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AC 360 LATER

Conservative Rally; Government Shutdown; Al Qaeda Suspect in U.S.; Veterans Group Blasts Politics Linked to Rally; Terrorism Suspect to be Tried in New York Federal Court

Aired October 14, 2013 - 22:00   ET

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


ANDERSON COOPER, CNN ANCHOR: Hey. Welcome to "AC360 Later." Thanks for joining us.

A lot to talk about on the table tonight, stunt politics over the government shutdown, conservatives, including Senator Ted Cruz and Sarah Palin, rally at shutdown memorials in Washington, one speaker telling the president to -- quote -- "put the Koran down." Also ahead, an alleged al Qaeda operative captured by U.S. soldiers in Libya is now in New York. But is that where he should face charges in the 1998 bombings of U.S. embassies in Kenya and Tanzania?

We begin, however, with the government shutdown, day 14, the clock ticking toward the debt ceiling deadline, with breaking news tonight that the Senate could be close to a deal. Could be. Senators are using words like very close and productive day to describe what is happening behind closed doors.

Even Senate Majority Leader Harry Reid is optimistic saying -- quote -- "Perhaps tomorrow will be a bright day." Sound likes a song from "Annie."

Joining me at the table tonight, Andrew Sullivan, founding editor of The Dish and a major "Annie" fan, CNN legal analyst and former federal prosecutor Sunny Hostin, Republican strategist Rich Galen, and in the fifth chair, former New York Congressman Rick Lazio. It's great to have him back.

Let's get the latest now on the possible Senate deal from chief congressional correspondent Dana Bash.

Dana, what is happening?

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: The sun will come out tomorrow. No, I'm just kidding.

(LAUGHTER)

BASH: The deal right now is that everybody in the Senate, sort of the two major sides, Mitch McConnell and the people who he is trying to please and Harry Reid, the Democratic leader, and the people he is trying to please, they each feel like they have given a little bit on this framework.

Democrats wanted to extend the debt ceiling way out through next year's election. They will not get that. It's going to be much shorter, in February. The Republicans wanted to have a very, very short window for opening the government. You know, Democrats wanted to have it a little bit longer.

They have a give and take on that. What's unclear is how this is going to sell with Senate Republicans first. That's going to happen tomorrow morning. And much more importantly, how it's going to sell with the House Republicans who wanted to go much, much further with regard to Obamacare and with regard the debt ceiling. We will have to see because every conversation we had with House Republicans when they voted earlier tonight, they said they are keeping their patter dry.

COOPER: But all the talk of defunding and dismantling Obamacare, there's none of that in there, just, what, kind of nibbling around the edges, minor things?

BASH: Exactly.

When it comes to Obamacare, my understanding is that if they do anything, it will be nibbling, it will be things like making sure that the income is verified for people who have low income and they need to get government subsidies and there's something that the unions actually want. So this is something that the Democrats wanted to give to their constituency having to do with a fee for employees.

Not anything major that has to do with big things, like the individual mandate, defunding, anything like that. But still when you listen to what Democrats have been saying, the president on down, that they're not going to pay ransom for anything with regard to Obamacare, they are giving a little bit.

RICH GALEN, REPUBLICAN STRATEGIST: Dana, I don't want to get too far down into the weeds. But I was hearing today that maybe if this gets through the Senate that it will go right to conference rather than going to the House floor, because if you go to conference it's not an amendable bill when it comes to the floor. You either take it or leave it.

You can send it back with instructions, as opposed to bringing a bill up where everybody could have 75 amendments. Is that something that is possible?

BASH: It is entirely possible.

In fact, Rich, the House Republican leader put out their notice about what they're doing in the House tomorrow and they left open the possibility that the House would vote on its own bill to extend the debt ceiling. That would absolutely lead to the possibility of a conference.

The problem is, even if it's expedited we're talking about tomorrow being Tuesday and the debt ceiling Thursday. So there's really not a lot of time even by Senate standards and House standards.

RICK LAZIO (R), FORMER U.S. CONGRESSMAN: You still have to name conferees, though. There will still be a vote one way or the other. --

(CROSSTALK)

LAZIO: -- be a clean up and down vote, basically.

(CROSSTALK)

COOPER: What do you see happening? What do you think the --

LAZIO: You know, I think this whole thing could have been played out two weeks ago with naming conferees and kicking this down two or three weeks from now and this is basically how this is I think playing out, that you will see this extended probably until January 15, a time with the sequestration, which is a big issue for a number of Democrats to try and revisit sequestration.

Republicans will want to use that a bit as leverage. They are going to kick this down -- the can down the road a little bit, try and get people to talk, which I think is fine, bring down tempers down, hopefully stop the kind of ad hominem discussion that's going on right now on both sides.

COOPER: But there is no guarantee John Boehner will bring this to the floor, is there?

LAZIO: Well, there's no guarantee. My guess is it will a big test of leadership here and there will be a number of Republicans that may not like what they state and they are going to go south on it and the question will be whether John Boehner will bring it to the floor knowing he's going to need a big bunch of Democrats in order to pass this.

GALEN: The so-called Hastert rule is really not a word. He just said it one day.

But it is not that bills have to pass with only Republican votes. It's that it has to pass with a majority of the majority. That's only 117 Republican votes. And if Denny Hoyer and Nancy Pelosi can gather up 100 Democrats to push this through if the president asks them to do it, then I think you have a deal.

ANDREW SULLIVAN, ANDREWSULLIVAN.COM: I just want to focus on what you said, which is this will take leadership. It takes leadership to avoid a default of the United States.

They have brought us to this point over this much time and now it's leadership? I mean, there's been no leadership, especially from the Republicans. I mean, what has Ted Cruz got from this crusade, apart from bringing this country to the brink of economic catastrophe? And we may still have it?

(CROSSTALK)

SUNNY HOSTIN, CNN LEGAL ANALYST: I completely agree with it.

And I think any concession by the Democrats will validate this ridiculous strategy. I really believe that. And that's why I just -- I don't know what will happen, because if you give a little bit, if you give even around the edges, if you give into the nibbles, then it validates the strategy.

COOPER: Dana actually talked to Ted Cruz. Did he say this is something he would support, Dana?

BASH: He is holding his cards close to the vest. I caught him as he was walking out of the Senate floor earlier today and asked if he would use all the tools available to him that any senator has to try to slow this train, even the first train, the Senate train, and he said I'm waiting to see the details of the plan.

He didn't rule it in and didn't rule it out. But that is something to remember, that he could use it and could delay the sequence of procedural events that need to happen in the Senate, and we absolutely could reach Thursday --

(CROSSTALK)

COOPER: To Andrew's point, what has Ted Cruz got out of all this?

LAZIO: I don't know what he's gotten out of it. The whole strategy of using the debt limit and the C.R. as leverage to try and repeal Obamacare as the president's signature achievement was pretty ill- conceived.

So I grant everybody that. I will also say that I think getting back to Andrew's point that there is an enormous amount of frustration among Republicans and fiscal conservatives that look at we have had a series of trillion dollar plus deficits, we're online right now to add $7 trillion of debt, and they really wanted the president to go out and provide some leadership.

Early on, Simpson-Bowles, his commission, turned his back on that to get entitlement reform. It is insanity that we have not had agreement on entitlement reform.

(CROSSTALK)

LAZIO: If you're a progressive --

(CROSSTALK)

SULLIVAN: I'm for entitlement reform, Rick. I'm totally for entitlement reform too. I'm for tax reform too. I'm for a grand bargain.

But the grand bargain has to raise some revenues so the Democrats have one side of the bargain. What the Republicans have proposed is not a grand bargain. It's their way or they will destroy the economy of the United States and possibly the world.

LAZIO: But you did get revenue. You got $600 billion of new revenue the last go-around in the last agreement.

(CROSSTALK)

SULLIVAN: At the sequester level.

(CROSSTALK)

LAZIO: And if you look at really --

SULLIVAN: The deficits from the last three years have been doing what, going up or down?

LAZIO: The deficits have been -- the debt has been going down.

SULLIVAN: The deficits?

LAZIO: The deficit this year for the first time has gone --

SULLIVAN: Not for the first time, the third year in a row, the fastest decline in the deficit in three years as a percentage of GDP since demobilization after the Second World War, at a time when the economy is severely depressed.

And you are arguing policies of extreme austerity at a moment of this fragility.

(CROSSTALK)

LAZIO: Let me tell you this. I think we could agree on this.

First of all, let me just answer that point. The other side will say by the time the president leaves office, he will have added more debt to the federal government than all other presidents combined, from George Washington to George Bush.

(CROSSTALK)

SULLIVAN: That's not true.

LAZIO: According to the Congressional Budget Office, number one.

Number two is as a percentage of economy if you measure taxes that way as a result of the last hike in taxes, the Congressional Budget Office will say we will have historically rates of revenues coming in. So there is taxes that have already been raised.

SULLIVAN: Revenues as a percentage of GDP are at the lowest they have been for 50 years.

LAZIO: Not any more they aren't. Not any more they aren't, not since the tax hike. You have got to look at the facts.

SULLIVAN: It's certainly very marginal.

LAZIO: The third point is, if you are arguing that in the short-term that the federal government needs stimulus and you think that we need more discretionary spending, do something on entitlements. It's two- thirds of the entire federal budget and the president on this has punted.

SULLIVAN: I agree. I don't think he should have punted. I agree in entitlement reform.

But I also agree until the Republicans agree with tax reforms which will raise revenues to pay for the baby boomer retirement, to pay for the structural things that will have to grow and we will have to spend, then it's not a deal. And they are not behaving like grownups and they created this crisis out of nothing. And they have got nothing to show for it.

And as far as I'm concerned, that delegitimizes the Republican Party as credible on deficits and on the economy.

COOPER: We have to take a quick break. We will talk more about this when we come back.

Follow us on Twitter at @AndersonCooper. Use the hashtag AC360Later.

Up next, less than 60 hours from now until the debt ceiling deadline, but what will really happen if there's no deal. It depends who you ask. I will talk to the panel about what they think when we continue. We will be right back.

(COMMERCIAL BREAK)

COOPER: Hey. Welcome back.

We are a little over 49 hours away -- I think I misspoke before the commercial break -- from the debt ceiling deadline, 49.

As we mentioned, our breaking news, there is a sign that a deal could be close in the Senate but we are talking about Washington after all, so who knows. What is that deal doesn't go through? Would a U.S. default be catastrophic or is it much ado about nothing?

Back with our panel, Andrew Sullivan, Sunny Hostin, Rich Galen, in the fifth chair tonight, Rick Lazio.

Do you think it would be catastrophic?

SULLIVAN: I don't know. I'm not an economist.

So what I do in those circumstances is listen to all the economists I know and all the people who are quoted as economists who know about this, and they all say not just reaching default, but even flirting with it could be catastrophic. And my view is when people are using the word catastrophe about the American economy and the global economy, then you should -- we should not be here tonight, Anderson. We should not be anywhere close to here.

And the party that made us get to here have to be punished for doing that to this country and the world. We are talking about millions of jobs that could disappear if we default.

(CROSSTALK) GALEN: Except, Andrew, we heard exactly the same thing when -- and I don't know either because I'm not an economist either.

(CROSSTALK)

GALEN: I'm on your side. I don't think we should.

But what I'm saying is we heard the same thing about sequester. Oh, my God. Oh, my God. Oh, my God. Then we heard the same thing about the shutdown. Oh, my God. Oh, my God. Now we are depending upon the guys who got us into this in the first place, the financial guys. They got us into this mess to start with in 2007. We bailed them out with trillions of dollars and they used a lot of that to pay themselves bonuses and now they're the guys saying oh, my God. Oh, my God. Oh, my God.

SULLIVAN: It's the Chinese who are wringing their hands, because it's their debt they think they are not going to get back. This could fundamentally marginalize America in the world economy if this currency and the dollar and the American economies are treated this way.

(CROSSTALK)

GALEN: We heard the same thing about sequester.

(CROSSTALK)

COOPER: Let me bring in David Walker. He's the former U.S. comptroller general, head of the Government Accountability Office. He's also the founder and CEO of the Comeback America Initiative.

David, great to have you back on the program again. How bad would be the? What would it mean, going over the debt?

(CROSSTALK)

DAVID WALKER, FORMER UNITED STATES COMPTROLLER GENERAL: Only God knows, and God's not telling us.

I will tell you this. There's way too much finger pointing and there's way too much hyping. Article 4 of the 14th Amendment to the Constitution makes it clear that bondholders of U.S. debt are guaranteed. They're going to get paid.

The real question is who is not going to get paid on time and what type of penalties and interest are we going to have to pay because of the Prompt Payment Act? Look, I think the Senate is going to reach a deal. The real question, is that deal going to be acceptable to the House? And I'm happy to come back to that if you want.

COOPER: Well, do you think going to be acceptable to the House? Because there's a number of how Republicans who have run on defunding or delaying Obamacare, and that's not going to happen.

WALKER: Well, first, I think it was just downright stupid for the conservatives in the House to be able to make Obamacare part of the C.R.

That was Just downright stupid. It's clear that it's going to be a peripheral part of whatever is done, if it's part of it at all. I do think we have to focus on the spending. And there's several kinds of spending. We need to invest more in critical infrastructure and research and development. We need to get rid of and cut back on programs that don't work.

We need to put mandatory spending on the table and we need to put tax expenditures on the table. If you define spending broadly, then one of the objectives that should take place during this extension period is to agree on spending reductions that include tax expenditures, mandatory spending and some additional investments that will put us on the right path. This austerity vs. more stimulus is a false choice. We need to come up with a comprehensive, integrated plan that will put us on a sustainable path going forward.

GALEN: But how do we get there? We have tried this before. As we know, every line in the tax code has a champion. Every line in every appropriations bill has a champion. We tried to do a grand bargain, as you were talking about earlier. How do we get there?

SULLIVAN: Especially when someone like Paul Ryan it going to torpedo it, and the president is not prepared to take on his left in order to get there.

And I agree with you. I think a key low-hanging fruit are these massive tax deductions that riddle our code that make the general rates higher. But I do think you can do an '86 deal where you can actually get rid of those deductions, lower the rates and still raise some revenue. There is a sweet spot there. And the main objection to that has been the Republican refusal to raise revenues.

LAZIO: I was about to agree with you until that last bit.

(CROSSTALK)

(LAUGHTER)

WALKER: I think you have to listen to the American people.

COOPER: Go ahead, David.

WALKER: You have to listen to the American people.

I traveled to all 50 states. We have got 97 percent agreement that a grand bargain is important and 85 percent agreement that it will be spending reductions and additional revenues. We got a minimum of 77- 90 percent on specific reforms.

And with regard to taxes, eliminate a lot of the tax expenditures and broaden the base, reduce the top marginal tax rate, if you will. You can generate more revenues there. But what we fail to have is leadership. And we didn't have it from the last president either. And secondly these people are not representing to the American people. They're not listening to the American people. We have a republic that is no longer representative of nor responsive to the public. We need political reforms, and we need them quick.

LAZIO: And I would just say, David, you have been around a long time. If the president does not provide cover to people in his own party and provide leadership, the thing doesn't get done.

And, Andrew, to your point, absolutely. In the context of a big deal where you're taking on entitlement reform, deep deficit reductions so you have a pathway to sustainable budget deficits over a long period of time, there will be some place for additional revenue. I think everybody --

(CROSSTALK)

SULLIVAN: No one in the House Republican Caucus will agree with that, not a single one.

LAZIO: No, no, but that's not true. In the context of tax reform, everybody is talking about paying for it by closing tax loopholes.

(CROSSTALK)

HOSTIN: Don't we have revenue, though? Don't we have over $2 trillion in revenue that comes in? And so we can service our debt. Right? Because debt is, what, $250 billion.

(CROSSTALK)

HOSTIN: Right. So, why is there this discussion at all? Because we can pay our debt. Right? We can at least service the debt.

LAZIO: But we are only -- the money coming in only covers 70 cents on every dollar. We are going out. And we have to borrow for that last 30 cents to make payments.

HOSTIN: But we can make the payments. Maybe we have to choose who we're going to pay.

WALKER: But interest on the debt is 10 percent.

LAZIO: Right, interest, and going up, right? Once we get to normalized rates --

(CROSSTALK)

LAZIO: -- of the '90s, it's going to explode.

You are going to look at a trillion dollars in 10 years at normalized rates, correct me if I'm wrong, David, in about 10 years. With $7 trillion more of debt and rates going up to the average of the '90s, you will have another trillion dollars added to the deficit.

SULLIVAN: And let me note the president just said he is in favor of means-testing Medicare.

(CROSSTALK)

SULLIVAN: He's in favor of it. He could be open to chained CPI. When has a single Republican said they are open to more revenues?

LAZIO: They are talking about it. And they're going to -- CPI, try and -- chained CPI. You have got people that are going to be supporting that.

(CROSSTALK)

SULLIVAN: A net increase in revenues to help the government, to actually give the Democrats something from this. What are you going to give?

LAZIO: I would say they have already raised $600 billion that Republicans requested.

SULLIVAN: At sequester levels.

(CROSSTALK)

COOPER: David, I want to give you the final thought, and then we got to go to break.

WALKER: The truth is two things.

One, the president's own budget estimates that we will be spending over $800 billion for interest in 10 years. That is more than we will be spending on national defense in 10 years. And what do you get for interest? Nothing.

Secondly, both political parties are responsible for growing government too big, promising too much. It's time to restructure. Yes, we need to reduce spending, but we are going to need more revenues. About 2-1 spending reductions to revenue. We will get the revenues through comprehensive tax reform. That will end up closing loopholes, lowering marginal rates and generating more revenues.

(CROSSTALK)

SULLIVAN: The Republicans say no to that.

WALKER: Let's get to work.

COOPER: All right, David Walker.

WALKER: No, no, they will be there. They will be there.

COOPER: We will see.

SULLIVAN: I don't see any of them anywhere right now.

COOPER: David, thanks for being with us tonight.

Up next, we have seen a number of political stunts in Washington during the partial shutdown. Now a veterans group claims its weekend rally in the capital was, in its own words, hijacked for political gain. We will see what the panel has to say ahead. (COMMERCIAL BREAK) COOPER: Hey. Welcome back.

Political stunts are a way of life in Washington. We have seen more than a few of them during the partial government shutdown, of course.

But more breaking news tonight. A veterans group though tonight is crying foul. It organized a rally yesterday in Washington to protest the barricades that have been erected closing the World War II Memorial and other national monuments. But the rally turned political into an anti-Obama protests with conservatives like Texas Senator Ted Cruz and Sarah Palin addressing the crowd.

(BEGIN VIDEO CLIP)

SARAH PALIN (R), FORMER ALASKA GOVERNOR: This is a matter of shutdown priorities. Now our military, our vets, our --

(SHOUTING)

UNIDENTIFIED MALE: You're an idiot!

PALIN: Our vets have proven that they have not been timid. So we will not be timid in calling out any who would use our military, our vets as pawns in a political game.

(END VIDEO CLIP)

COOPER: Sarah Palin talking about using vets as political pawns.

Longtime Republican activist Larry Klayman issued this message to the crowd.

(BEGIN VIDEO CLIP)

LARRY KLAYMAN, RIGHTMARCH.COM: I call upon all of you to wage a second American, nonviolent revolution, to use civil disobedience and to demand that this president leave town, to get out, to put the Koran down, to get up off his knees and to figuratively come up with his hands out -- up.

(APPLAUSE)

(END VIDEO CLIP)

COOPER: He's from the group Freedom Watch.

Now, the group behind that whole rally essentially said that it was sort of hijacked by politicians, hijacked for political purposes. And they were upset about that. They wanted it to be non-political and bipartisan.

What did you make of this rally?

SULLIVAN: It was revealing about a certain faction who just simply cannot accept that President Obama was reelected and that he is a duly elected president and that the way to repeal and change laws is by winning elections and doing it the traditional way and the way to pass budgets is to negotiate.

Instead, they simply just want to nullify the last election, because they believe this president is illegitimate.

(CROSSTALK)

SULLIVAN: The other thing I would say, Rich, is this. I have yet today to hear a single Republican denounce that rally.

Until someone in this Republican Party is prepared to take on these fanatics and extremists, they will simply keep gaining in power and momentum. And I'm tired of waiting for someone responsible to take these people on.

GALEN: Well, you're going to be tired-er, because every time this happens on your side --

SULLIVAN: My side?

GALEN: Yes, on your side, they say -- when we say, well, why don't you denounce that, well, he speaks for himself. It's not my job.

(CROSSTALK)

SULLIVAN: -- former vice presidential candidate of the Republican Party at a rally accusing the president of bowing down to Allah and asking to come out --

(CROSSTALK)

GALEN: That is not right.

SULLIVAN: She's on the same platform with these people.

GALEN: Well, she didn't say it. But those weren't -- I'm not a fan of Sarah Palin. But don't put those words in her mouth.

(CROSSTALK)

SULLIVAN: Who has condemned this on the right?

GALEN: Would it help you, would it make you feel better if I do it?

SULLIVAN: Yes, I would, actually. It's a start.

(CROSSTALK)

GALEN: Yes, because you can bay at the moon, but the moon doesn't care.

SULLIVAN: No, they are baying at the moon. It's your job to tell them to cut it out.

(CROSSTALK)

GALEN: I'm talking about them. They are baying at the moon. (CROSSTALK)

SULLIVAN: -- tell these people to stop it.

GALEN: And this happens all the time on both sides of the aisle.

SULLIVAN: It does not happen on both sides all the time.

(CROSSTALK)

GALEN: The liberals said exactly -- not quite in such colorful words, but they didn't think that George W. Bush was legitimate either for eight years. And we heard the same --

(CROSSTALK)

HOSTIN: This has such disturbing, disturbing overtones, though.

You have got a Confederate flag. You have got people calling President Obama a Muslim. I have got to tell you, as a person of color, I was so disturbed by what I saw. And I'm even -- another part of it that just didn't make sense is, you have got Senator Cruz.

If he is sort of the shutdown champion, he's the one that has put this forward, how are you then going to be protesting the shutdown of memorials and things like that? I mean, is he outraged at himself? It just doesn't make sense. And it's so offensive.

(CROSSTALK)

LAZIO: You said, which I understand, you are looking for one establishment Republican to condemn it.

And I say, I'm looking for one person who is aghast at this to lead by example and to be more civil about the dialogue, because it's all of our responsibility. The things that the president has said and Harry Reid has said and the things that the Republicans and conservatives have said have not made agreement -- agreement easier. They have not made it better for the American public.

They've not helped us make progress. In fact, they've divided us further. Everyone needs to take a chill pill and calm down and just be a little bit more civil.

SULLIVAN: You don't think that Ted Cruz, the person who created the shutdown that brought this country and the world to this brink, is at that rally legitimatizing those ideas...

COOPER: Let's play what Ted Cruz actually said at this rally, and I want to bring in Gloria.

(BEGIN VIDEO CLIP)

SEN. TED CRUZ (R), TEXAS: This is the people's memorial. Let me ask a simple question. Why is the federal government spending money to erect barricades to keep veterans out of this memorial? Why did the federal government spend money to erect barricades to keep people out of Mount Vernon? Why did the federal government spend money to erect barricades to keep people out of Mount Rushmore? Look, our veterans should be above politics. Enough games.

(END VIDEO CLIP)

COOPER: Let's bring in CNN chief political analyst Gloria Borger.

Gloria, you know, it was very disturbing when they were in front of the White House and, again, this is just some individuals. But you know, the -- I feel bad for the police. The police come, trying to basically create a line in front of the gate of the White House, and they're being called brown shirts and scazi (ph). One person said, "It looks like, you know, something out of Kenya." What did you make of this?

BORGER: Well, here's the thing. I mean, Ted Cruz is there, saying our veterans should be above politics, and this whole thing turned into a political rally. And I think if you -- you know, there was one veterans group, as you point out, who said that they were sad about it.

Veterans went there because they didn't like barricades in front of veterans' memorials. Some of them may blame President Obama. Some of them may blame the Republicans. But for whatever reason, they wanted to send a message, which is, "Please don't close these memorials. They ought to be open all the time. They ought not to be barricaded."

And Ted Cruz, Sarah Palin, et cetera, turned this into what was a political rally. And you know, it's no surprise. I mean, look, Ted Cruz is running for president. He's appealing to a base of the Republican Party that Sarah Palin appealed to. And it's no coincidence they are together.

COOPER: At this point, does anyone at this table -- does anyone at this table think that -- that Cruz has a shot to get the Republican nomination? Has he shot himself in the foot here?

LAZIO: It's impossible to know at this point.

BORGER: I don't think he has. Anderson, I actually think that, with a certain segment of the Republican base, he's done himself some good. I mean, I'm not sure that Wall Street is going to be -- going to be giving Ted Cruz an awful lot of money. But with the Republican -- with the base of the party, a certain segment of the base that say may vote in Iowa, for instance, I think -- I think Ted Cruz has kind of lifted himself out of the -- out of the pack.

COOPER: Rich, how do you see this?

GALEN: Well, but remember, Gloria, what we went through last time where we had this kind of -- this sequencing of frontrunners who lasted a week or ten days and then they kind of fell down. And I think that's where Cruz is. We had the same thing with Marco Rubio. He was the darling the of conservatives for a while, and he's sort of stepped back a little bit. It's too early to know whether he's going to...

SULLIVAN: But he had the gall to propose something constructive about immigration reform and has therefore been banished.

And look, if they are purging one sane Republican after another, all the people you would go to, to talk to, people like Richard Lugar or Cornyn, all these people are being purged completely from this party in favor of this Palinite fringe, which has dominated control.

GALEN: Andrew is the analyst of the Republican Party.

SULLIVAN: Well, I've watched it for a very long time. I think it's frightening. I think it's a very dangerous organization that has lost sense of reason, that took this country to a place no one should ever be taken to for reasons that are absolutely...

COOPER: Andrew, where -- where are you politically? Where do you consider yourself?

SULLIVAN: I consider myself an independent. I have never been partisan of either party. I supported Reagan and Bush and then Clinton. And I George W. Bush and the Iraq war, and I've learned my lessons. And I've watched the Republican Party over the past 25 years become something I do not recognize as conservative in any sense of that word and I surely don't regard it as something determinant...

COOPER: Do you consider yourself conservative?

SULLIVAN: Yes. But not that kind of conservative. No conservative would try and destroy the world economy over something like a modest health-care reform that Mitt Romney put in practice.

These people are crazy, Anderson. They've lost all senses. I don't think there's anything conservative about threatening to bring the entire global economy down to its knees, because he felt like it. That's a radical. These have to be put back in their places. Rich and Rick, will you do that for us? Someone has to do that in the Republican Party and soon.

BORGER: Well, and if the Republican Party is going to be a presidential party and not just a congressional party, then they have to appeal to those independent voters. And in the most recent "Washington Post" poll today, tonight, 2/3 of independent voters are fed up with the Republican Party. So they have to figure that out, or the party is going to split right open.

COOPER: Rick, do you think this has lasting impact? I mean, these -- the elections are, what, 13 months away.

LAZIO: I would just say to Gloria's point, which is really right on, the national party has to listen and appeal and persuade other people outside of their hard base. And this is a huge challenge for Republicans right now.

And so I think there's a bit of a sorting out period right now where they're finding their way. But they're going to have to, when they talk about compassionate conservatism, or they talk about empowerment, they need to have a narrative. They need to have an agenda that backs it up, that connects with people.

So there's a lot of work to be done, and the party, in my view, cannot be defined by Ted Cruz and Sarah Palin and be a national party right now.

GALEN: Here's where it's going to come from, I think, to your point. I think it's going to come from the Republican governors. And we don't see them very often. Nobody has run around spending much time in Columbus, Ohio, checking on what John Kasich is doing or any of those guys. But that, I think, Gloria, is where this is going to come from. They're going to get their heads together and say, "Enough. You guys are killing us."

COOPER: We've got to take a quick break. Gloria, thanks for being with us.

Up next, an alleged al Qaeda operative arrives here in New York to face trial in U.S. federal criminal court, not in Guantanamo. He's accused of playing a role in the 1998 U.S. embassy bombings in Kenya and Tanzania. He was taken from Libya by U.S. forces. Our panel weighs in on the case next.

(COMMERCIAL BREAK)

COOPER: Welcome back. The U.S. has brought Abu Faraj al-Libbi, the alleged al Qaeda operative snatched off the streets of Libya in a raid by U.S. forces earlier this month, to New York, to here. He's expected to face a federal official tomorrow and then he'll face trial in U.S. federal court for allegedly playing a role in the 1998 bombings of the U.S. embassies in both Kenya and Tanzania. That's right, in federal court, not in Guantanamo.

Back with Andrew Sullivan, Rich Galen, Rick Lazio, Sunny Hostin. And joining us at the table, CNN senior legal analyst Jeffrey Toobin.

You think it's a good idea to have him tried in federal court?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: This is not a great day to talk about things the federal government does well. But one thing the federal government does very well is prosecute criminals, especially terrorists. There has been a tremendous record of success, not only in convicting people but also persuading the world that we have a legitimate judicial system, whether it's Zacharias Moussaoui or the shoe bomber, Richard Reed. These people have gotten fair trials, and they've been imprisoned.

There is no reason why al-Libbi couldn't be treated, and should be treated, exactly the same way. He will get what he deserves but in a way that does credit to our system and our country.

COOPER: Rich.

GALEN: Is there any act of war that would -- would convince you -- I'm not being ugly about this. I just don't understand this. Is there any act of war that would convince you that somebody should be tried in a military tribunal?

COOPER: You say an attack on a U.S. embassy is an act of war?

GALEN: Well, sure. Because it's an attack on U.S. property.

COOPER: So you're saying he should be tried in a military tribunal?

GALEN: That's what I -- I mean, I would come to that conclusion. If an embassy is U.S. soil, it's no different than attacking the Washington Monument.

COOPER: David, do you feel that, as well?

LAZIO: I do, but I have to tell you, I have confidence in the federal prosecutors, as well, and the system broadly.

What I do have a problem with is the fact that they seemed to rush al- Libbi through. When it comes over, when they snatched him, they hold him off shore in a U.S. Navy ship. How does that align with the Constitution, if you're trying somebody in civilian court? I don't know. They keep him for only a week. He's supposed to be a treasure trove of information, having lived two decades in the sort of epicenter of al Qaeda.

And that's what I worry about is I think he's rushed into the civilian system because he's got to be released into the criminal justice system. And I will say two anomalies in my mind are, No. 1, he's held on a U.S. Navy ship, potentially indefinitely. Right?

And No. 2 is, the administration seems awful comfortable sending drones in to kill operatives, kind of operatives, but very uncomfortable detaining them and questioning them for long periods of time.

COOPER: Sunny, what do you think?

HOSTIN: Well, I agree with Jeff. I mean, I think federal prosecutors have, I think, a 90 percent conviction rate in cases like this.

TOOBIN: I think in all cases, period; and terrorism, it's higher.

HOSTIN: It's higher, exactly. And so, you know, if they kept him for a week, you would think that the intelligence they need to get, they've received. And then what really is this about? It's about making sure that someone can do no harm and gather the intelligence that you need.

COOPER: Also, it's not clear -- my understanding is it's not clear how much current operational information he had and how much -- he certainly has been out of the business, living with his family in Libya for a while, how much of his information is more past about...

SULLIVAN: The medical thing here. He did have hepatitis -- he does -- apparently does have hepatitis c, and they did not have the ability to treat that on the ship. And that's partly why this happened. I think we have to look at the success of military tribunals, as well. Because I take your point, Rich. They're in all part of this country's legal system and when we're at war, they've been used. The trouble is the way Bush and Cheney set them up, as rigged kangaroo courts, in which people were tortured brutally for long periods of time, rendering their convictions almost impossible in any decent court, and both completely destroyed this country's reputation for really being a country for justice and also made them unable to prosecute. They've had almost no success in prosecutions of people in military tribunals.

TOOBIN: And remember, there are 100-plus people in Guantanamo now. No one knows what's going to happen to them. Because I agree: military tribunals, there is a place for them in the judicial system. It's a small place. I don't think we should do it very often, but we can't keep people forever with no trials. And that's what Guantanamo is now. That's the nightmare of Guantanamo. People held there now a decade, no charges. Criminal court, military tribunal.

GALEN: Is that -- is that better or worse than sticking a Hellfire missile into their head?

TOOBIN: Look, we are at war with al Qaeda around the world. Part of that war is using drones. I agree. There is a paradox here that we're all tied up in knots about how to try these people, but we have no problem, you know, just sending a -- sending a missile into their tent.

(CROSSTALK)

SULLIVAN: And the people being hit by drones, many of these people are innocent, and the government has acknowledged they are innocent of everything. Just hitting them in limbo.

LAZIO: I have no problem holding people indefinitely in detention when we know that they're affiliated with al Qaeda.

SULLIVAN: How do we know?

HOSTIN: How could you have no problem with that.

LAZIO: In this case, al-Libbi -- al-Libbi himself has said, "We're at war. We're at war with America." He himself defined that he was at war.

HOSTIN: You have no problem with someone being held in our military facility?

LAZIO: In a military context, that is exactly what -- to have a tribunal...

HOSTIN: It goes against what we are as Americans.

SULLIVAN: And torturing?

LAZIO: I'm not talking about torture. I'm not talking about torture. I'm talking about being held indefinitely and having information...

COOPER: A lot of these guys in Guantanamo, several of them have already been released, they were rounded up by Northern Alliance fighters and...

LAZIO: I know.

HOSTIN: Doesn't it shake your very core.

TOOBIN: And Rick, you're assuming the conclusion. You're assuming that they are all al Qaeda people. If they are, they should be tried as such; they should be prosecuted. But the problem is there's no evidence against these people. And that's what makes...

HOSTIN: And no process. And no process.

COOPER: And what about the argument that I think Mark Geragos made a couple of weeks ago on this show, that this allows somebody like al- Libbi a platform to spout their views; allows them a platform to...

TOOBIN: Yes, I just think that is -- first of all, it just doesn't happen. These trials have not turned into...

(CROSSTALK)

TOOBIN: They have -- you know, they talk in court, but they have no impact in the world. But to the extent they have an impact and their words do get out, so what? So what? It is worth it to have a system that is internationally respected as a place where people...

HOSTIN: And transparent. And transparent.

LAZIO: If it works so well, why do we still have people in Guantanamo? Why -- why did President Obama say he's going to close gunman Guantanamo and now five years later, you've still got...

GALEN: The Congress won't let him.

LAZIO: No. Because he has no...

COOPER: There is no evidence against some of these people, and yet, there's concern about just releasing them.

HOSTIN: Exactly.

TOOBIN: But Rick, there's a very simple answer. Andrew is right. Congress passed a law that said he can't pass -- close Guantanamo. So you can't fault him for not closing Guantanamo.

COOPER: We've got to -- we've got to take a break. Up next, what's your story? It's the panel's chance to share a story that maybe you and I missed. We'll be right back.

(COMMERCIAL BREAK)

COOPER: Welcome back. Time for "What's Your Story?" where we ask panelists to talk about a story that interested them today. Sunny, what's your story?

HOSTIN: Yes, I was reading about the -- this 6-year-old boy that drowned on the Carnival cruise ship. And I am a cruiser. I cruise every year with my family. I just came back from a cruise two weeks ago. And what has always struck me as bizarre is that there aren't life guards on the ships.

COOPER: But they have a policy of not having lifeguards. It's just parents are supposed to...

HOSTIN: Parents are supposed to be responsible for the children.

COOPER: And no child under 13 is supposed to swim.

HOSTIN: Right. So I mean, there's -- there's that tension between, you know, personal responsibility for your children and also corporate responsibility.

COOPER: A 6-year-old -- a 6-year-old died?

HOSTIN: Yes. Shouldn't Carnival be responsible for making sure that it's safe for families to enjoy and just -- I'm really struck by that.

COOPER: Andrew, what's your story.

SULLIVAN: I'm struck by, I think, a very good essay by a man called Matthew Scully in "National Review," very conservative magazine. And very conservative person: he worked for Sarah Palin.

He connected the pro-life movement with the movement to protect the welfare of animals. In other words, he made an argument to connect protecting the vulnerable in our society that extends also to those animals that we produce and torture and kill in these disgusting factory farms that treat them really as sub-animal in a way. And with maximum cruelty. And I think that that is a sign of intellectual life on the right. And I support it.

I do think that these factory farms, one day people will look back at us and wonder why we allowed concentration camps for nonhumans in our country when we can produce food and do it in more humane ways. It won't be as cheap, but what we're doing to pigs right now in this country, when you think they have the same intelligence as dogs, is nothing short of horrifying.

COOPER: Rich, what's your story?

GALEN: I've got something that's even worse: the Washington Redskins. I think the president stuck his nose into whether or not the Redskins should change their name. Bob Costas told all 10 people that cared what Bob Costas says about political things that the president was right.

I think that what's going to happen is Dan Snyder, the owner, is going to say, "You know what? It's time to change the name of the Redskins," and he's going to make $10 billion in new beer mugs and hats and coats and everything else. And I think within five years there will be a different name.

COOPER: All right. Rick.

LAZIO: This is a -- this is a nonstory. This is something that should be a story. Almost every day that goes by in the media you hear about education, jobs and health care. You never hear about affordable housing.

But what -- what mother is prepared to start her first job when she slept in a van the night before? What child is ready to go to school if his bed was under a bridge the night before? What senior is prepared to go to clinic to get their medication if they slept on a park bench? It's a human tragedy.

In New York City, the largest and wealthiest city in America, tonight there will be more homeless kids than there will be fans that fill Madison Square Garden. And it's a tragedy. And it can be fixed.

COOPER: And it doesn't make headlines.

LAZIO: And it doesn't make headlines. Mortgage interest reduction is one federal policy. Just changing that alone could free up a ton of money. And it could be equitable for homeowners. We could reduce the deficit, and we can take care of those in need.

COOPER: Got to take a quick break. Our conversation doesn't end when we go to commercial. We'll have more on the other side. We'll be right back.

(COMMERCIAL BREAK)

COOPER: Welcome back. So a lot of weird things happen during commercial breaks on this program. When you get a group of really smart people at the table talking, sometimes the conversation, it doesn't end when we go to commercials. Sometimes it gets very heated. Sometimes it gets, really, not ready for primetime. But we want to hear an exchange from earlier tonight, overheard in the break about Harry Reid and Vice President Joe Biden.

(BEGIN VIDEO CLIP)

GALEN: The real problem is that the Democrats, Harry Reid is -- There's no reason to believe that Harry Reid will screw this up, once he feels he's got the -- the power back in his hands and...

LAZIO: What's interesting is the president has said -- and he is found in negotiating these things ever.

GALEN: Well, I have been saying that Biden disappeared and now we find out -- now we find out Reid won't let him in the building.

LAZIO: That's right. I think he cut a bad deal the first two times, so they don't let him in the room.

(END VIDEO CLIP) COOPER: A week or so, Andrew was talking about something during the commercials which I still -- I cannot get out of my mind, but I can't repeat it on TV.

I want to thank our panel. That does it for this edition of AC 360 LATER. Thanks for watching.

"SHUTDOWN SHOWDOWN WITH JAKE TAPPER" starts right now.