updated 11/24/2008 4:48:13 PM ET 2008-11-24T21:48:13

COUNTDOWN

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

Guest: Richard Wolffe, Margaret Carlson, John Talbott, Hillary Mann Leverett

DAVID SHUSTER, GUEST HOST (voice over): Which of these stories will you be talking about tomorrow? "Secretary of State" soap opera: The back-and-forth continues between the Obama and Clinton camps and growl over who is leaking what to whom. With Obama aides said they're frustrated that a private process is playing out publicly. Are the Clintons boxing the president-elect into a corner or is it the other way around? Moving forward: Obama's chief of staff meets with House Republicans.

(BEGIN VIDEO CLIP)

RAHM EMANUEL, OBAMA'S CHIEF OF STAFF: The challenges facing the country require that people of both parties work together to solve those problems.

(END VIDEO CLIP)

SHUSTER: And today's non-official cabinet pick of the day: Arizona Governor Janet Napolitano for the top spot at Homeland Security.

The battle over bailout for big auto: The Democratic leadership places demands on the Big Three.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI, (D) HOUSE SPEAKER: Until they show us a plan, we cannot show them the money.

(END VIDEO CLIP)

SHUSTER: Meanwhile, the White House is pushing for a compromise bill to be passed ASAP. With the auto industry teetering, jobless claims at a 25-year high, and another low on Wall Street, are we anywhere close to the bottom, yet?

(BEGIN VIDEO CLIP)

SEN. TED STEVENS, ® ALASKA: I yield the floor for the last time.

(END VIDEO CLIP)

SHUSTER: Senator Ted Stevens bids goodbye to Senate colleagues as they give the 40-year veteran, who embarrassed the chamber with felony convictions, a standing ovation. All that and more - (on camera): And this just in to MSNBC, breaking Sarah Palin news. She pardoned the Thanksgiving turkey Alaska-style and while the pardon went fine, the post-game interview went horrible wrong. All that and more: Now on COUNTDOWN.Good evening, everybody. I'm David Shuster. Keith Olbermann has the night off. This is Thursday, November 20th, 61 days until the inauguration of President-elect Barack Obama. Perhaps you've heard, just maybe, word seems to have gotten out that Senator Hillary Clinton is under consideration to be Mr. Obama's secretary of state. Unless, in our fifth story on the COUNTDOWN: The fact that nearly every detail about the vetting process so far has been leak to the media may have already derailed her chances. Or, instead, Senator Clinton simply might not want the job. Both are said to possible scenarios today. We begin with the latest leak. Former President Bill Clinton has released the identities of all donors to his charitable foundation to the Obama transition team. Also, he has apparently agreed to allow the Obama administration to vet his future speeches should his wife become the nation's top diplomat. At a public appearance yesterday, Mr. Clinton said, quote, "I'll do whatever they want." Yet, what if, ironically, the Clinton camp might already be doing, at least saying too much? The "New York Times" is reporting that by taking the former president's activities off the table as an issue, the Clintons are eliminating any excuse for President-elect Obama not to give Senator Clinton the cabinet post. But some in the Obama camp are bristling at the leaks. They feel they are boxed in, all but forcing the president-elect into having to give her the job. The "Washington Post," meanwhile, is reporting she might not even want the job anyway. The principal holdups being how much influence she would actually have in the Obama White House, as well how it would affect her political legacy. Time now to call in our own Richard Wolffe, senior White House correspondent for "Newsweek" magazine.

And, Richard, good evening.

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

SHUSTER: So, either Senator Clinton really wants the job, but might have damaged her chances of getting it by boxing in Team Obama with leaks to the media or she might not even want the job after all, which would beg the question: Why are we all, including her husband, putting ourselves through it anyway? What is going on here?

WOLFFE: Well, let's try and break this down a little bit, OK? First of all, the campaigns have finished, which means that there's a vacuum when it comes to communications. There is no one driving the message of the day, discipline is hard to enforce, and you have multiple leaks at multiple levels. Some of which contain a grain of truth, but not all of which sort of stack up. So, what you have here, I think, is two principles at the top of this, the president-elect obviously making an offer, the vetting process proceeding apparently, according to my sources, pretty smoothly. President Clinton offering up a lot of information here, and Senator Clinton conflicted to a degree, but not really entirely against it because this is a great job, given that she's a junior senator from New York. What you have at the lower levels, however, are some people who desperately want to move on. Some people who are unhappy with the leaks, and certainly, from the Obama side, way too much leaking and talking going on. But that's the price of doing business with the Clintons.

SHUSTER: Is there any chance that both sides might be looking for an exit, for a graceful way out of this?

WOLFFE: Well, it's not very graceful. And I'm not even sure they're really looking for an exit strategy at this point. Clearly, there are people involved who have different motives. There are some people around the president-elect who don't want to see the Clintons get this kind of position. Well, that's tough. The president-elect seems to want this to happen. So, he's the decider, as the president would say. And on Senator Clinton's side, well, you know, there are people who are grasping for jobs and positions and prominence in a way that they are getting attention that they haven't for many, many months. So, you know, once this thing becomes clear, I think a lot of this will be forgotten.

SHUSTER: Thomas Friedman of the "New York Times" wonders if Mr. Obama and Mrs. Clinton would or could ever have the type of close relationship for her to be an effective secretary of state, noting that the most effective to hold the job is always been viewed as speaking directly for the White House, no questions asked, the one job in the cabinet-argues Mr. Friedman-that should not be part of the team rivals. Is that a valid concern with both Obama and Clinton?

WOLFFE: Well, with all due respect to Tom Friedman, but no. Every single cabinet secretary should be speaking for the president and following his policy. So, the secretary of state is no different in that respect. And, in fact, there's every reason to believe that Hillary Clinton would be a disciplined performer. Really, the two tasks for a secretary of state are-do they get the attention of foreign leaders, I think there's no question that a Secretary of State Clinton would be able to meet with any foreign leader. And secondly, can they speak over the heads of those leaders through foreign media? Even more so, Senator Clinton, a Secretary of State Clinton would be able to reach any foreign leader. So, I think she'd have all the tools at her disposal and the discipline to deliver Obama's message.

SHUSTER: Advisors to Senator Kerry and Governor Richardson are said to be puzzled over the consideration of Clinton, especially since both men endorsed Obama at a time when their support was thought to be crucial. A lot of folks are scratching their head over this one, and how do they get so far as to seem inevitable?

WOLFFE: Well, the loyalty question is unsettling for folks in Obama world. But there are a number of big jobs that have not been allocated. And before people get way ahead on this one, you got to remember that the most important position for the president on a foreign policy is national security advisor. Just speculate for a minute what happens if Bill Richardson, for instance, is national security advisor. Could you have a conduit (ph) to this big team rivals in the cabinet? Remember that the big failing of that first Bush administration was to have a relatively weak national security advisor. Condoleezza Rice not being able to balance out the heavyweights of Colin Powell, Donald Rumsfeld, Dick Cheney. So, it depends on what President-elect Obama chooses for his own national security team. And, by the way, John Kerry, who knows what job he's going to get. But if he stays in the Senate, he'd be an important conduit to as chairman of the Foreign Relations Committee.

SHUSTER: Richard Wolffe of MSNBC and "Newsweek," Richard, thanks as always for your time. We appreciate it.

WOLFFE: Thanks, David.

SHUSTER: Of course, there was more transition speculation today beginning with reports that Arizona Governor Janet Napolitano is under consideration to head the Department of Homeland Security. As the governor of a border state, Napolitano criticized the Bush administration's plan to build a wall along the U.S.-Mexico border. She once pointed out, quote, "You build a 50-foot wall, somebody will find a 51-foot ladder." In other news, there could be some potential problems with the possible appointment of former Senator Tom Daschle as secretary of Health and Human Services, specifically, he serves on the board of the Mayo Clinic and has worked as a highly-paid advisor to healthcare clients at his law and lobbying firm. Both of which require him to recuse himself from any issue related to those activities while at HHS. One more name gone about as quickly as it arrived, the national finance chairman for the Obama campaign issued a statement today, saying she was not in consideration for commerce secretary. Chicago businesswoman Penny Pritzker made the public declaration this afternoon that she doesn't want to be considered for any cabinet position, saying she could best serve the nation in her current capacity, quote, "building businesses, creating jobs, and working to strengthen the economy." Officials say that Laura Tyson, former chair of the White House Council of Economic advisors under President Clinton remains in the running for commerce secretary. Let's bring in Margaret Carlson, Washington editor of "The Week" magazine and a political columnist for "Bloomberg News." Good evening, Margaret.

MARGARET CARLSON, BLOOMBERG NEWS: Hello, David.

SHUSTER: Today, we learn that there could be problems with the Daschle appointment. This being Washington, how hard is it going to be for President-elect Obama to find people who don't have one kind of conflict or another?

CARLSON: If you want people who know where the light switch is in the restroom, you're going to have to have some people who've been here for awhile. Democrats have been, more or less, in the wilderness for the eight years of the Bush administration, and they've been working at jobs in which they have worked for corporations and interests that now they will come to govern if they are chosen. The thing about Tom Daschle is he's not a lobbyist. He's not registered as a lobbyist. He's at a law firm and there's a policy in which they say to their clients, oh, we have Senator Tom Daschle here to give you, quote, "strategic advice." Now, how much of that advice that he gave to those clients is considered verboten by the policy? I think we'll find out. I think there maybe a new policy in which if you are not a registered lobbyist, they can find a way of letting you in. The other part of the Daschle thing is that these people are being retroactively punished for what they've been doing instead of prospectively which is-a lot of people are willing to give up a lot once they are in by not going out after they are done and benefiting. But they didn't know what not to do. And it doesn't-on both sides, it seems too stringent. On the Obama side where you need people who know something, and on the side of people like Tom Daschle who didn't know not to do it in order to serve in government again.

SHUSTER: And yet, whether it's lobbying or not, Obama has that pledge of essentially trying to eliminating conflicts of interest. So, does he simply push that aside?

CARLSON: Well, the reality is now hitting the transition teams. And we'll see if there's any way to modify it. If not, good people like Tom Daschle, who knows his way around healthcare and HHS issues is not going to be able to work there.

SHUSTER: If Governor Janet Napolitano is in fact the pick at Homeland Security, does it seem that Mr. Obama would be making immigration as top concern in a radically different way than the Bush administration has?

CARLSON: Well, you know, David, it's so strange. Immigration did not turn out to be an issue. In the Republican primary, it was, because Tom Tancredo was in there during the debates, but it kind of faded away. It should be an issue. I think it will be an issue. It's not something that caused a huge sum of money to fix. And Janet Napolitano is probably the smartest governor if not person in the country; she actually has been on the ground working on immigration. She rode horseback along the border. She's been in the sewer tunnels that they climbed through. She has really, in Arizona, done what can be done without a national policy that's worth anything, including coming up with a way of having a verification procedure so that there's nobody-nobody can get hired by employers saying, oh, well, we just didn't know, because the E-verify is there and it's very easy to verify whether somebody is a citizen or not.

SHUSTER: Margaret, why so many leaks of people other than Clinton, too? I mean, one would think that the first task for all these potential cabinet secretaries and their staffs would be to honor the request by Team Obama not to talk about it.

CARLSON: Yes. But don't you love the leaks, David?

(LAUGHTER)

CARLSON: It's so much better than the campaign because the Obama campaign didn't leak. You know, I remember the Clinton campaign, late at night, they were dying to talk to reporters. I don't know why, but they were. Not in this campaign. So-but, I think the main reason now, well, there's the Clintons and they, you know, they love to talk. But, when the transition team goes up to Capitol Hill to see if somebody is going to pass muster, it takes a nano-second for that to get out because Capitol Hill, as you know, David, they love to talk as well. So, it's-nothing is closely held anymore. It simply can't be. And so, the leaks are happening from Capitol Hill. And because-once the Clintons are involved, "No Obama Drama" goes out the window.

SHUSTER: Yes. And I'm not sure that any of these leaks are really coming from the Obama campaign. I think you're absolutely in terms of Capitol Hill and possibly the Clintons. But, in any case, Margaret Carlson of "Bloomberg News"-Margaret, thanks as always for talking with us.

CARLSON: Thanks, David.

SHUSTER: Coming up: The politics of saving the auto industry. We'll talk to one expert who says there are scores of other fixes to try before just throwing money away at a mismanaged industry. So, why is the bailout even an option? Special interest. Also, a fond farewell today to a convicted felon in the U.S. Senate. And later, the bizarre Palin interview out of Alaska. She pardons the turkey but she ends up looking like a turkey with the unfortunate bloody imagery behind her while she talks to a reporter. Ahead on COUNTDOWN.

(COMMERCIAL BREAK)

SHUSTER: To fail or not to fail? That's the question facing politicians over the American auto industry. Our next guest says not only is President-elect Obama getting bad advice on the issue, but that is an example of special interest still running the show in Washington, D.C. That and a cabinet backlash, anti-war folks are becoming increasingly upset with Obama's selection of hawkish appointees. Ahead on COUNTDOWN.

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SHUSTER: Congress today sent the plan to pass an auto industry bailout before Thanksgiving but it doesn't mean a rescue package is entirely off the table. In our fourth story on the COUNTDOWN: Instead of handing the Big Three a big fat check, lawmakers give them holiday homework. The CEOs of G.M., Chrysler, and Ford spent two days in Capitol Hill painting a grim picture and warned that if they collapse, millions of jobs will be lost. But dire predictions were not enough for Congress to draft legislation that would garner sufficient votes and get the president's signature. House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid delivered the news at a press conference this afternoon.

(BEGIN VIDEO CLIP)

PELOSI: Until we can see a plan where the auto industry is held accountable and a plan for viability on how they go into the future-until we see a plan, until they show us a plan, we cannot show them the money.

SEN. HARRY REID, (D) SENATE MAJORITY LEADER: We want them to get their act together. We want them to come up with something. We are here to help. We are not against the auto industry. We want to help those people keep those jobs.

(END VIDEO CLIP)

SHUSTER: The plan referred to by Pelosi is due December the 2nd. If a resulting bill calls for using money that's already been appropriated, President Bush is expected to sign it. As for those jobs referred to by Reid, according to some estimates, if just one of the automakers went bankrupt, 2.5 million people could be out of work. Speaking of which, the Labor Department reported today that the number of first time jobless claims has now soared to the highest level since 1992. This, while the number of people receiving benefits rose to approximately 4 million, the most since 1982. The White House reacted to the awful news by releasing a statement indicating that President Bush will support legislation to extend those jobless benefits. But that news was of little consolation today to an already battered stock market. In a late sell-offs, the Dow plunged by 444 points, closing at 7,552. Let's bring in former Goldman Sachs investment banker and the author of "Obamanomics: How Bottom-Up Economic Prosperity Will Replace Trickle-Down Economic," John Talbott. And, John, thanks for joining us.

JOHN TALBOTT, FORMER INVESTMENT BANKER: Hey, David. I had a quick question. Those turkeys that Sarah Palin pardoned, one of them wasn't Ted Stevens, was it?

SHUSTER: Oh, we'll you show later on the show, trust me.

TALBOTT: OK.

SHUSTER: In the wake of the bailout for the financial industry, how bad is the conundrum in terms of throwing money at the automakers?

TALBOTT: Well, it's serious. I mean, the entire economy is serious. And one of our worse industries for decades has been the automotive industry. Right now, they are hemorrhaging cash. They are losing about $25 billion a quarter. So, if we're talking about $25 billion bridge loan from the U.S. taxpayers, it's a bridge to nowhere. And once again, just like the bailout of Wall Street, we're talking about coming in with taxpayer money before we do any type of restructuring. The debt investors here, the creditors to these companies that took the debt investment and the risk and garnered an unusual return for years and decades are being let off scot-free without taking a single haircut. And finally, this is the worst management of the world, as Keith Olbermann might say. I mean, these are the guys that were against airbags, they were against the introduction of seatbelts, they were against mile-per-gallon standards, they were against the Clean Air Act. My God, when they introduced hybrids, where did they introduce hybrids? The introduced it to the Cadillac Escalade and the Yukon, driving their miles-per-gallon north of nine-per-gallon.

SHUSTER: And yet, it's sort of become conventional wisdom that a bailout is critical to the survival of the industry. Why do you believe that is short-sighted?

TALBOTT: I think people misunderstand what bankruptcy is all about-especially Congress, I think, misunderstands it. I think they think if a company goes bankrupt, all the employees are let go and the assets are sold. That's not typically what happens. What happens in bankruptcy is that creditors take a significant hit and that reconstitutes the company and then you restructure. And so, all of these industries, including banking, including investment banking, and now, the auto industry-they need to go in to a form of bankruptcy process the government can accelerated (ph) a bit and all the participants and the stakeholders can take a bit of a haircut. We get employees from the UAW, might not come out of a deal making $65 an hour, but they'll definitely be earning a decent wage. Retirees may not have $4,200 a month pensions, but they'll be taken care of and their healthcare benefits will be taken care of with Medicare. But these managements need to cut out their big bonuses and their expensive trips. And the shareholders they need to take a significant a hit as do the creditors.

SHUSTER: But what about the argument that if we let the automakers head towards bankruptcy, we are essentially inviting the Chinese to buy one of the Big Three? Would that be such a wise development?

TALBOTT: Well, I don't think anybody is going to buy one of these three companies. I mean, these three companies have demonstrated that the only thing they know how to do are make $20,000 pick-ups and sell them for $65,000 and sell a $30,000 SUVs for $55,000. That game is over. If you look at the ads recently, they are offering $25,000 and $30,000 discount on their big cars and their overhead is so large much they've never made a dollar on a small car. So, I think it's an insult to the Chinese to say that they might be interested here. And if they were, God bless them. Remember when we were afraid of Japanese ownership of American car companies, well, now, a good many, hundreds of thousands of Americans make a living at Honda plants and Toyota plants all over the south and midwest.

SHUSTER: John Talbott, author of "Obamanomics"-John, many thanks.

We appreciate it.

TALBOTT: Thank you very much, David.

SHUSTER: This has been a long week for Alaska Senator Ted Stevens. He loses his reelection bid on his birthday. He says farewell to the Senate today. And on top of all of that, (INAUDIBLE) to a really weird goodbye from Senator Larry "I am not gay" Craig. And when "Hang 10" just isn't good enough, your Oddball surfer news-next on COUNTDOWN.

(COMMERCIAL BREAK)

SHUSTER: On this date in 1975, four decades of absolute rule in Spain, when (ph) General Francisco Franco died at age 82. Franco led his nationalist to victory in the Spanish Civil War of 1930s. He headed the government until 1973. He was head of state until his death 33 years ago today. And wait a minute, this just in, "Generalissimo Francisco Franco is still dead." On that note, let's play Oddball. We begin with another nod to NBC News "Green is Universal" week. And in an Oddball investigative report, we have found those responsible for melting the polarized caps-Canada. In Mount Pearl, Newfoundland, this here is a snow dragon. Loads of white stuff is piled into the dragon's bed. The contraption then use 9 million BTUs of melting power to liquefy the flakes and the resulting water is then filtered and released back into the wild. It seems like a great idea. But the snow dragon's benefits go beyond the obvious. Besides keeping Mount Pearl's roads clear all winter, the dragon also provides a completely untraceable way to bump off your neighbor's snow man. To sunny Rio de Janeiro, Brazil where snow isn't a problem and the waves are tasty. This is a world champion surfer Rico de Souza, attempting to break his own longest surfer record by riding the waves on a word that is 30 feet long. Hey, Rico, are you compensating for something? The previous mark was 25 feet. And the trick is, you have to stay on the board for at least 10 seconds. De Souza got off to a rocky start but after removing the Tiki necklace given to him by Greg Brady (ph), he finally surfed back into the record books. Our congratulations to Rico. And special thanks to Henrique Daniel for his brave camera work. Finally, to the many Internets, we believe this clip comes to us from Germany. It's a guy trying to demolish a chimney by yanking it with a rope from his truck, and he got some help. Is this going to work? (INAUDIBLE) Take a look, in slow motion, the foreman's blue truck gets crushed when the chimney goes the long way (ph). Of course, we're not sure what that was the foreman's truck but we'd like to think it was. Speaking of crushed, that is how some antiwar activists are feeling about the direction of Obama's future Cabinet with rumors that Robert Gates could stay on to oversee the withdrawal from Iraq and Hillary Clinton at the State Department. Will Obama face a backlash for his pro-war picks? And breaking Alaska news. Image is everything in politics, so who though after Governor Palin pardoned a turkey, it would be a good idea to conduct an interview while workers slaughter turkey's behind her. We'll bring the mind-blowing tape ahead. But first, because they've only got two months left to ruin things further, the headlines breaking, the administration's 50 running scandals, "Bushed". Number three, Family Values-Gate. The Bush administration is pushing through some last-minute regulations changes to cement his legacy of compassionate conservatism. On Tuesday, the Federal Motor Carrier Safety Administration finalized a new rule that let's trucking companies have the drivers on the road, in the driver's seat for 11 hours at a time; so much for their families. For the change? Trucking companies in the White House, against the change, the Teamsters, consumer groups, and safety advocates. And then there are Mr. Bush's last-minute changes to the rules enforcing the Family and Medical Leave Act. Now, your bosses can go directly to your doctor for information about your medical leave. Oh, and when possible, you have to give advance notice of being sick. For the change? The U.S. Chamber of Commerce and the National Association of Manufacturers. Against the change? Everybody else, everybody. Number two, Gitmo-Gate. In June the U.S. Supreme Court ruled that the 250 or so detainees held at Guantanamo Bay, without the due process of law guaranteed on U.S. soil, by the U.S. Constitution, can challenge their detentions in court. Yesterday, the first group of detainees to do so, got their day in court. The six men have been in captivity since 2001, seven years. They were Algerians, arrested by Bosnia in Bosnia, then transferred to Gitmo. The Bush administration claimed they wanted to blow up the U.S. embassy in Bosnia. Then the Bush administration said, no that wasn't true, but claimed the men were planning to go to Afghanistan to fight the United States. Yesterday, Judge Richard Leon (ph), a Bush appointee, told the U.S. military to release all but one of the men. Number one, Parting Shots-Gate. Another last-minute rule change expected to be finalized tomorrow. After tomorrow, the law makes it much easier for the incoming president to undo last minute rules. So, an administration that has looked incompetent when it simply didn't want to do things like armor troop vehicles, or rescue Katrina victims, has pushed through a new rule in record time. On October 15 the period for public feedback on the new rule expired. The Bush administration took 36 hours to review a quarter of a million comments. Last week, the rule only slightly revised, went to the White House, which is expected to finalize tomorrow. Oh, the rule? It strips away the ability of government scientists to stop construction projects that are threatening endangered species. The primary policy implication, of course, for species such as the sea otter, red wolf, and California condor is-ruun! Run!

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SHUSTER: Every night until the inauguration of President Barack Obama, COUNTDOWN is asking the question: What do we do now? But in tonight's number three story on one particular subject, Iraq, we've been asking the question, what do we do now?, since before the inauguration of President Bush. Subsequent events, of course, rendered the question a little more urgent. The Iraqi parliament is now debating whether to ratify the status of forces agreement that Iraq's leaders have been negotiating with the United States since the spring. The vote is expected Monday, but it is expected to be close. Shiite leader Muqtada al-Sadr opposes the deal. And Shiite Cleric Ayatollah Ali al-Sistani has said it will only pass muster with him if it is passed by broad consensus in the parliament. This, despite lots of last-minute concessions by the Bush administration when it signed off on the deal this week. U.S. troops will be gone from Iraqi cities by June 30 of next year; gone from the entire country by the end of 2011. Until then, Iraq will have increased authority over U.S. military operations and intelligence gathering, even in some case inspecting U.S. cargo and even reading the mail of U.S. troops. Today, U.S. contractors were told their immunity from Iraqi law will end on January 1. And McClatchy newspapers today report that some senior Pentagon officials say Mr. Bush became eager to seal the deal with Iraqi Prime Minister Nouri al-Maliki, once Obama won because Mr. Bush didn't want to leave future decisions in Obama's hands. And therefore caved to numerous Iraqi demands, including some very good news for Iran. Mr. Bush has pledged that the U.S. will not attack any other country from Iraqi soil. Today Defense Secretary Bob Gates held his first formal substantive meeting with the leaders of Obama's Defense transition team. Speculation that Obama might keep Gates at the Pentagon, if only for a limited transitional period has begun to raised the hackles of some progressive antiwar groups and Democrats who supported Obama and who want to see less hawkish appointments in his Cabinet. Obama's vice president, of course, voted for the war as did his apparent choice for secretary of State, Hillary Clinton. Joining us now is Hillary Mann Leverett, former National Security Council, director for Iran and Persian Gulf affairs.

Hillary, first of all, thanks for joining us.

HILLARY MANN LEVERETT, FMR. NSC DIR., IRAN/PERSIAN GULF AFFIARS Thank you.

SHUSTER: Democratic sources have told NBC News now that Barack Obama is consulting with Brent Scowcroft who opposed the war. Is that a good sign for antiwar Democrats? Or is it possible that their assessment of the emerging Cabinet has been wrong to begin with?

LEVERETT: It's a good sign. General Scowcroft opposed the war in a courageous move. His protege, Condoleezza Rice, was one of the principal cheerleaders of the war. And he took a stand against that when it was very unpopular, particularly for a Republicans to do so. So, if Obama is listening to General Scowcroft about the composition of his Cabinet, I think that is a very positive sign. We similarly saw that General Powell, Colin Powell, was talking to President-Elect Obama. That similarly is a good sign in terms of having a policy on Iraq that is focused more on stability rather than the pipedreams of a beacon of democracy in Iraq transforming the Middle East.

SHUSTER: What about Defense -

LEVERETT: That --

SHUSTER: Go ahead.

LEVERETT: I was just going to say, that said, it's positive that Obama is talking to Scowcroft, positive that he's talking to Colin Powell. The continued speculation that he's going to pick someone like Secretary (sic) Clinton, who voted for the war in 2002, but also brings with her a team of advisors who not only encouraged her to vote for the war in 2002, but also were responsible for a lot of mistakes on foreign policy, including initially supporting regime change on Iraq back in the Clinton administration, back in 1998. There were some serious mistakes that were made then related to Iraq and other areas in the Middle East. So, if the speculation is correct and that Obama will go forward with the Clinton appointment, that does, I think, for people who greatly respected Obama's decision to stand up against the war and change the mind set that led us to invade Iraq, that that appointment would still be cause for concern.

SHUSTER: What about Defense Secretary Gates? I mean, is he going to stick around? What are the implications if he does?

LEVERETT: I'm not sure if he's going to stick around. But I do think that he has been a force for, again, for stability within the Bush administration to have a policy for stabilizing Iraq, rather than transforming it into some beacon of democracy. I think he's been a voice for a less militant policy vis-a-vis Iran and Russia, and some other critical countries. So, I think that he stayed on and had the ear of Obama, that could be very constructive. My concern, again, is that if the transition team tries to harness him with Clinton-era foreign policy or Defense policy advisors and in a sense deprives him of his current staff, with whom he has worked so well, and tries to put in these Clinton-era advisors, we could be, again, setting ourselves up for some of the mistakes of the Clinton era in the Middle East and some other critical areas around the world.

SHUSTER: On the issue of Iraq, what's your reaction to this McClatchy newspaper report that president Bush made these decisions because - made these concessions because he was eager to make the decisions himself instead of two months from now when Barack Obama takes office?

LEVERETT: I think the timetable is a little bit confused. I mean, Obama doesn't take office of course until January 20. The timetable that was operative for the Iraqi status of forces agreement to decide the legitimacy for a continued U.S. troop presence in Iraq was a December 31 timetable. December 31, the mandate that allows, that legitimizes, legalizes the U.S. troop presence in Iraq expires. So, the Bush administration, since it essentially conceded the defeat of its policy for a democratic transformative Iraq, since it conceded that, it has been on track to try to legalize and stabilize the situation and the U.S. troop presence. You know, ironically, I think that President Bush was no fan of then-candidate McCain. And at several key points, particularly this summer, essentially pulled the rug out from under McCain, not Obama, by conceding that a timetable, a strategy that had timetables for withdrawal was actually a constructive useful policy. Since Bush decided to do that and throw his lot essentially behind Obama's strategy, that's really been driving this decision.

SHUSTER: Hillary Mann Leverett, former director of the NSC. Hillary, thanks for joining us. We appreciate it.

LEVERETT: Thank you.

SHUSTER: Senator Stevens got a warm send off today from those who managed to stop by and hear his farewell. We'll have that and some of the reaction to it. Breaking Alaska news or broken Alaska news, might be more appropriate. Sarah Palin, a turkey pardoning ceremony and the turkey slaughterer, who doesn't know when to say when. And it is all on tape for you and me to enjoy. Stand by.

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SHUSTER: He's still officially a United States senator until January 6, when the 111th Congress gets sworn in, but our second story in the COUNTDOWN, for all intents and purposes, Alaska's senior senator has now figuratively left the building. Eighty-five year old Senator Ted Stevens, the recently defeated Republican incumbent and convicted felon, made his last-ever speech on the floor of the Senate this morning.

(BEGIN VIDEO CLIP)

SEN. TED STEVENS, ® ALASKA: My mission in life is not completed. I believe God will give me more opportunities to be of serve to Alaska and to our nation. I look forward with a glad heart and with confidence in its justice and mercy. I told the members of the press yesterday, I don't have any rearview mirror. I look only forward. I still see the day when I can remove the cloud that currently surrounds me. That's it, Mr. President, forty years distilled into a few minutes. I close by saying and asking that God bless Alaska and our governor. God bless the United States of America and our president. God bless the Senate and every member of this body. I yield the floor for the last time.

(END VIDEO CLIP)

SHUSTER: All his fellow senators rose to give him a standing ovation, something that is actually forbidden by Senate rules. And one gave him a little more than that. Here is some of Senator Larry Craig's tribute, context free.

SEN. LARRY CRAIG, ® IDAHO: I know that passion, and I, every day of my life, in working with Ted Stevens sensed that passion.

(END VIDEO CLIP)

SHUSTER: Speaking of passion, given the wide stance incident in the bathroom in Minneapolis, Senator Larry Craig should probably stay away from references like this.

(BEGIN VIDEO CLIP)

CRAIG: Oh, my! Ted's got an airport. That's neat.

(END VIDEO CLIP)

SHUSTER: And finally, Senator Craig offered a nice, though, kind of creepy good-bye.

(BEGIN VIDEO CLIP)

CRAIG: Uncle Ted, I'm going to miss you.

(END VIDEO CLIP)

SHUSTER: Moving on from Minneapolis memories to the Minnesota recount, two days after the statewide mandated recount began, Al Franken's vote tally seems to be increasing ever so slightly more than incumbent Republican Senator Norm Coleman's. By this afternoon Franken had just 163 less votes than Coleman. But by Wednesday night at least 221 ballots had already been challenged. The campaigns are arguing over issues of validity and differences of intent. Minnesota Public Radio providing some examples of what currently is under scrutiny. The Coleman campaign challenged this one because the voter didn't color in the correct circle. And this one, arguing the dot next to the Independent candidate's name indicates intent. While the Democrat's campaign challenged this one, saying the erased marks means the vote was meant for Franken. And this one, arguing that Franken's name is underlined, not crossed out. The hand recount is supposed to be finished by December the 5th. And there is no recount for some turkeys in Alaska if you weren't the one pardoned by Sarah Palin it was the end of the road for you. The most bizarre turkey-pardoning ceremony ever, at the top of THE COUNTDOWN.

(COMMERCIAL BREAK)

SHUSTER: To the top of THE COUNTDOWN and breaking news out of Alaska, it's turkey pardon time Palin-style. Governor Sarah Palin traveling to the Tripe D Farm and Hatchery in her very own hometown of Wasilla to officially pardon a turkey.

The press event started well, sort of.

(BEGIN VIDEOTAPE)

GOV. SARAH PALIN, ® ALASKA: I will read the following fowl pardon. I, Sarah Palin, governor of Alaska, and friend to all creatures great and small, do hereby do deem this fowl creature worthy of a pardon for the following reasons: Whereas, Benjamin Franklin once advocated the turkey as our national bird. Did you know that?

UNIDENTIFIED MALE: Yep.

PALIN: And since our national bird is the eagle, and actually is protected, it follows that at least one runner up bird should also be protected.

Whereas the word turkey can now be considered a term of endearment in casual conversation and as it is not at all clear that this turkey even had a trial let alone a fair trial by a jury of his or her peers. And, finally, whereas Alaska doesn't even have the death penalty and amnesty is also considered a form of pardon, and amnesty is sometimes invoked to achieve social peace and harmony and isn't this the time of year that we should be grateful for and working towards social peace and harmony - I think you see my point. Therefore, I, Sarah Palin, governor of Alaska, anticipating and hoping that in the spirit of Thanksgiving, Alaskans everywhere will find adequate nourishment elsewhere and without this particular turkey, I do hereby grant Thanksgiving a full amnesty and pardon and it is so ordered. And we will pick one of the big toms to pardon, OK? Ooooh, I don't know.

UNIDENTIFIED MALE: Come on, Sarah! Come on!

UNIDENTIFIED MALE: He's very heavy.

UNIDENTIFIED MALE: Come on, Sarah!

PALIN: All right, yes. This is our pardoned Turkey.

UNIDENTIFIED MALE: Watch his feet, there.

PALIN: OK. Oh my goodness! It weighs a ton!

UNIDENTIFIED MALE: Over 30 pounds!

PALIN: Oh, good job, good job.

(END VIDEOTAPE)

SHUSTER: But while one filthy bird found freedom, courtesy of the governor, his fellow turkeys were not so lucky. Now, we've made every effort to sanitize the video of what happens next, but you still might want to consider getting the kids out of the room right now. And anyone who is a little squeamish about where Thanksgiving dinner comes from. Are they gone? OK, here's what happened next. As Governor Palin stepped outside of the hatchery to give a post-pardon interview she neglected to notice what was happening directly behind her, in clear view of the television cameras. We've blurred out the goriest parts, but here's her interview from start to finish.

(BEGIN VIDEOTAPE)

PALIN: I don't think it's changed me at all. I have the same values and convictions and positions and policies. I just have a greater appreciation, I think for what other candidates go through. You know it's pretty brutal. The time consumption, there, and the energy that has to be spent in order to get out and about with the message on a national level. A great appreciation for other candidates who have gone through this, but also just great appreciation for this great country. There are so many good Americans who are just desiring of their government to kind of get out of the way and allow them to grow and progress, and allow our businesses to grow and progress. A great appreciation for those who share that value. And it was a blast. Everyday was just a blast out there on the trial.

UNIDENTIFIED FEMALE: Any other future plans for office?

PALIN: You know, plans just include getting through the budget process that we're going through right. Building the states budget based on the price of oil, that has plummeted so greatly, and reining in the growth of government; plans like that, that have to do with helping to govern this state and building this team is continually being built to provide good service to Alaskans. So, in my role as governor that's what my plans are all around.

UNIDENTIFIED FEMALE: Due to the decline in oil prices are you concerned about any state programs being on the chopping block?

PALIN: You know, thankfully we're in a good position still, fiscally speaking. We're in a good position. But it made no sense at $140 a barrel of oil, that some lawmakers wanted to spend, spend, spend. We were warning them then, the administration was, that we had to prepare for the day that the prices of oil would plummet, which of course it has done. So we had prepared then, reined in the growth of government then and we will now - that comes into play at this point, where those savings that we had set aside, forward funding, anticipating a drop in oil, accounting for that. All of that comes into play now at $50 a barrel oil.

UNIDENTIFIED FEMALE: OK, so great. So why was this day so important for you?

PALIN: Oh, well, this was neat. I was happy to get to be invited to participate in this. You know, for one, you need a little bit of levity in this job, especially with so much that's gone on in the last couple of months that has been so political, obviously, that it's nice to get out and do something to promote a local business, and to just participate in something that isn't so heavy handed politics that invites criticism. Certainly it will probably invite criticism for even doing this, too! But at least this was fun.

UNIDENTIFIED FEMALE: And what is it that you are thankful for this year?

PALIN: Oh, so thankful for the health and happiness of my family. That my son's Striker Brigade is safer over there in Iraq - relatively safe; and school is going well for the kids and Trig is happy and healthy, and just very thankful for the health and happiness of my family. But then, as much so, that thankfulness that I have, just being in Alaska, knowing that this is the land of opportunities and possibilities. So happy to get to be here.

UNIDENTIFIED FEMALE: What are you going to cook for Thanksgiving?

PALIN: I'll be in charge of the turkey. Yeah. My sisters and my mom they are all bringing everything else, but I'm always in charge of the turkey. So, I'm where I need to be today to prepare for that.

(END VIDEOTAPE)

SHUSTER: And you thought her media outings as a vice president candidate were as bad as it gets. By the way, Governor Palin's office is now telling our NBC News desk that a photographer asked her if she wanted that as a backdrop, and she replied, no worries. That's it for this Thursday edition of COUNTDOWN. I'm David Shuster in for Keith Olbermann. I hope you have a better night than those turkeys did. Our MSNBC coverage continues now with the "Rachel Maddow Show".

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

END

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