'Countdown with Keith Olbermann' for Monday, January 5
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Video via MSNBC: Oddball, Worst Persons

Guests: Richard Wolffe, Chris Cillizza, E.J. Dionne, Hillary Mann Leverett, Michael Beschloss

KEITH OLBERMANN, HOST (voice-over): Which of these stories will you be talking about tomorrow?

The new junior senator from Minnesota is him: Al Franken - certified by that state. After the recount, Norm Coleman promptly promises to sue - forever.

The new junior senator from Illinois is him? Roland Burris en route to Washington -

(BEGIN VIDEO CLIP)

ROLAND BURRIS, FORMER ILLINOIS ATTORNEY GENERAL: I feel I am a solution to the problem of the people of Illinois. That's what I feel.

(END VIDEO CLIP)

OLBERMANN: The Democrats promise not to seat him. But what possible legal leg could they have to stand on?

The commerce secretary designate's legal leg. Bill Richardson says he's guilty of nothing but withdrawing from the big thing.

(BEGIN VIDEO CLIP)

GOV. BILL RICHARDSON, (D) NEW MEXICO: However, I want to emphasize that I acted properly and my administration acted appropriately, too. A fair and impartial review of the facts will bear that out.

(END VIDEO CLIP)

OLBERMANN: There is a new Obama pick to head Central Intelligence:

Leon Panetta.

Against this fluid background, Mr. President-elect goes to Washington to sell his economic stimulus plan, including an unexpectedly rotund $300 billion tax cut, a grand per family, $100 billion for business.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT-ELECT: We've got to act quickly. We've got to act boldly.

(END VIDEO CLIP)

OLBERMANN: He'll also have to do both in the Middle East. George Bush's final present to Barack Obama: Chaos in Gaza.

(BEGIN VIDEO CLIP)

PRES. GEORGE W. BUSH, UNITED STATES OF AMERICA: Democracy is taking hold in parts of the world, in the Middle East.

(END VIDEO CLIP)

OLBERMANN: If you consider a democratically-elected group terrorizing one of our allies and that ally bombing that democratically-elected group "democracy."

Bushed: The secretary of the interior's $235,000 private bathroom.

Well, he is secretary of the interior.

Worsts: The Alaska drug agents claimed that they held off arresting Bristol Palin future's mother-in-law for the sake of Sarah Palin's election.

And Bests: Nobody was worried about investing with a guy whose last name includes the words "made" and "off."

All that and more: Now on Countdown.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: Where is the money, Lebowski?

(END AUDIO CLIP)

OLBERMANN (on camera): Good evening. This is Monday, January 5th, 15 days until the inauguration of President-elect Barack Obama and the night before the Senate of this nation is to convene with twin plot lines that neither Frank Capra nor Rod Serling would have touched.

An ex-"Saturday Night Live" comic elected by just 225 votes in the Minnesota recount and a distinguished member of the Hall of Fame of Centralia, Illinois, appointed by an allegedly almost cartoonishly corrupt governor. Call it Mr. Franken and Mr. Burris go to Washington, and who knows what they'll find when they get there.

Mr. Obama, the president-elect, having already arrived in Washington, is meeting today with Democratic leaders on Capitol Hill. For a refreshing change of pace he was not - repeat - not the center ring in the media circus. That status is reserved for the Senate side shows.

This just in - calling Bill O'Reilly and Rush Limbaugh, idiots and liars can be an excellent career moves, and it's also worked for Senator-elect Franken. The Minnesota state canvassing board today is certifying the Democrat as the winner of the U.S. Senate recount by 225 votes out of nearly 3 million cast. The board members doing so only hours after the state Supreme Court turned away a bid by Republican Senator Norm Coleman to have more than 600 rejected absentee ballots considered in the recount.

Coleman's attorney is saying he plans to file a legal challenge on the grounds that Coleman did not win - I made that up - on the grounds that those rejected absentee ballots should be counted.

Meanwhile, on Capitol Hill, Senator Coleman's staff locked out of their Senate office by order of officials on the Senate Rules Committee which declared that Coleman's term expired, saying, quote, "They cannot carry on Senate business."

After the board certified the recount result, Senator-elect Franken in Minnesota is saying he is good enough, he's smart enough - and doggone it, people like him, but in words more befitting his new profession.

(BEGIN VIDEO CLIP)

AL FRANKEN, MINNESOTA SENATOR-ELECT: After 62 days of careful and painstaking hand inspection of nearly 3 million ballots, after hours and hours of hard work by election officials and volunteers across this state, I am proud to stand before you as the next senator from Minnesota. I know that this isn't an easy day for Norm Coleman and his family, and I know that because Franni and I and our kids have had plenty of time over the last couple months to contemplate what this would be like if the election turned out differently.

(END VIDEO CLIP)

OLBERMANN: The fight over the open seat in Illinois moving from the "Land of Lincoln" to the "land of the Lincoln Memorial." Today, the Senate rejecting Roland Burris, saying his appointment by Governor Rod Blagojevich is not official. Mr. Burris at the airport in Chicago before getting on a plane to Washington, calling himself the "magic man" and "Senator Burris."

(BEGIN VIDEO CLIP)

BURRIS: I am going to there to be seated. I am the junior senator from the state of Illinois. That's all I can say.

UNIDENTIFIED MALE: But you haven't been sworn in yet.

BURRIS: Well, and I will - I look to be sworn in, but I am the senator.

(END VIDEO CLIP)

OLBERMANN: Time now to call in Chris Cillizza, White House reporter for the "Washington Post," and also author of "The Fix" at WashingtonPost.com.

Good evening, Chris.

CHRIS CILLIZZA, WASHINGTON POST: Good evening, Keith.

OLBERMANN: So, what are the odds that Franken gets sworn in tomorrow along with the other new senators?

CILLIZZA: Probably close to zero. I think that while Harry Reid did say today, the leader of the Senate did say there is a time when a race is over. This race is over. Al Franken has won. I don't think they are going to try and swear him in tomorrow. Republicans John Cornyn, Texas senator, head of the Republican campaign arm in the Senate, has promised a filibuster. I don't think they are looking for that fight.

Coleman is going to, as within his legal right, contest this on the grounds that the recount was not handled properly. We're likely looking at a relatively lengthy legal fight. But Al Franken is ahead by 225 votes and all of those 3 million or so votes have been cast. That's a big, big advantage for the Democrats.

OLBERMANN: And you've mentioned the Coleman legal right, what are they? What does it say about the viability of his options if the officials on the rules committee today ordered that his offices should be locked and his staff can't go in there and they said his term is expired?

CILLIZZA: Well, his term expires officially on Saturday. So, I don't think you should connect the two, but I do think - throughout this process, Keith, we have seen the Franken legal team beat the Coleman legal team to the punch. And as we learned from Florida in 2000, it all ends up with the lawyers. As much I'd like to say reporters are important, politicians are important, in the end, it's the lawyers who matter.

This is a legal fight. There is a guy named Marc Elias. He's a Democratic election lawyer here in Washington. He has been working for Al Franken. That guy, if Al Franken gets in the Senate, Marc Elias deserves a lot of credit.

So, Democrats have won the legal fights to date. It doesn't mean they will win this election contest, but they've got to be feeling pretty good given where the election ended on election night and where it ended up today.

OLBERMANN: All right. Let's move to Illinois and about Mr. Burris. He said on Sunday of Senate Democrats, quote, "They cannot deny what the Lord has ordained."

Two part question: If Blagojevich is the governor of Illinois, hasn't been tried, hasn't been impeached, and the governor is the guy who has the right to appoint the replacement senator, how on earth could Mr. Burris not be seated? And part two of this is: Which lord is Mr. Burris invoking? The Holy Blagojevich?

(LAUGHTER)

CILLIZZA: Well, Rod Blagojevich may well think of himself in this deity terms.

(LAUGHTER)

CILLIZZA: Look, the reality here is this is a game of chicken between Roland Burris and Rod Blagojevich on one side, and Harry Reid and the Senate Democrats on the other. In theory, Harry Reid and the Senate Democrats have the right to choose their membership. They can choose to seat or not seat people.

However, there is a big disagreement among constitutional scholars on whether if this is pressed, and as you point out, Keith, Roland Burris is within his rights. Rod Blagojevich is the governor of the state. Whether he's embattled, whether he's scandalized (ph), he's still the governor - he appointed.

Roland Burris has a right to that seat. If he wants to push this thing all the way out, it's going to put Harry Reid in a very uncomfortable position, not to mention the fact that Roland Burris would be the only African-American in the Senate, replacing Barack Obama who was the only African-American in the Senate.

OLBERMANN: And when crap gets this heavy, politicians look for a compromise. Is there one here? I mean, if the lieutenant governor said he's OK with Burris and if Burris notarizes the old promise he made when he proposed himself for this that he wouldn't run in 2010, might everybody wind up saving face here on this?

CILLIZZA: That second part, Keith, I think is the key. If Burris says, "Look, I recognize I didn't get this in the right way, but I'm going to serve until 2010, and then I'm not going to run," there's going to be an open seat. All of this people who wanted that there be a special election can run, then a compromise might be worked out.

If doesn't, if he says "I'm running no matter what. I'm the senator," I mean, you could be looking at this going to Supreme Court on a constitutional fight which is not the way Democrats want to start this term for Barack Obama, particularly in his home state of Illinois.

OLBERMANN: And particularly, when the other outcome is a 59-vote margin in the Senate. Chris Cillizza of the "Washington Post" - as always, Chris, great thanks, Happy New Year.

CILLIZZA: You, too, Keith. Thank you.

OLBERMANN: In the meantime, the new Obama cabinet posting a net gain of one over the long holiday weekend. Today, the news that the president-elect has selected former Clinton chief of staff, Leon Panetta, to be his CIA director despite the fact that the former congressman doesn't have a lot of intelligence or counterterrorism experience on his resume. As CIA director, Mr. Panetta would report to retired Four-Star Admiral Dennis Blair, who is Obama's pick to be director of national intelligence.

But subtract one nominee at commerce. New Mexico Governor Bill Richardson having withdrawn his name, as expected, as commerce secretary because of an investigation into allegations of corruption.

In a news conference today, the governor expressing gratitude that he is not joining the ranks of America's unemployed.

(BEGIN VIDEO CLIP)

RICHARDSON: Yesterday, I was hurting over this decision. I lost a cabinet appointment. But I think we have to focus on what people are losing in this country. You know, the American people or people in New Mexico are losing jobs. They are losing their savings. They are losing their homes. That's the real tragedy. You know, mine is minor compared to that.

(END VIDEO CLIP)

OLBERMANN: For the latest now about the cabinet, let's turn now to E.J. Dionne, the "Washington Post," columnist and senior fellow at the Brookings Institution.

Good evening, E.J.

E.J. DIONNE, WASHINGTON POST: Hi, Keith.

OLBERMANN: Senator Feinstein, who's going to chair the Senate Select Committee on Intelligence, issued a statement this afternoon about Mr. Panetta and the CIA. I'm going to quote it, "My position is consistently been that I believe the agency is best served by having an intelligence professional in charge at this time." When they asked Harry Reid a question about the selection, he basically ignored it, which would lead one to ask: Is the Panetta nomination not necessarily in trouble but troubled?

DIONNE: Well, you read the Feinstein statement and you said, "Ouch." She clearly was not happy about this. I was talking to somebody in the Obama apparatus this evening who said, "You know, it was a lot easier to control information during the campaign than it is here in Washington."

And one of the things that definitely happened here is that this name, Leon Panetta's name, leaked out earlier than they intended to because they clearly didn't run it by Feinstein. And I think, on her part, there may be, A, a sense they should have at least talked to her, and, B, perhaps, she had another candidate, perhaps, Jane Harman, the congresswoman from California with a lot of intelligence experience.

But I think when you look where the CIA has been and the history of people who came to that agency out of politics, a lot of times an outsider and political person has been successful. That building out there where the CIA is, is named after a guy who was a politician, named George H.W. Bush. So I think he is - I doubt that Leon Panetta is in trouble for confirmation.

OLBERMANN: So, apart from that background, is the other - what is actually the motive in terms of giving him this? What is on his resume that suggests he is the right man? Is it because he spoke out so unequivocally against torture?

DIONNE: Well, I think his positions match Obama's positions on those issues and the promises Obama made to roll back some of these things that happened in the Bush years. I also think that he was a White House chief of staff; he understands how presidents consume intelligence and what they need.

And, I think, furthermore, he is someone with a lot of respect from Republicans. He is a former Republican himself. So I think there is a sense that this is not a partisan pick. He is older, which the older I get, makes you think it's about wisdom.

OLBERMANN: Turning to Bill Richardson and the wisdom, is it better that this happens now than later? Is it - why did it happen? How is it not seen as a threat when the appointment was originally announced?

DIONNE: Way better than it happened now than in the middle of the hearings before the Senate. My understanding is that the Obama folks and, perhaps, even the FBI think that he wasn't fully forthcoming with them -

I'm sorry this thing keeps falling out of my ear - wasn't fully forthcoming with them.

I had a Machiavellian theory which an Obama person shut down, but I still like the theory. You know, they named Richardson possibly knowing there was a problem. But Obama gets credit, A, for helping his friend Bill Richardson, and B, for naming a Latino. And the fact that he's had to back out is not Obama's fault. So, it's a peculiar kind of win-win for them although it's not the kind of win they want to have regularly.

OLBERMANN: E.J. Dionne of the "Washington Post" and the Brookings Institution, and by the way, earpiece problems also result from wisdom or indicators thereof.

DIONNE: I hope so. Thank you, Keith.

OLBERMANN: Thanks, E.J. Happy New Year.

DIONNE: You, too.

OLBERMANN: Tax breaks for the middle-class might be the oldest thing in his playbook, but throw in new ones for business, and the president-elect is proposing cuts that in total might make George Bush blush.

Meantime, the early warning signs from Washington: Mr. Obama might be, in some respects, overshadowed in his presidency by the two Miss Obamas, Sasha and Malia - with presidential historian, Michael Beschloss.

(COMMERCIAL BREAK)

OLBERMANN: Republicans claim the Obama economic stimulus plan is actually one giant concession to Republicans. The president-elect, meanwhile, is trying to sell it on the Hill right now.

Later in Bushed, 15 days left, but Dick Cheney still thinks he deserves credit because there wasn't another 9/11, as if the first one did not create enough misery or blame. And this quote, "Poor people were not and are not poor because they lack money, they are poor because they lack values, ethics and morals." The right-wing radio demagogue who said that, not sometime in the 18th century but right now - in the first Worst Persons class of 2009.

You are watching Countdown on MSNBC.

(COMMERCIAL BREAK)

OLBERMANN: Any yelling about the evil, Bush tax cuts may have to be muted for a while. There are new proposed tax cuts which are, over at least the next two years, more than President Bush ever offered. Our fourth story on the Countdown: $300 billion in tax relief proposed by a new president and they were not proposed by President-elect Mills of Ghana.

Mr. Obama today is pressing the flesh and pressing his economic stimulus package on the Hill, meeting with Speaker of the House Nancy Pelosi, with Senator Majority Leader Harry Reid, with the bipartisan panel of congressional leaders - urging everyone to act swiftly and boldly on his recovery plan even though it is already clear that Congress will not be able to get a bill together in time for Obama to sign immediately after his inauguration, and it is hazy whether it will have one ready for him before the congressional break in mid-February.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT-ELECT: There are only so many days in the legislative process and it's going to take some time even if on an expedited schedule to get a bill passed and on my desk. But we anticipate that by the end of January or the first week in February, we have gotten the bulk of this done.

(END VIDEO CLIP)

OLBERMANN: As to what exactly Obama wants to get done by then, his aides hinting over the weekend that the stimulus package could cost up to $775 billion, with $200 billion for states, $300 billion worth of tax cuts, including more than $100 billion for businesses, 500 bucks for most workers and $1,000 for couples.

The president-elect insisting today that such measures about $100 billion more in tax cuts than his estimates pre-Christmas are not geared towards wooing Republican support for his plan.

(BEGIN VIDEO CLIP)

OBAMA: For the last two years, I've talked about the need for middle-class tax cuts. So, the notion that me wanting to include relief for working families in this plan is somehow a political ploy, when this was a centerpiece of my economic plan for the last two years doesn't make too much sense.

(END VIDEO CLIP)

OLBERMANN: Except to the good old GOP leadership, which made it clear today that it considers the tax cuts a major concession from the president-elect - and by GOP leadership we mean that one guy who always looks like he has not readjusted after somebody popped a flash bulge too close to him.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL, (R) MINORITY LEADER: I think he's already been listening to the suggestions we've made. If you look at press descriptions that some of you have written about what you think the current proposal looks like, it's different than what it looked like a week or 10 days ago. And the differentness so far has been the dramatically, apparently expanding portion of this that will be devoted to tax relief. That clearly is appealing to virtually all Republicans from Maine to Mississippi.

(END VIDEO CLIP)

OLBERMANN: You say "differentness," I say difference.

I'm joined now by our own Richard Wolffe, senior White House correspondent for "Newsweek" magazine.

Richard, good evening.

RICHARD WOLFFE, MSNBC POLITICAL ANALYST: Good evening, Keith.

OLBERMANN: Is the senator, Mr. McConnell, boasting to his constituents or trying to set a precedent for future concessions? Or could those cuts actually be concessions?

WOLFFE: I'm going to go for all of the above. Here's a guy who

happens to be the most powerful Republican in Washington but that's not

saying a whole lot. So, all he has to do is boast and block and tackle and

to the extent he can go out there saying, "Look, I did this, I got this," it's a good thing for the incoming administration.

What they're also trying to do, of course, is test this president. Test what kind of mettle he has. You remember Biden talks about him being tested by foreign leaders - he's being tested right now by people in Washington. Does he have steel in his spine? Will he put some extra billions on the table for those tax cuts? Yes, he talks about tax cuts. But whether this big, who knows?

If you're going on press reports, suddenly, the Republican Party are trusting press reports in a way that they never did before.

OLBERMANN: And, in terms of the Republican Party, to whatever this is a political calculation, is it going to work for the president-elect because are any members of Congress, particularly Republicans, risking alienating their constituents now if they vote against a stimulus package that has so many at least Republican-friendly components?

WOLFFE: Well, there are two ways to look at this. For a start, I guess they could say they are being courageous if they're block big government. But really, they'd be foolhardy to stop a stimulus package when we're in the middle of this deep recession, and therefore run the risk of taking the blame from a popular president for stopping the American economy from recovering.

So, I don't know that this is a difficult challenge for these Republicans. Yes, the tax cuts help them with some of their people, but there are many, many voters out there who want to see the stimulus package, want to see something get done. It's a no-brainer, really.

OLBERMANN: The president-elect has been saying from the beginning that any plan needs to be bold and swift, and Congress was - we know was trying to get the package done at his request, you know, right after the long song is played at the inauguration, now, maybe mid-February. Is a month and a half swift enough and is even mid-February a realistic guesstimate on when this could happen?

WOLFFE: Well, or six months ago would be swift enough. The problem here is that it takes so long for these stimulus packages to trickle into the economy. If it's infrastructure spending, you're looking at six months to a year. Even rebate checks take a long time to process. So, I don't think a month really makes much difference.

The problem here is the first round of stimulus that really kicked in was essentially wasted on the balance sheets of a bunch of financial institutions and it hasn't affected the real economy. The Bush TARP plan, the Troubled Assets Plan has not boosted the economy in any significant way.

OLBERMANN: What about the Obama plan? I mean, the essence of his campaign was tax relief for the middle-class. Is the stimulus package going to have to be it for the middle-class or is there going to be some more help down the line, and where would it come from?

WOLFFE: You know, I suspect there will be more help down the line because the economy, by best estimates, may only just start to recover in the second half of the year, maybe the final quarter of the year. By then, the political pressure is going to be very intense to come up with a second phase again in the fall. So, I think there will be a second round.

The question is: How big? Are they going to be over-stimulating the economy? My guess is, the politics will make sure something else happens.

OLBERMANN: Richard Wolffe of "Newsweek" and MSNBC - great thanks, as always. Happy New Year.

WOLFFE: Happy New Year, Keith.

OLBERMANN: Adventures in broadcasting number 217: Co-hosting on New Year's Eve with a comedienne who doesn't know when the mike might still be on. I don't go to your job and (INAUDIBLE).

And, an Alaska drug investigator sticks to his guns. An arrest warrant was too delayed until after the election for the sake of Governor Sarah. Worst Persons is ahead on Countdown.

(COMMERCIAL BREAK)

OLBERMANN: Bests in a moment. And you want to sell me the big bopper's casket. Well, where does he fit in all this?

First, one this date in 1969, Brian Hugh Warner was born in Canton, Ohio. He was working towards a degree in journalism when he met some musicians who went by cultural collision names like Twiggy Ramirez and Madonna Wayne Gacy and the next thing he knew, he was performing as Marilyn Manson. Marilyn Manson is now 40. Yes.

Let's play Oddball."

Happy Birthday, old man.

We begin back in the start of 2009 with something that would have offended Marilyn Manson. Tape from CNN's rocking New Year's Eve programming featuring Anderson Cooper and Kathy Griffin. Besides the duo freezing in Times Square, amid drunk revelers, the show also featured hard-hitting questions posed by Griffin to the guy voted "Playgirl's" third sexiest news anchor of 2004.

(BEGIN VIDEO CLIP)

KATHY GRIFFIN, COMEDIENNE: Who would you rather arm-wrestle Chris Matthews or Keith Olbermann?

ANDERSON COOPER, CNN ANCHOR: Chris Matthews or Keith Olbermann?

GRIFFIN: Yes, who could you take?

COOPER: I could take them both.

(END VIDEO CLIP)

OLBERMANN: Hey, when I turn my hat around, it's like a switch. The real wrestling would come between the otherwise delightful Miss Griffin and her own ability to tell when they had already gone to a commercial break and when they had not.

(BEGIN VIDEO CLIP)

COOPER: We have to take a short break and we'll go to Bourbon Street.

GRIFFIN: Shut up. You know what, screw you. I'm working.

COOPER: We'll be right back.

GRIFFIN: Why don't you get a job, buddy. You know what, I don't go to your job and knock the (EXPLETIVE DELETED) out of your mouth.

(END VIDEO CLIP)

OLBERMANN: We bleeped it. They didn't. This is CNN.

In other news, the first world's human size bug zapper. It does not work. That's a half a million volts of electricity pulsing from a Tesla coil through the air to a metal cage holding Dr. Peter Tarin (ph) of Banbury, Australia. The stunt has earned Dr. Tarin the nickname Mr. Electricity; that and he is a lot of fun at a party.

Tarin refused to divulge too many details about his trick, though he did say that he keeps the energy bill down by using a neighbor's electrical socket. I saw Jackie Coogan do this on the "Addams Family" in 1964. Big deal.

(END VIDEO CLIP)

OLBERMANN: Speaking of not being the biggest bulb in the marquee, the last lingering gift from Mr. Bush to Mr. Obama, war in the Gaza Strip.

And dad starts in two weeks, but today was inauguration for the Obama girls, and a nation positively swooned.

These stories ahead, but first time for Countdown's top three best persons in the world.

Number three, best creepy story of the day, Jay Richardson, son of the late J.P. Richardson, better known as the Big Bopper, the singer who died along with Buddy Holly in a plane crash 50 years ago next month. He is selling his father's casket, well, his old casket. The Big Bopper was exhumed a few years back and reburied in a different casket. Jay Richardson wants to sell the old one as a souvenir to finance a musical about his father. When you get down to it, he says it is just a metal box.

Number two, best eerie story of the day, the late Donald Peters of Danbury, Connecticut. On November 1st, he bought, as he always did, a series of Lottery tickets, state Lottery tickets for his wife. That afternoon, Mr. Peters died of a heart attack at the age of 79. The last of those tickets has turned to be a winner worth 10 million dollars.

And number one, best trust, all those who invested with the infamous Ponzi scheme artist Bernie Madoff, who went right in handed over their catch, even though they must have said, at some point in their lives, a sentence that have to have sounded very much like this one: I trust Bernie Madoff with my money.

(COMMERCIAL BREAK)

OLBERMANN: The death toll in Gaza today, after ten days of aerial bombardment, on this third day of Israel's ground invasion, now estimated at more than 540 dead, 200 of them at least civilians. With world leaders flying to the Middle East, working the phones for a cease fire, only one voice in the global community said let's not stop the bloodshed too quickly now. Our third story tonight, another Bush debacle bequeathed to the President-Elect Barack Obama.

Before the end of last year's cease fire, Israel sent soldiers into Gaza, claiming to stop plans for a terrorist operation there. Hamas, which took power in Gaza after winning the 2006 elections, responded to the Israeli incursion by renewing its random rocket attacks on Israel and escalating them once the cease-fire officially ended.

Israel says its invasion this weekend is intended to ensure that Hamas can no longer use its rocket staging grounds to attack Israeli targets. But some Israeli officials have been quoted and saying the goal is to end Hamas rule of Gaza altogether. After blocking a UN cease-fire resolution this weekend, Mr. Bush today blamed Hamas exclusively for the violence and made his first public comments about a possible cease-fire.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I know people are saying let's have a cease-fire. Those are noble ambitions. But any cease-fire must have the conditions in it so that Hamas does not use Gaza as a place from which to launch rockets.

(END VIDEO CLIP)

OLBERMANN: So no cease-fire unless it ceases the firing? Backed by Mr. Bush, Israel too is rejecting calls for a cease fire until its objectives are achieved, making this invasion likely to continue until it joins the other Bush legacies landing on the desk of President to be Obama on January 20th.

Let's turn to now Hillary Mann Leverett, former director for Iran and Persian Gulf Affairs at the National Security Council, also served in the US embassy in Tel Aviv, and spent considerable time in Gaza. Thanks for your time tonight.

HILLARY MANN LEVERETT, FMR. NSC PERSIAN GULF DIRECTOR: Thank you.

OLBERMANN: This is, obviously, a third rail politically worldwide, because the two sides only agree on one thing, that the other guy is not only 100 percent wrong, but has been 100 percent wrong for 2,500 years. But give me your thoughts on the Bush statement today, and what US role - the role we have had in the current crisis, because did Israel move because it got a knowing green light from us? Or was there an unwitting open window? How are we involved in this?

LEVERETT: There was an effective green light. There was a cease-fire in place until December 1th. The Bush administration actively discouraged the parties, particularly Israel, from renewing that cease-fire, because they didn't want to legitimate Hamas in any way. They wanted to work with Palestinians we like, the, quote-unquote, good Palestinians in the West Bank.

So they didn't want to do anything to encourage Hamas and Israel to renew its cease-fire that could actually become something more lasting and enduring. For President Bush to now come out and say, a week later, nearly 500 people dead - more than 500 people dead, to grudgingly acknowledge that maybe a cease fire, with some conditions, is warranted is - you know, it's maybe what Sarah Palin would call word trickery. A cease-fire was necessary immediately.

An immediate cease fire is what was needed to get monitors in, to get peace-keepers in, to ease the blockade, to get humanitarian goods into the people in Gaza. Something that's more lasting and enduring is not a cease-fire. That would be maybe an armistice or negotiations that could lead to a resolution and settlement of the conflict. That would be enduring and lasting. A cease fire, by definition, is not that. It is really, I would call it word trickery.

OLBERMANN: Well, say we did get an armistice, to use your term, even by end of tomorrow, this would obviously not be resolved in full by the time of the change in the presidents. What will Obama have to do? What will his options be as of the 20th?

LEVERETT: He really should be coming out now with a statement of sympathy for all those who have been killed, Palestinians and Israelis. The fact that he is silent is resonating very strongly throughout the Middle East. The fact that he came out with a statement after the Mumbai attacks, but will not say anything about what Israel is doing in Gaza is something that is resonating very strongly in the region where U.S. credibility is at its low point.

So I think he does need to come out with an immediate statement of at least sympathy for those who have died. When he comes into office, he has to do something even stronger to signal a departure from Bush administration policies. What I think will be critically important would be for the United States to finally come out and say that we support efforts for Palestinian reconciliation, for there to be some sort of Palestinian national unity government. That would mean that we would recognize and deal with a government of the Palestinians that included Hamas, something that Saudi Arabia tried to broker last year and we vetoed.

OLBERMANN: The other thing that will change, if not on the 20th then shortly thereafter, is the identify of the secretary of state. And here is Hillary Clinton coming in to the middle of this with a last name certainly that is, to some degree, magical, influential at least in the Middle East. How is her appointment going to shape Obama's efforts for Middle East peace? And how will it be received by both sides in the Middle East?

LEVERETT: Her name is magical and influential to an extent in Israel. But throughout many capitals in the Arab world, where I served at the US embassy in Cairo and in the Gulf, there is a lot more skepticism that she is going to be even handed. There is considerable fear about the advisers that she is going to bring with her, people like Martin Indyk or Dennis Roth, Ken Pollack, people that I would call neo-conservative fellow travelers, people who brought us a failed peace process between the Israelis and Palestinians by the end of the Clinton term in 2000, people who cheered and championed the invasion of Iraq under this administration.

There is a lot of fear and consternation that the advisers, in particular, that Hillary Clinton is bringing with her are going to make us long for the Bush days.

OLBERMANN: Hmm. Goodness. Hillary Mann Leverett, former member of the National Security Council, as always, great thanks for your insight into this stuff.

LEVERETT: Thank you.

OLBERMANN: Just another thing to hurry the bloom off the rose for the president-elect. In terms of the family and the newness, Washington is a-twitter over the Obamas, particularly on the first day of school, the girls. Historian Michael Beschloss will join us.

In worsts, this guy is back, insisting poverty is the result of low morals. Evidently, he thinks we just started 1909.

And big news coming up when Rachel Maddow joins you at the top of the hour. Her special guest, the man who may indeed be the senator from Illinois, Roland Burris, live.

But first, because they're not going away soon enough, the headlines breaking in the administration's 50 running scandals, Bushed!

Number three, put your money where your something is gate. The "Washington Post" reporting that lame deck Secretary of the Interior Dirk Kempthorne has left a present for his designated successor, Ken Salazar, 235,000 dollars in upgrades to their office bathroom. A new shower, monogrammed towels, new tile, new plumbing, and lavish, floor to ceiling wood paneling, which opens to reveal a refrigerator and a freezer, in the bathroom of the office of the secretary of the interior, who apparently likes to freeze stuff in there.

Number two, Chutzpah-gate, John Bolton and John Yoo, two of the architects of Mr. Bush's foreign policy of shoot first, ask questions second, mention it to Congress last. They have written an op-ed for the "New York Times" titled "Restore the Senate's Treaty Power." They are arguing that now the Senate needs to reassert its right to slam the brakes on unilateral international actions by the president. There concern that Obama may go for a Kyoto-style climate accord without Senate ramification. Bombing the hell out of the closest thing to an innocent bystander nation and getting 4,000 of our troops killed without Senate consent, that' fine. Try to save the atmosphere, and suddenly John freaking Bolton is demanding checks and balances.

To Mr. Yoo and Mr. Bolton this question: do you take your hypocrisy orally or intravenously?

Number one, crazy vice president-gate. We continue to race the clock.

Will Mr. Cheney somehow manage to destroy the planet in the next two weeks? On "Face the Nation," he not only insisted the economic collapse consisted of, quote, difficulties that have developed in the financial markets over the last six months, but when asked by Bob Schieffer if we are better off than we were eight years ago, he replied -

(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: I think we have done some very good things over the course of the last eight years. Defending the country against further terrorist attacks like 9/11 I think is a major accomplishment, for example.

(END VIDEO CLIP)

OLBERMANN: Gets worse: "our task when we came was ultimately to deal with the aftermath of 9/11. And we had to take on the global war on terror."

Listen, you fatuous, condescending lunatic, for the last time, your task was not to deal with aftermath of 9/11, it was to prevent 9/11. If you utterly whiffed on the most important test of all the presidencies in your lifetime, Mr. Cheney, you do not get credit for getting a C on the pop quizzes that followed.

(COMMERCIAL BREAK)

OLBERMANN: Washington, the nation, goes faint, as the Obama girls go to school. Presidential historian Michael Beschloss joins me next.

But first time for Countdown's number two story, tonight's worst persons in the world.

The bronze to racist radio host Bill Cunningham, syndicated by the Premier Radio Networks, belittling more efforts to fight poverty because, quote, "poor people were not and are not poor because they lack money. They are poor because they lack values, ethics and morals."

Apart from half a century of non-partisan research disproving that long standing bit of offensive home-spun nonsense gibberish, this note from Mr. Cunningham's own biography on the website of his home radio show in Cincinnati; he, quote, later became a butcher, baker and then a candlestick maker. Presumably, in at least one of those occupations, Mr. Cunningham probably met the qualifications for poverty and thus was, at least at that time, himself lacking in values, ethics and morals.

The silver to Alaska State Public Safety Commissioner Joe Master. You may have missed it, since it all came down during Christmas break, but Bristol Palin's future mother-in-law was arrested for allegedly selling OxyContin to a police informant. An Alaska State Troopers drug investigator involved in the case named Kyle young says, in an e-mail to all the members of his union, that quote, the search warrant service was delayed because of the pending election, and the local drug unit and the case officer were not the ones calling the shots.

Commissioner Masters and Governor Palin are disputing this, but the head of the Trooper's Union says other members confirm it.

But our winner, Joseph Farrah, the proprietor of World Net Daily. He is now denying that is lunatic fringe, right wing website verified the president-elect's birth certificate, and in so doing destroyed an industry of conspiracy theorists, who believe that Obama is from Kenya or possibly the moon. He says, quote, "nothing could be further from the truth." He adds, he did offer up to forgery experts the facsimile of a partial birth certificate. None of them could report conclusively that the electronic image was authentic or that it was a forgery.

Yes. Joseph Farrah's World Net Daily, August 23th of last year, posted and copyrighted this article by its guy, Drew Zaun, quote, "a separate World Net Daily investigation into Obama's birth certificate utilizing forgery experts also found the document to be authentic."

Oops. That would make Mr. Farrah of World Net Daily not just a bald faced liar, but one whose claim was easily disproved by his own website. Why do you think they call it the lunatic fringe? Joseph Farrah of World Net Daily, today's worst person in the world!

(COMMERCIAL BREAK)

OLBERMANN: There is something uniquely American about even a discussion of the possibility that the first African-American president might be culturally over-shadowed by his own kids. Our number one story tonight, the Obamas have arrived literally in Washington. We may have seen a long, unresolved national empty nest syndrome relieved.

Sasha and Malia Obama attended their first day of school, escorted by their mother and Secret Service, and trailed by the proverbial phalanx of journalists.

The Obama Transition Office released three pictures of seven-year-old Sasha and 10-year-old Malia preparing for their day. But as Michelle Obama accompanied her daughters to different campuses of Sidwell Friends School, the Associate Press or the journalists obviously followed and the Associate Press breathlessly described Sasha's backpack, quote, "a Trans by Jansport, pink, magenta and gray."

The Obamas are staying at a suite in the Hay-Adams Hotel until January 15th when they move to Blair House, five days late to the White House. With renewed speculation that the question of the dog might be settled with two dogs, one from a rescue shelter and another pure bred to satisfy Malia's allergy issues, perhaps, we hope. A pleasure to joined now by NBC News presidential historian Michael Beschloss. Good evening, Michael.

MICHAEL BESCHLOSS, NBC NEWS PRESIDENTIAL HISTORIAN: Hi, Keith. How are you doing?

OLBERMANN: Very will, sir, thank you for being with us.

BESCHLOSS: Happy New Year.

OLBERMANN: To you too. Let's begin by summing this all up. Does this all owe to some sort of national hunger to see pre-teen kids in the White House?

BESCHLOSS: I think it probably does. Go back to the Kennedy period, it certainly worked for JFK to come into the White House with a baby, John Jr., who was under two months, and Caroline, who has since gone onto other things in New York politics, who was three years old. You know, if you want to get historical about it, Keith, there is this idea of hostage to fortune. In the early 19th century, one writer talked about who the Americans were. They said, one thing that is important to Americans is that if there is a leader, sometimes American trust the leader more if the leader has small children, because those children are hostages to the kind of policies the leader might disseminate.

OLBERMANN: Is there another national psychological strain that could be at work here as well; as a recession deepens, so does hunger for revitalization that not only his family represents, but a family with two small daughters represent?

BESCHLOSS: I think that's right. You know, go back to 1960 when John Kennedy came in, John Kennedy with those young children was succeeding Dwight Eisenhower, who had four grandchildren. The oldest was 12 years old. Kennedy said in his inaugural "the torch is being passed to a new generation of Americans." The words worked, but the pictures said it more.

OLBERMANN: Despite the president-elect's obvious substance, will this also be necessarily, because of those kids, because of the photogenic nature of the entire family, without any encouragement, certainly, from anybody in the family, will this turn out to be a paparazzi presidency?

BESCHLOSS: Sure looks like it, although every sign we've seen is that the Obamas are going to work very hard to shield those kids from unnecessary publicity. They have done it so far. You know, those two daughters have always been the daughters of a public figure. Barack Obama has been in government as long as they have been alive. They're still so unspoiled. You saw them at the Democratic convention last summer; these are kids who are genuine. That is not something that is very easy to fake. It is not very common to many political children, as you know.

OLBERMANN: Also, standing up there in front of a convention center filled with 15,000 to 20,000 people is not also something that you can teach, nor something you can fake. They obviously have to be just enough of a ham each to make that work.

BESCHLOSS: And nothing wrong with that. A lot of people who don't know much about arms control or other issues will say if Barack Obama is that good a father and these kids are so nice, maybe he'll do the right thing on other issues that I don't take the time to know about.

OLBERMANN: What's the overall - the in brief, maybe the percentage history of successful raising of young kids in the White House? How many of them does the nation screw up on behalf of their parents?

BESCHLOSS: Well, there's a big history throughout American history of presidential children with a lot of divorces, even suicides, bad stories. But the ones who are successful are when you have two parents who are absolutely determined to keep these kids from getting spoiled. Jackie Kennedy felt so strongly that way that she didn't even send Caroline to a local school. She had a school on the third floor of the White House.

The interesting thing is that the second year of that school - it was a big deal at the time, that school was integrated. The first black child was an African-American child of the assistant press secretary. Jackie Kennedy came and greeted him, apparently, on the first day. The story is told he came home and told his mother, Mrs. Kennedy said hello to me by name. His mother said how did she know it was you? He said, she knew I was the one in the blue shirt.

OLBERMANN: The last point, Michael, the dog, is this a painless national obsession?

BESCHLOSS: Doesn't hurt a president, but sometimes doesn't work. You remember Lyndon Johnson pulled his dog's ears. They yelped. He said the dog enjoyed it. People wrote and said he was a sadist. His vice president, Hubert Humphrey was asked, what is your relationship with Johnson like. Humphrey went like this.

OLBERMANN: Michael Beschloss, presidential historian for NBC News, it's always a pleasure to speak with you, sir. Thanks for your time.

BESCHLOSS: Great to see you, Keith. Be well.

OLBERMANN: That is Countdown for this the 2,067th day since the declaration of mission accomplished in Iraq. I'm Keith Olbermann, good night and good luck.

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