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The Situation Room

Wiretap Tapes Released; President Obama Answers al Qaeda; "He Was Really Cool"

Aired January 27, 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: The president's first formal TV interview goes to an Arabic language channel in the Middle East, as he reaches out to the Muslim and Arab world. We're going to get behind the scenes details from the interviewer and hear from the interviewee.

And the Obama campaign used cutting edge communications, but is the White House technology so out of date right now that the staff can hardly even send e-mail?

I'm Wolf Blitzer.

You're in the SITUATION ROOM.

We're going to get to President Obama's one-on-one interview in just a moment -- his first interview -- a sit-down interview -- since taking office. And a dramatic interview, indeed, with an Arabic language television station. That's coming up. You're going to want to see and hear this.

But first, for the very first time, we're hearing the audiotapes of the Illinois governor, Rod Blagojevich, in those conversations that led to his arrest. The tapes were released as part of his impeachment trial now underway in Springfield, Illinois.

And that's where we find CNN's Susan Roesgen, who's standing by.

I take it some pretty dramatic audiotapes today -- Susan.

SUSAN ROESGEN, CNN GULF COAST CORRESPONDENT: Yes, Wolf, dramatic, especially for the state senators. Now, for our viewers who are listening to these tapes for the first time, it may not really seem conclusive in terms of any kind of crime being committed. But the state investigators know what this is about. And this was the first time you hear from the governor. If he wouldn't show up in person, his words are here.

(BEGIN VIDEOTAPE)

ROESGEN (voice-over): At last, state lawmakers got to hear at least a little bit of some of the FBI's secret recordings of Illinois Governor Rod Blagojevich.

In this call, someone the FBI calls "lobbyist one" speaks first.

(BEGIN AUDIO CLIP) UNIDENTIFIED MALE: Lon's going to talk to you about some sensitivities legislatively tonight when he sees you, with regard to timing of all of this.

GOV. ROD BLAGOJEVICH (D), ILLINOIS: Right.

Before the end of the year, though, right?

UNIDENTIFIED MALE: Oh, yes. Yes. Yes.

So...

BLAGOJEVICH: (INAUDIBLE).

UNIDENTIFIED MALE: There was no waffling there. It's just that, you know, we've got to -- we've just got to figure it out. And so he'll give you the specific details.

(END AUDIO CLIP)

ROESGEN: The impeachment prosecutor told state senators the conversation involves a horse racing bill that the governor allegedly refused to sign until he could get cold, hard cash.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: What are the chances, based on that conversation with you yesterday, that this gets done next week?

BLAGOJEVICH: You know, they're good. And I feel like...

UNIDENTIFIED MALE: All right. (INAUDIBLE)...

BLAGOJEVICH: I feel like there's somebody else who's holding him back.

UNIDENTIFIED MALE: No...

BLAGOJEVICH: I believe it's Chris.

UNIDENTIFIED MALE: No, no.

BLAGOJEVICH: Well, what's taking -- you know, a whole year, you know what I mean?

Hey, Lon...

UNIDENTIFIED MALE: No, I don't think he's been talking to Chris.

(END AUDIO CLIP)

ROESGEN: There were only four short snippets taken from hours of the government's wiretaps, but that may be enough to persuade the Illinois Senate to kick the governor out of office.

Much more will be heard in the criminal case that could send the governor to prison.

(END VIDEOTAPE)

ROESGEN: And, Wolf, of course, what many people want to hear is what was the conversation that involved Barack Obama's U.S. Senate seat?

What did the governor really say there and what was his intention?

That tape and so many others cannot be played until the criminal case because the federal prosecutor says he's very worried that if those tapes and those portions were to come out now, it could somehow hurt the criminal case that won't come up now for several months -- Wolf.

BLITZER: Susie Roesgen in Springfield, staying on top of this story.

He already has been impeached, as you know. Now, the trial is underway to see if he's convicted and actually kicked out of office. And, as she points out, the criminal case against him pending.

Let's get to President Obama right now. He's dramatically reaching out to the Muslim world. He's reaching out to the Arab world. But responds -- and he's responding to what he's -- what some are calling the demonization of America and the harsh personal attacks on him by Al Qaeda.

The president spoke with Hisham Melhem, the Washington bureau chief of the Middle East television network, Al Arabiya.

(BEGIN VIDEO CLIP, COURTESY AL ARABIYA)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I noticed...

HISHAM MELHEM, AL ARABIYA: It's a chorus.

OBAMA: ...they -- they seem nervous.

MELHEM: They seemed very nervous. Exactly.

OBAMA: Yes.

MELHEM: And now, tell me why they should be more nervous.

OBAMA: Well, I -- you know, I think that when you look at the rhetoric that they've been using against me, before I even took office...

MELHEM: I know. I know.

OBAMA: ...what that tells me is that their ideas are bankrupt. There's no actions that they've taken that say a child in the Muslim world is getting a better education because of them or has better health care because of them. In my inauguration speech, I spoke about you will be judged on what you build, not what you destroy. And what they've been doing is destroying things.

And, over time, I think the Muslim world has recognized that that path is leading no place -- except more death and destruction.

Now, my job is to communicate the fact that the United States has a stake in the well-being of the Muslim world, that the language we use has to be language of respect.

Now, I have Muslim members of my family.

MELHEM: Sure.

OBAMA: I have lived in Muslim countries.

MELHEM: The largest one.

OBAMA: In the largest one, Indonesia. And so what I want to communicate is the fact that in all my travels throughout the Muslim world, what I've come to understand is, is that regardless of your faith -- and America is a country of Muslims, Jews, Christians, nonbelievers. Regardless of your faith, people all have certain common hopes and common dreams.

And my job is to communicate to the American people that the Muslim world is filled with extraordinary people who simply want to live their lives and see their children live better lives. My job to the Muslim world is to communicate that the Americans are not your enemy. We sometimes make mistakes. We have not been perfect.

But if you look at the track record, as you say, America was not born as a colonial power. And that the same respect and partnership that America had with the Muslim world as recently as 20 or 30 years ago -- there's no reason why we can't restore that.

And that, I think, is going to be an important task. But ultimately, people are going to judge me not by my words, but by my actions and my administration's actions.

And I think that what you will see over the next several years is that I'm not going to agree with everything that some Muslim leader may say or what's on a television station in the Arab world. But I think that what you'll see is somebody who is listening, who is respectful and who is trying to promote the interests not just of the United States, but, also, ordinary people, who right now are suffering from poverty and a lack of opportunity. I want to make sure that I'm speaking to them, as well.

MELHEM: Any decision on where -- from where you will -- you will be addressing the Muslim world?

Or is it too early?

OBAMA: Well, you know, I'm not going to -- I'm not going break the news right here.

MELHEM: Maybe next time.

OBAMA: But -- maybe next time. But it is something that's going to be important. I want people to recognize, though, that we are going to be making a series of initiatives. Us sending George Mitchell to the Middle East...

MELHEM: Right.

OBAMA: ...is fulfilling my campaign promise that we're not going to wait until the end of my administration to deal with Palestinian and Israeli peace. We're going to start now. It may take a long time to do, that's what we're going to do now.

We're going to follow through on our commitment for me to address the Muslim world from a Muslim capital. We are going to follow through on many of my commitments to do a more effective job of reaching out -- listening, as well as speaking to the Muslim world. And you're going to see my following through with dealing with a drawdown of the troops in Iraq, so that Iraqis can start taking more responsibility.

And, finally, I think you've already seen a commitment in terms of closing Guantanamo and making clear that, even as we are decisive in going after terrorist organizations that would kill innocent civilians, but we're going to do so on our terms. And we're going to do so respecting the rule of law that I think makes America great.

(END VIDEO CLIP)

BLITZER: We're going to have more of this interview, coming up, including what he says about Iran, more on al Qaeda, more on his effort to reach out to the Arab and Muslim world. That's coming up. Stand by.

Let's check in with Jack Cafferty. He has "The Cafferty File."

That's a pretty remarkable development, when you think of it. His first television interview since becoming president is an interview designed to reach out, take a different attitude toward the Arab and Muslim world.

JACK CAFFERTY, CNN ANCHOR: Well, and it's certainly a change from what we're used to. It's been exactly one week since Barack Obama became our 44th president. And what a week it's been -- signing executive orders, meeting with his team of advisers on the economy, national security, Iraq, the Middle East. He's also been meeting with lawmakers from both parties, trying to win support for that emergency stimulus at the Capitol.

In addition to getting his feet wet, the new president is also learning some things along the way. For example, the White House press room is where the press is. And if you don't want the press to ask you questions, then don't go there.

And if you're going to ban lobbyists from working for you, then you have to ban the one that used to lobby for Raytheon from working in the Defense Department, as well.

And if you're going to close Guantanamo, you have to have a plan for what do with the inmates there. You see, a couple of them have turned up in recent Al Qaeda videos.

And you cannot overturn abortion funding for charitable groups overseas without incurring the wrath of the anti-abortionists in this country.

And picking a fight with that corpulent, OxyContin aficionado of right-wing talk radio, Rush Limbaugh, well, that mobilizes a bunch more on the conservative right and eventually it will begin to bring down your approval ratings.

Nevertheless, the new president seems to be weathering it all quite well. The latest Gallup Poll taken over the weekend gives him a 69 percent job approval rating -- roughly 40 points higher than his predecessor.

So here's the question: How would you rate President Obama's first week in office?

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

BLITZER: A lot of people, including his critics, are very impressed, I have to tell you, Jack. And you know that.

Thanks very much.

When it comes to terror, the new president is sounding much like his predecessor.

Just listen to this.

(BEGIN VIDEO CLIP)

OBAMA: I cannot respect terrorist organizations that would kill innocent civilians. And we will hunt them down.

(END VIDEO CLIP)

BLITZER: We're going to have more of President Obama's interview with the Arab language network Al Arabiya -- parts you probably haven't seen yet, including how he views Al Qaeda and the Muslim world. Stand by.

And former presidents revealing their regrets in their own words. We're talking about Bill Clinton and the first President Bush on what they wish had been different.

And Sarah Palin, the governor of Alaska -- she's making a move that could be a first step toward a run for the presidency in 2012.

Stay with us.

You're in the SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: The former president of the United States, Bill Clinton, he's now speaking about President Obama's move into the Oval Office. We have the audiotape -- the videotape.

Stand by. You're going to hear Bill Clinton here in the SITUATION ROOM. It's pretty dramatic.

Let's get some more right now of President Obama's stunning effort to reach out to the Muslim world, the Arab world. His interview with Hisham Melhem, the Washington bureau chief of the Middle East television network, Al Arabiya.

(BEGIN VIDEO CLIP, COURTESY AL ARABIYA)

OBAMA: The language we use matters. And what we need to understand is, is that there extremist organizations, whether Muslim or any other faith in the past, that will use faith as a justification for violence.

We cannot paint with a broad brush a faith as a consequence of the violence that is done in that faith's name.

And so you will, I think, see our administration be very clear in distinguishing between organizations like Al Qaeda, that espouse violence, espouse it and act on it, and people who may disagree with my administration on certain actions or may have a particular viewpoint in terms of how their countries should develop. We can have legitimate disagreements, but still be respectful.

I cannot respect terrorist organizations that would kill innocent civilians and we will hunt them down.

But to the broader Muslim world, what we are going to be offering is a hand in friendship.

MELHEM: Will the United States ever live with a nuclear Iran?

And if not, how far are you going in that -- in the direction of preventing that?

OBAMA: You know, I said during the campaign that it is very important for us to make sure that we are using all the tools of U.S. power, including diplomacy, in our relationship with Iran.

Now, the Iranian people are a great people. You know, the Persian civilization is a great civilization. Iran has acted in ways that's not conducive to peace and prosperity in the region.

Their threats against Israel. Their pursuit of a nuclear weapon which could potentially set off an arms race in the region that would make everybody less safe. Their support of terrorist organizations in the past. None of these things have been helpful. But I do think that it is important for us to be willing to talk to Iran, to express very clearly where our differences are, but where there are potential avenues for progress.

And we will, over the next several months, be laying out our general framework and approach. And, as I said during my inauguration speech, if countries like Iran are willing to unclench their fists, they will find an extended hand from us.

MELHEM: Sir, I really appreciate it.

OBAMA: Thank you so much.

(END VIDEO CLIP)

BLITZER: By the way, Al Arabiya was launched nearly six years ago. It was set up to counter Al Jazeera Television in the Middle East. It's seen as a more moderate voice, especially from the U.S. perspective. The 24-hour Arabic language channel, Al Arabiya, is based in Dubai. Its news programs reach some 40 million viewers. The largest audience is said to be in Saudi Arabia. Al Arabiya is part of the NBC group, owned by a brother-in-law of Saudi Arabia's King Fayed.

And now to the story behind this journalistic coup.

(BEGIN VIDEOTAPE)

BLITZER: Take us behind-the-scenes, Hisham, off-camera.

What was he like when you spoke with him?

MELHEM: He was really cool. And he was -- he was very friendly. He felt at home. I told him that we share an abiding love of Chicago blues. And he just beamed. And we began to talk for a couple of minutes about Chicago blues.

And I asked him about his two daughters. I told him about my daughter, who happened to be a volunteer and worked for him. And so he felt at home. I felt at ease. He puts you at ease.

BLITZER: He can be a pretty charming guy, is that what you're saying?

MELHEM: He is. Absolutely. Absolutely.

BLITZER: Yes.

MELHEM: But, you know, you realize, you're sitting across from a man who has a deep, a keen intellect, a sharp analytical mind, supple intelligence. And the way he weaves things, the way he frames issues, whether he's talking about terrorism, talking about different cultures, he has a very sophisticated understanding of the world.

BLITZER: How is it going to be received in the Muslim and Arab world? MELHEM: Judging by the first quick reaction that we got on our Web site and in the letters, the first reaction -- the Arab media and others -- especially what he said about the Muslim world, the way he spoke about Islam as a religion, when he said members of my family were Muslims. And I think that was his way of undermining those extremists -- al Qaeda and others -- who are trying to demonize the United States.

It's going to be extremely difficult for them. And he noted that -- laughing -- that these people are nervous because of me. Because they cannot demonize a man whose full name is Barack Hussein Obama, who has tried to say I'm extending a hand honestly, who is speaking with clarity and honestly.

And I think he's going to -- later on, when he addresses the Muslim world from a Muslim capital -- even if he shows them some tough love, he would say, look at my deeds -- closing down Guantanamo, getting out of Iraq, sending Mitchell to the region. These are deeds that -- and judge me by them.

BLITZER: You know these issues in the region as well as anyone.

MELHEM: Sure.

BLITZER: You've been covering this story for a long time.

Will he succeed?

MELHEM: Look, already he is sending the right vibes, the right tone and a different approach. There is a different wind coming from Washington, a different discourse. In terms of a radical shift, it's too early to say.

He's waiting for the Israeli elections, as you well know. He's waiting for the Iranian election, as you well know. He's sending the right signals at this stage. And I think he will -- he's going to force people in the Middle East to listen to him and take him very seriously and to listen to him carefully.

BLITZER: I think you're absolutely right. And as someone who also has covered this region for a long time, he spoke with authority and knowledge. He clearly knew what he was talking about...

MELHEM: Absolutely.

BLITZER: ... and he felt very self-confident in that as well.

MELHEM: Absolutely.

BLITZER: Hisham, good work.

Thanks for joining us.

MELHEM: Thank you.

(END VIDEOTAPE) BLITZER: The most high tech administration in history caught off guard by an out of date computer system -- there's trouble at the White House right now and an urgent scramble to fix it.

And what's in that stimulus plan for you?

Our chief business correspondent, Ali Velshi, breaks down the huge tax cut.

How much do you have coming?

Lots going on right here in the SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: You're going to hear something very dramatic and also very funny. The first President Bush brings the house down and he tells a story that even the former president, Bill Clinton, wound up blushing as a result.

Stand by. You're going to want to hear and see this.

But, first, Zain Verjee.

She's monitoring some other important stories incoming into the SITUATION ROOM right now.

What's going on -- Zain?

ZAIN VERJEE, CNN STATE DEPT. CORRESPONDENT: Well, Wolf, a deadly winter storm is clobbering much of the country right now, from Texas through the Midwest and over to the East Coast. The roads are a mess in Indiana. Six to eight inches of snowfall kept the plows busy, as they tried to keep the highways clear.

In Oklahoma, slippery conditions caused a school bus to just slide off the road and into a ditch. Much of that state is under an ice storm warning.

And right here in Washington, D.C. a snowy scene at the Capitol and freezing rain, too, could close the city before the storm moves out.

And the stock market finished higher despite the beating the job market took again today. The Dow closed up more than 58 points. That's after six more companies came out with discouraging news -- more than 10,000 jobs across several industries cut just today. Corning and Volvo are just a couple of the big names companies involved in today's cuts.

And, Wolf, bad manners and gender saved lives on the Titanic. Two researchers are studying the 1912 disaster. And they found that British passengers politely lined up for a lifeboat, while Americans elbowed their way on. The behavior gave Brits a 10 percent lower survival rate than any other nationality. The study also found that the social custom of women and children first increased the survival rates for those groups. Only about 700 of the more than 2,000 passengers survived -- Wolf.

BLITZER: I don't remember seeing that part in the film, "The Titanic." But maybe -- maybe there's some scientific evidence to back it up.

All right, Zain.

Thanks very much for that.

A former president for the United States unplugged.

(BEGIN VIDEO CLIP)

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: You know, he tells jokes that I just couldn't get away with telling.

(LAUGHTER)

CLINTON: Can you imagine what they'd do to me if I told that joke he told up here?

(LAUGHTER)

(END VIDEO CLIP)

BLITZER: Wait until you hear it -- what George H.W. Bush said. They also talk candidly about their biggest regrets. You're going to want to hear and see their comments. Also, Obama -- we're talking about the president of the United States -- President Obama plans for tax -- to cut taxes for millions of Americans.

Will you get more money?

Just how much more?

Our own Ali Velshi -- he's standing by to break down the numbers.

And Governor Sarah Palin makes a big move in what could be the first step on the road to a presidential campaign.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

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

Happening now, the president's rescue plan in plain English -- we're breaking down his call for tax cuts to show whether it will really put more money in your pocket.

And the economic crisis -- it's hitting just about everyone -- even our troops fighting in Afghanistan -- what they won't have in their fight against terrorism.

And the Obama administration is cracking down on corporate perks, like a multimillion dollar company jet and executive bonuses and more.

I'm Wolf Blitzer.

You're in the SITUATION ROOM.

President Obama on Capitol Hill today urging lawmakers to put politics aside and pass his $825 billion proposed economic stimulus package.

(BEGIN VIDEO CLIP)

OBAMA: The main message I have is that the statistics every day underscore the urgency of the economic situation. And the American people expect action. They want us to put together a recovery package that puts people back to work, that creates investments that assure our long-term energy independence, an effective health care system, an education system that works.

They want our infrastructure rebuilt and they want it done wisely so that we're not wasting taxpayer money.

(END VIDEO CLIP)

BLITZER: Let's break it down. Information you need to know about tax cuts and how they will impact on you. Our senior business correspondent Ali Velshi has got the numbers.

People want to know if it gets passed the way he wants it, the recovery plan, what does it mean for money in people's pockets?

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: And Wolf, our viewers can't make a decision about what they feel about it if they don't really understand where it's so all this week on THE SITUATION ROOM, we break down the part that could go into your pocket.

I'm going to show it to you. Let's put it up on the wall. Let's start with an increase. It's $275 billion in tax breaks. Let's go clockwise from just where it says tax breaks. $450 million immediately to people on social security, the elderly and disabled and blind and increase in social security supplemental benefits. That will be there.

Right under that is unemployment. A $25 a week increase in unemployment benefits and extensions of COBRA and an extension of emergency unemployment benefits through the end of 2009.

The next is an increase in tax deductions to another 16 million children through expansion of the child tax credit. In the bottom left corner, a $500 tax cut per worker, $1,000 per family up to a certain income level which the administration hasn't talked about but they have said it will give a tax credit to 95% of working Americans.

Finally, an extension of food stamps to over 30 million Americans. These are parts of the recovery plan that the Obama administration says will get into people's pockets immediately. Unlike the other parts that may take time to trickle down, $275 billion of the $825 billion is designed to get into the pockets of Americans in need fairly quickly -- Wolf?

BLITZER: Ali, thanks for breaking down the numbers. Good work. Appreciate it.

Let's discuss this and more with Democratic strategist Jamaal Simmons and Republican strategist Kevin Madden.

Are Republicans going to vote for this when the dust settles in the coming days?

KEVIN MADDEN, REPUBLICAN STRATEGIST: If the bill in the package continue to look like this where there is a lot of wasteful spending and there isn't enough on the pro growth tax side, I expect they won't. This is an opportunity for Republicans to coalesce again around Republican principals and essentially align themselves with American who is think this plan is not going to do enough to really create jobs and enough to help the private sector create more jobs.

BLITZER: If Barack Obama, the president of the United States, only gets a small number of Republicans to support this legislation in the House and Senate, how damaged is the effort to try to show he is a bipartisan leader?

JAMAAL SIMMONS, DEMOCRATIC STRATEGIST: I don't think the question is how damaged will Barack Obama be, but how damaged will the Republican Party be if they allow this to pass without being helpful. The American people spoke very clearly in November. Barack Obama said in his meeting last week, he won. It's time for the Republicans to get into the game and what they need done in the package so they can be a part of bringing America out of the ditch. What we see right now is we see a fair amount of obstruction and the Democrats and the Republicans are waiting to see.

BLITZER: The president did overrule what Nancy Pelosi wanted. Listen on Sunday about funding that would involve abortion rights for women. Listen to this.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: The family planning services reduce cost. It reduces cost to the fiscal budget crisis now and part of what we do for children's health and education and some of those elements that are to help the state meet their financial needs.

(END VIDEO CLIP)

BLITZER: All right. President Obama has rejected that notion because it was way too controversial. Saying Nancy Pelosi was wrong to include this kind of funding and this $825 billion dollar economic stimulus.

MADDEN: I think he arrived at that decision by virtue of the fact that Republicans made that argument. $200 million or something like that amount for contraceptives is not exactly jobs creation. I think just to disagree with what Jamaal said earlier, Republicans will not vote for a bill because there is a stimulus bill. We will vote for a plan to make sure that the American taxpayer is getting the bang for their buck and creating more jobs in the private sector. The way this bill is crafted right now, we are looking at $275 thousand then for every job created. The private sector can do a better job.

Barack Obama is continuing his talk with bipartisanship. The problem right now is that house Democrats are not. His own party is his biggest problem.

BLITZER: Do you think that's true? Democrats are the big problem because they want to do what Democrats normally want to do or are Republicans the problem?

SIMMONS: When a president goes to Congress asking to get a bill passed, people want to add on their own bulbs on the Christmas tree. I think what Barack Obama's trying to do here is to say, this is not the bill for that. Let's get the clean bill through. Some things we like and some things we don't, but we need to be fair and not dictate the terms of what this bill's going to be. He is showing good faith by takes out items Republicans have been critical of.

BLITZER: Listen, Jamaal, to the Senate Republican leader Mitch McConnell. Listen to this.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R), MINORITY LEADER: We wish President Bush well, but frankly we will not have to be carrying that political burden that we carried the last two elections.

(END VIDEO CLIP)

BLITZER: Wow. When I heard that earlier, he was saying you know what e the Republicans suffered in the 2006 and 2008 election because of the great unpopularity of the former president George W. Bush.

SIMMONS: He's right. You don't normally hear that, but as Democrats we ran often against President Bush. Here's the challenge. The Republicans now have to do something. They have to show they will be productive in helping to find a way out of the mess that America is in.

BLITZER: Is that fair for him to blame President Bush for the Republicans' significant losses in the two election cycles?

MADDEN: In all fairness, Republicans lost in 2006 and 2008 because we had an unpopular president and we failed to be the party of ideas. We failed to be the party of reform. At our core, we flourish as a party when we are the party of ideas and we can advocate for issues the American public cares about. We have to go back to answering the fundamental question, why us? Why should we be responsible for running the government and why should we help make lives easier when it comes to the economy or make it safer around the globe. Fundamentally, the party can't be about individuals. They have to be about ideas. With all due respect to leader McConnell, he is right in that we have to be a party of ideas.

BLITZER: They are trying to find their way right now and perhaps using this presidential proposal for this $825 billion recovery plan to reestablish where they stand on the issues.

SIMMONS: I'm sure that's what they're trying to do, but Barack Obama left the white house to talk to the Republicans. He is doing as much as he can. They have to extend a hand back.

MADDEN: He has done more than Nancy Pelosi. So I mean that again is his big problem. She is not talking about partisan talk.

BLITZER: We will see what happens. Thanks, Kevin and Jamaal. Good work.

They ran the most high tech campaign in American history and the Obama team is having trouble with simple e-mail at the white house.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Apologies if you e-mailed us in the last 2 1/2 hours. The e-mail system is not working so well.

(END VIDEO CLIP)

BLITZER: With an ambitious agenda, does the white house have the tools necessary to get the job done?

Former President Bill Clinton speaks out on what he sees on the significance of president Obama's election.

Stick around. You are in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Just got this video in a few moments ago. There is President Obama walking from the west wing of the white house to the Eisenhower office building next door for a swearing in ceremony for several of his cabinet members including Susan Rice as the U.S. ambassador to the United Nations, Ray Lahood as secretary of transportation and Shawn Donovan for secretary of housing and urban development and others are participating. Congratulations to those new members of the cabinet.

Our senior political analyst Bill Schneider is joining us now with more on what the former presidents, we are talking about Bill Clinton and the first President Bush, what they say they now regret most. Let's go to Bill Schneider and a little bit talk about it.

What are their greatest regrets looking back on their years in the white house?

BILL SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Things left undone. (BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): Regrets? They had a few, but not too few for the two former presidents to mention.

GEORGE H. W. BUSH, FORMER PRESIDENT OF THE UNITED STATES: I thought a lot about it, but at the end of Desert Storm, the question was should we have kind of kept going on the road to death and all this slaughter until Saddam Hussein showed up and laid his sword on the table and surrendered? The common wisdom is he wouldn't do that.

SCHNEIDER: A year after the war, President Bush was asked whether he wished he had taken Saddam Hussein out. The answer was no.

BUSH: I am not going to commit American troops unless I know how they are going into the battle and what the mission is and how they will get out of there. That the battle will be accomplished.

SCHNEIDER: And now?

BUSH: If we had tried to get Saddam Hussein to come and literally vender and lay as sword on the table, it might have been avoided some of the problems we did have in the future from him.

SCHNEIDER: President Clinton's biggest regret?

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: I was not able to persuade Yasser Arafat the peace plan I offered at the end of my presidency that the Israelis accepted.

SCHNEIDER: Had Clinton succeeded there would be fewer problems for the world and his wife to deal with.

CLINTON: We would have a Palestinian state and I think now normal peaceful relations for Israel and the Arab neighbors. We would be much better positioned to deal with the problem of Iran and we would have taken away about half of the arguments of terrorists around the world.

(END VIDEOTAPE)

SCHNEIDER: Both former presidents regret leaving problems for successors to deal with. As President Clinton put it "you want each new president to make new mistakes, not the same ones".

BLITZER: Interesting stuff. All right. Stand by, Bill. I want everyone to listen to a little bit more of what Mr. Clinton had to say about the election of President Barack Obama.

(BEGIN VIDEO CLIP)

CLINTON: Clearly that he's our first African-American president which for those of us like me who grew up in the south is an enormously positive and significant thing because it lifts the burden of southern history and from the burden of racism and long history of discrimination and gives us a chance to say to all our children, you can grow up to be whatever you want to be if you have the willingness and ability to work for it. Everybody knows that, but I think it's possible in part only because we are no longer a biracial society. This is now an America that is multiracial, multireligious, multiethnic, multicultural. There is no majority race in California, our largest state, and by 2050 there will be no majority race in the United States. We know now that the whole world is part of America and we are part of the whole world.

(END VIDEO CLIP)

BLITZER: There were lighter moments. I want you to listen to the story that Mr. Bush told. Check out Bill Clinton's reaction.

(BEGIN VIDEO CLIP)

BUSH: One time we thought we had outsmarted the crowd and sent a decoy limousine off in one direction while I snuck out the back entrance. As we rounded the corner, I will never forget it, I saw one of the ugliest and angriest women I have ever seen in my entire life. She was really bad. She charged my car with a sign. I don't see why the secret service let her next to the window. Stay out of my womb. No problem, lady.

CLINTON: He told jokes I couldn't get away with telling. Can you imagine what they would do to me if I told that joke? Some people can do things, other people can't. It reminds me of a story of the two dogs who is watched kids break dancing and one dogs said to the other if we did that, they would worm us. Some guys got it, some guys don't.

(END VIDEO CLIP)

BLITZER: Former presidents to the United States, Bill Clinton and George H.W Bush.

We will go back to that interview that the president the United States, Barack Obama, gave to an Arabic language television station, parts you haven't heard yet right here in THE SITUATION ROOM coming up, what he is saying about the U.S. needing to reach out to the Arab world and the Muslim world. Stick around. You will hear that.

And the Barack Obama campaign used cutting edge communication. So why is the Obama white house having some troubles in these first days with e-mail? We are looking at technical difficulties.

And Sarah Palin make a big move, showing she wants to remain a player on the national political scene. We have information for you right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: We're getting ready to hear from the president, Barack Obama. Stand by for that.

In the meantime, there are some serious technological problems going on the white house right now. Brian Todd is working this story for us.

How bad is it?

BRIAN TODD, CNN CORRESPONDENT: Well Wolf, the Obama team, as you know, is used to speedy state of the art technology. They've hit a few snags since taking up residence on Pennsylvania Avenue.

(BEGIN VIDEOTAPE)

TODD: What a difference half a day makes. On Monday afternoon --

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: Our apologies. If you've e-mailed any of us in the two and a half hours. Our e-mail system is not working so well.

TODD: By Tuesday morning, white house e-mails were humming again. Officials say the system crashed because a piece of older hardware in the data center broke. They say they're modernizing their technology. Since last week, several published reports have portrayed a white house staff slowed down by archaic technology, with outdated computer software, overwhelm phone lines. It seemed an abrupt welcome to Washington for an Obama team that was used to communicating during warp speed on the campaign.

ABBI TATTON, CNN INTERNET REPORTER: They posted on You Tube. They posted pictures on Flicker. They have text messages. Those are all things that the white house did not use.

TODD: The one technical restriction that most white house staffers have that we don't have at work. They're not allowed to communicate through things like You Tube, Facebook, instant messaging or even personal emails from their desks. It's for legal or historical reasons.

DAVID ALMACY, FORMER WHITE HOUSE INTERNET DIRECTOR: Unless you can accurately capture all of that, and preserve it for the archives, there's a concern by historians by those in general counsel whether that actually satisfies the presidential records act requirement.

TODD: The current white house staffers tell us Stone Age rotary dial technology are overblown. Other tools at the white house aren't much different than commercial businesses. He said comparisons with the campaign's technology are just a matter of resources.

ALMACY: The 95 campaign volunteers on the website alone for the Obama campaign, $12 million spent in two years versus six staff we had on average at the white house, about $1 million a year was our budget. So they spent more in two years than we spent in eight years.

(END VIDEOTAPE)

TODD: And the current white house website actually is pretty good compared to your average commercial website, says it's designed well. You can see part of it there, has sharp graphics, updated features, where you can play video of the president's speeches and events. He said it's well ahead of the curve of the websites' agencies. They're going to modernize it quite a bit.

BLITZER: Just wait. I'm sure the Obama administration will move it beyond anything they had already. Thanks, Brian, very much.

Let's go back to Jack for "The Cafferty File" -- Jack?

CAFFERTY: The question this hour: is how would you rate President Obama's first week in office?

Andrew writes from California: "As long as President Obama continues to distance himself from the Bush administration, like he did in his first week, he will maintain his support nationally. It's too early to grade him on his performance, but I like what I see so far."

Markel in Houston: "Obama has been impressive, Congress has not. Change takes time. Obama's making his mark. He's still trying to show Congress a new, involved management style. I think our hyper partisan Congress ought to look to the youngster for guidance on how to get along with their colleagues."

Joey in Yankee Island, New York: "Personally, I'd give him an f. He's doing all the things he thinks are politically correct, not what the American people want. He needs to cut the pork out of the stimulus package, not try to get the Republicans onboard with some sort of barter. Pork is pork. It's the taxpayers' money they're spending. Plus he moved a criminal into the treasury department."

Susan writes: "I think his first week in office has been outstanding. Reagan used to be known as the great communicator. I don't have a catchy phrase to describe him, but President Obama has demonstrated through his actions and words that he understands the basic human need to communicate and be respected by going to the state department, to inspire that work force that's been shabbily treated, going to the hill to meet with the House Republicans, to granting his first interview to the Arab media, a stroke of genius. I'm more excited than ever about his presidency and the future of our country."

Kay in West Virginia says: "I give him a solid "d." Comments like, well, I won, so I'm going to get my way, are in no way bipartisan, signing executive orders with so many loopholes to give himself wiggle room like he did on Gitmo is a complete copout. Immediately giving one personal waiver is a reminder of the kind of thing we've seen for the last eight years. Where's the change?"

And Jeremy writes: "For a guy who has walked into hell, he seems cool as a cumber."

If you didn't see your e-mail here, go to my blog CNN.com/CaffertyFile, look for yours there among hundreds of others.

BLITZER: I love our viewers, Jack. Thank you very, very much.

The Pentagon bracing for leaner times, winding down one war, wrapping up another. We're taking a closer look.

And stimulating the economy. President Obama wants spending, Republicans want more tax cuts. One works better, we have the report.

Stay with us. You're also going to be hearing directly from the president of the United States.

(COMMERCIAL BREAK)

BLITZER: Getting new information on Sarah Palin. And what's being called her political action committee. Let's talk about that with our internet reporter, Abbi Tatton. What's coming in?

TATTON: It's called Sarah Pac. Today it's open for business. The political action committee now registered with the Federal Elections Commission. It's already accepting donations online. The aim to push Palin's goal for energy independence and reform and support candidates who share her position. What this Pac will allow Sarah Palin to do is travel around the country, supporting candidates, likeminded candidates, but keeping her national profile high as she does so. She's in good company by Romney launching one last year. Today Sarah Palin has been drumming up support for her new group by turning to Facebook, telling her almost half a million supporters there to stay tuned for updates. Wolf?

BLITZER: Abbi, thanks very much.

Let's check in with Lou Dobbs. He's got a show coming up in an hour. Let's talk with the president's economic plan. It looks like it will pass with or without the Republicans.

LOU DOBBS, CNN ANCHOR: It looks like it may pass and that is a shame. With or without Republicans, too much of what is happening here is being reported in the national media, I believe, Wolf, in a partisan sense rather than in a responsible constitutional concern. That is, the role of oversight on the part of Congress has been advocated here. The president declaring an emergency. He is, frankly, the new boss is the old boss. This is precisely what George Bush did back in November of 2008. Rushing through legislation and a bailout in that case for Wall Street that didn't work. There is no analysis beyond a cursory analysis which raises serious concerns. We haven't seen either party demonstrate they've read this carefully. We've been doing that on my broadcast. We're going to go through much of this line by line to show you what people are trying to do and what probably won't work and probably what will.

BLITZER: Lou's coming up in one hour from now. We'll be watching, Lou. Thanks very much.

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

Happening now, President Obama urges Republicans to put politics aside to get an economic recovery plan passed. And to do it quickly. This hour, the personal appeal up on Capitol Hill and whether he's changing any minds or any votes.