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The Situation Room

Obama, Palin & Governors; Bailing Out the Big Three; India Demands Pakistan Acts

Aired December 02, 2008 - 16:00   ET


WOLF BLITZER, CNN ANCHOR: Happening now, Barack Obama set to tap another all-star for his cabinet tomorrow. And he's telling the nation's governors something they were hoping to hear. Was former rival Sarah Palin impressed? Stand by.
And the Big Three automakers telling what they want and what they're willing to give up right now. Will they get the green light for a multibillion-dollar bailout?

And world at risk. A brand-new report warning a nuclear or bioterror attack is likely in the United States in the next five years. Is the U.S. prepared?

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

Even as President-elect Barack Obama met with the nation's governors today, he was preparing to nominate one of them to his cabinet. That would be the New Mexico governor and former Obama presidential rival, Bill Richardson. A Democratic source tells CNN Mr. Obama will name Richardson as his choice for commerce secretary tomorrow.

Our Senior Political Correspondent Candy Crowley is covering the transition to power. She's in Chicago watching all of this unfold.

Candy, all right, what's the latest on this day?

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Well, the latest, as you say, Wolf, is that Bill Richardson, who has not just been the governor of New Mexico, he has also served at the U.N., as the U.S. ambassador there, he has been energy secretary, he has been a congressman. So he brings to this plate, in particular an era where the economy is the focus of attention, a lot of skill that could be put to use, perhaps opening up marketplaces for U.S. products abroad. He has also in New Mexico sought to bring in new businesses to create jobs in New Mexico.

So the Obama team considers this part of the economic team, someone who can help bring much-needed jobs and much-needed businesses into the U.S. and thriving, bringing businesses who are not thriving at this point up to speed within the U.S. So this is, again, a part of their economic team.

After yesterday, where we heard who the foreign policy team was going to be, Barack Obama has now focused his attention back on the economy. He met with governors today in Philadelphia and had some encouraging words for them.


CROWLEY (voice-over): Forty-one governors project red ink in their state budgets this year or next. So they were glad to see them.

BARACK OBAMA (D), PRESIDENT-ELECT: I hope you don't mind. I have to shake everybody's hands.

CROWLEY: And they were happy to hear this...

OBAMA: We're going to need action, and we're going to need action swiftly. That means passing an economic recovery plan that helps both Wall Street and Main Street. And this administration does not intend to delay in getting you the help that we need.

CROWLEY: The president-elect is talking about the stimulus package his economic team is putting together. Sources suggest it could run as high as $700 billion, and is likely to include money for roads, bridges, mass transit and schools, ready-to-go projects underfunded in states which could use the influx of jobs. Direct money to taxpayers would also boost state revenues. Still, so much money is needed in so many places, the stimulus package remains a work in progress.

GOV. ED RENDELL (D), PENNSYLVANIA: What the amount is or the final product will look like, I don't think any of us have a clue.

CROWLEY: For many of these state leaders meeting at the National Governors Association, balanced budgets are mandated by law. The options are not pretty.

OBAMA: Jobs are being cut. Programs for the needy are at risk. Libraries are being closed and historic sites are being closed.

CROWLEY: Obama's trip to Philadelphia was a rare outing for his presidency-in-waiting, but another chance to promise solutions that transcend party. There are 22 Republican governors.

OBAMA: I offer you the same hand of friendship, the same commitment to partnership, as I do my Democratic colleagues.

CROWLEY: Fresh off the Georgia campaign trail, the governor of Alaska says she's all about working together.

GOV. SARAH PALIN (R), ALASKA: The campaign is over, and I so appreciated this meeting that we had. And I'm quite optimistic about moving forward in a bipartisan manner.


CROWLEY: In fact, the National governors Association is perhaps one of the most bipartisan groups. As one Obama person put it to me, they understand the problems that are out there. And in this meeting, in fact, they all seem to agree that what all of these states need is what Obama is promising, jobs -- Wolf. BLITZER: That's priority number one. He made that abundantly clear, Candy. Thank you.

Today U.S. automakers are spelling out the kind of financial help they want from Washington. Congress and taxpayers have a lot of questions about the prospect of another multibillion-dollar government bailout.

Right now we are waiting to hear from the House speaker, Nancy Pelosi. She's getting ready to weigh in on the respective plan submitted today by the Big Three automakers.

CNN's Kate Bolduan is joining us from Capitol Hill right now.

Kate, what do we know about the these latest proposals coming in from the Big Three?

KATE BOLDUAN, CNN CORRESPONDENT: Well, Wolf, all three automakers are starting to turn those proposals in today. Today is the deadline as all three automakers repeat their plea for an emergency loan, a lifeline, and also trying to repair their public image.


REP. GARY ACKERMAN (D), NEW YORK: It's almost like seeing the guys show up in the soup kitchen in high hat and tuxedo.

BOLDUAN (voice-over): Mocked for taking private jets to ask for a taxpayer bailout, this time they are driving -- Ford's CEO, in an Escape Hybrid, and GM's top executive in a Malibu Hybrid -- making the nearly nine-hour trip from Detroit to Washington to ask again for a $25 billion loan. Job one is salvaging a PR gaffe. Ford's CEO is making the case through a new Web site and YouTube.

ALAN MULALLY, FORD CEO: And we'll get through this and we'll come out the other end as a turbo machine.

BOLDUAN: Chrysler's vice president warning Maryland dock workers about the fallout if the Big Three fail.

JIM PRESS, VICE CHAIRMAN & PRESIDENT, CHRYSLER LLC: The campaign that we are on is a real simple one. It's about saving jobs and preserving our way of life in America.

BOLDUAN: Congressional leaders demanded accountability and proof the Big Three can survive. Ford, the first to submit its proposal, is asking for access to up to $9 billion. Ford says it may be financially strong enough to not need the cash but wants it available. And like the other automakers, it would step up production of electric and fuel-efficient vehicles.

Ford also would get rid of its five corporate jets. And all of the CEOs are promising to work for $1 a year.

(END VIDEOTAPE) BOLDUAN: Now, Ford says that pay cut will take effect for its CEO if the company uses the bailout money.

Now, GM -- we just got word that GM has now submitted their proposal to Congress, asking for up to $12 billion, Wolf.

Now, all three automakers will be back up here on Capitol Hill to face the music once again in hearings Thursday and Friday.

BLITZER: And we'll be all over this story as well. Enormous ramifications. Thank you.

Microsoft founder Bill Gates, by the way, has personally had a huge impact on America's economy. And now he's speaking out about how to fix it.

Bill Gates will be a guest tomorrow right here in THE SITUATION ROOM. And guess what? You can participate in the interview. Send us your videotaped questions to We'll try to get some of your questions, some of your questions to Bill Gates tomorrow, right here in THE SITUATION ROOM.

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

JACK CAFFERTY, CNN ANCHOR: Wolf, a runoff election under way in the U.S. Senate race in Georgia today between Republican incumbent Saxby Chambliss, Democratic challenger Jim Martin. Poll watchers say the race will come down to voter turnout, which is probably why Alaska Governor and former vice presidential candidate Sarah Palin flew down to Georgia to campaign for Chambliss, the Republican. That, and they promised to take her picture.

She apparently, though, has not lost her touch. She drew huge crowds wherever she went in Georgia.

The Georgia race, one of two unresolved Senate races. Democrats need to win both. If they do, they get a filibuster-proof 60-seat majority.

The other undecided race is in Minnesota, where a recount is under way between the Republican, Senator Norm Coleman, and the Democratic challenger, Al Franken. Don't hold your breath on that though. The recount is not expected to be finished for weeks.

If the Democrats manage to win both races, they will have the trifecta, a filibuster-proof majority in the Senate, a commanding lead in the House, a big majority there, and, of course, the White House.

So here's the question: How important is a 60-seat Senate majority for the Democrats?

Go to and you can post a comment on my blog -- Wolf.

BLITZER: Jack, thank you. Very powerful new stories emerging today from survivors of the India terror attacks.


CHARLES CANNON, SURVIVED ATTACKS IN INDIA: These were no pistols. These were AK-56s. These were big weapons, and the explosions vibrated through the whole building.


BLITZER: Tense times in India right now. We're going to tell you what the secretary of state, Condoleezza Rice, is doing to prevent a different kind of explosion in the region.

And we could be just hours away from finally learning the outcome of one of the closest races in this year's elections. The voters of Georgia, as Jack just pointed out, voting right now. The polls getting ready to close fairly soon. How could they decide the final balance of power in the U.S. Senate?

And it's never been heard by the public until now. Richard Nixon calling Joe Biden soon after Biden lost his wife and young child in a car accident. You're going to hear the audiotape and the rest of the recordings, including Nixon's feelings about getting into Vietnam.

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


BLITZER: They showed them moments just before, during and after the bloodthirsty terrorists unleashed their hellish wrath. You're looking at these pictures right now, new video from the attacks in Mumbai captured by close-circuit TV at a train station. You can see people ducking as gunmen spray the air with bullets. Lights are blown out; people running for their lives. The train station was one of several sites where gunmen randomly mowed down police and other innocent people.

Meanwhile, those who survived continue to recall their horror. Listen to one survivor who was staying at one of the ambushed hotels. He's part of a meditation group from Virginia that saw the deaths of two of its members.


CANNON: My friend went out and down the hallway to the balcony where he could look over and look down into the lobby, and he saw two terrorists with their guns just shooting everyone and everything in the lobby. He ran back to the room and told me what was happening. We couldn't believe it.

We immediately barricaded the door of the room with furniture and wondered what was happening. And then came the first of the very loud explosions and grenades and gunfire, the volume of which you couldn't imagine. These were no pistols. These were AK-56s. These were big weapons, and the explosions would vibrate through the whole building.

And, of course, being human, are adrenaline started pumping and our hearts started racing, and we had no idea what was happening. Then there was a loud explosion directly underneath us, and fire broke out. And we could see the smoke and the fire rising up through the windows that opened onto the street below. The room filled with smoke so thick that I could not see you if you were two feet from me. We put wet towels over our faces so we could breathe.


BLITZER: Wow. And the tensions are clearly rising throughout the region right now, tensions between India and Pakistan.

Let's bring in our State Department Correspondent Zain Verjee.

The secretary of state, Condoleezza Rice, is now, where, in India?

ZAIN VERJEE, CNN STATE DEPT. CORRESPONDENT: Yes, she's just gotten there. I mean, any tension between India and Pakistan, Wolf, really spells a major problem for the U.S. And America's top diplomat is there right now trying to cool down a potentially dangerous situation.


VERJEE (voice-over): On an emergency mission with just weeks left on her calendar, the U.S. secretary of state is flying to India to make sure the nuclear-armed neighbors don't go one step too far.

CONDOLEEZZA RICE, SECRETARY OF STATE: I want to consult with the Indian government further about what we can do to help. I have already noted that everyone should cooperate fully, and Pakistan in particular.

VERJEE: India blames Pakistani-based militants for the Mumbai terror attacks. It's demanding answers and action from Pakistan. Condoleezza Rice's visit calls a time-out.

THOMAS SANDERSON, CENTER FOR STRATEGIC & INTERNATIONAL STUDIES: One, give a little bit of breathing space by talking to the Indians for the Pakistanis to conduct their investigation. And the other half of that coin, the side of the coin, is she needs to push the Pakistanis to do it well and do it quickly, because we don't want this pressure to boil over.

VERJEE: The same message in Washington to India: don't retaliate.

UNIDENTIFIED MALE: We don't give green lights to any countries, green or red lights.

VERJEE: Reinforcing the same, Senator John McCain in New Delhi, meeting with India's prime minister.

The stakes are high for the U.S. and its fight against terrorism along the Pakistan/Afghanistan border.

SANDERSON: We're counting on Pakistan to cooperate in the tribal areas against foreign fighters and against the Taliban.

VERJEE: This was supposed to be a farewell tour with U.S. allies for Rice, with Rice even playing the piano for the queen at Buckingham Palace. But she cut her European trip short to manage the crisis in South Asia.


VERJEE: Tensions between India and Pakistan will land in the lap of the new secretary of state. Secretary Rice, meantime, wants to make sure that by then, it's not a full-blown crisis -- Wolf.

BLITZER: So this is really a delicate mission for Secretary Rice.

VERJEE: Yes, it's really delicate for Secretary Rice and for the U.S. and its views and future in the region. Pakistan is an ally, India is an ally. The U.S. sees India as a strategic counterbalance to China. They just signed this major civilian nuclear deal with India. So what Secretary Rice has to do is to work with both of them without getting the other one really upset.

BLITZER: All right, Zain. Thanks very much. We'll continue to monitor what is going to happen, obviously, in India as it watches Pakistan.

The president of Pakistan, by the way, is firmly denying any notion that his nation was involved in these Indian attacks. And he's also responding to the suggestion that a suspect in custody is a Pakistani national.

Listen to what the president of Pakistan, Asif Ali Zardari, told CNN's Larry King.


LARRY KING, HOST, "LARRY KING LIVE": Aside from the gunmen themselves, who do you believe was responsible for the terrorist attacks against Mumbai?

ASIF ALI ZARDARI, PAKISTANI PRESIDENT: Larry, I think these are stateless actors who have been operating all throughout the region. The gunmen, plus the planners, whoever they are, they're all stateless actors who are holding hostage the whole world.

KING: So the state of Pakistan is in no way responsible, you're saying. Right?

ZARDARI: The state of Pakistan is no way responsible. That I believe. Even the White House and the American CIA have said that today. The state of Pakistan is of course not involved. We're part of the victims, Larry.

I'm a victim. The state of Pakistan is a victim. We are the victims of this war, and I am sorry for the Indians, and I feel sorry for them.

I've seen this pain. I feel this pain every time I see my children. I can see it in their eyes. This pain lives with me because of my wife and what we are going through in Pakistan.

KING: What do you know about this lone surviving attacker, the man that's in custody? Is he definitely a Pakistani?

ZARDARI: Not as yet. We have not been giving any tangible proof to say that he is definitely a Pakistani. I very much doubt, Larry, that he's a Pakistani.


BLITZER: All right. You can watch Larry King's entire interview with the Pakistani president tonight. That will air at 9:00 p.m. Eastern, only here on CNN.

A terrifying warning today that terrorists might launch nuclear or biochemical attacks within the next five years in the United States. Here's the question: Is the U.S. ready? I will ask the man whose panel issued the report, the former senator Bob Graham.

And move over, Sarah Palin. It turns out some other politicians have been using political cash to improve their wardrobes as well. We'll have details.

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



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

Happening now, first-time Republican Senator Mel Martinez tells Florida and his party he won't be running for reelection in 2010. We'll sort out the potential impact on the GOP. Stand by.

And we'll also sort out who was behind last week's deadly siege in Mumbai, India. CNN's Kelli Arena examines one Pakistani-born Islamic militant group believed to have ties to al Qaeda.

And it's open, it's grand, and it came in way over budget. It's easy to understand why some people are impressed by the new Capitol Visitors Center, but is it worth all of the money?

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

They are the worst weapons in the world and should be kept away from the worst terrorists in the world, weapons of mass destruction that one intelligence expert says could possible cause 10 or 100 times the deaths seen on 9/11.

Our Homeland Security Correspondent Jeanne Meserve has more on some disturbing predictions from a blue ribbon panel that was assembled by the government -- Jeanne.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Wolf, the title of the commission's report says it all: "World at Risk."


MESERVE (voice-over): The terrorists in Mumbai used guns and bombs. But the bipartisan commission says within the next five years, terrorists are likely to use something even more lethal -- nuclear weapons or, more likely, biological weapons. Anthrax, smallpox, ebola -- almost 15,000 scientists in the U.S. work with dangerous pathogens like these to develop vaccines and other countermeasures.

There is security.

UNIDENTIFIED MALE: We need to continually push the knowledge front, but also recognize that we have a duty to society to make sure that we deal with the regulatory agencies.

MESERVE: But many experts are sounding an alarm.

In 1918, a virulent strain of influenza killed an estimated 20 million to 40 million people worldwide. That virus has been recreated from scratch in a laboratory. So has the polio virus.

The capability and technology to do this science is spreading across the globe to places like Indonesia, Pakistan and Iran, increasing the odds that a deadly virus or bacteria could fall into the wrong hands and be used as a weapon. It's already happened here with anthrax.

UNIDENTIFIED MALE: We cannot -- we cannot in this world preclude a biological attack. It's -- it's simply impossible.

MESERVE: But the congressionally mandated Commission on the Prevention of Weapons of Mass Destruction, in a report this week, says there are steps that could make a biological attack less likely: tighter security at U.S. labs handling dangerous pathogens, a strengthening of international treaties, enhanced disease surveillance to detect an attack, and better forensics to track where it came from.

(on camera): Without action, the commission says, the risks are growing, and America's margin of safety is shrinking -- Wolf.


BLITZER: Jeanne, thank you.

My next guest leads the commission that made these rather disturbing predictions, its assessment. Bob Graham is the former senator from Florida and the former chairman of the Senate Intelligence Committee. Senator Graham, thank very much for doing this work.


BLITZER: And thanks very much for coming in.

GRAHAM: Thank you.

BLITZER: And I know that it is out in the form of a nice little paperback, "World at Risk." Our viewers probably will want to read this.

When you offer assessment like this, I pay attention, because you were one of the few in the United States Senate, when you were on the Intelligence Committee, that went through all the evidence of Saddam Hussein's weapons of mass destruction, and you concluded it did not pose an imminent threat to the United States. And you voted against that resolution authorizing the president to go to war.

Am I right?

GRAHAM: Right.

BLITZER: All right, so, here's the question. Based on your experience, extensive experience, is the United States ready for this threat right now?


And our margin of safety has been declining over the last seven or eight years. We concluded, after talking to 250 academics, scientists, intelligence officers, military personnel, political leaders, that the prospects were that, in the next five years, by the end of the year 2013, there would be a weapon of mass destruction used someplace in the world, and it was more likely that that would be a biological, rather than a nuclear, device.

BLITZER: These people, these terrorists out there, they hate us, right?

GRAHAM: As we have just seen in Mumbai, they hate us, and they're prepared to act in the most extreme way to reflect that hate.

BLITZER: Why hasn't it happened yet?

GRAHAM: It hasn't happened yet because, fortunately, thus far, we have been able to keep these materials out of the hands of terrorists.

Those -- that prospect, however, is getting thinner and thinner, as there are more nuclear states with more nuclear sites and materials. Biological materials are becoming ubiquitous around the world.

What -- what it will take is a few scientists prepared to become terrorists working with a terrorist organization to convert this possibility into a reality.

BLITZER: Where is that -- that location, that site of this potential, let's say bioterrorism or nuclear terrorism, where is it most likely to come from for these terrorists?

GRAHAM: Pakistan. Pakistan is the intersection of the perfect storm.

Terrorists occupy its northwest territories. Its had a history of proliferating nuclear materials. It is the sixth or seventh largest nuclear state in the world. It has an unstable government. It has a very -- to use the word acrimonious is an understatement relationship with India.

It is the potential bombshell where terrorism and weapons of mass destruction will intersect.

BLITZER: So, if you were asked by the president-elect, Barack Obama, and, if he said to you, all right, Bob, what do we need to do right now -- and he's taking office on January 20 -- what's the most important thing you would tell him?

GRAHAM: The most important thing is, President Obama, be consistent with what you said as candidate Obama, that the number-one security risk for the United States of America is when the worst weapons get into the hands of the worst people.

We have submitted 13 recommendations as to what it's going to take in order to avoid that happening. The president needs to make that the highest security goal of the United States.

BLITZER: But the -- Pakistan is a sovereign country. They have got a new president, Zardari. How does the United States have any influence on what's happening within the tribal areas or some rogue areas of their military or their intelligence service that might be amenable to passing along nuclear or biological capabilities to these terrorists?

GRAHAM: Some of the things that we ought to be doing -- and not necessarily alone, but in conjunction with other regional powers, such as Russia and China, specifically -- is, we should be working to secure their nuclear weapons, applying some of the principles that the Soviet Union and the United States developed over 40 years of the Cold War.

We should intensify our efforts to clean the terrorists out of those -- those territories between Pakistan and Afghanistan. We need to send an envoy into the region to work with Pakistan and India to try to reduce the level of tension that currently exists.

BLITZER: And one final question, because we're out of time. Why hasn't there been a major terrorist attack in the United States since 9/11?

GRAHAM: One, because the terrorists have not been able to get access yet to the materials for a weapon of mass destruction; two, because al Qaeda's policy has been that every attack against U.S. interests should be bigger, have a higher kill rate than the previous attack. And they have not yet felt they were in a position to be assured that they would kill more than 3,000 people in their next attack in the United States.

BLITZER: And, as we know, these -- these al Qaeda guys and their spinoff groups and the other groups that they have inspired, they are very patient, and they have a long sense of history.

GRAHAM: They -- they view history in centuries, not years or decades.

BLITZER: Absolutely true.

Senator Graham, thanks very much for doing it. And thank Senator Talent, for -- the vice chairman for helping us, former Governor Talent, I should say, as well.


BLITZER: The book is entitled "World at Risk: The Report of the Commission on the Prevention of Weapons of Mass Destruction Proliferation and Terrorism."

Thanks very much.

GRAHAM: Thank you, Wolf.

BLITZER: Over a month after Election Day, a very close and important Senate contest is being decided right now. We are going to have a live report on the race in Georgia, what's going on, and what it means for the balance of power right here in Washington.

Plus, why Richard Nixon picked up the phone years ago to call Joe Biden. There's newly released audiotapes capturing a president's encounter with a future vice president more than three decades ago. You are going to hear it for yourself, now for the first time.

And another powerful Republican woman in Alaska sends a stern warning to Governor Sarah Palin. You are going to want to hear this.

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


BLITZER: (AUDIO GAP) fascinating flashback right now to vice president-elect Joe Biden's early years in the United States Senate.

It turns out he had a rather emotional phone conversation with then-President Richard Nixon.

Our Brian Todd is looking into this and got some new audiotapes that are being released now for the first time.


BLITZER: And it's pretty fascinating, Brian. What do we know?

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, this is part of hundreds of hours of just-released White House phone recordings from the Nixon Presidential Library and Museum. As we were combing through this material, an official of the National Archives directed us to this conversation.

We will set the scene for you. It is December 19, 1972, more than a month after Joe Biden's been elected to the U.S. Senate, but just one day after Biden's wife, Neilia, and his year-old daughter, Naomi, were killed in a car accident in Delaware.

Here is President Richard Nixon talking to a distraught 30-year- old Joe Biden.


UNIDENTIFIED FEMALE: Mr. President, Senator-elect Biden for you.


UNIDENTIFIED MALE: Just a minute, Mr. President.

SEN. JOSEPH BIDEN (D), DELAWARE SENATOR-ELECT: Hello, Mr. President. How are you?

NIXON: Senator, I know this is a -- a very tragic day for you, but I wanted you to know that all of us here at the White House were thinking about you, and praying for you, and also for your two children. And (INAUDIBLE) that family. We -- we know that -- I understand you were on the Hill at the time, and you wife was just driving by herself.

BIDEN: Yes, that's...


NIXON: So -- so, the -- but, in any event, I mean, looking at in a -- as you must, in terms of the future, because you -- you have the great fortune of being young -- I remember I was two years older than you when I went to the House.

But the main part is, you can remember she was there when you won a great victory. And you enjoyed it together, and now I'm sure that she will be watching you from now on.

Good luck to you.

BIDEN: Thank you very much, Mr. President, for your call.


TODD: Now, Biden's two young sons, of course, were injured in that accident, but they recovered.

In a recent documentary, CNN reported Biden considered stepping aside before even taking the oath as a senator, that he even considered suicide. He was famously sworn in as a senator right by his son's hospital bed.

The rest is history, Wolf, and just a fascinating look into the president consoling this young and very distraught Joe Biden.

BLITZER: Yes, I can see.

There's some other fascinating material in the newly disclosed audiotapes as well, isn't there?

TODD: That's right, some incredible conversations between Richard Nixon and his then-national Security Adviser Henry Kissinger about ordering the bombing of North Vietnam, Kissinger voicing a lot of frustration over the North Vietnamese double-dealing in peace talks. He calls them some very colorful names, which you are going to hear next hour.

BLITZER: Brian Todd, thanks very much -- Brian Todd going through history for us.

We are soon going to be seeing the climax of a political cliffhanger. Polls will close in little more than two hours in the runoff race for the Georgia Senate seat. And many people are watching, surely including president-elect Barack Obama himself.

CNN's Dana Bash is watching as well. She's in Atlanta, watching this runoff.

And it has implications far beyond Georgia, doesn't it, Dana?


You know, people around the country, of course, for most of them, the very long 2008 campaign ended last month. But it never ended here in Georgia. And you're right. Today's Senate runoff does have national implications because of the fact that it will have an impact on the new president's agenda.


BASH (voice-over): Georgia's Republican senator dials for last- minute votes...

SEN. SAXBY CHAMBLISS (R), GEORGIA: Well, this is Saxby Chambliss, guys. How are you all this morning?

BASH: ... urgently calling radio stations. Around the corner, an army of volunteers remind GOP voters that it's Election Day in Georgia again. Getting fatigued voters back to the polls is the name of the game for both incumbent Saxby Chambliss and Democratic challenger Jim Martin.

JIM MARTIN (D), GEORGIA SENATORIAL CANDIDATE: We want to go to Washington to change things. BASH: In a runoff because both fell short of a required 50 percent threshold on November 4. It's been a four-week Georgia campaign about the balance of power in Washington.

Chambliss warns that, if he loses, Democrats could have 59 senators, almost a filibuster-proof majority, with a Democratic president.

CHAMBLISS: Having 41 votes, Republican votes, in the Senate is critical. It's very important, because, otherwise, if you have one party in control, then the voices of Georgians are not going to be heard.

BASH: Martin calls that a false argument.

MARTIN: Electing somebody who wants to be a firewall will just continue that partisanship in Washington. Now, I don't want to change -- I want to change that. I want to work with our new president.

BASH: On issues, the candidates sparred over the economy and veterans' benefits, using millions that poured into both candidates' runoff coffers to bombard voters with harsh ads.


UNIDENTIFIED MALE: Martin voted for the largest tax increase in Georgia history.



ANNOUNCER: Saxby Chambliss doesn't understand what a recession means?


BASH: To keep voters engaged, a parade of political celebrities appeared for both candidates. Chambliss closed on a four-stop tour, luring conservatives with Sarah Palin...

PALIN: Send Saxby back to the United States Senate.

BASH: .. as Martin tried to rally African-American voters with hip-hop artists like Ludacris.

LUDACRIS, RAPPER: I definitely feel like we need a senator who -- who is going to work with Mr. Obama.


BASH: Now, polls close in just a little bit more than two hours, Wolf.

Democrats say they have 3,200 workers and volunteers out as we speak, trying to get voters to those polls. Republicans say they have representatives from 42 states here trying to do the same thing. But, as you well know, Wolf, runoffs are very hard to poll, virtually impossible to poll, and, therefore, hard to predict.

BLITZER: All right. We will have to just wait the old-fashioned way and see the results coming up. Thanks very much, Dana, for that.

A new warning for president-elect Barack Obama, that his biggest political problems will come from the left, instead of the right. Stand by for our "Strategy Session."

And does Sarah Palin see the Senate as a launchpad for the presidency? If so, her would-be rival says, she better think twice.

Stand by. You're in THE SITUATION ROOM.


BLITZER: New rumblings today about president-elect Barack Obama and where he may eventually find his biggest critics when it comes to foreign policy and national security.

The son of a former president, the son of Ronald Reagan, in fact, says it will come from the far left. Is he right?

Let's discuss in our "Strategy Session." Joining us, the Democratic strategist Hilary Rosen and Republican strategist Terry Jeffrey, editor in chief of the Cybercast News Service.

Here's Michael -- Michael Reagan, the conservative radio talk show host, earlier today.


MICHAEL REAGAN, RADIO TALK SHOW HOST: The problems that Barack Obama's going to have are going to be coming from the Daily Kos, coming from MoveOn.orgs and the left. Those people wanted to get out of the war tomorrow afternoon. And, all of a sudden, they find out, maybe they are not going to get out of the war tomorrow afternoon.


BLITZER: Does he have a point, Hilary? Because, you know, he has a lot of mainstream, middle-of-the-road national security advisers, including a holdover from the Bush administration...


BLITZER: ... Robert Gates, as his defense secretary.

ROSEN: Well, you know, the Democrats have now become the big- tent party, where we have centrists and we have liberals and we have progressives.

I think that there's some merit to the notion that there's going to be tension within our party over strategy. Clearly, Barack Obama won on an anti-war platform and ran on it for two years. I don't think he can back off of that. They are going to need a lot of good reasons for -- something happening in the ground of Iraq -- for him to walk away from that.

But that's not going to be the only issue. There's going to be a tension from -- from those groups on the left and -- and between the centrist Democrats and -- and the liberal Democrats...


BLITZER: There probably will be tension on -- on the left on some of his national security issues, but there certainly, Terry, will be some tensions from the right when it comes to his domestic economic policies.


I mean, I think that conservatives, Wolf, are expecting a number of big fights with Barack Obama. And, maybe, right now, he looks like he's thinking a more practical approach to foreign policy with the team...


BLITZER: You're happy about that?

JEFFREY: Well -- well, yes.

I mean, you had Senator Graham on earlier saying that we might be seeing a weapons of mass destruction attack sometime in the next five years. There's very serious issues about the security of our country that Barack Obama's going to face.

But, yes, I think that Republicans and conservatives expect there will be major battles with Barack Obama. And I'm sure, when those happen, the hard left is going to line up on his side.

BLITZER: All right. Let's talk a little bit about Sarah Palin. We saw her today in Philadelphia with the other governors, the nation's governors.

Lisa Murkowski, who is the senator from Alaska, she says this, if Palin is thinking about challenging her for that Senate seat in Alaska. She said: "I can guarantee it would be a very tough election. If she wants to be president, I don't think the way to be -- to the presidency is a short stop in the United States Senate" -- Lisa Murkowski speaking out earlier to "The Politico."

What do you think?

ROSEN: Well, a lot of family history there with the Murkowskis and Sarah Palin. After all, Sarah Palin beat Lisa Murkowski's father for the governorship.

BLITZER: Frank Murkowski.


ROSEN: It was a nasty race.

But, you know, this is a -- this is a warning. You have an incumbent member from your own party who's actually well-liked in the Senate by members of her own party and even some Democrats. I think Sarah Palin's going to do better concentrating on burnishing the credentials she needs if she wants to be a successful politician.

BLITZER: Because, normally, except this time around, being in the Senate is not necessarily a good step towards the presidency.

JEFFREY: Historically, it hasn't been. You have Jack Kennedy and you have Barack Obama.

I think Lisa Murkowski obviously a little nervous. She has good reason to be. I mean, this is a pro-choice moderate Republican from a base -- a state that has a very conservative Republican Party. She was first put in the Senate by her own father.

I think, if -- if Palin got into a primary with Murkowski, she would -- you would think she would probably beat her. But I'm not sure that's the wisest thing, Wolf, for Palin going forward...


BLITZER: What is the wisest thing, assuming she wants to be president of the United States? And she's young. She's only 44 years old.


Look, you have had Ronald Reagan, two-term governor of California, who was elected and a two-term president of the United States. You had Bill Clinton, multiple-term governor of Arkansas, two-term president of the United States.

She does have to increase her credentials on foreign policy and national security issues. I don't think she can do that in two years if she's elected to the Senate in 2010 and immediately goes out and runs for president.

BLITZER: What do you think?

ROSEN: Well, she would have to start running for president right away. It -- it -- she will end up looking flaky, I think, if she does this, because it will look like she's just sort of climbing a political ladder, instead of really trying to find a -- you know, the right perch to serve, with a -- with a base of substantive and policy views...

JEFFREY: What she...

ROSEN: ... which she doesn't seem to have yet.

JEFFREY: What she should do, Wolf, is look for national public policy issues, where she can move the grassroots of the Republican Party against Barack Obama, issues where she can win.

If she does that, she can become the national leader of the Republican Party and be the front-runner for the Republican...


BLITZER: I was down at that Republicans governors convention in -- in Miami a couple of weeks ago, when I interviewed her.

And a lot of Republicans who were there, not just governors, but others, were saying, you know what, she needs to spend the next six months studying and learning and boning up on a lot of these national security and domestic issues, and get herself ready, if she's really serious about thinking about a race for the White House.

ROSEN: You know, presidents are -- are won in the middle. That's one of the issues that president-elect Obama is facing with Democrats. They are not elected by the left and they are not elected by the right.

And she's a favorite of the right. She's got to find some of those issues that bring her more to the middle. Otherwise, I think she just stays a right-wing candidate.

BLITZER: Although, in fairness to her, up in Alaska, she has got an 80 percent job approval rating. She's very popular up in Alaska.

But we will continue this conversation, guys.


BLITZER: Thanks very much.

You might not know it, but the trouble with the auto industry could impact you directly -- why little leagues, high schools, even charities might suffer from the unprecedented problems with the Big Three.

And, behind closed doors, what Barack Obama and Defense Secretary Robert Gates talked about -- Gates himself today opening up and giving us some incredible insight into what happened in those meetings with Barack Obama. You're going to want to hear him in his own words -- right here in THE SITUATION ROOM.


BLITZER: Let's go right back with Jack for "The Cafferty File" -- Jack.

CAFFERTY: The question this hour is: How important is a 60-seat Senate majority for the Democrats? There's a runoff election in Georgia going on today and there's an undecided Senate race in Minnesota as well.

Billy writes from Las Vegas: "I think it's overblown, because there are so-called Democrats like Joe Lieberman who will vote against Obama on many foreign policy issues, while Republican moderates like Susan Collins, Olympia Snowe and Arlen Specter just may side with him on domestic programs. Except for die-hard ultra-right-wingers, many of Southern state Republican senators, I think most Republicans will do what is best for their state and the country."

Ann in South Carolina: "My understanding of Obama's campaign rhetoric was that he would seek consensus. He said we were not blue states or red states, but United States. That being the case, does the Democratic Party need the 60-seat majority? Ideally, consensus would mean the opposing point of view would be taken into account and included in any legislation. The operative word, of course, is ideally."

N.S. writes: "Without the majority, the Republicans will do whatever they can to stop any plan Obama and the Democrats have to try to help the country, because that is what they do best. They have no intention of letting Obama be successful. That way, they can use it against him and the Democrats in the next election."

Philip in New Jersey: "It's not really that important, because there will always be somebody willing to vote your way if the price is right. Just ask Joe Lieberman."

Joy in Florida: "Obviously not important enough for Obama to go to Georgia and campaign for Jim Martin."

He's the one who is running against the incumbent, Saxby Chambliss.

And Ralph in Corpus Christi, Texas, writes: "Doesn't matter how many seats, if they don't get up off them and get some work done."

If you didn't see your e-mail here, you can go to my blog at Look for yours there. We post hundreds of them every single hour -- Wolf.

BLITZER: And it's a good thing you do, Jack, because our viewers appreciate it. Thank you.

And, to our viewers, you're in THE SITUATION ROOM.