WASHINGTON (CNN) -- A longtime friend of Barack and Michelle Obama has been appointed as a senior adviser to the incoming president.

President-elect Obama, in a statement released Saturday morning by his transition staff, announced that Valerie Jarrett will serve as "senior adviser and assistant to the president for intergovernmental relations and public liaison."

Jarrett is co-chair of Obama's transition team and was senior adviser for his presidential campaign. She became the president and CEO of The Habitat Co. on January 31, 2007, and was also the company's vice president. The Habitat Co. develops and manages residential apartments and condominiums.

Before joining The Habitat Co., Jarrett served for eight years in government for the city of Chicago, Illinois. She was deputy corporation counsel for finance and development, then deputy chief of staff for Mayor Richard M. Daley and finally became commissioner of the Department of Planning and Development.

Jarrett met Barack Obama when she hired Michelle Obama for a job in the Chicago mayor's office years ago and has been very close to the two ever since. Watch who might be the next secretary of state »

The transition team also made official Saturday the hiring of Ron Klain as chief of staff to the vice president.

Klain was also chief of staff to Vice President Al Gore, but he's no stranger to Vice President-elect Joe Biden, having served as chief counsel to the Senate Judiciary Committee when Biden was the committee chairman.

Klain also served as general counsel of Gore's 2000 Florida recount effort, and was portrayed by actor Kevin Spacey in an HBO movie about the event.

This year Klain helped with debate preparation for both Obama and Biden.

"Ron Klain has been a trusted adviser of mine for over 20 years," a statement from Biden said Saturday morning. "He brings extraordinary judgment, a deep understanding of the important policy issues facing our nation, a wide range of experience in the executive, legislative and judicial branches of government, as well as a unique understanding of how the vice president's office works."

The transition team also announced Saturday that Phil Schiliro will serve as assistant to the president for legislative affairs. Schiliro is director of congressional relations for the Obama transition team. Before that, he was a senior adviser to Obama's presidential campaign.

Schiliro has worked in Congress for more than 25 years, in positions including chief of staff to Rep. Henry Waxman, D-California, and policy director for then-Senate Democratic Leader Tom Daschle of South Dakota and staff director for the Senate Democratic Leadership Committee

(CNN) -- President-elect Barack Obama met with his former rival Sen. Hillary Clinton to see if she would be interested in a role in his administration, two sources told CNN Friday.

Obama also will meet with the man he defeated in the general election, Republican Sen. John McCain, on Monday, the Obama transition team announced Friday.

On Friday, Clinton responded to the latest rumors at a transit policy speech in Albany, New York.

"I'm very happy there is so much press attention and interest in transit," Clinton said to laughs.

"In the off chance that you're not here for this important issue and are here for some other reason, let me just say that I'm not going to speculate or address anything about the president-elect's incoming administration."

She added: "I'm going to respect his process and any inquiries should be directed to his transition team."

Clinton went to the meeting Thursday with Obama because "she knew Obama wanted to talk about whether she would have a role in the administration," one of the sources knowledgeable about the meeting said.

Obama and Clinton met in Chicago, Illinois, at the request of the president-elect, the sources told CNN.

The two sources said Clinton was surprised to hear rumors she was being considered for secretary of state position. The sources could not confirm that the she and Obama discussed the nation's top diplomatic position or that it was offered.

This is not the first time Clinton has been rumored to be under consideration for a position on Obama's team.

The New York senator was said to be on Obama's short list of possible vice presidential picks this summer, but Obama ended up picking Sen. Joe Biden of Delaware.

That source said Clinton thought the speculation that she would be tapped to be Obama's secretary of state was "silly" because of the earlier buzz about her becoming Obama's running mate. iReport.com: Who should Obama pick?

A spokesman for the former presidential candidate and first lady, Philippe Reines, said "any speculation about Cabinet or other administration appointments is really for President-elect Obama's transition team to address."

On Monday night, while walking into an awards ceremony in New York, Clinton was asked if she would consider taking a post in the Obama administration.

"I am happy being a senator from New York. I love this state and this city," she said. "I am looking at the long list of things I have to catch up on and do.

"But I want to be a good partner and I want to do everything I can to make sure his agenda is going to be successful." Watch whether Clinton would join Obama's team »

Other names that have been mentioned for the top diplomatic role include Sen. John Kerry of Massachusetts, the Democrats presidential nominee in 2004, and New Mexico Gov. Bill Richardson, a former U.S. ambassador to the U.N. and energy secretary in the Clinton administration.

Latino groups are championing Richardson for the top State Department slot. If picked, Richardson would be the nation's first Latino secretary of state.

A source close to transition team tells CNN that Obama is also trying to build a diverse Cabinet that includes women and minorities and that works as a team.

Obama's transition team is expected to announce some high-level staff positions on Friday.

Obama campaign spokesman Robert Gibbs is widely expected to be named White House press secretary, and Obama chief strategist David Axelrod is expected to be picked as a White House senior adviser.

Potential grows for lame-duck session of Congress

(CNN) -- A rapidly deteriorating situation in the U.S. auto industry may serve as the backdrop for a classic contest of political wills between the outgoing Bush administration on one hand and both President-elect Obama and the newly strengthened Democratic congressional majority on the other.

If President Bush refuses to help bail out the struggling Big Three automakers, the Democratic leadership is promising that it will do so, most likely in the form of a lame-duck session convened as early as next week.

House Speaker Nancy Pelosi, in a statement released Tuesday afternoon, called on key congressional leaders to work with the Bush administration "to craft legislation to provide emergency and limited financial assistance to the automobile industry under the Emergency Economic Stabilization Act."

According to spokesman Brendan Daly, Pelosi believes that the administration can assist the auto industry under its existing authority, but "in case [the administration doesn't], it needs to be done one way or another."

In her statement, Pelosi directed House Financial Services Committee Chairman Barney Frank to draft legislation extending the Treasury Department's authority to use bailout funds for the auto companies.

If the bill is needed, according to Daly, Congress can come back and vote as soon as next week, regardless of whether there is a deal on the larger economic stimulus package.

"We'll have to see what Speaker Pelosi is proposing. There are no details, so there's nothing to react to," White House spokesman Tony Fratto said in a statement Tuesday. "If Congress wants to change the law, we'll see how they intend to do it. Of course, it's strange that congressional Democrats would choose to ignore the $25 billion program they actually created to assist the automakers; that would be a better place to start."

Senate Majority Leader Harry Reid released a statement Tuesday night saying Democrats are "determined to pass legislation" to help the auto industry.

"Senate Democrats are committed to doing all we can to help the auto industry. ... They deserve no less," he said. "But until next year, we still have the slimmest of majorities in Senate; this will only get done if President Bush and Senate Republicans work with us in a bipartisan fashion, and I am confident they will do what is right for our economy."

The question of a possible bailout of the automotive sector -- and whether it might be tied to policy objectives more strongly favored by the Bush administration -- has been the subject of intense debate this week.

Both the White House and a senior aide to President-elect Barack Obama emphatically denied Tuesday that there had been any attempt on the part of President Bush, while meeting with Obama on Monday, to link a federal bailout of the auto industry or a second stimulus package to passage of a Colombia free trade deal.

Those two financial packages are favored by many Democrats, including Obama, and the free trade deal remains a top priority for the outgoing Republican administration.

"The president does support free trade but did not suggest a quid pro quo" with Obama, White House spokeswoman Dana Perino said Tuesday. "He did discuss the merits of free trade, but there was no linkage between Colombia free trade and a second stimulus package."

The denial of a proposed quid pro quo from Bush runs counter to reports in the New York Times and Washington Post suggesting otherwise. Those reports were based in large part on a leak from the Obama camp, which was adamant in denying any potential deal Tuesday.

There was no "wheeling or dealing" between Obama and Bush during their private Oval Office meeting Monday, the Obama aide said; the president and the president-elect each listed his top priorities but did not attempt to reach any agreements.

Obama is not "under any great illusion" that Bush will support a second economic stimulus plan, the aide said.

Obama did, however, strongly urge Bush to support billions of dollars in aid for the struggling auto industry during the increasingly likely lame-duck session of Congress, according to three officials briefed on the meeting.

The officials said Bush expressed skepticism about giving taxpayer money to automakers on the heels of a string of government bailouts for other industries. In addition, they said, the president urged Obama to help push through the free trade pact with Colombia, a key legacy item for the outgoing administration that is facing stiff resistance from Democrats on Capitol Hill.

But a senior Bush administration official downplayed suggestions that Bush was offering a tradeoff, saying the White House still believes that the trade deal "deserves to pass on its own merits" without being linked to anything else.

The officials familiar with the meeting said Obama, pushing the auto industry aid, made the case that dramatic action needs to be taken this year -- rather than after he is sworn into office -- because the Big Three U.S. automakers are bleeding cash at an alarming rate.

One of the officials noted that about one in 10 jobs in America is tied to the auto industry and that if one of the companies goes bankrupt, it could have a massive spillover effect in the credit industry and other sectors.

The senior Bush administration official said the White House is "open to ideas from Congress to accelerate funds they've already appropriated" to help the auto industry.

But the administration official said support for the auto industry would come only "as long as funding will continue to go to viable firms and with strong taxpayer protections."

"Congress created a loan program for the auto industry," Perino noted. "As we read it, we don't see anything in there that would give us the authority to help individual industries, but we are willing to listen to Congress as to how they might choose or not choose to provide additional authority so that we could accelerate those loans to viable companies. We understand that they're going through a very difficult time."

An official in the auto industry said that bringing the Colombian pact into the negotiations could be a poison pill that would prevent passage of an auto industry aid package.

But a senior Democratic aide suggested that even if Bush attempted to link the aid package to the trade deal, Congress may be likely to stand up to him and pass the aid package separately.

The senior aide said Democrats do not think "this president wants to add the demise of GM to his legacy list.

WASHINGTON (CNN) -- President-elect Barack Obama could reverse some of President Bush's most controversial executive orders, including restrictions on embryonic stem cell research, shortly after taking office in January.

Two other executive orders from Bush -- one dealing with a so-called "gag" order on international aid organizations regarding abortion, the other with oil and gas drilling on federal lands -- also are receiving increased scrutiny.

Obama's transition team is reviewing hundreds of Bush's executive orders, according to John Podesta, Obama's transition co-chair.

New presidents often use executive orders to put their stamp on Washington quickly. Unlike laws, which require months to complete and the consent of Congress, presidents can use their executive authority to order federal agencies to implement current policies.

"Much of what a president does, he really has to do with the Congress -- for example, budgeting, legislation on policy -- but executive actions are ones where the president can act alone," said Martha Kumar of the White House Transition Project, a nonpartisan group established to help new presidential administrations. See what orders Lincoln, Franklin D. Roosevelt, other presidents issued »

Obama is expected to use his executive authority to reverse Bush's order limiting the types of embryonic stem cell research that can receive federal tax dollars.

Advocates for those suffering from a host of diseases -- including diabetes, Parkinson's disease and spinal cord injuries -- are eagerly awaiting the Bush-era restrictions to be lifted.

"We have every reason to believe -- if not on Day One, then in the very near future -- they will be issuing an order rescinding this policy," said Amy Comstock Rick, president of the Coalition for the Advancement of Medical Research. Watch how Obama could reverse Bush »

In August 2001, Bush barred the National Institutes of Health from funding research on embryonic stem cells other than that using 60 cell lines existing when he signed the executive order.

Researchers say the ban has limited their progress and want the opportunity to create new stem cells from human embryos. Many conservatives, however, object to the destruction of human embryos because they believe it ends a human life.

On his campaign Web site, Obama said he supports the creation of new stem cells from embryos created for in vitro fertilization treatments that would otherwise be discarded.

But White House spokeswoman Dana Perino on Monday suggested that the incoming Obama administration should consider keeping Bush's policy in place.

"Unfortunately, the president's position on stem cells has been misconstrued over the years, with the suggestion that President Bush put a ban on research for embryonic stem cell research. That is not true," Perino said. "The president made a very important choice after a lot of careful deliberation." Watch Obama's ambitious agenda »

Other controversial Bush measures Obama is expected to overturn are related to abortion and family planning.

U.S. State Department officials and family planning groups such as Planned Parenthood said they expect Obama to overturn the "Mexico City" policy, first instituted by the Reagan administration. The policy prevents taxpayer dollars from funding groups that perform or promote abortions overseas.

President Clinton dropped the order, but Bush re-implemented it and expanded the policy to ensure State Department funding does not go to family planning organizations that even counsel about abortion.

An Obama administration also could overturn the Bush administration policy of banning funding to organizations such as the U.N. Population Fund that operate in countries that practice forced sterilization, including China, which adheres to the "one child" policy.

Podesta said his team also is reviewing Bush's order that lifted restrictions on oil drilling on fragile federal lands in Utah. Environmental groups decried Bush's decision when he opened the lands to exploration this month, and Podesta called the decision a "mistake."

One set of executive orders that may take longer to overturn pertains to detainees at the Guantanamo Bay, Cuba, military prison.

Obama has said he wants to close the prison, but Denis McDonough, a senior adviser to the incoming Democrat, said Monday that no decisions have been made about what to do with the prison's 255 inmates.

"There is no process in place to make that decision until his national security and legal teams are assembled," McDonough said.

Reversing Bush's executive orders would be an immediate way for Obama to show that a new era has begun in Washington, said Jonathan Turley, a George Washington University law professor.

"Until President Obama gets rid of all these executive orders, he'll be sharing his presidency with his predecessor," Turley said. "Now that's a particularly obnoxious thought for an administration that was elected for change

WASHINGTON (CNN) -- For most African-Americans, the election of Barack Obama as president was a dream come true that they didn't think they would see in their lifetime, a national poll released Tuesday suggests.

Eighty percent of African-Americans questioned in a CNN/Opinion Research Corp. survey said that Obama's election was a dream come true, and 71 percent said they never thought a black candidate for president would get elected in their lifetime.

The poll reflects anecdotal evidence that surfaced across the country last week as soon as Obama's projected win was announced.

"It's history," said iReporter Tave Johnson, who spent Election Night at the Grant Park Obama rally in Chicago, Illinois. "I'm half-black and half-white. I talked to my grandparents today, and they told me this is historic. To be honest ... I never would have guessed it would happen."

Among white Americans, only 28 percent said Obama's victory in the race for the White House was a dream come true, with the vast majority, 70 percent, saying it was not.

The poll also suggests a racial divide among people who thought a black candidate would be elected president in their lifetimes. Fifty-nine percent of white respondents said they thought a black president would be elected in their lifetime, but only 29 percent of black respondents agreed.

"Polls show that whites and blacks tend to have different views on the amount of racism in the U.S." said CNN Polling Director Keating Holland. "So it's not surprising that they would have different views on the likelihood of an African-American president."

The survey suggests that Obama's victory may have some affect on race relations in this country.

"A majority of blacks now believe that a solution to the country's racial problems will eventually be found," Holland said. "In every previous poll on this topic dating back to 1993, black respondents had always said that racial problems were a permanent part of the American landscape."

"Even in polls taken earlier this year, a majority of African-Americans said that a solution to the country's racial problems would never be found; now blacks and whites agree that racial tensions may end."

As a result, most blacks view Obama's election as the start of a new era of better race relations in the United States, while most whites appear to disagree.

Only one in three whites questioned in the poll said the election marks the start of a new era, although most predicted some improvement in race relations in the country.

"Some whites are tending to take a 'wait and see' approach; six in 10 blacks forecast better race relations as a result of Obama's victory," Holland said.

Indeed, emotions ranged from disbelief to euphoria among African-Americans after the results were announced.

"This is the most wonderful night of my life," said emotional iReporter David White, who grew up during the civil rights movement of the 1960s. "I have never seen anything like this. This is beautiful."

"I've seen this country vindicate itself," he said.

After Michelle Obama crossed the threshold of her new home yesterday to meet with its outgoing occupants, she was briefed on what would convey: certain pieces of furniture, the carpeting and the drapes -- if these met her tastes -- and, of course, a tremendous sense of history. Meeting privately with Laura Bush while her husband conferred with the president in the Oval Office, the incoming first lady was participating in a century-old Washington ritual that represents the softer side of the serious business of a presidential transition.

It's a tradition that may not rank with the passing of secret nuclear-launch codes, but the White House visit by Michelle and Barack Obama was no less freighted with significance. "They will literally become living symbols of the country to the world, for all of history," said Carl Sferrazza Anthony, who has written several books about first ladies. "It will redefine their identities."

Michelle Obama had already made clear that her first priority will be smoothly settling her daughters, Malia, 10, and Sasha, 7, into this new life. She squeezed the White House visit in between trips to the private Georgetown Day School and Sidwell Friends School.

The transition team and staff at both schools in the District refused to discuss the visits. So it fell to a 10-year-old boy, Nicolo Pisoni, to offer on-the-record confirmation of her trip to Georgetown Day's campus on MacArthur Boulevard.
 

"I thought it was awesome because I saw the future first lady," the fourth-grader said. "I got really excited, but we weren't supposed to get excited. Not out loud. Our teachers told us not to get excited but to show Michelle it was a regular school day and that we aren't crazy kids. They didn't want us asking her for her autograph."

Isabel Dorval, a 10th-grader at Sidwell, said she was running on the field at the middle/upper school campus on Wisconsin Avenue a little after 4 p.m. when a convoy of cars arrived. About 45 minutes later, the motorcade drove off as Sidwell students waved. Michelle Obama rolled down the window and waved back: "It was cool," said 15-year-old Isabel.

Past presidents have sent their children to both public and private schools. But sources familiar with the process say they expect the Obamas to select a private school, where tuition for both girls would total more than $50,000 a year. The girls attend a private school now near their Chicago home, and Michelle is on the board of trustees.

As is customary during transitions, the outgoing first lady led her successor on a White House tour that focused primarily on the upstairs private residence, including three bedroom suites and three living areas. These areas, along with the Oval Office, are subject to redecoration, as opposed to the public rooms. A stop on the tour always of particular interest, Anthony said, is the first lady's sitting room, whose windows afford a direct view of the Oval Office below: "She can really keep an eye on who's coming and going, who's meeting with the president."

Michelle Obama and Laura Bush also spent time discussing "raising daughters in the White House," Stephanie Cutter, the Obama transition spokeswoman, said in a statement. "Mrs. Obama was honored to finally meet the First Lady, who was a gracious hostess." It was Michelle's second visit to the White House -- she was there once before with Malia and Sasha around the time of her husband's swearing-in to the Senate.

On MSNBC, Anita McBride, Laura Bush's chief of staff, said the first lady showed Michelle Obama where the Bush daughters, Jenna and Barbara, lived.

"She thought the rooms were beautiful and would be perfect for her two little girls and that they could decorate in a way that would be appropriate for young children," McBride said. "And it is a historic room. The Kennedy children lived there. The Johnson girls lived there, Chelsea Clinton as well . . . and Amy Carter."

Bush calls meeting with Obama 'friendly'

President Bush had a "relaxed" and "friendly" meeting with President-elect Barack Obama after he and first lady Laura Bush welcomed their successors to their future home Monday, a White House spokesman said.

"The president and the president-elect had a long meeting, described by the president as good, constructive, relaxed and friendly," White House press secretary Dana Perino said in a statement. "The president enjoyed his visit with the president-elect, and he again pledged a smooth transition to the next administration."

Perino said the two discussed both national and international issues but did not provide specifics of the conversation. Bush also gave Obama a tour of the White House's living quarters, including the Lincoln bedroom.

Bush and Obama held a private meeting in the Oval Office, while the first lady gave incoming first lady Michelle Obama a tour of the residence.

The president and president-elect walked together along the Colonnade by the Rose Garden before entering the Oval Office together. They briefly waved to reporters along the way.

Obama and Bush were not expected to speak on camera after their meeting.

An aide to Obama said they were "going to let the pictures speak for themselves."

The two met in the Oval Office for just over an hour. When President George H.W. Bush hosted President-elect Bill Clinton after the 1992 election, the two talked for nearly two hours.

Monday's meeting was a historic formality, but it was also a time for serious talks. It marked the first time that Obama has visited the Oval Office. Watch Bush welcome Obama to the White House »

The two were expected to discuss "a broad range of issues," focusing on the economy, according to a leader of Obama's transition team.

"It's clear that we need to stabilize the economy, to deal with the financial meltdown that's now spreading across the rest of the economy. The auto industry is really, really back on its heels," transition team leader John Podesta said.

Podesta told CNN's "Late Edition" that Obama will push Congress to enact "at least part" of an economic package before he takes office in January, but said the problems Americans face need short- and long-term approaches.

The president and president-elect also were expected to talk about national security and the war in Iraq.

Perino said earlier Monday that Bush and Obama were going to have a "private meeting" in which they would discuss "a range of issues." Go inside the Oval Office

"I don't think any of us can understand what it's like for two people ... who understand what it's like to be the commander in chief, to be the leader of our great country," she said. "And so they'll have a private conversation. I'm sure they'll talk about a range of issues."

Despite the negative tone of the campaign season -- in which Obama frequently campaigned against what he called Bush's "failed policies" -- Bush has pledged to do everything he can to make sure they have a smooth transition. iReport.com: What's your message for Obama?

"When I called President-elect Obama to congratulate him on his historic victory, I told him that he can count on my complete cooperation as he makes his transition to the White House. Ensuring that this transition is seamless is a top priority for the rest of my time in office," Bush said in his radio address this weekend.

Podesta said cooperation with Bush administration officials has been "excellent" since Tuesday's election. Watch more on the transition to power »

Obama said he was "gratified by the invitation" to meet with the president and his wife.

"I'm sure that, in addition to taking a tour of the White House, there's going to be a substantive conversation between myself and the president," he said at a news conference Friday.

"I'm going to go in there with a spirit of bipartisanship and a sense that both the president and various leaders in Congress all recognize the severity of the situation right now and want to get stuff done," he said.

Given their drastically different views on foreign policy, Mark Preston, CNN's deputy political editor, predicted an "uncomfortable meeting at best." Watch CNN's Mark Preston talk about the meeting »

"Let's not forget that Barack Obama ran against President Bush every day when he was taking on John McCain. While they will be cordial, I bet you it will be uncomfortable," Preston said.

As the president and president-elect met in the Oval Office, Perino gave Robert Gibbs a tour of the White House press office.

Gibbs was the communications director for Obama's presidential campaign. He has not officially been named the incoming press secretary, but he is widely considered the top contender for the position