In the Headlines

"Discussions With Clintons as Obama Creates Team" (Peter Baker and Helene Cooper, New York Times) - Former President Bill Clinton has agreed to all of the conditions sought by President-elect Barack Obama's transition team to eliminate potential conflicts of interest if Senator Hillary Rodham Clinton becomes secretary of state, people close to the Clintons said Wednesday.

"Big Three on the brink" (J. Taylor Rushing and Silla Brush, The Hill) - An emergency effort to send billions of dollars in aid to the ailing American carmakers fizzled on Wednesday, as Senate Democrats failed to strike a compromise with Republicans and the White House.

"Weakened House GOP moves right as it picks new leaders" (David Lightman, McClatchy) - Republicans in the House of Representatives on Wednesday gave their bloc a decidedly more conservative — and outspoken — tone, as they voted in new leaders who have reputations as sharp-edged partisans.

"Minnesota Recount is Underway in Senate Race" (AP) - City and county workers across Minnesota began a laborious recount Wednesday of more than 2.9 million ballots in the tight U.S. Senate contest between incumbent Republican Norm Coleman and Democrat Al Franken.

On the Morning Shows

Fox and Friends - Gov. Arnold Schwarzenegger, on the election: "I think it's always very difficult when you're from the same party as the party in the White House and you have an economic crisis. ... The cards were stacked against McCain without any doubt."

On poking fun at Obama's "scrawny" arms and legs on the stump: "I've talked to since then and he's told me he's going to build a big gymnasium in the White House to bulk up and that I should him bulk up. And I said only if he helps me play basketball."

On joining an Obama administration: "I've made it clear that I will in everyway possible the administration to be successful. So whatever they need, I'm there. I've also made it clear that I want to finish my term as governor because there's a lot of different challenges to get the state out of crisis. ... before I make any move, the next move that I make I'm going to go and say to Maria [Shriver], 'Maria, you tell me what to do.'"

Morning Joe - Sen. Jim Webb, on the auto bailout: "We should be stepping up in some form with the right protections to help them get through this period just as we've helped other industries get through it."

On Afghanistan and Obama's proposal to send more troops: "What needs to happen ... is for us to insist on a clearly articulated strategy, which we failed to do before we went into Iraq."