And, you know, one of the things that I think will be interesting -- to have watched General Jones over these years -- is the difference between the role that he's going to play in the Obama White House and that of Condi Rice and Steve Hadley in the Bush White House. They're both regarded as relatively weak national advisers. I think that's -- that's true. I don't expect that he will play that role.

BLITZER: We did see some implied criticism from the president- elect of the Bush administration, specifically, Dana, on this -- and I'm going to play this little clip for you. Listen to this.

(BEGIN VIDEO CLIP)

OBAMA: Eric also has the combination of toughness and independence that we need at the Justice Department, because, let me be clear. The attorney general serves the American people. And I have every expectation that Eric will protect our people, uphold the public trust and adhere to our Constitution.

(END VIDEO CLIP)

BLITZER: It sounds like a polite criticism of Alberto Gonzales and the Bush Justice Department.

BORGER: You think?

(LAUGHTER)

MILBANK: Yes, I don't think there was much implied about it. That seemed like a full frontal assault. And it came from the notion that Gonzales was the White House counsel, the president's lawyer, came over to the Justice Department and seemed to think of himself as still the president's lawyer, defending the president. And he got a lot of grief for that and was ultimately pressured into resigning for that. So I think that is very much head-on, actually.

BLITZER: And the other implied criticism was when he said Hillary Clinton will restore America's diplomacy around the world.

BORGER: Right. Again, not so implied -- really, pretty -- pretty straightforward, saying we have to have a diplomacy. And -- and that's something that he has talked about an awful lot and he has said that this administration hasn't done enough of. So it's very clear there are going to be differences.

BLITZER: You know, we did hear from President Bush today. And he's being very reflective, shall we say, in these exit interviews that he's giving. And he's now saying, you know what, he wasn't prepared for war, among other things. You've seen some of the excerpts that were released by ABC News.

HAYES: Yes. It's pretty -- it's pretty amazing stuff. I mean, I think his discussion about immigration and regretting the tone of the debate. I mean, clearly, I think that was a criticism of his own party. We're going to be seeing a lot more of this. And there's an ongoing Bush Legacy Project that's been meeting in the White House...

BLITZER: And...

(LAUGHTER)

HAYES: ...really, with senior advisers -- Karl Rove. Karen Hughes has been involved, current senior Bush administration advisers. And they are looking at how to sort of roll out the president's legacy.

BLITZER: And he regrets -- he's saying, I think, that other great disappointment was not getting immigration reform done.

MILBANK: Right.

BLITZER: Who is he blaming, though, for that?

BORGER: His own party.

MILBANK: The whole country has been on a Bush Legacy Project and it's not looking very good for him. The extraordinary thing is, you know, how does he pick from among the various things to choose from?

Now he looks at immigration -- something that certainly helped to torpedo John McCain. And all of -- of all things in the now he tells us category to say that...

BLITZER: And all of us remember...

MILBANK: ...I wasn't prepared.

BLITZER: ...that news conference. It wasn't that long ago, a few years ago, when he was asked about any mistakes he might have made, he couldn't think of any.

BORGER: He couldn't remember.

BLITZER: He couldn't remember any.

(CROSSTALK)

BLITZER: A marked contrast now.

(CROSSTALK)

BORGER: But, Wolf, I think it's all going to depend on Iraq and how Iraq, in the end, turns out is going to -- is going to be the way we're going to view George W. Bush in history.

BLITZER: We'll leave it there, but we'll continue to talk tomorrow and the next day and every day after that, guys.

BORGER: You think?

BLITZER: Thanks very much.

Millions of Americans could have told you this months ago, but now it's official -- the United States economy is in recession.

Could Congress and the White House have acted sooner?

Stay with us.

We have new information for you.

(COMMERCIAL BREAK)

BLITZER: Let's check in with Lou Dobbs to see what's coming up right at the top of the hour -- Lou, what are you working on?

LOU DOBBS, CNN ANCHOR: Wolf, thank you very much.

Much more tonight on President-Elect Obama's new cabinet and his choice of Senator Clinton to be his secretary of State.

Have the president-elect and Senator Clinton resolved all their differences? We'll be talking about that and the president-elect's other cabinet choices with three top political analysts.

Also, it's official -- we're in a recession. You didn't know that, right? That recession began nearly a year ago, according to the people who make recessions official -- the National Bureau of Economic Research. The Dow Jones Industrials today plummeting nearly 700 points -- a complete sell-off on Wall Street today. Three of the country's best economic thinkers join me to tell us about this recession and the prospects of recovery.

And many local government officials are furious with Wall Street executives who took huge bonuses while their communities suffered massive losses on Wall Street. One county government in California fighting back -- targeting the personal assets of former Wall Street executives.

Join us for all of that and more at the top of the hour from an Independent perspective -- Wolf, back to you.

BLITZER: We'll see you in a few moments, Lou. Thank you.

All right, we're just getting this in to THE SITUATION ROOM right now -- confirmation that U.S. intelligence warned the government of India of a possible terrorist attack from the sea on Mumbai long before last week's massacre.

Let's go to Brian Todd for details -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, this is new information from our justice correspondent, Kelli Arena. She reports that a U.S. counter-terrorism official says the United States did pass along information to India beforehand about a potential attack by sea against Mumbai. We are told the information was passed to India at least one month before the attacks and that similar information was given to India by at least one other intelligence service. That is according to this source. Now, another counter-terrorism official, regarding another aspect of this investigation, tells CNN that the FBI team sent to Mumbai has just gotten there and has not gotten a lot of access yet. This source says the team is getting the lay of the land right now. It is unclear what the FBI team will be allowed to do. And the source said: "That is a work in progress" -- Wolf.

BLITZER: We'll stay all over this story. Brian, thank you.

Let's go back to Jack Cafferty right now for "The Cafferty File" -- Jack.

CAFFERTY: A quick clarification, Wolf. The National Bureau of Economic Research is a private group of economists, not a government agency. But the government relies on them for them to tell them when we're officially in a recession, which they did today.

Our question this hour is: What does it mean that the White House and Congress failed to act earlier on warnings about the growing mortgage meltdown?

Mike writes: "The failure on the part of Congress and the White House to act in the best interests of the American public demonstrates they are not our representatives, but are instead beholden to a set of interests other than their voting constituents.

Marshall writes: "Your assumption the White House failed to act on the crisis warnings does not hold up to scrutiny. There's plenty of video clips of Congressional hearings during which John McCain and others asked Congress to act on the impending mortgage crisis. To blame this on Republicans alone is as dishonest as your assumption is corrupt."

I said the White House and Congress, Marshall. Try to follow along here. We don't do pictures with this stuff.

Rich in San Clemente, California: "The Bush administration's operating mode put mine owners and lobbyists in charge of mine safety, put a college girl in charge of hiring at the Justice Department, put oil execs in charge of energy policy, put contractors in charge of contractor oversight. If Bush ever even cared enough to ask his Treasury guys and economic advisers whether or not things could get bad, he'd be getting answers from the men who have made and were still making millions from the situation."

Michael in Canada: "Greenspan admitted publicly government put too much trust in the banks to regulate themselves. He thought the banks and financial firms would have held themselves more accountable, which should have prevented over-leveraging assets, in this case real estate. Greenspan, although he didn't come right out and say it, admitted there should have been better regulation of the housing and financial markets."

And M. writes: "This is an opportunity for the Republicans to loot the Treasury and put an end to the new president's plans before they are even born." If you didn't see your e-mail here, you can go to my blog at CNN.com/caffertyfile and look for yours there among hundreds of others -- Wolf.

BLITZER: Thank you, Jack. See you tomorrow.

Her international stature will certainly help her as the next secretary of State, but not necessarily behind the podium. CNN's Jeanne Moos takes a "Moost Unusual" look at the next secretary of State.

Plus, emotional new images coming in from the massacre in Mumbai -- among today's Hot Shots, right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Here's a look at some "Hot Shots" coming in from our friends at the Associated Press -- pictures likely to be in your newspapers tomorrow.

In Mumbai, residents light candles outside the Taj Mahal Hotel in memory of the 179 people killed during the terrorist siege that lasted three days.

In Brazil, an activist interacts with a woman while standing inside a bubble promoting HIV awareness. The Portuguese words in the bubble read "prejudice isolates."

In Iraq, a woman cheers as Iraqi couples prepare for a mass marriage ceremony.

And in L.A. a tired woman puts her head in her hands after spending nine hours on a plane grounded by heavy fog.

Some of this hour's "Hot Shots" -- pictures worth a thousand words.

Hillary Clinton's next job has major implication that stretch far beyond the State Department.

CNN's Jeanne Moos takes a "Moost Unusual" look.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): Everybody keeps calling them...

UNIDENTIFIED FEMALE: A team of rivals.

MOOS: Yes. Well, their first rival was the microphone.

CLINTON: If confirmed...

MOOS: ...that kept overshadowing...

UNIDENTIFIED FEMALE: I am deeply honored. MOOS: ...the shorter nominees...

UNIDENTIFIED FEMALE: With the American people.

MOOS: But nothing could overshadow the "that was then"...

CLINTON: So shame on you, Barack Obama.

MOOS: ...this is now angle.

CLINTON: Well, Mr. President-Elect, I am proud to join you.

MOOS: That was then...

OBAMA: I mean she's talking like she's Annie Oakley.

MOOS: This is now.

OBAMA: With my dear friend, Hillary Clinton.

MOOS: Then...

OBAMA: And she has supposedly all this vast foreign policy experience.

MOOS: Now.

OBAMA: I am proud that she will be our next secretary of State.

MOOS (on camera): No more elephant rides as a mere tourist. And all those they naysayers from months back?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: A dream ticket. Yes. I dream of this. Are you kidding? If I ever had a dream of this -- like this, I'd run to a psychiatrist and I'd say, quick, something's got to be done, because I'm hallucinating.

(END VIDEO CLIP)

MOOS: Well, hallucinate this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: You can call me Madam Secretary.

(END VIDEO CLIP)

MOOS: Wait a minute -- that's an impostor.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Hi, James. It's Hillary.

(END VIDEO CLIP) MOOS: Drinking wine and firing her feet in the tub, praying for God to please make Barack go away.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: He's too young. He's barely out of Juice Boxes.

(END VIDEO CLIP)

MOOS: Hillary impersonators are the beneficiaries of Ms. Clinton becoming secretary of State.

(VIDEO CLIP)

MOOS: It means another few years of potential gigs to Rosemary Watson, a struggling San Diego performer who discovered Hillary's voice.

ROSEMARY WATSON: I had no idea that she was living in me.

MOOS (on camera): And then what happened?

WATSON: The floodgates opened.

CLINTON: The sky will open...

MOOS: Just like the real Hillary, Rosemary will have to change her tune about Barack Obama.

WATSON: Barack, I'm coming for you.

MOOS: Impersonators like Rosemary will have to learn a new strange language.

(VIDEO CLIP)

MOOS: Diplomatese.

WATSON: I have no idea where that came from.

MOOS: Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

BLITZER: And President Bush is now offering this explanation for Barack Obama's win in the presidential election.

(BEGIN VIDEO CLIP)

CHARLES GIBSON, ABC NEWS ANCHOR: Was the election in any way a repudiation of the Bush administration?

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I think it was a repudiation of Republicans. And, you know, I'm sure some people voted for Barack Obama because of me. And I think most people voted for Barack Obama because they decided they wanted him to be in their living room for the next four years explaining policy. In other words, they made a conscious choice to put him in as president.

(END VIDEO CLIP)

BLITZER: President Bush speaking with Charlie Gibson of ABC News.

Here's a question -- do you want to be in THE SITUATION ROOM?

You can. On Wednesday, I'll be joined by the billionaire, Bill Gates. You can submit your video questions for the interview. Go to iReport.com/situationroom. We'll pick some of the questions from you for Bill Gates.

That's it for me. Let's go to Lou.

"LOU DOBBS TONIGHT"' starts right now.