Yes, according to one of Obama's advisors, Valerie Jarrett (who, yes, is an Obama advisor) won't be replacing Ol' Bamma in the Senate.
http://politicalticker.blogs.cnn.com/2008/11/10/sources-jarrett-headed-to-white-house-not-senate/
Jarrett, an attorney and close friend of the Obamas since the beginning, helped Obama out in the election process, and buzz was about saying that she would replace him as Senator. Well, Obama says that she is too valuable and wants to keep her close to him.
Having said that, other Democrats from Illinois such as Jesse Jackson, Jr. are eyeing that seat. Governor Blagojevich will tell us soon who will be taking it.
Can you say "political machine"?
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