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Atlantic City Rebuilding After Sandy; Obama Under Fire for Obamacare Website, Spying on World Leaders; Clapper, Alexander Testify about NSA Spying; Walmart CEO Defends Against Pay Criticism

Aired October 29, 2013 - 13:30   ET

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

(COMMERCIAL BREAK)

WOLF BLITZER, CNN ANCHOR: Mike Rogers is the chairman of the House Intelligence Committee. He's just beginning a hearing under way right now, just starting it. James Clapper, the director of National Intelligence, and General Keith Alexander, the head of the National Security Agency, the NSA, will be testifying answering questions, presumably about the NSA surveillance program including reports over the past few days that the U.S. has been spying on allied leaders, including monitoring the personal cell phone of the German Chancellor Angela Merkel. We'll monitor what's going on, bring you the highlights. Stand by for that. Right now, he's just opening up the hearing.

Meanwhile, President Obama is being hammered on many fronts right now. How much did he know about the surveillance of friendly allies? Why didn't he know about the problems that were going to plague the health care website?

I want you to listen to part of the new article from CNN's chief political analyst, Gloria Borger, that she just wrote and posted on CNN.com. I'll read you a line from it: "The ultimate irony may be this -- a president who extols the virtues of government has now been sucked into the big government vortex experiencing up close and personal, as they say, what it feels like to lose control to the bureaucrats. The ones who are afraid to deliver bad news, not to mention those who don't deliver the news at all, and the surveillance chiefs who didn't initially volunteer that they're spying on the private phone lines of America's best friends."

Gloria is joining us right now.

Another excellent column on CNN.com

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Thank you.

BLITZER: How big of a problem is this for the president?

BORGER: I think it's a very big problem. It looks like he's not in control of his government. We all know that this is a very big government, that the bureaucrats creep in and take charge. The president clearly understands that there's always incentive not to the deliver the bad news to him, to keep it from the Oval Office. And -- but at a certain point, as he is fond of saying over and over again, the buck stops here.

So whether or not he should have known or didn't know about the Angela Merkel phone calls, it's embarrassing for him. He should have been on top of the website. Clearly, they weren't on top of the website over at the White House. That is bad for the president.

So, yes, he may be angry about it, but he has to kind of look at his management and ask the questions about, if I didn't know about this, why didn't I know about it? Because I should have known about it. Is it my fault or is it the way we're running the shop over here.

BLITZER: The second term of his administration. He wants to take charge of his government. What does he need to do?

BORGER: Well --

(LAUGHTER)

-- you know, he needs to figure out -- I mean, you know, they're going to have to try and figure out what went wrong.

It was interesting, I was talking to a former senior administration official, who said to me, the sad part about all of this is when you try and unspool the thread here and figure out what went wrong, say with the website, that there may not be enough time left in this administration to actually figure out what went wrong and why. So have you no choice in this kind of situation but to kind of cut your losses and move onto the next thing, because he's got a huge agenda that he wants to deal with. And all of this, all of this is taking him off message. Had he moved from the government shutdown, in which, one would say, he won politically -- if he could have moved from the government shutdown on to healthy Obamacare, he'd be in a lot better shape right now.

BLITZER: And they're not handling it all that well.

BORGER: Right.

BLITZER: The postmortem, the damage control or whatever. And in all the years I've covered presidents, and a long time, people make mistakes. Everybody understands people make mistakes.

BORGER: Right. Right.

BLITZER: When you try to spin and explain and come up with weird explanations, that usually doesn't work. You have to acknowledge, yes, I made a mistake. I apologize. Here's what we're doing to learn from the mistakes and here's how we move forward.

BORGER: Right. For the first time we heard an apology this morning from somebody who works for the administration, who administers the --

BLITZER: During the House hearing.

BORGER: -- health care website during her testimony on the Hill, apologizing to the American public for that. I think a little bit of contrition always works -- Wolf?

BLITZER: People understand that.

BORGER: And I think that these are complicated matters. Everybody knew, going into in this, that when you try and do something as large as the Affordable Care Act, there's always going to be revisions. There is an always going to be tweaking. There's always going to be, you know, upgrading of it. Fine. But because of the government shutdown, which wanted to kill Obamacare, now that they've saved it, I think they're in kind of a political situation where they don't want to give one inch on anything because it would look like then that they were caving in a way that they didn't want to cave just weeks ago. So it's a difficult political situation. And they're not making it any better.

BLITZER: You made the mistake, acknowledge it.

BORGER: Yeah, they're not making --

(CROSSTALK)

BLITZER: All right. Gloria, CNN.com, I read your column, but I want all of our viewers to read it, as well.

BORGER: Thank you. Thank you, Wolf.

BLITZER: Thank you very, very much.

Walmart says it's promoting thousands of workers ahead of the busy holiday season. We're going to hear from the CEO and ask him how criticism over how the company pays his workers is working out.

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BLITZER: The director of National Intelligence, James Clapper, testifying now before the House Intelligence Committee on what he calls the severe damage to the United States as a result of the disclosures of the surveillance, the NSA surveillance program by Edward Snowden. Let's listen in.

JAMES CLAPPER, DIRECTOR, NATIONAL INTELLIGENCE: But the disclosures, for better or for worse, have lowered the threshold for discussing these matters in public. So to the degree that we can discuss them, we will. But this public discussion should be based on an accurate understanding of the intelligence community, who we are, what we do, and how we're overseen.

The last few months, the manner in which our activities have been characterized has often been incomplete, inaccurate or misleading or some combination thereof.

I believe most Americans realize the intelligence community exists to collect the vital intelligence that helps protect our nation from foreign threats. We focus on uncovering the secret plans and intensions of our adversaries as we've been charged to do. But what we do not do is spy unlawfully on Americans or, for that matter, spy indiscriminately on the citizens of any country. We only spy for valid foreign intelligence purposes as authorized by law with multiple layers of oversight to insure we don't abuse our authorities. Unfortunately, this reality has sometimes been obscured in the current debate. And for some, this has led to erosion of trust in the intelligence community. We understand the concerns on the part of the public.

I'm a Vietnam veteran and I remember as congressional investigations of the 1970s later disclosed -- and I was in the intelligence community then -- that some intelligence programs were carried out for domestic political purposes without proper legal authorization or oversight. But having lived through that as a part of the intelligence community, I can now assure the American people that the intelligence community of today is not like that. We operate within a robust framework of stringent rules and oversight involving all three branches of the government.

Another useful historical perspective, I think, is during the Cold War, the free world and the Soviet bloc had mutually exclusive telecommunication systems, which made foreign collection a lot easier to distinguish. Now world telecommunications are unified, intertwined with hundreds of millions of innocent people conducting billions of innocent transactions are a much smaller number of adversaries trying to do harm on the very same network. So our challenge is to distinguish very precisely between these twos groups of communications. If we had an alarm bell that went off whenever one terrorist communicated with another, our jobs would be easier. But that capability just doesn't exist in the world of technology at least today.

Over the past months, I've declassified and publicly released a serious of documents related to both Section 215 of the Patriot Act and Section 702 of the Foreign Intelligence Surveillance Act, or FISA. We're doing that to facilitate informed public debate about the important intelligence programs that operate under these authorities. We felt, in light of the unauthorized disclosures, the public interest in these documents far outweigh is the additional damage to national security. These documents let our citizens see the seriousness, the thoroughness, and the rigor with which the FISA court exercises its responsibilities. They also reflect the intelligence community's, particularly NSA's, commitment to uncovering reporting and correcting any compliance matters that occur.

However, even in these documents, we've had to redact certain information to protect sensitive sources and methods such as particular targets of surveillance but we will continue to declassify more documents. That's what the American people want. It's what the president has asked to us do. And I personally believe it's the only way we can reassure our citizens that their intelligence community is using its tools and authorities appropriately.

The rules and oversight that govern us insure we do what the American people want us to do, which is protect our nation's security and our people's liberties. So I'll repeat. We do not spy on anyone except for valid foreign intelligence purposes, and we only work within the law. Now, to be sure, on occasion, we've made mistakes, some quite significant. But these are usually caused by human error or technical problems. Whenever we found mistakes, we reported, addressed and corrected them.

The National Security Agency, specifically as part of the intelligence community broadly, is an honorable institution. The men and women who do this sense of work are honorable people dedicated to conducting their mission lawfully and are appalled by any wrongdoing. They, too, are citizens of this nation who care just as much about privacy and constitutional rights as the rest of us. They should be commended for their crucial and important work in protecting the people of the country, which has been made more difficult by this torrent of unauthorized damaging disclosures.

That all said, we, in the I.C., stand ready to work in partnership with you to adjust foreign surveillance authorities to further protect our privacy and civil liberties.

And I think there's some principles we already agree on. First, we must always protect our sources, methods, targets, partners and liaison relationships. We must do a better job in helping the American people understand what we do, why we do it, and most importantly, the rigorous oversight that helps insure we do it correctly. Third, we must take every opportunity to demonstrate our commitment to respecting the civil liberties and privacy of every American. But we also have to remain mindful of the potential negative long-term impact of overcorrecting the authorizations granted to the intelligence community.

As Americans, we face an unending array of threats to our way of life more than I've seen in my 50 years of intelligence. We need to sustain our ability to detect these threats. We certainly welcome a balanced discussion about national security and civil liberties. It's not an either/or situation. We need to continue to protect both.

With that, let me turn to General Alexander.

GEN. KEITH ALEXANDER, DIRECTOR, NATIONAL SECURITY ADMINISTRATION: Chairman Rogers, Ranking Member Ruppersberger, distinguished members of the committee, thank you for the opportunity to provide opening comments today.

I have a prepared statement, but many of you know I'm not going to be able to read it as well as I can just tell you what's on my mind. So I'm going to talk from the heart so that you know what we're talking about here from an NSA perspective as what I think you and the nation needs to hear.

First and foremost, I've had eight-plus years at NSA. They are among the finest people in this country. What they do every day for this nation is unheralded. We don't get a lot of fanfare out of it, but it's absolutely superb.

Saturday, I had the opportunity to work, again, which we have done every weekend since I've been there, to support our troops in Afghanistan who are under threat of an attack. We do that all the time. Our people were in there supporting our troops, supporting the military operations. And in eight-plus years, not one person has ever come up to me and said, I have to work tonight or the weekend. They always come in, they protect our troops, and they protect this country. They've taken an oath to defend the nation and to protect our civil liberties and privacy. And they do that better than anyone I have ever seen. It is a privilege and honor to work next to them every day.

What I want to tell you about is how did we get here, talk about the business record FISA, and I want to give you insights to what we see going on worldwide. I want to talk about the compliance and how we protect these programs and where we need to go in the future.

And then, Chairman, we'll address some of the questions I know you want to ask. So I'll drop that until your question portion.

First, how did we get here? How did we end up here? 9/11. 2,996 people were killed in 9/11. We all distinctly remember that. What I remember the most was those firemen running up the stairs to save people, to themselves lose their lives. And we had this great picture that was created afterward of a fireman handing a flag off to the military, and I say the intelligence community, and the military and intelligence community saying, we've got it from here.

BLITZER: We're going to continue to monitor this hearing. General Keith Alexander, the director of the NSA, the National Security Agency now testifying. Earlier, you heard James Clapper strongly support the NSA surveillance programs.

We'll take a quick break. More special coverage right after this.

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BLITZER: Take a quick look at the markets right now. There you see the Dow Jones Industrial is up almost 90 points. We got some data this morning that showed housing prices are on the rise. That helped push stocks higher, at least for now. Wall Street waiting until we get a statement from the Federal Reserve. That will presumably move the markets as well.

Walmart today said it's planning to promote thousands of workers ahead of the big holiday rush.

Christine Romans has the story and a conversation with the Walmart's U.S. CEO.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Wolf, a company criticized for low pay, trying to change the story line. Walmart announcing at least 25,000 new promotions, higher pay, and more responsibility, bringing the year's promotions to 160,000 sales associates.

(BEGIN VIDEOTAPE)

BILL SIMON, U.S. CEO, WALMART: We hear from them often. They ask us to stand up for them because they are good jobs. They are a chance for them to start and a chance for them to progress.

ROMANS: A rare interview with the Walmart CEO Bill Simon, who employs some 1.4 million people, the largest employer in the country.

Walmart pays, on average, $12.83 an hour. That's slightly higher than the retail industry standard and above the federal minimum wage of $7.25. But Walmart's critics say it is far below a livable wage. Just last week, Congressman Jan Schakowsky called Walmart executives, quote, "welfare king," and told us Walmart benefits from public programs that support, quote, "their poverty wage employees." It's a criticism echoed by some union groups and other Democrats.

The Walmart CEO calls it unfair and misinformed.

SIMON: A pro-union point of view and with a specific and a particular agenda. We're no different than any other retailer in America. We provide opportunities for people to join the company and to grow. The level of subsidy that exists is an issue that the government decides.

ROMANS: A familiar Walmart talking point, 75 percent of store managers started as hourly associates.

SIMON: The issue isn't where you start. It's where you go to once you've started.

ROMANS: The mobility.

SIMON: The mobility. So raising the minimum wage will change the starting wage, but it won't adjust where people can go to in the career opportunities that exist in the country today.

ROMANS: Livable wage debate aside, Walmart's CEO is concerned about the head winds to consumers. Among them, Washington dysfunction.

SIMON: Certainty, from a customer perspective, will generate confidence, and certainty, from a business perspective, will generate investment. In both cases, uncertainty generates a lot of shoulder shrugging and waiting.

(END VIDEOTAPE)

ROMANS: With more than 4700 stores that millions of customers visit every single day, that's a lot of buying power -- Wolf?

BLITZER: Christine Romans, thanks very much.

I'll be back later today, 5:00 p.m. eastern, in "The Situation Room." We've got lots to report. Also, special guests including the House Intelligence Committee chair, Mike Rogers. He'll join us live. Senator Lindsey Graham of South Carolina will join us live. And Representative Fred Upton, the chairman of the House Energy and Commerce Committee, which will hold special hearings tomorrow on Obamacare, the rollout of the website. Kathleen Sebelius, the secretary of Health and Human Services, will be testifying before that panel. We'll get a preview from Fred Upton.

At 6:00 p.m., in "The Situation Room," we'll have special coverage, a special report, "Obamacare Under Fire." What's going on?

Thanks very much for watching.

NEWSROOM with Brooke Baldwin continues right now.