Return to Transcripts main page

CNN Newsroom

Shutdown Deepens, Debt Crisis Nears; Effects of Government Shutdown to Military Families; Libya Concerns Prompt U.S. Military Moves; Stores Slash Price of iPhone 5c; Interview with former U.S. Congressman Steve LaTourette; ATF Blocks Agent's "Fast and Furious" Book

Aired October 08, 2013 - 09:00   ET

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


(BEGIN VIDEOTAPE)

CAROL COSTELLO, CNN ANCHOR: Now the man who exposed the botched "Fast and Furious" gun sting is banned from publishing his tell-all book.

Plus, 45 bucks? Why iPhone is slashing its prices. And --

UNIDENTIFIED MALE: Where is it? Where is it?

COSTELLO: "South Park" taking on George Zimmerman?

You're live in the CNN NEWSROOM. friendly faces everywhere

(END VIDEOTAPE)

COSTELLO: Nothing like a Little Carmen early in the morning.

Good morning, everyone. I'm Carol Costello. We're now eight days into the partial government shutdown and nine days from the greater economic threat of a debt crisis. Americans caught in the middle. Your nest eggs taking a beating. Wall Street opens this hour after a big day of sell-offs from all the uncertainty.

Also today Senate Democrats will introduce a bill raising the debt ceiling with no strings attached as in no Obamacare. If it's passed later this week, it could put new pressure on House Republicans and make them take some action of their own. In the next hour, we'll hear from Republican House Speaker John -- John Boehner, rather. He'll be speaking at a news conference. But right now let's head to the White House and check in with our White House correspondent Brianna Keilar.

Good morning, Brianna.

BRIANNA KEILAR, CNN SENIOR WHITE HOUSE CORRESPONDENT: Good morning to you, Carol. So far all of these bills that we've been seeing going back and forth between the House and the Senate have dealt with the shutdown, with funding the government. But now we're seeing the Senate move towards trying to avoid a disastrous default as we get uncomfortably close to the debt ceiling.

(BEGIN VIDEOTAPE) KEILAR (voice-over): Ramping up the pressure on House Republicans, Senate Democrats will introduce a bill today that would increase the debt ceiling for more than a year. The goal, push this hot potato issue beyond the 2014 midterm elections. The bill has no strings attached. No agreement to change Obamacare. No budgetary bartering.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I cannot do that under the threat that if Republicans don't get 100 percent of their way, they're going to either shut down the government or they are going to default on America's debt.

KEILAR: The president still says he won't bargain with the country's ability to pay its bills.

REP. JOHN BOEHNER (R), HOUSE SPEAKER: The president's refusal to negotiate is hurting our economy and putting our country at risk.

KEILAR: House Speaker John Boehner insists a debt ceiling increase without some concessions from the White House will never get past his Republicans. He says the same about a government funding bill, though, Democrats question that.

SEN. HARRY REID (D), MAJORITY LEADER: One surefire way to find out whether the bill would pass is have a vote on it.

KEILAR: Only one thing is for certain, Americans are not impressed, especially with Republicans. In a new CNN/ORC International Poll, 63 percent of those surveyed blame the GOP for the shutdown, 57 point the finger at Democrats, and 53 percent hold President Obama accountable.

Eight days into the partial government shutdown, nine days from breaching the debt ceiling, here are some ways this could all play out. Perhaps a long-term proposal like what the Senate is taking up. If that doesn't fly, there could be a short-term measure to buy time, or both sides could keep talking past each other until the U.S. defaults, and there is bipartisan agreement that would be an economic disaster.

(END VIDEOTAPE)

KEILAR: And all of this already being set up for quite a cliffhanger, Carol, because what you'd expect with the Senate is the initial vote, which is really a procedural vote to take place on Saturday. The final vote on this extending the debt ceiling for a year. It may not take place until Wednesday. That would be the latest.

Remember, Thursday is really the day when it comes to the debt ceiling. So, you know, if you're biting your nails already, just wait.

(LAUGHTER)

COSTELLO: OK. Good advice. And, of course, you're going to be with us at the top of the hour because that's when we're going to be hearing directly from John Boehner. The House speaker due to hold a news conference at 10:00 Eastern. Of course, we'll carry it live. The shutdown is starting to hurt military families who are grieving the death of their loved ones.

CNN's Pentagon correspondent Barbara Starr is here with details.

Good morning.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Good morning, Carol. Just when you think it couldn't get any worse, Defense Secretary Chuck Hagel and the Joint Chiefs met yesterday to talk about the shutdown and they have been told, under the rules, they cannot reimburse and pay military families grieving for the loss of their fallen in the war in Afghanistan.

Here is what will not be paid to families during the shutdown. Listen to this. A cash payment of $100,000 within three days of death. That has been going on for years. Not paid during the shutdown. Reimbursement for funeral and internment of remains expenses, not paid during the shutdown.

Travel to Dover Air Force Base. We've all seen those heartbreaking pictures of families waiting for the flag-draped casket to come off the plane at Dover. Not paid during the shutdown. Travel to hospitals if their loved one is perhaps on life support and being kept alive until their family members can get there. That travel, not paid during the shutdown.

Now of course, families can still pay their own way on all of these expenses. They may get reimbursed when the shutdown is over. But this is a package of benefits that has been available to military families for nearly a decade of war and right now they are not going to be paid. Needless to say, the Pentagon, not very happy.

COSTELLO: Yes. Barbara Starr, reporting live from the Pentagon this morning.

Also this morning, there are new tensions between the United States and Libya over the Special Ops mission that nabbed an accused al Qaeda operative. A short time ago Libya's government called the United States Military's capture of Abu Anas al-Libi an abduction. And it is demanding answers from Deborah Jones, the U.S. ambassador to Libya. She met with Libya's Justice minister after being formally summoned.

Also the rising tensions are prompting the move of some U.S. Marines for security reasons. Some 200 heavily armed troops are being shuttled from Spain to Italy in case the U.S. embassy or Americans become threatened in Libya.

CNN senior international correspondent Nic Robertson has just arrived in Libya. He's on the phone with us now.

Good morning, Nic. Can you tell us more?

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT (via phone): Carol, there have been no details released from the Justice Ministry here about what was discussed, what was told to Deborah Jones when she was called in for the meeting with the Justice minister.

I did meet with another government minister today. He told me that the abduction, as the government here is terming it, came at a very bad time for the government, that there would be elements in the country, implying Islamist elements and others that would use this as an opportunity to try to destabilize the government.

In the meantime, there have been a small protest in the city of Benghazi in the east of the country, about 150 people gathered there to protest the capture of Abu Anas al-Libi. But the -- what we can expect in Tripoli at the moment, according to the minister I talked with, is really anything is possible, that really whatever response may come from Islamists -- there have been threats on some Web sites that they use, that they would like to kidnap Americans, target American interests in Libya.

He said no one can say whether or not that will happen. But certainly the government taking those threats on those Web sites very seriously -- Carol.

COSTELLO: Well, some Americans might be asking themselves, look, we help Libya, we helped Libya overthrow Moammar Gadhafi. Why isn't Libya helping us out more?

ROBERTSON: You know, that was one of the things I told the minister about. And he said, look, if we've had a little more time, this could have been handled in a different way. Al-Libi was already coming to the government here to try and organize meeting to discuss the situation. The minister said look, it would have been possible for him to have -- perhaps met with U.S. official here in Libya. Discuss things. It didn't mean to go this way.

So from the government perspective, they think this could have been handled better. They think that more patience was required and essentially a lack of understanding of the precarious nature of this government in Libya. The prime minister was elected on 93-85 votes. So it's a slender margin and there are those that would try to unseat him.

One previous prime minister unseated in a similar situation. He was blocked by the Islamist factions here from forming a government and there's real concern that the Islamists again will try to take advantage of the situation and penalize the government.

COSTELLO: Nic Robertson, reporting from Libya this morning.

Back here at home, wild weather shakes people in parts of the northeast. The storm system brought heavy rain and high winds, uprooted trees from the nation's capital all the way to Massachusetts. In Emerson, New Jersey, trees fell on power lines, sparking small explosions. Utility and fire crews did respond, but it could be days and days until electricity is fully restored.

CNN's Indra Petersons is in New York to tell us when this will be over.

Good morning.

INDRA PETERSONS, AMS METEOROLOGIST: Yes. Good morning. I mean, believe it or not, that same storm system that brought record-breaking snow into South Dakota and then spawned the tornadoes in Iowa, that's actually the system that made its way through the northeast and mid- Atlantic yesterday.

You're wondering what all these dots are. Those are storm reports of damage. So unbelievable squall line as it made its way across yesterday evening. Good news? Yes. It is currently offshore.

Wanted to show you some perspective, though. The big change. These is yesterday's highs. You noticed we were above normal with those temperatures. And then all this cold air is filling in. So that's one of the things that allowed some of the severe weather that occurred. But notice now we're going to be talking about temperatures dropping way down with that cool air coming in from Canada.

Today, typical temperatures. Where we should be this time of year. And in fact after that, we're going to see those temperatures back off a little bit more to some low 60s -- Carol.

COSTELLO: Hello, fall.

PETERSONS: Yes.

COSTELLO: Thank you, Indra.

PETERSONS: Sure.

COSTELLO: New details this morning about that 9-year-old boy who sneaked on to a plane to Los Vegas without a ticket. Well, he has been in trouble before. The "Minneapolis Star Tribune" reports the boy recently stole a car and on numerous occasions has taken mass transit to a water park and sneaked in without a ticket.

The boy remains in Las Vegas, though. There's a court hearing today to discuss his case. Delta Airlines says it's reviewing surveillance video to see how he got on the flight from Minneapolis to Vegas. The boy's parents are reportedly cooperating in the investigation.

If you want to get your hands on the new iPhone you might -- you might not have to pay full price. In fact it's relatively cheap. The iPhone 5c has only been on shelves for two weeks and it's really being marked down.

Alison Kosik is at the New York Stock Exchange. Really?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Yes. Go figure. You can get a brand spanking new iPhone for $45 at some places. That's down from $99. Now this is price-cutting war that start with Best Buy. And look at what happened on Thursday, Best Buy threw in a $50 store gift card when you bought the 5c. Well, that ended yesterday. But Wal-Mart cut its price to $45.

That's going to keep going through the holiday season. And then there's RadioShack. It started offering $50, a $50 store gift card. That's going to go on through November. Now the big catch here, if you want to buy the phone you need a two-year contract with all these deals.

You know what, it's kind of unheard of. When was the last time you heard of Apple products discounted for new phones? You know, when they're discounted it's usually only when an updated product is coming. Right? It's kind of raising some eyebrows because these price cuts usually mean there's weak demand. That's not the case. You look at the first weekend that these phones went on sale. Apple sold nine million of them.

Also you could see retailers cutting prices, Carol, because they want to get buyers in, because not only will they buy the phones, buy a few accessories, and before you know it, you spent 1,000 bucks on what -- Carol.

(LAUGHTER)

COSTELLO: They'll get you one way or another, right?

KOSIK: Yes.

COSTELLO: Alison Kosik, thanks so much.

Still to come in the NEWSROOM, tainted chicken? Eighteen states on alert for salmonella.

Plus not in my store. A deli clerk fights off an armed robber with a machete.

Wait. Is that Bill Gates? The Microsoft video we probably weren't supposed to see.

(COMMERCIAL BREAK)

COSTELLO: Checking our top stories at 16 minutes past the hour.

A new arrest in connection with the notorious Steubenville rape case. William Rhinaman is accused of perjury and covering up evidence for two students convicted back in March. It gained national attention after the underage boys posted photos of their drunk female victim to social media. If convicted, Rhinaman could face four years in prison.

A California chicken producer maybe the source of a salmonella outbreak that has sickened nearly 300 people in 18 states. Foster Farms says it's working with federal official to identify the raw chicken products in question. The products were mostly distributed to stores in California, Oregon and Washington.

A fourth arrest now made in connection with the recent beating of an SUV driver in New York. Police say 29-year-old biker has been charged with gang assault and unlawful imprisonment. At least two off-duty undercover police officers were also under fire for riding with the group. One of the officers says he wanted to come forward because he didn't want to blow his cover -- he did not want to come forward because did he not want to blow his cover.

Frightening moments at a deli on Long Island. Surveillance video shows an armed man walking in and demanding money and firing at the wall behind the cashier. But that's when the clerk pulls out his machete, chasing him into the parking lot and scares him off. The incident happened last month. The gunman is still on the loose.

My next guest was so fed up with all the partisan bickering in Washington, he actually quit his job, and he was a congressman.

Steve LaTourette is the president and CEO of the Republican Main Street Partnership, a group that focuses on finding common sense solutions with centrist policy makers. Wow, that's an impossibility these days.

Good morning.

STEVE LATOURETTE, REPUBLICAN MAIN STREET PARTNERSHIP: Good morning to you, Carol.

COSTELLO: Good morning, Steve.

You were a freshman congressman during the last government shutdown. What's the difference this time, do you think?

LATOURETTE: Well, in 1995, 1996, you have to remember it was the first time in four years that Republicans had taken the majority in the House, lot of hard feelings. It was more about numbers than it was ideology.

Today, it's all about ideology. You have the Tea Party wing of the Republican Party is obsessed with Obamacare and whether or not it looks like a kamikaze mission or not, they're going to go ahead with this strategy.

COSTELLO: Man, you sound like a Democrat.

LATOURETTE: That's what my wife tells me all the time.

(LAUGHTER)

COSTELLO: Well, I mean, really, you're a Republican and you take a look at the CNN/ORC, its most recent poll, it shows Republicans taking most of the blame for this shutdown. Actually, that is wrong. Democrats, 57 percent of Americans say Democrats are to blame for shutdown. But a whopping 63 percent believe Republicans are to blame.

Are they?

LATOURETTE: Well, you know what? At the end of the day, everybody is to blame. And the big difference, aside from ideology this time, if you go back to these debt ceiling discussions, since Dwight Eisenhower was the president 60 years ago, we've always been able to work it out.

Now, clearly, some Republicans are on this kamikaze mission. But when you have the president saying he's not going to negotiate and Harry Reid having the fight he's always wanted, it really is tough to figure out how we're going to get out of this mess. A lot of people are wondering where is Joe Biden when we need him.

COSTELLO: That's right. He is supposed to be good at talking to members of Congress. He was in Congress forever, right?

LATOURETTE: Yes, he was.

COSTELLO: Let's talk about House Speaker John Boehner because some people say he holds all the cards in this. That he has enough Republican votes in the House to get an up vote on a continuing resolution with no strings attached.

He says he doesn't. Who's right?

LATOURETTE: Well, he obviously is, because he's the vote counter, first of all. But second of all, where the speaker is -- I mean, the speaker is not one of these nutty people that's driving this thing. The speaker is, Mr. President, if you're asking the country to borrow another trillion dollars, don't you think it's appropriate we have a discussion and negotiation about why it is we have to borrow another trillion dollars?

That's the missing piece. I mean, there are a lot of pieces out there, carol. I'll tell you, a lot of senators are talking about extending tax provisions.

There are ways to pay for this, cut spending, reopen the government, get everybody back to work. But, you know, if I ask you to a dance, it wouldn't be so good if you were out there on the dance floor by yourself. And that's where John Boehner finds himself.

COSTELLO: OK. So, what's the answer is here, because I think pretty much all Americans want to know, what is the way out? What needs to happen to end this thing?

LATOURETTE: One good thing that happened yesterday is Treasury Secretary Lew said we're not going to run out of money until Halloween, which frightened every American that it's now Halloween.

But, two, it's going to take the president and Senator Reid saying, OK, Mr. Speaker, we can give up the medical device tax. We can give up something else and you reopen the government. The reason that this isn't like the old days where you just say, the president is using what I call the Wimpy approach from Popeye. I'll glad you pay you Tuesday for a hamburger today. There's no trust between the two branches.

So, in the old days, John Boehner would say, you're right. Let's reopen the government and we'll have a negotiation. They don't trust the administration to follow through on their end.

COSTELLO: OK. So, how do you -- how do you overcome that? I mean, is there any politically courageous politician who can come out and be the leader and kind of fix the trust issue, at least temporarily? LATOURETTE: Yes, I think there is. I think in the House, at least. The Senate is sort of a mystery to me. I never understood what they did when I was there for 18 years.

But in the House, you have Ron Kind, Democrat from Wisconsin, and Charlie Dent, Republican from Pennsylvania, have put forward a proposal that centers around the medical device tax and they say they can garner enough Republicans and Democrats to get this thing open. That's what it needs.

You're not going to get the outliers. I mean, the far right of the Republican Party and the far left of the Democratic Party. You don't need them. You only need 218 votes. That's the kind of path that needs to be followed.

I have every reason to believe -- I mean, John Boehner is one of my best friends. He will not let the government default but --

COSTELLO: You really think so?

LATOURETTE: Oh --

COSTELLO: It sounds like he's willing to do that.

LATOURETTE: No, no, no, no, no. There's public consumption and then there's private consumption. When he said on the Sunday shows, look, there's a back room where a backroom deal would be discussed. Nobody is in it at the moment. We just need to get warm bodies in there.

Again, Joe Biden would be a great choice.

COSTELLO: OK. Well, I'm going to pose that question to my next guest, who's a Democratic House member. We'll see what he has to say about that.

Thank you so much, former Congressman Steve LaTourette joining us this morning.

And in case you're wondering what this medical excise tax bill about, it's a 2.4 percent tax on medical devices, and both Republicans and Democrats say this tax hurts small business people because, of course, you would go out of the country to buy something cheaper. So, both Democrats and Republicans think this tax ought to go away. The problem is, part of that tax pays for Obamacare. So now you know.

Still to come in the NEWSROOM: he blew the whistle on the ring known as Fast and Furious, but his plans to publish a book about it may not happen and it has everything to do with morale.

(COMMERCIAL BREAK)

COSTELLO: The ATF is telling one of its agents not so fast, publishing his book as the gun-running sting known as Fast and Furious, whether it's a matter of free speech.

CNN's Miguel Marquez has more for you. (BEGIN VIDEOTAPE)

MIGUEL MARQUEZ, CNN CORRESPONDENT (voice-over): This morning, new controversy surrounding the government program "Fast and Furious", after the government tells Bureau of Alcohol, Tobacco, Firearms, and Explosives whistleblower he cannot publish his already written book, an insider's look into the botched program.

JOHN DODSON, ATF WHISTLEBLOWER: The guns that we saw these individuals by would begin turning up at crime scenes in the United States and in Mexico, and yet, we still did nothing.

MARQUEZ: The book is written by John Dodson who turned whistleblower over the 2009 program, allowing 2,000 guns to cross into Mexico with the intention of tracking them to criminal gain. But authorities lost track of hundreds of weapons. Some winding up in the hands of drug cartels.

DODSON: Rather than meet the wolf head on, we sharpened his teeth, at a number to his claw. All the while sat idly by watching, tracking, and noting.

MARQUEZ: Most explosively, two of those lost guns turned up at the scene of border patrol agent, Brian Terry's, murder in 2010, still unclear whether either of those guns delivered the lethal shot. But the program, the death, and the controversy reached national proportion -- with Republicans holding Attorney General, Eric Holder, in contempt over the White House's refusal to turn over documents.

ERIC HOLDER, ATTORNEY GENERAL: We've produced 7,600 --

REP. DARRELL ISSA (R), CALIFORNIA: Look, I don't want to hear about the 7,600.

MARQUEZ: Superiors at ATF told Dodson by letter that his book could have a negative impact on morale and his field division at Phoenix and a detrimental effect on ATF relationships with other law enforcement agencies. The American Civil Liberties Union has taken up Dodson's defense saying the ATF decision denies Dodson his constitutional right to free speech.

Miguel Marquez, CNN, Los Angeles.

(END VIDEOTAPE)

COSTELLO: Still to come in the NEWSROOM: nation's bills will soon come due. Some of those bills could go unpaid. Why the Washington gridlock could have a damaging affect on the U.S. and global economy.

(COMMERCIAL BREAK)