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THE SITUATION ROOM

'Strategy Session'; Bizarre Murder Mystery; Why Birds Dropped Dead From the Sky; Shake-Up in Team Obama; GOP Takes Charge of the House; GOP Changing the Rules; New Speaker Takes Charge; Daniels for President?; Denying Babies U.S. Citizenship

Aired January 5, 2011 - 17:00   ET

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


WOLF BLITZER, HOST: Thanks very much, Brooke.

Happening now, John Boehner holds the gavel and the Republicans control the House. This hour, the hand over of power and what comes next. GOP leaders are playing by new rules.

Also, a new move to prevent hundreds of thousands of babies from being declared U.S. citizens. States are banning together right now to try to redefine the Constitution and dramatically change the debate over illegal immigration. Critics, though, are calling it all wrong and racist.

And the post-mortem on those startling incident of birds dropping dead from the sky -- we're taking you inside the examination room. And we'll tell you what wildlife experts are learning right now.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

All that coming up.

But right now, new signs of changes -- historic changes, potentially, over at the Obama White House.

Let's go straight to our senior White House correspondent, Ed Henry.

Major shake-ups going on at the White House. You're getting new information -- Ed, what are you learning?

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: That's right, Wolf. We already know Robert Gibbs made it official today that he's stepping down. But we've just confirmed with senior officials that, in fact, Bill Daley, the former Clinton Commerce secretary is here at the White House right now. He's having meetings with the president, with Pete Rouse, the interim White House chief of staff, other officials here.

This is the surest sign yet that they're edging closer to officially offering this job to Bill Daley. I want to stress that senior officials say there's been no job offer made yet. But that word yet is key, because a growing number of senior Democratic officials I've spoken to just in the last hour or two say that all signs here at 1600 Pennsylvania Avenue pointing toward Bill Daley likely getting this job, that they -- a lot of top Democrats inside this building and outside this building find it hard to believe Bill Daley would come all the way here, after previous conversations and in one face-to-face meeting with the president in December, that he would come back here for a second meeting unless this was edging closer.

Another important note, we've learned today, as well, is the president, on February 7th, is going to be giving a major speech to the U.S. Chamber of Commerce after a lot of tense relations with the business community.

Why is that significant?

Well -- well, Bill Daley now at JPMorgan Chase, somebody with a lot of clout on Wall Street, with business leaders. This is a sign -- even though this has been in the works for a long time, this speech, that if Bill Daley were to come on, there's going to be a lot of outreach to the business community, trying to work with moderate Republicans on the Hill to try to pass some pro-business issues, just as we saw with that tax cut deal in December.

And finally, we're learning today Robert Gibbs confirming that on Friday, the president will announce a new pick to replace Larry Summers to head the National Economic Council.

I just spoke -- I just got off the phone with a senior White House official who said it's 99 percent sure that it's Gene Sperling. All signs pointing to that, a former Clinton official.

Why is that significant?

He worked very closely with Bill Daley, of course, back in the Clinton administration -- Wolf.

BLITZER: I remember those days quite well.

All right, we'll see what happens to Gene Sperling, Bill Daley.

Ed Henry, thanks very, very much.

John Boehner now is second in line to the presidency of the United States. His inauguration today as House speaker is changing the entire dynamic here in Washington. But the Republican leader gave himself a reality check, telling colleagues -- and I'm quoting him now -- saying: "It's still just me."

The man who took the gavel away from Nancy Pelosi and the Democrats already challenging President Obama's agenda, knowing his new political clout may only be temporary.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: The American people have humbled us. They have refreshed our memory as to just how temporary the privilege of serving is. They have reminded us that everything else here is on loan from them. That includes this gavel, which I accept cheerfully and gratefully, knowing that I am but its caretaker. After all, this is the people's house.

(END VIDEO CLIP)

BLITZER: Let's go right to our senior Congressional correspondent, Dana Bash. She watched it all unfold.

A dramatic and historic day on Capitol Hill -- Dana.

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: That's right. There really is an electric a atmosphere here, because even though Democrats are not happy about losing control of the House, there is bipartisan respect for the ceremony we saw today, the ceremony of convening and swearing in a new Congress and a new speaker.

Now the House chamber was filled with children and grandchildren of 87 new Republicans who were sworn in, nine new Democrats. And it was -- it really is a fascinating thing to watch on the House side. On the Senate side, too, there were new senators sworn in. But, of course, Democrats maintained control over there. So all eyes really were on the House, where there was a change in control. A new speaker, John Boehner, was sworn in.

Now, as he made his way through the chamber, he was vintage John Boehner, Wolf. You could see him tearing up, wiping tears from his eyes. But when he got to the stage -- the podium, when he got to the front of the chamber and began to speak, he made clear that he would move quickly -- quickly to push the conservative agenda that the Republicans campaigned on.

(BEGIN VIDEO CLIP)

BOEHNER: To my colleagues in the majority, my message is this. We will honor our pledge to America, built on a process of listening to the American people. We will stand firm on our Constitutional principles that built our party and built a great nation. We will do these things, however, in a manner that restores and respects the time-honored right of the minority to an honest debate, a fair and open process.

(END VIDEO CLIP)

BASH: Now, Wolf, Boehner also said he understands that, quote, "scar tissue" has been built up on both sides of the aisle. And he said he thinks that they can both disagree without being disagreeable.

He also promised transparency and openness. But I can tell you, Wolf, already Democrats are baulking at that, because the very first piece of major legislation Democrat -- Republicans are going to push is repealing the health care law. And that will be something that Democrats will not be able to amend. So already some questions about how open this Republican Congress, at least on the House side, is going to be.

BLITZER: All right, Dana. I'm going to have you stand by.

We're going to be getting back to you. The speaker -- the new speaker is promising to try to make government more honest, accountable and responsive. Republicans contend they can do all of that by changing the rules of the House. And they're wasting no time trying to make that happen.

Our Congressional correspondent, Brianna Keilar, is here in THE SITUATION ROOM following this part of the story -- rules, sounds boring, but this is critically important stuff.

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: It is. And it's pretty interesting. Four key rule changes here.

First, Wolf, all of the bills that will be submitted for approval, they have to be accompanied by a statement that explains why they are Constitutional. Republicans, especially Tea Party members, have argued that Democrats have gone beyond the Constitution. And they say this is to make sure that they stay within the lines.

Now, also, there is a new 72-hour rule. Bills will have to be online for three full days before a final vote. This gives the public a chance to read them and voice their concerns or support. This, Republicans say, is in the name of transparency and opinions.

And check this out. The House of Representatives finally entering the technological age -- BlackBerries, iPads, laptops. They are allowed now on the House floor, as long as they don't impair decorum. That is part of the rule.

And, finally, the Budget Committee chairman gets some extra authority under these rules. Republicans say this is a response to Democrats not passing a budget last year. This is a new rule that would allow the chairman to unilaterally set spending limits on a temporary basis if the House doesn't act. This actually reverts to the way things were when Republicans controlled the House in the '90s. But Democrats are calling this a power grab and they say it's not transparent and honest to give one person that much power -- Wolf.

BLITZER: That would be Paul Ryan.

KEILAR: Exactly.

BLITZER: He's going to be the chairman of the Budget Committee.

KEILAR: Yes.

BLITZER: So he would be a very, very powerful guy...

KEILAR: Very.

BLITZER: -- up on Capitol Hill, as we all suspected he would be.

There was one rule, though, that some wanted and didn't necessarily make the cut.

KEILAR: This is interesting. House Republican leaders, in the name of transparency, proposed a rule where they would say -- where they would make public attendance at committee hearings. But then you had some rank and file Republicans who are uncomfortable with this. They felt like there may be some extenuating

stances where maybe they couldn't show up and it would ruin their 100 percent rating. And they voted it down.

For us journalists, we want -- kind of want to know who's skipping class, right?

So, you know, this something where we're not going to be able to tell, actually.

BLITZER: And sometimes you go into those committee rooms, as you well know, and there may be one...

KEILAR: Empty.

BLITZER: -- one member sitting there...

KEILAR: Sure.

BLITZER: -- asking a whole bunch of people questions. Everybody else doing other stuff.

KEILAR: Sure.

BLITZER: All right, Brianna, thanks very much.

We're only a few days into 2011.

Jack Cafferty is already looking ahead to next year.

He's got The Cafferty File -- Jack.

JACK CAFFERTY, THE CAFFERTY FILE: As the new Congress convenes today, the next election, 2012, already looming as a possible impediment to the Democrats' majority in the U.S. Senate.

Politico reports that several moderate Democratic senators who are up for reelection in two years are going to be more likely now to buck their own party in order to save their hide.

It's already begun, actually. During a lame duck section of Congress, when Harry Reid tried to prevent an extension of the Bush tax cuts to the wealthy, three moderate Democrats defected.

When the Republicans proposed deep spending cuts, two more Democrats joined them. And yet another moderate jumped ship when Reid pushed through President Obama's tax compromise.

In all, there are 21 Senate Democrats, plus two Independents who caucus with them, who will be up for reelection in 2012. And you can bet the Democrats are well aware of the shellacking their party took last November in the mid-terms. They don't want to be the next casualty. As Senator Claire McCaskill, who's up for reelection herself puts it -- I love this quote, "If you're in reelect mode, there's a tendency around here just to hide under a chair instead of making the tough calls," unquote.

Meanwhile, Republicans are worried that Senate Democrats may try to eliminate the use of the filibuster now that they have a smaller Senate majority, just 53 seats. Some Democrats are proposing a rule change that would require only a simple majority of 51 votes, instead of 67, in order to break a filibuster. The GOP calls that "a naked partisan power grab." Here's the question -- how effective can the Senate Democrats be if some moderate members are already looking ahead to the elections in 2012?

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

BLITZER: One tiny correction, Jack. You need 60 votes to break a filibuster, 67 to override a presidential veto. But just for the record, I wanted to make you...

CAFFERTY: I stand corrected.

BLITZER: OK.

CAFFERTY: Thank you.

BLITZER: Stuff happens. Sorry, Jack.

Thanks very, very much.

A good question.

Nancy Pelosi's final moments as House speaker raising some eyebrows.

Did she say too much and did she get too political?

Plus, opponents of illegal immigration say pregnant women are crossing the border so their babies can become automatic U.S. citizens. Now there's a concerted move by states to try to stop that from happening.

And new surveillance tape in the murder mystery involving a former Pentagon official whose body was found in a landfill. This case keeps getting more curious.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: And it strikes me as him -- as being odd, because he had one shoe in his hand and he didn't have a coat on. And it was like really cold that night.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: Check out the new House speaker taking charge, getting lawmakers and their families in position for photos. John Boehner trying to put the Republican stamp on the House as quickly as possible.

One of his big first challenges -- a huge fight that's coming up over the national debt.

I asked a leading Republican, the Indiana governor and former Bush budget director, Mitch Daniels, if Congress should automatically raise the limit on the national debt.

(BEGIN VIDEOTAPE)

GOV. MITCH DANIELS (R), INDIANA: No, they shouldn't automatically do it. They should, I hope, use it as leverage and another teaching moment for the country and -- and really start a...

BLITZER: But in the end, they should raise it, no matter -- even if there are some conditions attached, they have to raise it, otherwise the country goes into bankruptcy.

DANIELS: That's correct. And, you know, they -- they ought not feel any embarrassment in so doing. They're paying for the sins of the past. These bills were all racked up by their predecessors. But I think they're entirely right if they, as I suspect, they try to really get something for it -- something, in this case, being a big first long step on the way back to national solvency.

BLITZER: To cut -- to cut government spending?

DANIELS: Absolutely.

BLITZER: Which is, as you know, as a budget director, is a lot easier said than done.

DANIELS: It better get done starting soon, easy or hard. And my -- my belief is, actually, the American public is ready for it in a way that it may not have been in years past.

BLITZER: You've seen the -- the stories in the papers, including in "The New York Times." Conservatives love you.

Are you running for the Republican presidential nomination?

DANIELS: No, I am not. I'm not saying that I won't under any circumstances. Only that for the moment I'm not and I won't decide and can't decide for a while.

BLITZER: What does a while mean?

DANIELS: You're more expert than I. I know there's a point in no return out there probably not too far away.

BLITZER: You're away from Iowa and New Hampshire.

DANIELS: Well, all I can tell you, Wolf, when people first started bringing this to me over a year ago. At that time, they said it's already late. You got to get going that turned out not to be true. I think in an act of a mercy, somehow we're going to have to have a shorter election. I think we all could be glad for that as political reporters.

BLITZER: We love covering politics, but we'll get to that. What I hear you saying and just being precise, you're leaving the door open and you have not made a final decision in.

DANIELS: I have not made a final decision to do it or not do it. Our general assembly opened today in Indiana also and it's going to be a very important, but also exciting one. We've got some major reforms, on education and elsewhere that we are looking forward to enacting and it's going to get my full attention.

BLITZER: A columnist in the "New York Times" wrote recently this. Saying if you decide to run for president, you need to explain this. He says this, why as budget director, he did not try to prevent the Bush administration from turning a big surplus into a huge deficit, not just through the war, but through tax cuts and other policies, too? If he runs for president, that question deserves to be a big part of the vetting. Do you want to respond to that?

DANIELS: You know, the nation went into a deficit then because the bubble burst. We had a recession. It wouldn't have mattered what policies you tried to implement. We're going to have a great big reversal. Beyond that, I would say that in every fight I ever had on the president's behalf with Congress, and there were a lot of them, there was never one where I would suggest spending more and they would suggest spending less -

BLITZER: Because the national debt doubled during the eight years of the Bush administration?

DANIELS: Well, nobody is happy about that. Nobody - but you know, the deficit that the president left was dramatic. We would love to be back at that level today.

BLITZER: But the government turned out to be during those eight years a lot bigger than it was when he started?

DANIELS: It did and you know, we don't have to agree with that to agree --

BLITZER: Who was to blame for that? Because Republicans have been saying forever, the government has to be smaller. The national debt - there's going to be balanced budgets, but during the eight years of the Republican administration and you work for the president. It got bigger the government and the debt doubled.

DANIELS: I think there is plenty of blame to go around and we can spend the next couple of years trying to apportion it and assign it between Republicans and Democrats and the economy, which two bubbles popped and led to a plunge in revenues, but --

BLITZER: For six of those eight years, the Republicans had the majority of the House and Senate as well.

DANIELS: Yes, some of my biggest fights were the members of our own party. You covered a lot of them. Maybe you can still recall. So I will just say that the choices that were made in those years were not all accurate, not all good ones, but far better than what we've been doing in the last two years and the numbers show it.

BLITZER: You also said that we need a different kind of Medicare, a different kind of Social Security, what are you specifically talking about?

DANIELS: I think we need a new compact with a younger people who are paying now -

BLITZER: Meaning what?

DANIELS: Under a bill of 50, maybe.

BLITZER: Under a bill of 50 right now and tell them what?

DANIELS: That - we need a new compact, one that you can afford in the future, one that will not blight your future and --

BLITZER: You're not going to get the benefits that your parents got, is that what you're saying?

DANIELS: That's correct because society cannot afford. But, you know, why should that be? Let's guarantee to those now in the system or approaching the system and nothing changes.

And just as many corporations have done, Wolf, and many public sector entities I could name, they start a new plan that is sustainable for the next generation and Social Security 2.0 and Medicare 2.0.

Let's reserve the money for the people in the most need. There's no reason to give rich people pension checks. Let's catch up to the data and have a -- more of a retirement age way out there in future that is in keeping with the lives of people that are going to live to be 100.

BLITZER: Because otherwise the country goes broke basically that's what you're saying?

DANIELS: That's exactly right and that's a disaster for everybody.

BLITZER: Politically treacherous territory when you start saying that, as far as Social Security and Medicare is concerned.

DANIELS: Let's see. I have a little more confidence in the maturity of the American people in our little corner of America. We practice some pretty rigorous economy in the last few years. People have supported it and they appear to think that the results matter most.

I also think that the up-close and personal experience with death that tens of millions of Americans have had in the last couple of years. You can already see behaviour changing, consumption patterns and so forth. I think people are ready to hear the real facts and make what we call a grown-up judgment.

BLITZER: Let's see what they do. Thanks for coming in.

DANIELS: Always fun.

BLITZER: Good luck.

DANIELS: Thanks.

BLITZER: You'll let us know in a while what to decide.

DANIELS: You'll be the first to know.

BLITZER: OK, I'll hold you up to it.

Governor Daniels, by the way, is here in Washington to accept the new award for his leadership on financial matters. The award is called the Fiscy Award. Congressman Paul Ryan and Senator Ken Conrad, by the way, they're also being honored.

Dozens of lawmakers are trying to take immigration reform into their own hands right now. They're doing so by targeting their children. Their controversial plan to - citizenship just ahead.

And Nancy Pelosi hands over control to the new Speaker John Boehner, but, first, she had something to say about health care and Boehner's gavel. Stand by. Roland Martin and Tony Blankly, they're here in THE SITUATION ROOM. They'll weigh in our strategy.

And Starbucks is marking a major milestone with a new look.

(COMMERCIAL BREAK)

BLITZER: Look for a fight over illegal immigration just surfaced once again and very soon in the new Congress. Some state officials though aren't sitting around waiting for action. They are launching a new battle of their own this time targeting the constitution and babies. Mary Snow is working the story for us. She's here to explain. What is going on, Mary?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, state lawmakers say that they're frustrated with the action by the federal government when it comes to illegal immigration and now some are working together to draw a line over birthright citizenship.

(BEGIN VIDEOTAPE)

SNOW (voice-over): Granting citizenship to babies born in the United States, a right protected under the 14th Amendment is at the front lines of a new effort by state lawmakers fighting illegal immigration.

RANDY TERRILL, (R) OKLAHOMA STATE HOUSE: Long considered birthright citizenship to be the holy grail if you will of the illegal immigration debate.

SNOW: This Oklahoma State representative joined lawmakers from Arizona, Georgia, South Carolina, and Pennsylvania who were proposing state laws to prevent automatic citizenship to babies born to illegal immigrants living in the U.S.

UNIDENTIFIED MALE: Inhumane racist bill and it will be stopped.

SNOW: Protesters interrupted the press conference several times as legislators argued that the 14th Amendment has been misapplied.

UNIDENTIFIED MALE: We were expecting legal challenges certainly over the next two years with whatever we do.

SNOW: Darrell Metcalf is a Republican state lawmaker in Pennsylvania who's leading the effort of state legislatures. He's been working with lawmakers in Arizona who passed the controversial bill that authorize police to ask about the immigration status of people stopped for unrelated reasons.

Major parts of the law are blocked in court, but Metcalf is undeterred. He intentionally brought state lawmakers together in Washington, D.C., on the same day the day that Congress was sworn in.

UNIDENTIFIED MALE: It's another instance where the states are announcing that we have had it to hear where the federal government not doing their duty. We have hundreds and thousands of illegal aliens, foreign nationals coming to our country that they are crossing our borders illegally. It's nothing less than invasion.

SNOW: Metcalf plans to introduce a series of immigration measures in Pennsylvania, including one that would prevent citizenship to children of illegal immigrants. Andy Hoover the state's legislative director of the American Civil Liberties Union is fighting it.

ANDY HOOVER, ACLU OF PENNSYLVANIA: It's unconstitutional. State legislators do not have the power to simply circumvent the constitution at their will and there are enough smart folks here at our state legislatures who understand that. They understand it's an extreme position to take and I'm confident they won't move this forward.

SNOW: Proponents say they will not try to amendment the constitution, but will try to change state laws that would create two forms of birth certificates, one for babies of illegal citizens and one of babies of illegal immigrants. One opponent calls it an illegal scheme.

BRENT A. WILKES, LEAGUE OF UNITED LATIN AMERICA CITIZENS: It's an ugly idea of a future American, which there are citizens who have the rights to vote and people who are doing all of the work that don't have any right at all.

(END VIDEOTAPE)

SNOW: Now, there is one thing both sides do agree on, and that is the need for immigration reform. But they have very different ideas on how it should be done, Wolf.

BLITZER: We'll watch this debate together with you, Mary. Thanks very, very much.

A history day, Nancy Pelosi handing over control to a new House speaker, John Boehner with these words about his gavel. (BEGIN VIDEO CLIP)

NANCY PELOSI: I now pass this gavel, which is larger than most gavels here, but the gavel of choice of Mr. Speaker Boehner, and I now pass this -

(END VIDEO CLIP)

BLITZER: And the new House minority leader that would be Nancy Pelosi, also has something to say about health care. Was it appropriate? Our strategy session is next.

And surveillance tape of murdered defense expert John Wheeler just days before his death. We're going to show you the video.

And later, thousands of birds falling from the sky. New information on what's behind it. We'll have a live report from a lab seeking answers.

(COMMERCIAL BREAK)

BLITZER: Here in THE SITUATION ROOM happening now. New video captures a well-known Washington insider only days before his body was found in a landfill. And a witness now says he was acting strangely. You're going to see the videotape.

And a flight diverted after the pilot spills coffee on the plane's communications equipment. Wrong emergency codes are set off including a hijacking alert. We have details coming up. I'm Wolf Blitzer and you're in THE SITUATION ROOM.

Nancy Pelosi was not at a loss for words when she turned over the House speaker's job to John Boehner today. She spoke about as long as John Boehner did, check out the word clout from Boehner's remarks. He spoke about 13 minutes before taking the oath as speaker, talking a lot about the institution of the House and the American people.

Pelosi touched on some of those themes as well, but she also got in the last word of the Democrats' accomplishments over the past two years, including health care reform.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), OUTGOING HOUSE SPEAKER: That means that children with pre-existing conditions can get care, young people can stay on their parents policy until they are 26, pregnant woman and breast and prostate cancer patients can no longer be thrown off their insurance, our seniors paying less for their medical prescriptions. Taking together, it will save taxpayers $1.3 trillion.

(END VIDEO CLIP)

BLITZER: Let's get right to our "Strategy Session."

Joining us are CNN contributor Roland Martin and Republican Strategist Tony Blankley. Tony, you worked for a Speaker once. That would be Newt Gingrich for, what, about seven years, including when he was Speaker of the House.

Was it appropriate for Nancy Pelosi to give sort of a laundry list of Democratic accomplishments in this, her final speech as Speaker?

TONY BLANKLEY, REPUBLICAN STRATEGIST: I think I was, actually. I was on the floor when Dick Gephardt, then the Democratic Majority Leader, handed the gavel over to Newt, who's the new Speaker. And while I haven't seen the remarks in the 16 years, I remember it was mostly ceremonial, but he did -- I can remember he made a point about Democrats' commitment to wage disparities between working class people.

So -- and then Newt's speech, which was longer and bipartisan, nonetheless, he listed the "Contract With America," he talked about we were going to do welfare reform that hadn't been done. So I think that Nancy Pelosi's statements were within the historical traditions of what you say at a moment like that.

BLITZER: And John Boehner's speech as the new Speaker of the House of Representatives, an historic speech. And you could see he was working hard to make sure he didn't break down and start crying, because he is a very emotional --

ROLAND MARTIN, CNN POLITICAL CONTRIBUTOR: Thank God. Thank God.

BLITZER: There's nothing wrong with crying. It's an emotional moment.

MARTIN: Not all the time, Wolf.

BLITZER: If you had 11 brothers and sisters, you probably would have gotten emotional, too.

MARTIN: I have three sisters, one brother. And yes, you can cry, but not all the time.

But no, look, there's this whole notion of Speaker Pelosi. This was her last speech as Speaker of the House. I see no issue with that.

I don't think anybody out there is saying, oh, my God, that's way to political. You're talking about a political body. You're talking about Congress. You're talking about turning over the Democrats to the Republicans.

And so I see no issue with it at all. And if anybody has a problem, well, guess what? Deal with it. These are political animals. This is what we expect when it comes to our Congress.

BLITZER: There was this moment when she actually handed over the gavel to John Boehner. Let me play the clip.

BLANKLEY: Sure.

(BEGIN VIDEO CLIP) PELOSI: I now pass this gavel, which is larger than most gavels here, but the gavel of choice of Mr. -- Speaker Boehner. I now pass this gavel and the sacred trust that goes with it to the new Speaker.

God bless you, Speaker Boehner.

(END VIDEO CLIP)

BLITZER: Was there a little dig there or something?

BLANKLEY: Actually, there's a whole tradition -- talking about the gavel, when Newt got his gavel, he made some -- I don't remember the detail, but he made some reference to this is made out of Georgia pine or something. And it's a light moment when the gavel gets passed. I hate to not be fighting on this one, but I think this was all perfectly -- this was appropriate.

BLITZER: This was a gavel that he -- he got it from friends of his back in Ohio.

BLANKLEY: Yes. They often do. It's a special occasion and people talk about it.

MARTIN: One word: levity. First of all, also, you're talking about a female Speaker. She's saying, wait a minute, this thing is a huge gavel here.

No big deal. There's nothing wrong with members of Congress, Republicans and Democrats, actually laughing sometimes versus fighting. So I thought it was cute.

BLITZER: Michele Bachmann, she's the outspoken congresswoman from Minnesota. Now there's some suggestion she may be thinking of running for the Republican presidential nomination. Have you heard that?

BLANKLEY: Yes, I have. Look, I've been involved in Republican primaries going back to Goldwater-Rockefeller in '64.

This is the most fluid primary I've seen. Now, I don't think anyone in modern times has jumped from the House to the presidency. So it's unlikely -- Dick Gephardt couldn't do it, and he had been Majority Leader.

But I know her. I once moderated an event. She's a very smart woman.

If she decides to run, you know, you wouldn't bet on any single individual winning. And I think it's a big jump.

But she was a former tax lawyer before she got into Congress. And she's an impressive person. I wouldn't predict she's going to win it.

BLITZER: She's certainly a favorite of the Tea Party movement. Her communications director, by the way, says, yes, she's going to Iowa next month. And we're always looking to see who is going to Iowa, who's going to New Hampshire, South Carolina -- those are important early states. But the communications director is saying she's not ruling anything out right now.

MARTIN: Tony, you and I have a better chance of being Chippendale dancers than Michele Bachmann getting the Republican nomination. It ain't happening.

BLANKLEY: You've never seen me dance.

(LAUGHTER)

MARTIN: It's not happening.

BLITZER: I've seen you dance. You're a pretty good dancer.

MARTIN: Yes, but you need the muscles and everything to go along with it.

It's not happening. OK?

I mean, she might be a darling of that particular movement, and I am quite sure Republicans are saying she's the last person we want out there on the campaign trail running. There are a number of strong candidates out there who are talking about running. I would not even put her in the second tier of Republican candidates who has a shot at the nomination.

BLANKLEY: Well, you know, there's arguably nobody in the first tier right now. I mean, if there is --

BLITZER: Sarah Palin.

BLANKLEY: But the truth is, it's a completely wide open primary. We don't know who is going to get in and out. And each person who gets in will have a certain effect.

BLITZER: We just heard from Mitch Daniels. He was here in THE SITUATION ROOM. He's a very serious guy.

MARTIN: A serious guy with a difficult time answering your question when it came to the whole notion of deficits and the surplus.

But, again, Tony, I'll be happy to bet $1,000 right now, she has no shot at winning the Republican nomination. It ain't going to happen.

BLANKLEY: We're not going to gamble here. And I would bet you could bet against any single person and you'd be making a good bet.

MARTIN: OK, $2,000.

(LAUGHTER)

BLITZER: You guys take your bets out in the green room, guys. Thanks very, very much.

Roland Martin, Tony Blankley.

Roland, the only person who comes in with two BlackBerrys into THE SITUATION ROOM.

MARTIN: Got to. Absolutely.

BLITZER: One is not enough.

MARTIN: I'm tweeting. Wolf Blitzer --

(CROSSTALK)

BLITZER: At WolfBlitzerCNN.

MARTIN: There you go.

BLITZER: And @RolandSMartin.

MARTIN: There you go.

BLITZER: OK. There we go.

Are you tweeting too?

BLANKLEY: I am not tweeting.

BLITZER: One day you will. We all do.

If you're balding or care about someone who is, stand by for new information about a brand new medical study.

And there's also new video and new information coming out right now about the final hours of a formal Pentagon official who turned up down in a Delaware landfill. It's only making this murder mystery even more mysterious.

(COMMERCIAL BREAK)

BLITZER: Lisa Sylvester is here. She's monitoring some of the other top stories in THE SITUATION ROOM, including a medical story millions of people will be excited to hear about.

Go ahead. Tell us.

SYLVESTER: Yes, I think a lot of the guys are going to be interested in this one.

A new discovery could eventually lead to a treatment for male pattern baldness. Research from the University of Pennsylvania's School of Medicine indicates baldness may be caused by stem cells in the scalp failing to give rise to cells that actually grow the hair. The study suggests that if scientists are able to figure out exactly how to get the growth cells working again, well, then, they could possibly develop a re-growth treatment.

And avid fans of the TV show "Lost," well, they may be just a little bit richer today. The winning numbers of last night's $380 million Mega Millions lottery were: 4, 8, 15, 25, 47 and 42. Now, four of those numbers matched a lottery ticket picked by "Lost" character Hurley with a $114 million jackpot.

(BEGIN VIDEO CLIP, "LOST")

UNIDENTIFIED FEMALE: And that makes tonight's Mega Lotto jackpot drawing 4, 8, 15, 16 and 23, with the mega number 42. Whoever has those numbers has won, or will share in the near-record jackpot.

UNIDENTIFIED MALE: That's right, Mary Jo (ph), because this is the 16th week without a winner.

(END VIDEO CLIP, "LOST")

SYLVESTER: Wow. Pretty eerie there.

Well, thousands of die-hard "Lost" fans have played those numbers. So what exactly did those digits net in the Mega Millions lottery? It netted $150. Two tickets though did win the entire $380 million jackpot.

And today, Starbucks is debuting a new look to mark its 40th anniversary. The company's new logo takes the iconic green siren out of the inner circle, and the Starbucks name is also nowhere to be found. Starbucks says customers can expect more changes this spring.

But they're not giving any details, Wolf, so we're going to have to stay tuned to that. And I'm a big Starbucks drinker, actually, so --

BLITZER: I know. A lot of people are.

SYLVESTER: Yes. So we'll have to keep watching for those changes. Hopefully, they won't change the drink menu too much.

BLITZER: No. You like the Venti Skim Latte? Is that what you like?

SYLVESTER: I do the hot chocolate these days.

BLITZER: The hot chocolate?

SYLVESTER: Yes. I'm staying away from caffeine, so Venti Hot Chocolate Skim.

BLITZER: Cappuccino, the latte, the whole thing.

SYLVESTER: Sometimes without whip. It depends if I'm trying to be good or not.

BLITZER: Thanks. See you in a few minutes.

Bizarre new details about the activities of a murdered U.S. Defense Department official -- at least a former official. Only days before his death, John Wheeler has several unusual encounters with strangers, including this parking lot attendant.

(BEGIN VIDEO CLIP)

IMAN GOLDSBOROUGH, PARKING ATTENDANT: He was smiling and he seemed like he's a nice guy. The only thing that didn't seem right to me was just, like, he looked like he was kind of lost, and he was just looking around like he was in an unfamiliar place.

(END VIDEO CLIP)

BLITZER: The surveillance tape showing Wheeler's movements and his odd conversation with a pharmacist, coming up right after this.

(COMMERCIAL BREAK)

BLITZER: Police are now learning more about the activities of a well- known Defense Department expert only days before he was murdered.

Let's turn to our national correspondent, Susan Candiotti, who has been following the latest developments in this very, very mysterious case.

Susan, you're in Newark, Delaware, right now. Is that right?

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: That's correct. Actually, we've moved from there. We're in Wilmington, Delaware, right now, which is in the vicinity of Newark, certainly.

But we're talking about the strange, mysterious case of John Wheeler. And the fact is, he was last seen in the building that you see behind me, which is combination office building and residential building.

He spent several hours here, Wolf, before his death. But it's unclear what his connection is.

We spent much of today trying to retrace Wheeler's steps.

(BEGIN VIDEOTAPE)

CANDIOTTI (voice-over): This surveillance video backtracking John Wheeler's movements makes his death even more mysterious. First, where he was two days before his body was found.

About 6:00 p.m. Tuesday, a pharmacist confirms to CNN that Wheeler stopped by this drug store near his home and inexplicably asked for a ride to Wilmington 10 miles away. The drug store (ph) says Wheeler turns down an offer to call a cab and leaves.

About 40 minutes later, Wheeler shows up at a parking lot in Wilmington. An attendant says Wheeler didn't have a coat on, was only wearing one shoe, and insisted he wasn't drunk.

GOLDSBOROUGH: He striked (sic) me as being odd because he had one shoe in his hand and he didn't have a coat on. And it was, like, really cold that night. There was snow on the ground.

CANDIOTTI: She says Wheeler kept saying his parking ticket was in his briefcase and that his briefcase was stolen, but wouldn't explain more.

GOLDSBOROUGH: He was smiling and he seemed like he's a nice guy. The only thing that didn't seem right to me was just, like, he just looked like he was kind of lost, and he was looking around like he was in an unfamiliar place.

CANDIOTTI: Apparently, he was lost, searching the wrong garage. Wheeler's car was later found at a train station slot a mile away.

The next day Wheeler was at this downtown Wilmington office- residential building, but police won't release those pictures. They say he appears confused.

People try to help. He's last seen there at 8:30 at night.

At 4:30 the next morning, eight hours later, police say sanitation workers unknowingly picked up Wheeler's body from a dumpster and brought it to landfill. It wasn't until nearly six hours later that workers called police after noticing the body jutting out from a garbage truck.

LT. MARK FARRALL, NEWARK POLICE: We need to find the crime scene. We're still attempting to locate the crime scene, which may or may not provide us with more clues and more details to help us come to a resolution.

(END VIDEOTAPE)

CANDIOTTI: Now, police say that Wheeler was also scheduled to be on a plane from the Washington, D.C., area to Wilmington, but they haven't been able to confirm that he was actually on that train, nor have they been able to locate his briefcase, which you will recall he told the parking attendant was stolen.

Back to you, Wolf.

BLITZER: Susan, have we heard from his wife or any of his relatives?

CANDIOTTI: Well, they issued a statement saying that they wanted to maintain their privacy, but we did see his widow early year today in New York because the couple also owned a condo there that they purchased for $1.5 million a couple of years ago.

We can tell you this, however -- that in regard to that apartment, New York Police Department assisted the Newark, Delaware, police in searching that condominium on Monday, when that was a consent search. In other words, his widow allowed it to be searched. But we don't know what, if anything, what kind of evidence was collected -- Wolf.

BLITZER: What a mystery. All right. We'll stay on top of it. Thanks very much for that, Susan.

Jack Cafferty is asking, how effective can Senate Democrats be if some moderate members are already looking ahead to 2012?

And scientists are looking for answers about why thousands of birds from the sky in two states. We're taking you inside the investigation.

(COMMERCIAL BREAK)

BLITZER: Let's get right back to Jack for "The Cafferty File" -- Jack.

CAFFERTY: The question this hour is: How effective can Senate Democrats be if some moderate members of that party are already looking ahead to 2012?

Loren writes, "How effective should they be? Clearly, the electorate was unhappy with the programs of the Democratic Party. If a minority of that party continues to choose programs that are unwanted by the American people, do all members of the party have to support those programs? The joy of democracy is that when the people speak, the elected dance."

Kathie writes, "Face it, Jack, the people elected to represent us are only interested in themselves and their own reelection, which is another reason term limits are needed."

Tony says, "Senate Democrats will have to start thinking about their careers and distance themselves from the Pelosi-Reid politics of the last several years. If that happens, maybe we can get this economy going, get more people working, and eliminate the idiotic parts of the so-called health care reform bill."

"It always comes down to me first and the people second. Now they better listen, or the people will speak loudly in 2012 just as they did this past November."

Adam in California writes, "The midterms were a referendum on the left's politics. And unless these senators come from districts that are full of nanny-state ideologues, they better wake up. Obamacare is a stone around the neck of every 'yes' voter. The majority of Americans don't want to live in a European-style social democracy, and the ones who do are free to move there. I'll help them pack."

Randy writes, "The left-right moderate concept is getting as old as the Harlem Globetrotters. The Globetrotters, Republicans, always win. They play the generals, the Democrats, for fools, while both teams laugh all the way to the bank(ers). The real loser is always the poor and middle class Americans who fall for the shame charade every two to four years."

And Philip says, "Enough of the re-election talk. We just elected a new batch of weasels that hopefully can concentrate on doing the jobs they were there to do."

If you want to read more on this, go to my blog, CNN.com/caffertyfile.

BLITZER: We will do, Jack. Thank you. Stand by.

A power shift here in Washington as the 112th Congress convenes. Full coverage of this historic day with "The Best Political Team on Television." That's right at the top of the hour.

And thousands of birds drop dead in two states. Up next, we're going to take you live to a lab that is trying to find out why.

(COMMERCIAL BREAK)

BLITZER: Rights now wildlife experts are getting a closer look at some of those birds that fell from the sky on New Year's Eve. Up to 5,000 dropped dead in Arkansas. Then 500 dead birds were found in Louisiana.

Were these two events related?

CNN's Martin Savidge is over at a laboratory where they are trying to figure out exactly what happened.

What are they learning, Marty?

MARTIN SAVIDGE, CNN CORRESPONDENT: Well, Wolf, so far, we've had birds that have arrived from Arkansas, and also from Louisiana, to this University of Georgia laboratory here that specializes in looking at wildlife. They are going to do -- well, if they're dealing with a human being, you would call it a autopsy. The fact you're dealing with an animal, it's called a necropsy.

They've been doing those already, and they're starting to get some answers.

(BEGIN VIDEOTAPE)

SAVIDGE (voice-over): These three red-winged blackbirds from Arkansas could hold the key to a disturbing puzzle. Working with the birds inside what's called a bio-safety cabinet, Dr. Kevin Keel begins to try to determine what killed them. And not just these birds, but thousands of others New Year's Eve.

The cabinet is a precaution just in case the birds were the victims of some disease. Scientists don't think so, but let's let the doctor explain as he begins the exam.

DR. KEVIN KEEL, UGA WILDLIFE RESEARCHER: And I'm looking and palpating for any broken bones, and feeling the bones in the wing, trying to tell if there are any fractures. I'm looking for hemorrhages. Sometimes if birds fly into things, you may see hemorrhages in the mouth and may see fractures of the beak. And the evidence we have so far suggests that this was a traumatic event.

SAVIDGE: Traumatic event, as in the birds ran into something -- something hard. The lab has already dissected and x-rayed the Louisiana birds, and the internal damage suggests the birds likely died as the result of a collision.

DR. JOHN FISHER, UGA WILDLIFE RESEARCHER: This tells us that these birds probably flew into inanimate objects which caused the trauma. We looked for evidence of gunshot injuries with the radiographs and didn't see any. And so they may have flown into anything from buildings or power lines, or towers, or it could have flown into the ground, as well. SAVIDGE: Power lines are thought to be to blame in Louisiana. In Arkansas, it was noted the bird deaths occurred near where they roost for the night. Simply put, something startled them, possibly fireworks since it was New Year's Eve, and the birds took off panicked into the darkness.

KEEL: The weather in that area last night, the night of the mortality event, was overcast. There was a little bit of rain so that there was a low ceiling. It wasn't foggy, but it still may have resulted in some disorientation of the birds and contributed to them flying into objects.

(END VIDEOTAPE)

SAVIDGE: Scientists don't think the two events in the two different states are related. They also are taking tissue samples. They will send them out for further study to make sure it's not some sort of disease, not some sort of chemical and not poisoning. They'll get the results in a few weeks -- Wolf.

BLITZER: Marty, thanks very much.

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