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The Situation Room
Surprise Ending to Messy Election; Fifth Largest Bankruptcy in U.S.; Interview With Members of President Obama's Inner Circle
Aired November 02, 2009 - 17:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAFFERTY: Mike in Massachusetts: "Drop off the detainees at a fire house in New York City. Have the New York fire department administer the vaccine. I guarantee they'll never need another one."
D. writes: "Probably not, but 200 or so shots are not going to break the vaccine bank. Let's protect the servicemen and women any way we can."
And Steve writes: "Anybody here who recommends the GITMO prisoners get a swine flu vaccine should be investigated by the FBI. Plus, they should get a kick in the ass."
If you didn't see your e-mail here, check my blog at CNN.com/caffertyfile -- Wolf.
BLITZER: Jack, thank you.
Will do.
To our viewers, you're in THE SITUATION ROOM.
Happening now, the final hours of two bitter and closely watched gubernatorial campaigns, one in New Jersey and the other in New Jersey -- two states President Obama carried just one year ago.
Can he sway enough votes to keep Democrats in the governors' mansions?
We're also watching what could be watershed mayoral races -- the possibility of an openly gay mayor in Houston, Texas and Atlanta's first white mayor in almost four decades.
Plus, my exclusive interview with three of the president's top advisers talking candidly about White House missteps, crises in the middle of the night and the first lady's influence on the Oval Office.
I'm Wolf Blitzer.
You're in THE SITUATION ROOM.
A pivotal Congressional race, key governors' contests and elections steeped in the divisive issues of race and gay rights -- it may be an off year election, but what happens when the polls open could set the tone for years to come. Let's bring in our senior political correspondent, Candy Crowley, with a little bit of a preview -- a viewers' guide, shall we say, to what we should be looking for.
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Well, they should first know, as many of them already do, that there are 600 mayoral races across the country in the cities across the country. So lots of things going on, lots of issues and offices on the ballot tomorrow.
But the three that will be parsed for their national implications are in New Jersey, Virginia and New York -- contests which may together answer a couple of questions -- how powerful is the conservative movement on the streets and how durable are the president's coattails?
(BEGIN VIDEOTAPE)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Hello, Virginia.
CROWLEY (voice-over): Barack Obama won Virginia by more than 6 points last year. This year, the Republican running for Virginia governor is ahead by double digits.
BOB MCDONNELL (R), VIRGINIA GUBERNATORIAL CANDIDATE: It's a fiscally conservative state and some of these things that have been proposed by the United States Congress aren't resonating with the Virginia voters.
CROWLEY: But the president is still resonating in Virginia -- his approval rating around 56 percent. He hopes a bit of that will rub off onto Democratic candidate Creigh Deeds, who has neither the Obama magic nor the money to crank up the Obama machine.
CREIGH DEEDS (D), VIRGINIA GUBERNATORIAL CANDIDATE: And here's the thing, the president spent $70 million in Virginia last year -- unprecedented. We'll spend maybe $20 million. You know, our -- we're -- we're trying to build on what he did as much as possible.
CROWLEY: In New Jersey in 2008, Barack Obama won by 15.5 percentage points.
OBAMA: If New Jersey votes like it voted last year, if all those folks who had felt disenfranchised and felt forgotten are reminded of the incredible power of ordinary people...
CROWLEY: If New Jersey votes like last year, Governor Jon Corzine will win re-election. But he's struggling. The president, the vice president and the former president have all made their way through New Jersey to help punch up his prospects against Republican Chris Christie.
(BEGIN VIDEO CLIP, COURTESY NEWS 12, NEW JERSEY)
CHRISTOPHER CHRISTIE (R), NEW JERSEY GUBERNATORIAL CANDIDATE: After all these stars leave, it still comes down to me and to Jon Corzine and which one of us would be the better governor.
(END VIDEO CLIP)
CROWLEY: And by way of marquee races, it's hard to beat the soap opera of New York's 23rd Congressional District, where the Republican moderate dropped out over the weekend, leaving the race to a conservative, Doug Hoffman, the choice of many on the right, including Sarah Palin, former House leader, Dick Armey, and Tea Bag partiers.
DICK ARMEY, FREEDOMWORKS: The energy today and political activism today is coming out of the small government conservative movement, which is the biggest tent in politics in America today -- Evangelicals, libertarians, Democrats, conservatives, Independents all saying Obama and Pelosi are going to take us too far to the left, it's time to put on the reins.
(END VIDEO TAPE)
CROWLEY: As for who might be despondent and who might be elated following Tuesday's elections, one of the things you can look for, Wolf, is that this pea party group -- these the conservatives are very jazzed at this point, having forced, really, this Republican establishment candidate out of the race in 23. They are already talking about the races they want to take on in 2010.
So it -- it occurred to me that the Republicans could win all three races and still really have a big problem on their hands as to how they're going to navigate between the right of their party and the more moderate wing.
BLITZER: Because there -- there's concern they would push out the more moderate Republicans, who, in the big elections, might have a better chance of getting elected than those more on the right.
CROWLEY: Exactly. Exactly.
BLITZER: Candy, thanks very much.
From elections here in the United States to elections in Afghanistan. Election officials there are declaring the incumbent, Hamid Karzai, the winner of the country's contested presidential vote, canceling a runoff election after the surprise withdrawal of the rival candidate, Abdullah Abdullah.
CNN's Sara Sidner is joining us now from Kabul with more on what's going on -- Sara, what is the latest?
SARA SIDNER, CNN CORRESPONDENT: Well, Wolf, we have to say that no matter what the world says, Afghanistan's Independent Election Commission truly believes it made a legally sound decision today in canceling the runoff and deeming Mr. Hamid Karzai the president for a second term.
(BEGIN VIDEOTAPE)
SIDNER (voice-over): The decision came just one day after President Hamid Karzai's only opponent in the runoff election dropped out. Dr. Abdullah-Abdullah, the former foreign minister withdrew -- but not without a parting shot, saying the runoff would have been as tainted with fraud as the August 20th election.
It was up to the Afghanistan Independent Election Commission to decide whether to go ahead with the runoff with only one candidate in the running or officially declare Mr. Karzai the winner.
AZIZULLAH LODIN, INDEPENDENT ELECTION COMMISSION PRESIDENT: We declare that Mr. Hamid Karzai, which got the majority votes in the first round and he is the only candidate for the second round of elections of Afghanistan in 2009, we declare him the elected president of Afghanistan.
SIDNER: The Commission said it based the decision on the constitution, that demands there be two people in a runoff election. But there were other serious factors.
ZAKRIA BAREKZAI, INDEPENDENT ELECTION COMMISSION: It doesn't make sense to have elections and sacrifice people's lives, security agencies, international security agencies and put their lives at risk -- all the economic situations, stability in this country, put in uncertainty because we want to show that there is something happening and we already know that this -- the result is already known.
SIDNER (on camera): International community appears to be standing by the decision. The British and Indian prime ministers, the United Nations and the Obama administration were first to congratulate President Karzai on his victory.
OBAMA: The results were in accordance with and followed the rules laid down by the Afghan Constitution.
SIDNER: Not heard from today, President Karzai and his rival. Both remain silent. But now that the political fight is over, the world and most of the Afghan people want to know if Mr. Karzai will attack problems like corruption and the drug trade with more gusto than in the past and whether he'll regain the confidence of his increasingly skeptical allies in the US, U.K. and NATO.
(END VIDEO TAPE)
SIDNER: Wolf, it may seem a bit strange that the newly victorious president did not come out and speak today after that announcement. He did not. But, in fact, we are expecting to hear from him tomorrow and we'll get the details then -- Wolf.
BLITZER: We'll check back with you, Sara.
Thanks very much.
Sara Sidner reporting from Kabul, Afghanistan.
Let's go right back to Jack Cafferty for The Cafferty File -- Jack.
CAFFERTY: Can you believe this -- this Afghanistan thing?
BLITZER: It's a little crazy.
CAFFERTY: He's been declared the winner of what?
A crooked election that his brother allegedly fixed. We're in bed with -- with -- well...
It's been one year since President Obama defeated John McCain and rode into office promising change we can believe in.
So what's he done in the first year?
Some say Mr. Obama's biggest accomplishments have been keeping the financial crisis from becoming worse and improving America's image abroad. Democrats credit the $787 billion economic stimulus bill with rescuing the economy, although Republicans call it an big waste. And with nearly 10 percent unemployment, the country is still waiting for the jobs to come back.
The president and Congress have spent most of the first year wrestling with health care reform. And if we get anything at all, it's probably going to fall far short of meaningful reform.
Meanwhile, President Obama has done nothing to regulate Wall Street or close the nation's borders, the deficits are beyond absurd, the wars continue, so does most of the government secrecy that's left over from the Bush administration and the president's policy of engaging our enemies has not produced many results yet, especially when it comes to countries like Iran and North Korea.
Even his liberal supporters don't think he's delivered on issues like don't ask/don't tell, climate change and education reform.
You could make the argument -- and it's a fair one -- that Superman couldn't have done this stuff in a year either. And he actually hasn't been in office a year. He was elected a year ago,
So here's the question -- one year after the election, how's President Obama doing, do you think?
Go to CNN.com/caffertyfile and let us know what you think -- Wolf.
BLITZER: It's hard to believe it's a year -- already a year since (INAUDIBLE)...
CAFFERTY: Can you imagine...
BLITZER: ...since the world...
CAFFERTY: I was thinking of that...
BLITZER: ...learned that the United States had elected the first African-American president. CAFFERTY: I was thinking of that at home this morning, what we were all up to a here ago. It was quite a different temperature and feel around CNN, with the excitement of that election campaign.
BLITZER: Yes. It was exactly almost a year ago.
CAFFERTY: I can't get that worked up over Corzine tomorrow.
BLITZER: What about Bob McDonnell in Virginia?
CAFFERTY: Him either.
(LAUGHTER)
BLITZER: OK.
Thanks very much, Jack.
New signs of economic recovery that few people were expecting -- President Obama touts the good news, but adds a warning. We'll hear him in his own words. Stand by.
A massive new bankruptcy is underscoring the very serious problems still facing the country.
Our chief business correspondent, Ali Velshi, is here with details of the latest financial failure.
And it's been almost four decades since Atlanta had a white mayor. That could change tomorrow and we've just learned who the current mayor will be voting for.
(COMMERCIAL BREAK)
BLITZER: Better than expected economic news -- three closely watched reports show increases in U.S. manufacturing, construction and home sales. The new numbers were a welcome addition to a meeting between President Obama and his top economic advisers. The president credited his stimulus package, but warned that job losses are likely to continue.
(BEGIN VIDEO CLIP)
OBAMA: We have come a long way since January, when, at that time, we were losing 700 jobs -- 700,000 jobs per month. And across the political spectrum, I think there was fear of a -- another great depression. We have pulled the economy back from the brink. We got good news last week showing that, for the first time in over a year, the economy was actually growing once again. And we have seen some other indicators that manufacturing is beginning to pick up.
That's all good news. And we are pleased that the actions that we took swiftly, through the Recovery Act, helped to stem what could have been a disastrous situation for the economy.
We anticipate that we're going to continue to see some job losses in the weeks and months to come. As I said before, there is a -- always a lag of several months between businesses starting to make profits again and investing again and them actually rehiring again.
But I want to emphasize I am confident that having moved the economy on the right track, that if we apply some good common sense and some -- and -- and reinvigorate that sector of our economy that's based on innovation and dynamism and entrepreneurship, that there's no reason why we're not going to be able to not only create jobs, but establish sustainable economic growth that everybody is looking for.
(END VIDEO CLIP)
BLITZER: But even as there was promising news trickling out, there were also signs of ongoing economic distress. The small business lending giant, CIT, filed the fifth largest bankruptcy in U.S. history.
Let's bring in our CNN chief business correspondent, Ali Velshi -- Ali, explain exactly what CIT is.
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Wolf, it's a company that many people haven't heard of, but it's 100 years old, and, in fact, is a very, very important part of financing slightly riskier small businesses, mid-sized businesses and -- and retailers in this country.
CIT -- it's not Citigroup. A lot of people have asked about that. But it is very, very important to -- to business in this country. It has filed for bankruptcy, which means it will continue to exist. But it was one of the companies that got money from the U.S. government.
At this point, we don't know how it's going to emerge, but it has filed for bankruptcy.
BLITZER: Who is affected, Ali, by the bankruptcy?
VELSHI: It's pretty broad. Let me break it down for you. And I actually want to use a t-shirt as an example, Wolf.
In a perfect world, a manufacturer makes t-shirts and delivers them to the retailer, you buy the t-shirt, the retailer takes their cut and then pays the manufacturer, who then makes more t-shirts and so on and so forth.
But in the real world, the t-shirt sits on the retailer's shelf for a while and the manufacturer has to get paid in order to stay in business so that it can keep on making more t-shirts.
And that's where CIT comes in, Wolf. It lends the shirt maker money -- basically a cash advance on the money that the retailer owes the manufacturer. Or it might lend money to the retailer to buy the t-shirts. Other banks -- other companies offer this service, Wolf, but CIT is the largest and it doesn't only do this for small businesses, it finances larger businesses, retailers, franchises. Without CIT, much of the flow of money between businesses, Wolf, would actually come to a stop.
BLITZER: Now the government loaned CIT a lot of money. And we're talking billions of dollars, right?
VELSHI: Yes.
BLITZER: So the question as a taxpayer I'm asking, a lot of viewers are asking, what about us?
What about us taxpayers?
Will we ever get that money back?
VELSHI: Probably not from CIT. The government had -- had equity in CIT. Remember, in many cases, when the government loaned money, it took stock in exchange. In a bankruptcy, the stock gets wiped out. So this money, a little over $2 billion, is probably gone. And it probably isn't the only time that we've invested, in the last year, TARP money and bailout money that won't be seen again -- Wolf.
BLITZER: So making a very dramatic change to Ford Motor Company.
VELSHI: Yes.
BLITZER: They're posting a huge profit in this last quarter.
VELSHI: Remarkable news -- a billion dollar profit in the quarter and an outlook that is as positive as it's been in the last five years. Ford saying that, in fact, it -- it plans to return comfortably to profitability in 2011. Wolf, you'll remember, Ford is the only U.S.-based automaker that did not take a government bailout and that did not declare bankruptcy.
So Ford being run now by Alan Mulally, who was brought in in 2006 from Boeing. He's not from the auto industry. He is the outsider. Really, he made some determined efforts to turn this company around with product, with quality. Ford did benefit from the Cash for Clunkers sales in the summer, Wolf, but they actually gained market share from other automakers.
So the bottom line is this isn't one -- this isn't a tide rising all boats. Ford actually is doing better business right now.
BLITZER: Good for Ford.
VELSHI: Yes.
BLITZER: Very nice work.
All right, Ali, thanks -- thanks to you.
Turnout for Tuesday's elections isn't expected to set records, but those who do vote could set the stage for some significant firsts. We're going to tell you why we're watching the Houston mayor's race so closely.
And if you eat burgers, we have some information you'll want to know. It's a recall on some -- repeat some -- ground beef.
(COMMERCIAL BREAK)
BLITZER: Brooke Baldwin is monitoring some other important stories incoming into THE SITUATION ROOM right now into THE SITUATION ROOM right now -- Brooke, what's going on?
BALDWIN: Yes, Wolf, here's a heads-up for people who might have ground beef in their fridge. Health officials say two deaths may be linked to a batch of ground beef that was recalled Saturday. We're talking about Fairbank Farms. They're out of Asheville, New York. They voluntarily recalled more than half a million pounds of the meat because of concerns that it was contaminated with E. coli. A death in New York, plus another in New Hampshire and as many as 26 other illnesses may be connected to all that contaminated beef.
And the new head of the U.N. nuclear agency, Mohammed ElBaradei, says Iran must move quickly to clarify its response to the latest proposal aimed at slowing its nuclear program. The proposal to have Iran send most of its enriched uranium to Russia for further processing has been both endorsed and rejected by Iranian diplomats. Baradei calls this a unique opportunity to move from a confrontation to cooperation.
And bank employees shot and wounded this morning at a robbery near Atlanta. Take a look at some of these pictures here -- dramatic security photos capturing these two men. There they are coming into the bank. And according to the FBI, they brandished a pistol and announced they were "taking over the bank." An employee was inside of the office who was shot in his leg. The two suspects escaped with an undetermined amount of money.
And how about this one?
All right, by now, we've all been told, yes, it's dangerous, we shouldn't be using our thumbs -- i.e. Texting, e-mailing, you know, on our phones while we're driving.
But how about this concept?
What about using your thumbs to do the driving?
Yes, there was an app for that. A German scientist has developed an iPhone app that drives your car. But it will not be coming to a highway any time soon. The scientist said that while the science was easy, legal questions make computer driven cars unrealistic -- Wolf, I don't know about you, but I'm a big fan of both of my hands on the wheel.
BLITZER: Yes. Me, too. It sounds crazy to me.
But you know what, who knows what's going to happen five or 10 or 20 years from now?
BALDWIN: There is an app for everything.
BLITZER: Who knows?
BALDWIN: Yes, who knows?
BLITZER: Thanks, Brooke, very much.
BALDWIN: OK.
BLITZER: The president's inner circle with an exclusive look at the year since an historic election.
(BEGIN VIDEOTAPE)
BLITZER: Is there an oops moment, Anita, that you wish you had a do-over for?
(END VIDEO CLIP)
BLITZER: The answer to that question, plus the first 3:00 a.m. phone call and the first lady's role in setting White House policy. All that coming up -- my exclusive interview with the president's insiders.
And when Atlanta chooses a new mayor tomorrow, it could mark an historic shift for the city. CNN has some late breaking exclusive information that potentially could signal a change in the election's tide.
(COMMERCIAL BREAK)
BLITZER: To our viewers, you're in THE SITUATION ROOM.
Happening now, are the detainees in Guantanamo Bay getting the swine flu vaccine before desperate parents here in the United States?
We're going to bring you the latest information we have.
Also, what is Michelle Obama's real role in making policy?
I'll get the exclusive inside story from three of the president's closest advisers. You may be surprised at their answer.
And a piece of the World Trade Center returns to New York City -- a proud monument to those lost on 9/11.
I'm Wolf Blitzer.
You're in THE SITUATION ROOM.
One year ago this week, Barack Obama was elected the 44th president of the United States, in a victory that secured his place in history.
I sat down with members of his inner circle for an exclusive interview -- the first they've given since President Obama took office.
(BEGIN VIDEOTAPE)
BLITZER (voice-over): The wave of enthusiasm from a legendary campaign has given way to the heavy burdens of reality -- it's not being president of the United States. But that burden is shared by a close-knit group of insiders. The same people who helped propel Barack Obama into the White House now help shape his message to the American public and the world.
Senior adviser, David Axelrod, and communications director, Anita Dunn, have known the president since his early days in Chicago. Press Secretary Robert Gibbs came on board when Barack Obama was elected senator in 2004. This is the first time any of them have worked so closely with a president of the United States.
(on camera): What was the biggest, over the past year -- maybe all of you have a different answer and maybe you don't even have an answer -- the biggest oops moment, the -- something you could do over, that you would have liked -- if something happened, he made a decision, you made a decision, that, you know what, I wish we would have done it a little differently?
David?
(LAUGHTER)
DAVID AXELROD, SENIOR WHITE HOUSE ADVISER: And I'm not sure...
(CROSSTALK)
AXELROD: I'm sure there are many things that, if we could do over, we would. But I have to say that -- and, you know, your viewers can filter it for what it is. The thing that's been pleasing to me is that, by and large, things have gone as we -- we as intended. We try and think things through. He certainly does. And I think -- you know, now some of the decisions we made may not work out. But they're -- they're generally well reasoned. And, therefore, you know, I don't think there are so -- there -- there aren't major things where I said gee, man, I wish I -- I had that back. I wish we had gotten the swearing in, the inaugural oath right the first time, but, you know, things happen.
BLITZER: Whose fault was that?
AXELROD: I'm not going to blame anybody. We've got business with the Supreme Court and I honor them greatly.
BLITZER: Is there an oops moment, Anita, that you wish you had a do-over for?
ANITA DUNN, WHITE HOUSE COMMUNICATIONS DIRECTOR: Well, you know, I think -- I'm a person who can, you know, at the end of every week look back and find about 2,000 things I would have done differently. But I think from -- what David is saying is true, which is if you look at what the president said during his campaign of what he wanted to get accomplished and you look at where we are now, you know, roughly a year after he was elected, that, you know, by and large, we have kept -- he has certainly kept to what he laid out as the challenges that he wanted to address and that the administration has done a pretty good job of executing to get him where he wants to go and where he wants to lead the country.
BLITZER (voice-over): But the president's critics on the right and left don't give him such high marks. He faces constant battering from conservative television and radio hosts and even struggles with disapproval from some members of his own party. He is deliberate, some say too slow in his decision-making. He has yet to announce whether he'll send more troops to Afghanistan, has not staked out a hard and fast position on some of the most controversial specifics of the health care bill. Even his first promise as president, to close the detention center at Guantanamo Bay, is mired in problems. "Newsweek" columnist Anna Quindlen write, "He is methodical, thoughtful, cerebral, a believer in consensus and process. In an incremental system, Barack Obama is an incremental man."
(on camera): I brought over the new issue of "Newsweek" magazine with the headline "yes, he can, but he sure hasn't yet." Anna Quindlen wrote that article. Have you read that article, Robert?
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: I have.
BLITZER: Do you want to talk about that?
GIBBS: I give the American people great credit. They are always ahead of most decision-makers here in Washington. I think the American people understand that what brought us to the point right before the president was either elected or eventually inaugurated we didn't get to overnight. We got into where we were over the course of a long time, and I think the American people understand that we're on the road to change. We're on the road to building a new foundation for an economy that works for them and helps create jobs for them, but understands that it's not all going to happen overnight. I think what we saw in the candidate America has had a chance now to see for the better part of almost a year.
BLITZER: Because they still, according to the polls, they still like him a lot, but they are not necessarily in love with his policies.
AXELROD: Well, Wolf, let's take into consideration that we're governing in some difficult times and we knew that. I say to him, gee, it would be interesting to be here when we didn't have two wars, the worst economic crisis since the Great Depression, you know, huge deficits we were handed, and he said....
DUNN: And a pandemic.
AXELROD: And a pandemic, yes, and his -- and he says, yeah, but we probably wouldn't be here if not for all these problems. He takes that in stride. But the fact is, people have a reason to be dissatisfied. These are not great times. I think they understand he's working towards solving these problems. As Robert said, they understand it is going to take some time. But nobody should feel satisfied. We've accomplished a lot, a lot of good things that we've gotten done, but until the American people are feeling full recovery from the economic situation we're in, until we get our troops home not just from Iraq but Afghanistan clarifies, and so on, you know, people are going to ask questions, and they should.
(END VIDEOTAPE)
BLITZER: Just ahead, the president's reaction when he got his first 3:00 a.m. phone call, and what it was about and how he handled it, plus the first lady's role in the white house.
Is she an adviser to the president on substantive policy issue?
The answer to that question when my exclusive interview with the president's inner circle continues. That's coming up.
And next hour, there's a nationwide shortage of the H1N1 vaccine, so why are prisoners at Guantanamo Bay likely to get it? Stand by.
(COMMERCIAL BREAK)
BLITZER: More now of my exclusive interview with President Obama's senior adviser David Axelrod, the communications director Anita Dunn and press secretary Robert Gibbs. Like the president, their jobs can go around the clock. As our conversation continued, I asked them about crises in the middle of the night.
(BEGIN VIDEOTAPE)
BLITZER: Was there a 3:00 a.m. wake-up call for the president over the past year that you remember where there was some sort of international crisis?
(CROSSTALK)
AXELROD: One on the road, the North Korean launch.
GIBBS: For some reason waking up from slumber falls unnecessarily on the press secretary at times.
AXELROD: The scariest thing is to wake Gibbs up.
(LAUGHTER)
BLITZER: Usually Rahm Emanuel, the chief of staff, should have that job, shouldn't he?
GIBBS: You know, I'm going to give him that job the next time there is something. We all were in a room in -- on the first foreign trip in Prague, in the Czech Republic, when we were notified of the North Koreans testing a long-range missile, something we'd expected to happen over a certain amount of time. And I think it was about 4:00 in the morning, we were in there, and we then discussed that, and I went to wake him up, and he soon joined all of us in getting intelligence briefings from in the room as well as back in D.C.
AXELROD: We were kind of a mess. He came in there. He was ... GIBBS: Speak for yourself.
(LAUGHTER)
AXELROD: I was a bigger mess than you, but, I mean, physically, but he came in, sat down and got a readout from the military people, got on the line with Secretary Gates, General Cartwright I think, and then he -- he said OK, here's what we're going to do, bing, bing, bing.
BLITZER: Did he then go back to sleep?
AXELROD: No, he went out to the gym.
BLITZER: Really?
AXELROD: He said I'm going to go work out and I'll be up in 90 minutes.
BLITZER: He's more of a morning person than an evening person, is that right?
AXELROD: A morning workout person and an evening reading person. He does a lot of heavy reading a night. He does about two hours of homework every night and then he reads a book, some magazines after he's done with that, so he squeezes the day.
BLITZER (voice-over): Part of that day includes spending time with his daughters and the first lady Michelle Obama who has sought to carve out a substantial but comfortable role for herself.
(on camera): Talk a little bit -- maybe I'll ask Anita about the first lady and her role in all of this as his wife, his adviser, his friend.
DUNN: Well, I think that, you know, as every first lady does, she is creating her own job. She's created her own job description, you know. Obviously a huge part of that has always been as a mother and, you know, I always think when I think of the president's ability to keep in touch, there's nothing like having two elementary school daughters to keep you in touch with reality, and he'll be the first to tell you that. You know, I think the first lady in the course of the campaign developed some issues that she was, you know, passionately concerned with, with military families and veterans and how we as a nation treat -- treat the people who have given up and sacrificed the most for us. You know, she's had a long-time interest in healthy families and healthy bodies and child nutrition, which is something she's brought to the White House, and there's a very unique approach to the job.
BLITZER: Is she an adviser to the president on substantive policy issues?
AXELROD: Well, I think I'll put this way. I think he really values her opinion, and I don't think she takes folders of, you know, on nuclear proliferation home and offers her point of view, but she's -- she's incredibly bright. She's got great sense, and she, like anyone who has a good solid relationship with their spouse, she offers her views, and he takes them seriously.
BLITZER: Is it ever necessary for you, David Axelrod, to go to the first lady and talk to her and try to convince her to weigh in with the president on something you want to do?
AXELROD: No, the president is the easiest guy in the world to talk, to and he solicits your points of view. He listens. He's a great listener. There's never -- you don't have to do an end-around, but I will say this about the family. I think the thing that got him down the most during the campaign -- it wasn't the really tough things that we had to face. It was being away from his family. And even with all the stuff that he has to deal with as president, I think his mood is consistently good in part because he gets to see his kids every day, he has dinner with them every night. He wakes up and sees them every morning, and just working above the store has been an incredible plus for him.
DUNN: It's the first time in a long time he's been able to do that. He was a Senate candidate in 2004, traveling, 2005, 2006, you know, was in Washington, and then was a presidential candidate for two years.
BLITZER: That's a source of strength for him to have his whole family.
DUNN: Absolutely, absolutely.
AXELROD: No doubt about it.
GIBBS: And he uses that term, what a beauty it is to live above the company store.
DUNN: Right.
BLITZER: He's very lucky to have that.
GIBBS: Look, he can be in the Oval Office. He walks about 90 seconds and he's sitting in his -- his dinner table.
(END VIDEOTAPE)
BLITZER: Coming up tomorrow, part two of my exclusive interview with the president's inner circle. David Axelrod talks about what has changed, what hasn't changed, what it's like to work for a man he's been friends with for so many years. He also talks about security for the president of the United States, how worried are they about his security, and I also ask them about the white house's number one priority for the coming year. That's all coming up tomorrow right here in THE SITUATION ROOM.
We've just received an update on a story of a young woman who was allegedly run over by her own father. Let's go back to Brooke Baldwin at the CNN Center for details.
This is a heartbreaking story, Brooke, but what we do know.
BROOKE BALDWIN, CNN CORRESPONDENT: Right. It's a sad, sad ending to this part of the story, Wolf. You're talking about the story back on October 20th, this Iraqi father basically accused of running down his 20-year-old daughter in an Arizona parking lot. We've just received word here from Peoria police in Arizona that she has died. Again, happening back on October 20th, father runs her down. This happens in Arizona. He flees Arizona, heads to -- heads to Mexico, hops a flight to London, is then denied entry into London and flies back to Atlanta, and then is extradited back to Arizona where he was thrown in jail and charged with two counts of aggravated assault, but given his daughter's death, Wolf, they say the charges will likely be upgraded.
BLITZER: All right Brooke. Thanks very much. That's a heartbreaking story indeed.
We're watching what could, repeat, what could be a watershed mayoral race in Atlanta. Atlanta could elect its first white mayor in almost four decades. We just found out who the current mayor will be voting for.
Plus, the possibility of an openly gay mayor in the country's fourth largest city. That would be Houston, Texas, why the candidate's sexual orientation isn't really an issue.
(COMMERCIAL BREAK)
BLITZER: Tomorrow's elections could signal history-making shift in Atlanta. A top contender could become the predominantly black city's first white mayor in decades, and now there's a little bit of breaking exclusive developments coming in to our own Don Lemon. He's joining us now from Atlanta.
Don, what are you learning?
DON LEMON, CNN CORRESPONDENT: Wolf, I learned a lot. I sat down with current Atlanta Mayor Sheryl Franklin just a few minutes ago. She has not endorsed any candidate and has intentionally remained quiet about the upcoming election, that is, until now, and what she told me could be a potential game-changer for the top two candidates in this race.
(BEGIN VIDEOTAPE)
LEMON: Shirley Franklin made history in 2001 when she became the first black woman elected mayor of Atlanta. Tuesday she plans to vote against the candidate who if elected would become the first white woman to assume that office.
Have you endorsed anyone? Are you going to?
MAYOR SHIRLEY FRANKLIN (D), ATLANTA: I've not endorsed anyone, but I am going to vote tomorrow, and -- and I'm going to vote for Kasim Reed. LEMON: Reed, the leading African-American candidate, helped Franklin win two terms in office as her campaign manager. The front- runner is city councilwoman Mary Norwood, a fiscal conservative from an affluent neighborhood known for its shopping malls and night life. She could become Atlanta's first white mayor in 35 years.
FRANKLIN: Atlanta is full of firsts, and we may indeed have a white woman mayor. What I'm interested in is who are you? What do you stand for, and do you have the courage of my predecessors? If you have that and you're white and female --
LEMON: Just hours before the election, candidate Norwood tended to her council duties choosing not to speak to the media, but in a campaign ad she fends off accusations that she's a closet Republican.
MARY NORWOOD: I voted for Barack Obama, John Kerry, Al Gore, Bill Clinton and Ross Perot, the independent.
LEMON: The mayor's race is non-partisan and that ad didn't seem to matter on Sunday at the last debate before the election.
NORWOOD: I'm not a Republican. We know that that is a way to just divide the city and that is very saddening to me.
LEMON: Norwood set herself apart from her opponents by running as a clear alternative to the current mayor Shirley Franklin whose approval ratings have remained strong despite the collapse of the city's real estate market and a rising crime rate. But the strategy might not be as effective if she doesn't win by a majority on Tuesday and faces a runoff against one of her African-American rivals.
(END VIDEOTAPE)
LEMON: And by Mayor Franklin saying she is going to vote for Reed, some people believe it will be a game-changer in the polls and it could move two candidates closer. We asked Mary Norwood for an interview today. She declined saying it did not fit into her schedule and she wanted to attend the council meeting and go campaign. Wolf after seeing this report, I would imagine a response will be coming soon.
BLITZER: I suspect you're right, Don. Why does she have such a lead, at least into the polls going into this election?
LEMON: Well, here's the interesting thing. She was 20 points ahead of her closest candidate. The demographics of the city changing a little bit with more whites moving into the city, living in the city. She used her seat right away as a platform, positioned herself as the anti-mayor Franklin, taking on the economy, jobs and crime which helped her build critical significant support from African- Americans here in Atlanta.
BLITZER: All right. Don, we'll watch this together with you. Thanks very much for the report.
We're also closely watching another mayoral race, one that could make history in the country's fourth largest city. CNN's Ed Lavandera is working that story for us.
Ed?
ED LAVANDERA, CNN CORRESPONDENT: Wolf, the campaign for the mayor of Houston, Texas, is a tightly contested three way race. One of the candidates could become the first openly gay woman elected mayor of a major American city.
(BEGIN VIDEOTAPE)
LAVANDERA: Annise Parker is a veteran of Houston's big city politics. She served on the city council, spent the last five years as the controller in charge of the budget. Before politics she worked in Houston's oil and gas industry. That's what gets the most attention. The footnote is that Parker is openly gay. She's been with her partner for 19 years and they have two adopted children.
ANNISE PARKER, HOUSTON MAYORAL CANDIDATE: I have always stood up for the fact that I am gay and it's part of the resume I bring to the table. But it's just a piece of the package.
LAVANDERA: Houston voters haven't always been that accepting of gay political issues. A few years ago, Houston voters rejected a plan to offer benefits to same-sex partners of city workers. And 24 years ago, anti-gay candidates ran what was called the straight slate in an unsuccessful effort to unseat a mayor who backed job rights for homosexuals. Annise Parker was a young political activist then. She became president of Houston's gay and lesbian political caucus.
PARKER: Houston is a multiracial, multicultural, international city and I think my election will send a message to the world that -- just kind of, Houston is a city might surprise a lot of folks.
LAVANDERA: But in a mayor's race that some have called boring, Parker is in a tight three-way contest with architect and city councilman Peter Brown and attorney Gene Lock. The three candidates share virtually the same positions on the issues. Charles Kuffner, a Houston political blogger says that makes the election a personality contest.
CHARLES KUFFNER, HOUSTON POLITICAL BLOGGER: It's a matter of who do you really want in the driver's seat? I as a voter believe that any of the top three candidates would do a decent job. It's a question of which one do I think will do the best job.
(END VIDEOTAPE)
LAVANDERA: None of the candidates are expected to get a majority of the votes on Tuesday which means this race is headed into a runoff. And the top two vote-getters will face off again in December. Wolf?
BLITZER: Ed Lavandera, thanks very much.
Mayoral races in three other cities took some mentioning. In Pittsburgh, 29-year-old Luke Ravenstahl became the nation's youngest big city mayor in 2006 when he was elected after his predecessor died suddenly. He's expected to win re-election easily over two independent challengers. Four tier Boston mayor Thomas Menino is waging a tough re-election battle with one city councilman, Michael Flaherty. If Menino wins a fifth term, he would Boston's longest serving mayor ever. And he earlier won an extension of New York's mayoral term limit to three four year terms. Polls show Michael Bloomberg leasing his bid for his third term. Bloomberg has sunk almost $86 million of his own money into his campaign. It's the most expensive self-financed political campaign in U.S. history.
More swine flu vaccine is on the way. But it's still hard to come by. Why is the government deciding to make it available to hundreds of terror suspects held at Guantanamo Bay?
And with President Karzai in place for another term, what will President Obama decide to do about sending in more troops?
(COMMERCIAL BREAK)
BLITZER: Right back to Jack Cafferty for "the Cafferty File."
Jack?
JACK CAFFERTY, CNN CORRESPONDENT: Wolf, one year after the election the question this hour is how is President Obama doing?
Pardon me. John in San Jose, California writes, "As an independent, I walked away from Obama because he did nothing to solve the real problems of corruption and transparency of politics and Washington. Instead he and his handlers are playing politics like no other before him. All I can hope as he moves forward is that he does something to change Washington because so far Washington has changed him. The grade I give him so far is D-."
Juan writes, "I don't have a college degree, yet I have a great, secure job making a mid-forties salary. I have a great house in a safe area with a great public school district. My mortgage is up to date. My credit scare is in the 750s. My 401k is solid and growing and my health insurance just became $100 a month cheaper without any reduction in benefits. So in my opinion, President Obama's doing a tremendous job helping a little guy like me get ahead."
Janie in Massachusetts says, "I think he is starting to look too much like Jimmy Carter: indecisive, unsure, weak, ineffective. He needs to make some decisions now. I thought hell would freeze before I agreed with Rush Limbaugh but I do agree with his comments from the weekend. Obama is looking and acting inexperienced. He needs to turn this country immediately - turn this around immediately before he becomes a lame duck."
Jim in Ohio says, "It's a very big ship and it was going in very much the wrong direction, on just about every issue that mattered. The president has grabbed the wheel and is wrestling this mammoth beast, but moving it is a slow process. Gentle pressure relentlessly applied will eventually get us turned around and I think soon we'll begin to reap the benefits of that." Eric in Delaware says, "In my humble opinion, there is a huge chasm between Candidate Obama and President Obama. I've been very disappointed."
And Bob says, "I think President Obama is doing what I expected. I'm looking forward to the change we can all afford in 2012."
If you didn't see your e-mail here, check my blog, CNN.com/Caffertyfile. My, how time flies.
BLITZER: One year almost exactly, thank you very much, Jack.
To our viewers, you're in THE SITUATION ROOM. Happening now, the best political team on television on these stories.
