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The Situation Room

Arm Twisting on the Economy; Interview with Pervez Musharraf

Aired January 23, 2009 - 17:00   ET

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

WOLF BLITZER, CNN ANCHOR: And to our viewers, you're in THE SITUATION ROOM.

Happening now, President Obama steps up the pressure -- urging Congressional leaders to quickly pass his economic recovery plan. He wants almost a trillion dollars.

Will he give a little to get a lot?

He admits Al Qaeda has bases in his country, so how does he feel about the Obama administration's first missile strikes in Pakistan?

My exclusive interview with the former president of Pakistan, Pervez Musharraf. That's coming up.

And he got strong backing from women in the November election and named half a dozen to cabinet level posts. Now some say President Obama isn't showing enough appreciation.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

The arm twisting begins over President Obama's massive rescue plan for the U.S. economy. The president today called an urgent meeting of Congressional leaders, trying to ease doubts about his nearly one trillion dollar stimulus package.

Let's go straight to our senior White House correspondent, Ed Henry -- the president making it clear, Ed, he wants quick action.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: That's right, Wolf. He's demanding urgent action because, his aides say, they think this financial crisis is going to get worse before it gets better. And that's why he called in leaders from both parties for the first time of his presidency, urging them to get to work on this $825 billion recovery plan. Mr. Obama acknowledged that Democrats and Republicans don't agree on everything, including the price tag, some of the details about the tax cuts, for example. But he expressed a lot of optimism that this could get passed and signed into law by mid- February.

(BEGIN VIDEOTAPE)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I know that it is a heavy lift to do something as substantial as we're doing right now. I recognize that there are still some differences around the table and between the administration and members of Congress about particular details on the plan.

But what I think unifies this group is recognition that we are experiencing an unprecedented, perhaps, economic crisis that has to be dealt with and dealt with rapidly.

(END VIDEOTAPE)

HENRY: Now, here's the back story, though. The White House was very careful today to make sure that was the only video you saw of the president today sort of ending his first week on a bipartisan high note, working with Republicans as well as Democrats.

Meanwhile, just in the last hour, they twice called in the press pool of reporters, saying there was going to be some sort of an event with the president signing something. The reporters waited and waited and they never got called in.

Meanwhile, White House aides came out and said privately, behind closed doors without cameras, the president signed an executive order overturning this Bush policy that basically prevented international family planning groups from promoting abortion as an option.

So what they did was they kept television cameras out from showing him sort of a partisan move, signing this executive order, because that would have stepped on his message about the economy and working with Republicans.

This other move, this executive order he just signed in the last half hour, is something that is outraging to Republicans.

So it's interesting to see how this White House, very early in the first week, is being very careful to manage this message -- Wolf.

BLITZER: Interesting stuff.

Ed Henry, thanks very much.

President Obama has vowed to go after Al Qaeda and the Taliban. Now, the first missile strikes of his administration have been launched in tribal areas of Pakistan. Seventeen people were killed today in those two strikes. Pakistani officials say they came from U.S. drones.

Let's get reaction right now. My exclusive interview with the former Pakistani president, Pervez Musharraf.

(BEGIN VIDEOTAPE)

BLITZER: Are you -- are you comfortable that the U.S. is continuing, in the Obama administration, the same strategy of launching strikes against targets in Pakistan?

PERVEZ MUSHARRAF, FORMER PAKISTANI PRESIDENT: Well, nobody in Pakistan is comfortable with the strikes across the border. There is no doubt in that. Public opinion is very much against it. But as far as this issue of the new president, President Obama, having taken over and this continuing, but I have always been saying that policies don't change with personalities.

BLITZER: But you understand why the U.S. is interested in locating and going after these Al Qaeda or Taliban suspected targets inside Pakistan?

You understand the U.S. interest in this particular point?

MUSHARRAF: Yes, we understand the interest of fighting militants, fighting terrorists, fighting the foreigners in the Pakistani territory is common. It's common with Pakistan. It is in Pakistan's interest that we hit militant targets.

BLITZER: Here's what President Obama said in his inaugural address.

Listen to this.

(BEGIN VIDEO CLIP)

OBAMA: To the Muslim world, we seek a new way forward based on mutual interests and respect. For those leaders around the globe who seek to sow conflict or blame their society's ills on the West, know that your people will judge you on what you can build, not what you destroy.

To those...

(APPLAUSE)

OBAMA: ...to those who claim to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history. But that we will extend a hand if you are willing to unclench your fists.

(END VIDEO CLIP)

BLITZER: That was his message to the Muslim world.

What's your message, President Musharraf, to President Obama?

MUSHARRAF: Well, I would like to really get involved in giving a message to President Obama. He understands best for himself for the next four years what he wants to do.

And I'm not here to really advise him.

But certainly the Muslim world expects justice because it is these political uncertainties, political injustices which -- which are spawning terrorism and extremism.

So I hope that he addresses the core issue of resolving political disputes involving all the Muslim -- almost all political disputes involving different countries. BLITZER: He said this week, the new president of the United States, that Pakistan and Afghanistan, in his words, "represent an urgent global security threat and is now the central front on the war on terror."

Why is it that?

Why is it that the terror threat emanating from your country, Pakistan, has apparently increased over the several -- past several years?

MUSHARRAF: Well, I -- you know, now I would like to correct this.

First of all, let nobody correct Pakistan with Afghanistan. Pakistan is a very established country. It has institutes functioning. It has a strong military. It has a strong bureaucracy. It has a political system. It has democracy functioning and a democracy in place.

So, therefore, we should not to equate Pakistan with Afghanistan.

And the second point I want to make is to say that terrorism is emanating from Pakistan -- terrorism, Pakistan is a victim of terrorism. Terrorism came -- emanated from Afghanistan because of Mujahedeen and militant Taliban are all products of Afghanistan. It is only support that they get from Pakistan.

So let's be very clear where terrorism is originating from. We are the victims and we need to be helped to address the issue of terrorism and extremism within our area.

BLITZER: But as you know, only...

MUSHARRAF: ...and that is what we are trying to do.

BLITZER: ...only this week one of his first decisions, his decision and the new secretary of State, Hillary Clinton's, decision, was to name a special enjoy, the former U.S. ambassador to the U.N., Richard Holbrooke, as a special enjoy to Afghanistan and Pakistan to deal with this problem. You say that these are two different problems, but apparently a lot of people think it's part of the same problem.

MUSHARRAF: No, it is the same -- it is the same problem. I'm not saying that they are two different problems. But we must understand where it emanates from.

Where is the problem?

The problem lies basically in Afghanistan. And Pakistan has side effects of that. And there is support -- yes, indeed, there is the (INAUDIBLE). The is support. They are sanctuaries to Taliban and Al Qaeda.

BLITZER: But you acknowledge that there are Al Qaeda and Taliban bases now...

MUSHARRAF: Yes.

BLITZER: ...established in Pakistan?

MUSHARRAF: Yes. Yes.

BLITZER: All right...

MUSHARRAF: Yes, indeed, there are bases. In the mountains, al Qaeda is there. I've been always saying that. And everyone knows it.

BLITZER: Only last October, in one of the presidential debates, then candidate Obama said this.

Listen to what he said.

(BEGIN VIDEO CLIP)

OBAMA: If we have Osama bin Laden in our sights and the Pakistani government is unable or unwilling to take them out, then I think that we have to act and we will take him out. We will kill bin Laden. We will crush Al Qaeda. That has to be our biggest national security priority.

(END VIDEO CLIP)

BLITZER: Why hasn't bin Laden been found yet?

MUSHARRAF: I mean, I would like to ask the United States why he hasn't been found. They have their intelligence. There are -- you have more intelligence capability. I would like to ask the United States why Mullah Omar has not been found, who is the leader of all the Taliban in Afghanistan.

I mean there are issues. These are well-known issues. This is a mountainous terrain, inaccessible. Yes, indeed, there are sanctuaries. Yes, indeed, there is maybe support and harboring him, people sympathetic toward them.

So all of this combined, it makes the task difficult. And there's no doubt about it.

BLITZER: Let me read to you a paragraph from a new book that's just been published in the United States by "The New York Times" writer David Sanger. The book is entitled, "The Inheritance." And I'm going to read to you what he writes.

"President Bush's reliance on President Musharraf to wage the war for him turned out to be one of the biggest misjudgments of this war on terror. Bush would eventually come to realize that Pakistani president commanded forces that were not only unwilling to take on al Qaeda and the Taliban in Pakistani territory, but were incapable of doing so."

That's a serious indictment, President Musharraf, of your administration.

I wonder if you'd want to respond to that.

MUSHARRAF: I don't agree with the statement at all. This is by a person who doesn't understand the realities.

Look at what has gone -- we have gone through over the last eight, nine years. This very army has suffered 1,500 casualties. This very army has apprehended more than 600 Al Qaeda people. This very army has fought the Taliban in North Waziristan, South Waziristan, in by all agencies.

So -- and I, as a person, has suffered suicide attacks on me -- on my person. Now telling such an army, such an intelligence organization and such an individual that we didn't have our hearts and minds in the fight against terrorism can only be said by a person who is totally divorced from realities.

BLITZER: Because they -- there is a suggestion out there -- and you've heard it often -- that there are elements inside the Pakistani military, but especially inside the Pakistani intelligence services, that are sympathetic to the Taliban and Al Qaeda.

MUSHARRAF: Now, let me -- let it be really clear to -- to everyone that the -- in Pakistan, if we need to strengthen the global war on terror, we need to strengthen the army and the intelligence organization of Pakistan. And they are doing a good job. It is only the detractors, those who want to weaken Pakistan, who try to cast aspersions on these two organizations.

It weakens the global war on terror. And I have said it very clearly in the beginning -- let us not confuse strategy with tactics.

(END VIDEOTAPE)

BLITZER: The former Pakistani leader also had some very, very blunt comments on U.S. aid to his country.

(BEGIN VIDEO CLIP)

MUSHARRAF: If you want to ask me to thank you for the $10 billion, well thank you very much. But I am telling you the realities.

(END VIDEO CLIP)

BLITZER: Coming up, you're going to hear what President Musharraf's full explanation is -- why he says U.S. aid to Pakistan isn't all that it's cracked up to be.

The rest of my exclusive interview -- that's coming up right here in THE SITUATION ROOM.

But first, I want to check in with Jack Cafferty once again for "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: President Obama proclaimed that the United States will actively and aggressively seek lasting peace between Israel and the Palestinians. Every president says that. Last month, Israel launched an attack on Gaza that lasted three weeks, destroying buildings and claiming lives. A unilateral cease- fire was reached last week and President Obama has now urged Israel to open its borders with Gaza.

The new president also announced that George Mitchell will serve as a special enjoy for the Middle East peace process under Secretary of State Hillary Clinton. Mitchell's credentials include negotiating a cease-fire in Northern Ireland in 1998 -- no small accomplishment that.

This is yet another break from the Bush administration, which avoided appointing someone to that post of special Mideast envoy. Former secretary of State, Condoleezza Rice, did negotiate a deal for open border crossings to Gaza back in 2005, but Israel has often closed those crossing because of security concerns.

Israeli officials say they will not open the border with Gaza if it in any way strengthens or legitimizes Hamas.

So here's the question -- and we've asked it before and I have a hunch we'll probably ask it again, but it's worth asking: How should the Obama administration approach achieving peace in the Middle East -- something that has been elusive, to say the least?

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

BLITZER: It would be great if the new administration could do something about this. And we can only hope, Jack.

Thanks very much.

The rest of my interview with Pakistan's president -- that's coming up. It's revealing.

Also, he's a president surrounded by women, so why do some women's groups say Barack Obama isn't showing them enough respect?

And President Clinton used to stay up late. President Bush was known for his early to bed schedule. How Barack Obama -- how his schedule will impact his presidency.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: An assassination and a very chilling message from the grave -- one leader implicating another leader. We haven't heard directly from the former Pakistani president, Pervez Musharraf, until today. And now he's responding, in this exclusive interview.

Let's play part two.

(BEGIN VIDEOTAPE)

BLITZER: Let's talk a little bit about the late Benazir Bhutto, the former prime minister of Pakistan. She was killed in October of last year. After she was killed, she had authorized one of her U.S. advisers to send me an e-mail. Actually, she had sent this e-mail to me before she was killed, saying if she's ever killed, you could read this e-mail. And this e-mail said this, and I'll read it to you. This is from Benazir Bhutto, writing to me through an intermediary before she was assassinated.

"Nothing will, God willing, happen. Just wanted you to know if it does, in addition to the names in my letter to Musharraf of October 16th, I would hold Musharraf responsible. I have been made to feel insecure by his minions and there is no way what is happening in terms of stopping me from taking private cars or using tinted windows or giving jammers or four police mobiles to cover all sides could happen without him."

In other words, she was saying you were at least indirectly responsible for her assassination because you didn't authorize the appropriate security for her as she went around the country.

And we haven't had a chance to speak since her assassination, so I would love you to respond to what her charge was.

MUSHARRAF: Well, frankly, Wolf, there is so much of confusion in this matter, so much of diverse opinions, so much that has been said which has totally confused the issue. I would only say that I totally disagree with and aspersions on myself and I don't want to further compound this confusion that already exists on the -- on this assassination by giving further comments. I wouldn't like to do that.

But I take serious exception to any aspersions on myself -- on my person.

BLITZER: The U.S. provided, while you were president of Pakistan, about $10 billion in various forms of assistance, mostly military assistance. You said in a speech at Stanford University: "There is no misuse of these funds. They are utilized. This is pittance for a country which is in the lead role to fight terrorism. We must get much more."

Some suggested you were being ungrateful to the United States for these $10 billion.

What's -- what do you say?

MUSHARRAF: Well, I, no not, at all. I am not being ungrateful. Well, I would like to thank the United States for giving money. But let the people of United States and the people of the world be very clear -- and that is what you haven't covered.

And I said where have these $10 billion gone?

Half of them -- which is about $5 billion -- are for facilities and services provided by Pakistan, reimbursements for those -- reimbursements for services and facilities provided. Now, you could very well get those services and facilities somewhere else, from some other country.

So don't please tell us that for the services and facilities provided by Pakistan, you are counting that against something that you have given to Pakistan.

So, therefore, half of it goes there.

What about the other half?

The other half -- half of that other half, which means a quarter, almost -- goes for military assistance.

Now what military assistance?

So much of military is being used against our fight against terror. So much of equipment being used and the wear and tear of all that equipment on the end of pressure on the limited resources of Pakistan. So half of it goes there.

And the other half goes for social development, social economic projects.

So, therefore -- and spread over the last six or seven years. And this is $10 billion.

So now, the amount is there. Thank you very much. Thank you for giving us this amount over the last six, seven years.

But if you compare what you've spent in Afghanistan -- I believe I read an article where roughly $143 billion equal have been spent in Afghanistan.

What have you spent in Iraq?

Maybe over a trillion dollars.

No why -- this is what hurts Pakistan. It hurts the leadership. It hurts the government. It hurts the people of Pakistan that Pakistan is being treated so unequally, while we are the ones who are in the lead role fighting the global war on terror. We were in the lead role fighting a war for you for 10 years between '79 and '89.

Why the benefits of all the fallout of all the victory in 1989, the peace dividends that we got went to Europe -- East Europe and all the development that took place here.

What did Pakistan get out of fighting for 10 years with you?

Nothing, sir. For 12 years, we were left alone.

So, please, let's understand that is why the public opinion in Pakistan -- why is the public opinion so much against the United States? Well, for 42 years, up until 1989, we were your strategic partner. So if the people of United States -- the people of United States must understand issues in their correct perspective.

If you want to ask me to thank you for the $10 billion, well, thank you very much. But I am telling you the reality.

Please don't think that this $10 billion was such a great amount that we -- we have to be eternally grateful, when we know that we deserve much more and we should have gotten much more and we must get much more if we are to fight the global war on terror. That is what I've been saying.

(END VIDEOTAPE)

BLITZER: Pervez Musharraf speaking with me -- his first major interview since stepping down as president of Pakistan.

And one correction I should point out. Benazir Bhutto was assassinated back in December of 2007, not last year. I misspoke during that interview. The e-mail she sent me via an intermediary came in October of 2007.

We're going to have much more of this exclusive interview with Pervez Musharraf in our new Saturday edition of THE SITUATION ROOM. It will air tomorrow, 6:00 p.m. Eastern, only here on CNN.

It's been called Obamania, but does the fascination with the president's personal life give him a political advantage?

I'll discuss that and more. Donna Brazile is standing by.

And you've heard of soccer riots, but tennis riots?

We're going to find out about this -- what's going on.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Let's check in with Zain.

She's monitoring some other stories incoming into THE SITUATION ROOM right now -- Zain.

ZAIN VERJEE, CNN STATE DEPT. CORRESPONDENT: Wolf, police in the Bahamas say an investigation is underway into a report that someone has tried to extort money from actor John Travolta in relation to the death of his son. They say two people who are in custody are assisting with the investigations. Travolta's 16-year-old son Jett was found unconscious on January 2nd while on vacation with his family in the Bahamas. He was taken to a hospital, where he was pronounced dead on arrival. Former Cuban President Fidel Castro writes in a newspaper column that he might not be alive four years from now. He's instructed Cuban officials to stop taking into account him in their decisions. But many Havana residents are taking heart from these new pictures of the aging revolutionary. The Argentine government published this photograph of President Cristina Fernandez meeting with Castro in Havana on Wednesday. It's the first image published of the 82-year-old Castro since November.

And, Wolf, take a look at some of these pictures -- ugly images of ethnic violence at the Australian Open Tennis Tournament. Look at that. It's awful. It flared after a Serb won a match against a Bosnian-born American. And there were chairs and insults and bottles that were just hurled like that, back and forth. A Bosnian woman was hit in the head by a chair and she just fell to the ground. Police then intervened and ended this brawl. Two people were charged and another man was fined for riotous behavior -- Wolf.

BLITZER: Wow!

VERJEE: I know.

BLITZER: I've never seen that at a tennis match before, Zain.

VERJEE: I know. And Wolf...

BLITZER: Wow!

VERJEE: Wolf, I'd like a bookmark, as well.

BLITZER: We're going to get you one of those.

VERJEE: Yes. You didn't get me a Wolf pack t-shirt, either.

BLITZER: I've got about five...

VERJEE: You've been promising.

BLITZER: I've got about 5,000 of them.

VERJEE: OK.

BLITZER: OK. Thanks.

(LAUGHTER)

VERJEE: I just want one.

BLITZER: Star power and real power -- does President Obama's long running celebrity status give a boost to his political muscle?

The president is a bit of a night owl -- can he keep those hours at the White House, though?

And why bargains can mean big business in hard times.

We're back in 60 seconds.

(COMMERCIAL BREAK)

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

Happening now, selling the economic stimulus package -- President Obama sits down with Congressional leaders to discuss his nearly one trillion dollar plan. We have the latest on how close they are to an agreement.

Also, the president's approval levels at a record level. He's receiving criticism, though, from one core group of supporters. We're going to tell you about his potential problem with some women's groups out there.

It sounded great, but did the inauguration day classical ensemble fake their performance?

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

Our top story, the president of the United States, Barack Obama, putting pressure right now on Congressional leaders to quickly pass his massive economic rescue plan. Let's go to Capitol Hill, our Congressional correspondent, Brianna Keilar, she's working the story for us.

Brianna, you're digging and digging. What are Republicans who were there saying?

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: They're not quite going along, Wolf, but there is the mirror of bipartisanship.

(BEGIN VIDEOTAPE)

KEILAR: All together now.

UNIDENTIFIED MALE: We had a very productive meeting.

UNIDENTIFIED FEMALE: Very productive.

KEILAR: Perhaps, but after a meeting with President Obama, house Democrats and Republicans still don't see eye to eye on the $825 billion plan to pull the country out of recession. Republicans say the plan is light on tax cuts for businesses, too heavy on government spending that won't move fast enough to create jobs.

REP. JOHN BOEHNER (R-OH), HOUSE MINORITY LEADER: It doesn't spend out very quickly, it's almost too late and have concerns about the size of the package.

KEILAR: Congressional Democrats and the White House say not true.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: We believe, looking at the packages that exist, that 75 percent of the money will be spent out in an 18-month period of time with great stimulative effects.

(END VIDEOTAPE)

KEILAR: At the meeting today, house Republicans pushed for deep tax cuts for businesses, as well as for Americans in the two lowest tax brackets. This is an alternative to the Obama tax cut plan which would give those breaks to almost all Americans. However, Democratic and Republican sources pointed out that Mr. Obama said that Americans endorsed his tax cut plan when he was voted in to the White House.

BLITZER: All right. Thanks very much, Brianna, for that.

Let's talk about what's happening in the end of this inauguration week. It's been an incredible week here in Washington. Joining us, our CNN political contributor, the Democratic strategist, Donna Brazile. We're really happy Don Lemon is still in Washington, heading back to Atlanta tomorrow. And our Republican strategist, Kevin Madden. He doesn't really need Republican support in the House and Senate given the lopsided majorities the Democrats have, but he really would like it.

DONNA BRAZILE, DEMOCRATIC STRATEGIST: Absolutely. Because he wants to change the tone this Washington, D.C., he's held two bipartisan sessions. He's agreed to meet with house Republicans to try to look at more. He's reaching out but you know the bipartisanship is a two way street and they should also reach back.

BLITZER: If I remember, Bill Clinton in 1993, he passed his tax increases if you will, without any Republican support. He did it with the Democrats alone.

KEVIN MADDEN, REPUBLICAN STRATEGIST: Sure. This could pass with a party line vote, but I think everybody's interested in making this work. The differences, Republicans want a plan that is going to focus on spending that is going to get liquidity right into the economy very quickly. Not going to be these big expenditures on growing the size of government. We want to see pro-growth tax policies in there. We're going to fight on principle on those issues but we're going to look and reach across the aisle and see where we can work together on it.

BLITZER: Is it in his nature to be partisan and to do it alone just with the Democrats or is it in his nature to reach out and bring in the Republicans?

DON LEMON, CNN ANCHOR: It is in his nature to reach out. That's how he was in Illinois and that's how he is now. The basis of his speech, the basis of his campaign, was reaching out. In the first couple of days you can see that. Yes. That's his core. Reaching out.

BLITZER: This first week, it's been an amazing week. Did he get off on the right foot? Right now in all the symbolic and substantive things he did?

BRAZILE: Absolutely. Look I think President Obama was prepared to lead from day one. You've seen with the signing of the executive orders, the meetings with all of the various leaders across the country, calling world leaders, he's ready to get off to a fresh start.

BLITZER: What do you think?

MADDEN: He's been very successful at playing his popularity against Congress because we all know that a lot of people have put their hopes, dreams and aspirations in Barack Obama right now, given the challenges we face and he does understand that the American public is still not enamored with Congress so he's playing against some Cynicism in Congress very well. I think there's going to be a clash eventually. A lot of Democrats on Capitol Hill, they are looking to reassert their Congressional authority at a time where the challenges really require an activist president from Barack Obama. I think that's where the clash is. I think some of the resistance is going to come from his own party on the left.

BLITZER: You had a chance today Don, in the District of Columbia to go out to Ben's chili bowl. You spoke to some folks there. I'll play some clips of what they said to you.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: He's getting on the economic plan today. He's ending Guantanamo Bay yesterday. I want to see that stimulus package come out.

UNIDENTIFIED FEMALE: If he comes through on the promises, amen.

UNIDENTIFIED FEMALE: Peace throughout the world, bringing the world together -- unified.

(END VIDEO CLIP)

BLITZER: He's going to reach out to folks right here in Washington, D.C., at least he's starting to do that. That's pretty different from President Bush. Really didn't spend a lot of time outside the White House. He's got a different attitude, doesn't he?

LEMON: He does. Now, Ben's is just as popular as Barack Obama. We went back afterwards and people there say the first week, he's done really well. He's hit the ground running like he said he was going to do on day one, yet they say he's got a long time, four more years, but they'd like to see the economy. The economy came up time after time after time. They were dancing in the aisles today. They were actually dancing.

BLITZER: It's almost like a shrine to Barack Obama.

LEMON: They didn't know we were there. There was a guy standing up on the bar stool, singing. I said you're in the middle of African- Americans -- he said, I'm in Detroit, I can dance. Everybody started dancing.

MADDEN: The food was good enough before. BRAZILE: It was Bill Cosby who really introduced it to the world.

LEMON: He was a great dancer. Barack Obama said he wants to be a part of Washington, D.C. and he is, in fact, delivering on that as well. Many of the presidents did do that.

BLITZER: We'll see if he throws out the first pitch at a Washington Nationals game. Then he'll really be part of Washington, D.C. I know he wants to go to Chicago and throw out the first pitch there but let's see if he does it in Washington.

BRAZILE: I'll recommend it. Friday night is date night and I hope he takes Michelle out to a neighborhood restaurant.

LEMON: I'm here tonight.

BRAZILE: You went to Ben's.

LEMON: I know you said Anderson --

BRAZILE: We have fried chicken on Fridays. You can show up with me.

BLITZER: What about me?

BRAZILE: Wolf, you're working. I'm sorry.

BLITZER: Does his celebrity status give him more political power to get him want he wants?

MADDEN: The burden of high expectations is there. It's a tough thing to manage with the American public's expectations. Any politician wanted to be more popular than hated. It helps him because he's become such an icon. When challenges arise for Barack Obama, he's going to be able to tap into an incredible number of activists. That's a very powerful thing. It could dissipate as quickly as it was born, but that will be interesting to see.

BLITZER: As soon as anything is reported here in THE SITUATION ROOM that has at all critical of Barack Obama, we get flooded from complaints from supporters. How could you be saying this? Yesterday, no cameras in with the second swearing in, my god, you would have thought he was doing some terrible thing.

LEMON: You should stop talking about it, or even Michelle Obama's voice mail not being set up. People were saying give them time. I just want today say, it's hard to say no to someone you like, so that's the basis.

BLITZER: There's going to be a powerful tool for him.

BRAZILE: He's the president of the United States of America. He's the commander in chief. He should leverage this right now and remind the American people that we face difficult days ahead. MADDEN: It's a very powerful thing to have so many voters and feel vested in either his success or failure. It's something I expect they'll use these next four years. As Republicans, it's something that we have to really look at as a challenge for enacting our agenda as well.

BRAZILE: Like dancing with him.

BLITZER: As journalists, we're going to look closely at all of his decisions as we should and report them accurately. Thanks very much.

He got strong backing from women in the election. He's since named half a dozen to cabinet level posts, but some women's groups saying President Obama's not showing them enough appreciation.

Plus, the president is known to keep a night owl's schedule. Will those hours work in the White House?

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

(COMMERCIAL BREAK)

BLITZER: Barack Obama enjoyed strong support from women in the election, but now, some women's groups say he's not doing enough to show his appreciation. Christine Romans is looking into the story.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): He is a president surrounded by women.

OBAMA: How good looking is my wife?

ROMANS: The Harvard educated wife, two young daughters. His mother-in-law lives on Pennsylvania Avenue. On the campaign trail he invoked the hard work of the woman who raised him and promised equal pay for women.

OBAMA: I think about my grandmother and what she could have done if she had been treated equally.

ROMANS: He named Hillary Clinton his secretary of state. Janet Napolitano to head homeland security. So far, six cabinet level positions to women. So why are women's organizations like NOW and the New Agenda disappointed?

AMY SISKINO, THE NEW AGENDA: We had high hopes for President- elect Obama going into this and it's been very discouraging.

ROMANS: Just six out of 21 cabinet positions they say is not enough. Women are 52 percent of the population and 54 percent of voters and 56 percent of women voted for this president.

SISKINO: Clearly not getting the respect or the amount of power that the women in this country deserve and it just shows you that Obama does not take this constituency seriously.

ROMANS: Unfair, says author Naomi Wolf.

NAOMI WOLF, FEMINIST & OBAMA SUPPORTER: I personally feel strongly that it's more important to have the right policies.

ROMANS: But there's also a nagging concern that men will be favored in the 3.7 million jobs Obama wants to create. Jobs building bridges and roads, alternative energy and healthcare technology, fields dominated by men.

WOLF: What he could make sure his policy advisers invest as much in hospitals, schools and the kinds of sectors where women dominate.

ROMANS: A message the president's team has heard loud and clear, recently estimating Obama's stimulus will save or create about 1.5 million jobs for women over the next two years.

(END VIDEOTAPE)

BLITZER: Here's a nugget though. A lot of people agree it will be a challenge to create a ton of jobs for women because in his proposed package, there will be heavy emphasis on construction jobs and only about 3 percent of that industry is female. Engineering and technology by the way as you no doubt know largely dominated by men as well. The controversy will continue.

One of the perks of being president of the United States is getting to set your own hours. Over at the White House, seems likely that the new boss will bring a new schedule. Our national correspondent Jason Carroll has been comparing Barack Obama's work habits with that of past presidents.

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JASON CARROLL, CNN NATIONAL CORRESPONDENT (voice-over): Clinton worked so late his staff called it Clinton standard time. Carter, too, the compulsive workaholic, but historians say Reagan worked fewer hours but was more effective. Then there's George W. Bush. The first lady joked about his early hours.

LAURA BUSH, FORMER FIRST LADY: George, if you want to end tyranny in the world, you're going to have to stay up later.

CARROLL: What about our new commander in chief?

DAVID MENDELL, AUTHOR, "OBAMA FROM PROMISE TO POWER": He's always been a night owl, going back to his college days.

CARROLL: If you're on Obama's staff, listen up. Expect long, long hours, but you might get a break here and there.

GIBBS: Yesterday, between two events, went upstairs to have dinner with them and that means a lot as a father.

CARROLL: Take note. Some insight from past presidential staffers, Ed Rollins worked under Nixon, Ford and Reagan.

ED ROLLINS, REPUBLICAN STRATEGIST: Nixon didn't like to work with staff. He liked to work along. Reagan was a great decision maker. He had a great ability to make decisions. Move on, go to bed at 8:00.

CARROLL: Paul Begala remembers trying to convince Clinton to take a vacation during his first year in office.

PAUL BEGALA, DEMOCRATIC STRATEGIST: You know, sir, if you don't take a vacation, people are going to think you're weird. He said, Paul I am weird. I love this job and don't want to take a break.

CARROLL: Even the greatest presidents like FDR took time out for leisure and they say long hours do not always equal success.

MARY MATALIN, FORMER BUSH ADMINISTRATION STAFFER: For every failed president like Bush who had a limited workday, you have one that's considered highly successful like Reagan.

(END VIDEOTAPE)

CARROLL: The best advice, find people you can trust and surround yourself with them.

Jason Carroll, CNN, New York.

BLITZER: Hillary Clinton's power, at least some are calling it that. The secretary of state wants to take back resources she feels rightfully belong to her department.

Pope Benedict XVI calls it the great family that knows no borders. How he's making history online with You Tube.

Stick around. You're in THE SITUATION ROOM.

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BLITZER: The economic downturn is helping some companies thrive. Thrive. CNN's Alina Cho is looking into the story.

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ALINA CHO, CNN CORRESPONDENT (voice-over): Wal-Mart, Campbell's Soup, McDonald's, the Dow may be down but these household names are up. Way up.

UNIDENTIFIED MALE: You can get a lot of food for $5 here.

UNIDENTIFIED MALE: It's hard in a recession. Everybody is hoping it gets better, but who knows.

CHO: With unemployment up, spending is down and everyone these days is looking for a deal. That means Wal-Mart and McDonald's, often the butt of jokes, has the last laugh. They are the only two companies in the Dow whose prices rose in 2008. In the third quarter, McDonald's profits were up 11 percent.

DANA TELSEY, TULSEV ADVISORY GROUP: The companies that are doing well in this environment are companies whose brand names are well- recognized who are offer good value for the money.

CHO: Take Campbell's soup.

ANTHONY SANZIO, CAMPBELL SOUP CO.: In tough times, people do turn to the familiar.

CHO: Like chicken noodle and tomatoes. Sales of condensed soup are up 14 percent.

SANZIO: We are seeing a return to comfort foods, casseroles are huge. The number one search term on our website right now is crock pot.

CHO: Campbell is using the downturn as a marketing opportunity. Taking a queue from McDonald's calling the soup selection the original dollar menu. It's not just soup. Spam is surging. So is Kraft Food's Mac and Cheese, Jell-O and Kool Aid. Frugal chic.

TELSEY: Part of what drives consumer spending is the feel good factor. If everyone's friends and neighbors don't have the same level of dollars to spend this year as last year, it doesn't make anyone feel good to be that different from someone else.

CHO: The outlook is good. Analysts say comfort companies should do well in 2009.

(END VIDEOTAPE)

CHO: One analyst said it's the worst of times for restaurants, but the best of times for McDonald's. The sales have increased for 55 straight months. In Campbell's case, just look at the stocks. The company shares are down by about eight percent over last year, but the Dow is down 30 percent. McDonald's shares are outperforming the Dow.

Alina Cho, CNN, New York.

BLITZER: As part of world communication, a day at the Vatican. Pope Benedict XVI is joining the You Tube generation. Wow. Abbi Tatton is looking into this. What's going on?

ABBI TATTON, CNN INTERNET REPORTER: It was about a year ago that the queen of England joined you tube. It was just a matter of time. Pope Benedict XVI got his own You Tube channel, an official space from the Vatican. They are uploading news, speeches from the pope and one of them he explained that they have to embrace this to reach the digital generation.

POPE BENEDICT XVI (through translator): You must find new ways to spread voices and images of hope through the ever-evolving communications system that surrounds our planet.

TATTON: It was Pope John Paul II that launched a website in 1995. Last year Pope Benedict XVI went further, sending out a text message on world youth day and signed it off, BXVI embracing the internet. He warned against obsessive connectedness. I think the Holy Father saying it's OK to put down the blackberry.

BLITZER: I know people who have that disease.

TATTON: A lot of people around here.

BLITZER: No doubt about that. Thank you, Abbi.

What derailed the bid to take over Hillary Clinton's Senate seat? A lot of people say she was hurt because of a double standard for women. A live performance and now we know the music was on tape. A practical move or inaugural embarrassment?

You are in THE SITUATION ROOM.

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BLITZER: Let's get right back to Jack for the Cafferty File. Jack?

CAFFERTY: The question this hour is: How should the Obama administration approach peace in the Mideast?

Brian in Trinidad writes: "What is this a joke now? Every president says the same thing. What else are they going to say? They can't say the truth which is peace in that part of the world is hopeless. So let's do the next best thing, make tons of money selling both sides weapons and technology and don't forget about contracts to American firms to rebuild the bombed out neighborhoods. Are you kidding me Jack? You of all people taking these peace comments seriously."

Rick in Ohio said: "I think it was a real stroke to create a special position for this purpose and bring in someone of George Mitchell's stature. My fear is that fanaticism will be a continuing obstruction. The George Mitchell dealt with this before. He helped solve an 800-year-old conflict in Northern Ireland. We can all just hope and pray he can pull it off again."

Bob in Ontario says: "The Obama administration has to treat both sides with respect with legitimate grievances. Israel has to be told it cannot say no to any reasonable proposal put forward because it doesn't like Hamas. It's one of the reasons the Palestinians feel frustrate and why they retaliate with rocket launches into Israel. It's time the U.S. and its allies stopped being pro Israel with more time to be more cooperative."

Kim in Kansas said: "The Mideast has been the cradle of violence since the dawn of time and you think by now the world would have grown weary of the caveman tribal mentality that permeates the cultures of that region. It's time the U.S. washed its hands of the whole affair, let these marginal societies eliminate each other without our interference. We have our own problems that deserve immediate attention." And Jane says: "The Mideast has been in turmoil since the dawn of time. I if I had the answer, I would be president of the United States. If Obama can craft a lasting peace, maybe we will have to rethink that messiah rumor that flew around on the right wing blogs."

If you didn't see your email here, you can go to my blog at cnn.com/caffertyfile. Look for yours there among hundreds of others.

BLITZER: Thank you, Jack.