Danny Hakim and Nicholas Confessore
The New York Times

Problems involving taxes and a household employee surfaced during the vetting of Caroline Kennedy and derailed her candidacy for the Senate, a person close to Gov. David A. Paterson said on Thursday, in an account at odds with Ms. Kennedy’s own description of her reasons for withdrawing.

The account emerged 14 hours after Ms. Kennedy announced that she was taking her name out of contention for the Senate seat vacated by Hillary Rodham Clinton, and as Mr. Paterson appeared to be leaning toward selecting Representative Kirsten E. Gillibrand, an upstate lawmaker in her second term in Congress.

Hard feelings toward Ms. Kennedy were clearly building among the governor’s staff on Thursday, after a dramatic evening in which she was reported to be dropping out, then wavering, then ultimately, shortly after midnight on Thursday, issuing a statement ending her candidacy.

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CNN's Mary Snow takes a look at the remaining contenders for the New York senate seat vacated by Hillary Clinton.

Cate Vojdik
AC360° Writer

There’s breaking news tonight. A short time ago we learned that Caroline Kennedy has withdrawn from consideration for the Senate seat left vacant by Hillary Clinton (who was sworn in today as Secretary of State). Kennedy is said to have cited concerns about her uncle’s declining health. Sen. Ted Kennedy had a seizure yesterday during the post-inaugural luncheon and was rushed to a hospital. He was released today and is back at home. As you might imagine, many people are wondering if there are other reasons for Caroline Kennedy’s change of heart. We’re working the story.

The 44th President of the United States woke up to a towering stack of challenges today – his first full day in office.

He immediately got to work, arriving in the Oval Office just after 8:30 a.m. We’re told he spent 10 minutes alone in the historic room. Imagine what that moment must have been like. We know that President Bush left him a letter to read. What we’d give to know what it said!

Aside from that bit of solitary time, the day was a flurry of activity. President Obama plunged into foreign policy with calls to Mideast leaders; he presided over the swearing-in of cabinet nominations approved yesterday; he met with his advisers about the recession and ordered new ethics rules. Oh yes, he and first lady Michelle  Obama also hosted an open house for a few hundred people lucky enough to win a lottery. 

Tonight we’ll have all the details of President Obama’s day – including his do-over of the presidential oath. That’s right, he took the oath of office again today, after all the flak Chief Justice John Roberts’ got for yesterday’s flub.

We’ll also ask some tough questions about President Obama’s plans for Iraq. We’ll have a Keeping Them Honest report on how realistic it is for U.S. troops to leave Iraq on the time-table Mister Obama envisions.

Today also brought a new wave of grim economic news, including thousands of new job cuts - a reminder of perhaps the biggest challenge on the president’s plate. Ali Velshi will weigh in on that piece of the presidential story.

See you at 10 pm ET!

Deirdre Walsh
CNN Congressional Producer

Oprah Winfrey made her way through screaming crowds to her seats in section 6 on the West Front. She hugged Caroline Kennedy on her way in, and actor Samuel L. Jackson, both sitting in the same front row of the section.

Asked her feelings about being here, Oprah said, "It's beyond the dream. We're just here feeling it with the throngs of people. It's amazing grace personified."

Rudy Giuliani says New York needs an advocate in the Senate who also understands America's needs.

Rudy Giuliani
Special to CNN

Now that President-elect Barack Obama has nominated Sen. Hillary Clinton to be his secretary of state, the governor of New York will appoint a new senator to fill the vacancy.

The relationship between the mayor of a large city and a United States senator from that city's state reveals the genius of the U.S. Constitution.

A good senator must perform two tasks simultaneously - advocate for the interests of his (or her!) state while also helping to shape the direction of the entire country.

As mayor of New York City, I thought of our U.S. senators as New York's advocates in Washington. All of New York's senators during the time I was mayor - Alfonse D'Amato, Daniel Patrick Moynihan, Charles Schumer and Hillary Clinton - were effective advocates for New York City.

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Caroline Kennedy says she is the best person to replace Hillary Clinton in the Senate.

Frederic U. Dicker and David Seifman
The New York Post

Assembly Speaker Sheldon Silver, who last week sharply questioned whether Caroline Kennedy should be appointed to the US Senate, said yesterday he's rethinking his views because he believes Gov. Paterson may soon pick her.

"I have determined there's a good possibility she will be the appointee of the governor," Silver, the state's second most powerful Democrat, told The Post.

"If she is the appointee of the governor, I will certainly be supportive of her. I will work for her and will work strenuously for her election."

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Caroline Kennedy's verbal tic...she says "you know" hundreds of times. And you know who's counting? CNN's Jeanne Moos.

Nicholas Confessore and David M. Halbfinger
The New York Times

Caroline Kennedy, the woman who would be New York’s next senator, is sure of one thing. Among all the hopefuls seeking to succeed Senator Hillary Rodham Clinton, she said on Saturday, there is no better choice.

“I wouldn’t be here if I didn’t think I would be the best,” Ms. Kennedy said, sitting in the back room of an Upper East Side diner around the corner from her home.

After weeks of criticism that she had not opened up to the public or the press, Ms. Kennedy has embarked on a series of interviews. But in an extensive sit-down discussion Saturday morning with The New York Times, she still seemed less like a candidate than an idea of one: forceful but vague, largely undefined and seemingly determined to remain that way.

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By Hank Sheinkopf
CNN Contributor

Judging by the screaming newspaper headlines and the steamy ecstasy of the gossip columns, people from other worlds might presume that it has already come to pass: that a woman who happens to be named Caroline Kennedy was pole-vaulted above the crowd and sent with magic wand and golden slippers to the U.S. Senate from New York, in the hope of saving the Empire State and bringing goodness to all its inhabitants.

After all, why shouldn't she be sent to the Senate?

Her unique experience of writing a book or two, smiling well, appearing from time to time - but not too often - at city mayoral news conferences announcing help for those who attend New York City public schools - and, well, just being a Kennedy - should suffice.

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Caroline Kennedy visits Syracuse, New York, on Wednesday.

Joel I. Klein
Special to CNN

I was named schools chancellor in New York City in 2002, shortly after Mayor Michael Bloomberg won control over the city's school system.

At the time, our schools were in desperate need of a strong advocate. Few prominent New Yorkers were willing to take a chance on our schools - or invest in a system that many saw as beyond repair.

Caroline Kennedy was willing.

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