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THE LEAD WITH JAKE TAPPER

Interview With Oklahoma Senator Tom Coburn; Interview With Will Ferrell; NSA Surveillance Changes?; Outrage Over Indian Diplomat's Arrest

Aired December 18, 2013 - 16:00   ET

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


JAKE TAPPER, CNN ANCHOR: Stop letting the NSA collect Americans' phone records, a review panel tells the president. But is he listening?

I'm Jake Tapper. This is THE LEAD.

The national lead, breaking news this hour. We will learn what sweeping reforms the White House is being advised to make after leaks forced the president to commission a review of the super secret National Security Agency. It doesn't mean he will follow the recommendations, though.

The world lead. Sorry, Mr. Putin, our president can't make it to the Olympics in Russia. He is going to send instead some of those openly gay athletes you like so much in his place. We will dive into this issue with our guest, out and proud four-time gold medalist Greg Louganis.

And the pop culture lead.

(BEGIN VIDEO CLIP)

TAPPER: Is there something about my profession that is inherently amusing?

WILL FERRELL, ACTOR: It's a profession that's based on being serious, having good hair. Your hair looks great.

TAPPER: Thank you. I appreciate it.

(END VIDEO CLIP)

TAPPER: I lay down the ground rules for my interview with "Anchorman" Will Ferrell. No touching of the hair or the face, and that's it. The funnyman joins us as "Anchorman 2" opens in theaters everywhere today.

Good afternoon, everyone. Welcome to THE LEAD. I'm Jake Tapper.

We will begin with some breaking news.

In our national lead, 46 recommendations to reform the NSA's massive web of surveillance revealed right this moment by the White House following what it calls an outside review. Chief among the recommendations, a call to end the mass storage of Americans' phone records by the government. I don't mean getting rid of them. The panel wants to see private third parties handle storage instead, or the phone companies.

The administration, ever fond of its secrets, was planning to keep a lid on the panel's recommendations until January, but it's now releasing them to stop what it calls inaccurate and incomplete reports about this review, on the same day that President Obama met with the panel that compiled it.

The five members of the panel, most of them with notable backgrounds in national security, but one privacy expert, they were all handpicked by the White House.

Let's go right to our chief national security correspondent, Jim Sciutto.

Jim, there are 46 recommendations, as we mentioned. Walk us through the major ones.

Jim, apparently, we're having some technical problems.

Jim Sciutto, walk us through the major recommendations.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Well, Jake, the headline point from this report is accountability, the panel members saying they want better accountability by the NSA to the public, to Congress, to the courts and even to the White House.

But, to be clear, as you say, they are not ending the most -- well, Jake, if you can hear me now, the headline from these panel recommendations are -- is the word accountability, accountability to Congress, to the public, to the courts and to the White House by the NSA, but to be clear, they are not ending the most controversial program, which is the so-called Section 215, which gathers all this phone metadata on Americans' phone numbers and phone calls, that kind of thing.

That's going to stay in place. One of the panel members saying to me -- quote -- "that we're not in any way recommending disarming of the intelligence community, because," he went on to say, "this terror threat is still real."

But let's go through some of the ways they are aiming to make the NSA more accountable here. The first one is, they recommend the passage of new laws, of legislation that would, as you referenced, move this phone metadata from the NSA to the private sector, back to the phone companies, so the NSA isn't just sort of holding it there and so they can go to it whenever they want to.

They also recommend more court oversight of searches of that data, so that when the NSA wants to search it for a particular phone number, they got to get more court backing for it. A few other things. They are recommending that the next NSA director, who is currently an admiral, traditionally a military official, be a civilian to give the impression to the public a better public oversight of this organization.

They're also recommending a special assistant to the president for privacy, and they also recommend, and this is interesting, that the Cyber Command, the military Cyber Command, be split from the NSA, but this is something that the White House has already publicly rejected.

Now, it's interesting as well that they are not just talking about protections for American citizens. They are talking about protection for foreign citizens as well, including making it clear that when the NSA accesses foreign data overseas, that it's purely for national security interests. They are not going to go out there and trying to get secrets, for instance, to help American companies or just because they can, but because there's a national security interest.

But also you remember this issue that we have been covering, Jake, a lot, foreign leaders, the NSA spying on foreign leaders such as Angela Merkel, her phone calls, made the Germans very angry. That will now have to get senior level approval, approval at highest level in the White House by the president if the NSA is going to be spying on those kinds of communications.

You know, earlier today, I spoke with a senior administration official about this, and he told me this. He said, listen, they know they have a trust gap, not just with the American public, but with the foreign public, and they are trying to address that here with hard measures. The White House is taking this to heart, and what I was told is that the president is going to review these. He's going to accept some of these recommendations.

Then in January, he's going to speak before the American nation and the American people about these new constraints on the NSA, so that he's fully transparent with the American public.

TAPPER: All right. Jim Sciutto, thank you so much. We will have more coverage of the National Security Agency recommendations for reviewing the NSA in the coming days, of course, with response from critics as well.

Now the money lead. It will likely be the last major decision of his 10 use, and, boy, was it a doozy. Today, Fed Chair Ben Bernanke announced that the Fed will start scaling back some of the billions being pumped into the economy each month as part of the massive stimulus plan.

Starting in January the Federal Reserve will buy $75 billion in bonds every month. That's $10 billion less than the norm, and it likely signals the beginning of what Wall Street calls tapering, kind of a baby taper here. Basically, the Fed is slowly but surely cutting the cord to get the economy rolling on its own.

Stocks took a dramatic jump after the news, with the Dow shooting up nearly 300 points, closing on a record high. That might mean some see Bernanke's decision as a sign that the economy is getting stronger, or maybe the reaction was positive simply because investors saw it coming. By the way, the decision means Bernanke can potentially leave his post on somewhat of a high note after what's undoubtedly been an rocky ride.

Joining us now live from Chicago is Diane Swonk. She's the chief economist and senior managing director for Mesirow Financial.

Diane, thanks for being here.

Let's start with today's decision. Bernanke says even with the taper, even with stopping some of this money, only $10 billion a month, but stopping it, interest rates will stay low, he says. Do you think this is the right call?

DIANE SWONK, SENIOR MANAGING DIRECTOR AND CHIEF ECONOMIST, MESIROW FINANCIAL HOLDINGS, INC.: It is the right call.

I think what we're seeing, is you know, the Fed -- there's two things that are important. First of all, Treasury issuances and mortgage- backed security issuances have actually fallen since the Fed began this program a year ago, the new issuance. So even though they are tapering, they are still buying a larger proportion of those markets than they were. So it's not really easing up, which is what Ben Bernanke tried to say is, we're not going away here.

And, in fact, he also did that sort of pivot that we knew he was going to do and say, we're going to leave that punchbowl out there longer than you ever thought possible, although some of you get tipsy, as long as it means this party gets going and more people on the dance floor. That promise to sort of leave the punchbowl out longer than they would historically, longer than people thought possible, that helped to dampen the effect of tapering, along with this concept that it really is small.

Like you said, it's a toe in the water. This isn't -- the Fed didn't dive into the waters of exiting stimulus. In fact, the intent is clear. Ben Bernanke is leaving with a little hope for the future of 2014 being better. The elephant in the room of fiscal drag, higher taxes, cuts in government spending, the 21-month budget deal, sort of taking some of that off the table, and there's hope that we can get a better economy with the Fed playing the tailwind, instead of just fighting headwinds.

I sort of Ben, after charging a bunch of windmills like Don Quixote, finally getting the tailwind and riding the horse into the sunset.

TAPPER: Diane, Ben Bernanke obviously has many, many critics, a lot of conservatives especially, but some consider him a hero for in their view saving the country from another depression in addition to the stimulus plan. What do you think he's done right?

SWONK: I think one of the best things he did is he did avert another Great Depression. It's sort of serendipity that this man was -- predicated -- his career was all predicated on understanding the Great Depression, understanding financial crisis and what to do different. He sort of echoed some of that sentiment today. He said, listen, I feel a little bit -- in his own way, and sort of implicitly, he said he felt a little bit vindicated, because other central banks around the world are now adopting the policies that he told them to do, Japan to do ages ago. They are finally doing it now with some success, and that other banks are doing this suggests that maybe he got it right.

Also, we did avert another Great Depression. This economy is not the most encouraging economy, but we averted a Great Depression with the worst financial crisis in history, a worse financial crisis than we had during the Great Depression. I think he did do it right in terms of averting and stabilizing the situation when frankly the entire foundations of our economy were crippling back in 2008.

TAPPER: All right, a big day on Wall Street. Diane Swonk, thank you so much.

Already breaking in money news, a decision with millions at stake that could sack one of the most aggravating rule sports fans are forced to deal with. The FCC, the Federal Communications Commission, today voted on a proposal to get rid of sports blackout rules. Right now, the league will black out games in local market if the home team does not sell the vast majority of empty seats in their stadiums.

The FCC will look at whether these rules are still fair, given how high ticket prices and the economy have made it difficult for many fans to go to games, potentially a big decision.

Coming up next on THE LEAD: $125,000 for a super hero documentary? You will never believe what the Congress is spending your taxpayer money on as the Senate prepares to finally pass a budget.

And we'd never be able to say their name on TV if Russia hadn't thrown them in jail. Could the ladies of Pussy Riot now get an early release? That's ahead.

(COMMERCIAL BREAK)

TAPPER: Welcome back to THE LEAD.

The national lead now, a 3-D pizza printer for astronauts, $125,000. A rocking trip to Rio for indy music executives, $285,000. Tax exemptions for Nevada brothels, $17.5 million. Congress sticking the taxpayer with the tab for all this stuff, well, some might say not so priceless.

According to Senator Tom Coburn, Republican of Oklahoma, those are the type of bizarre expenses your government is funding on your dime. It's all part of a Coburn's annual "Wastebook," outlining 100 examples of what he calls egregious federal spending out just in time for the bipartisan budget vote in the Senate today, which could come down as soon as this hour.

Senator Tom Coburn and ranking member of the Homeland Security and Government Affairs Committee and Oklahoma Republican joins me now.

Senator, thanks for being with us.

The grand total for 2013 here was about $28 billion. Before we get into it, which example do you find personally most outrageous?

SEN. TOM COBURN (R), OKLAHOMA: Oh, I think buying airplanes that you're not going to use and shipping them to the desert, $677 million of them. That's pretty egregious.

TAPPER: Who did that?

COBURN: The U.S. Air Force.

TAPPER: And what's their excuse for it. What do they say?

COBURN: Well, part of it is the Congress forced them to do it. Part of it is because they are buying an airplane that they didn't really want, and it was a foreign-made airplane, and actually that may not be right, but they were forced to buy them, and instead of using those, they bought C-130s to replace.

TAPPER: Which part might not be right, though, the fact that they were foreign made?

COBURN: Yes, that might not be right. I can't remember. I think they are, but I can't remember.

TAPPER: OK. So, bigger picture here, who do you blame the most for this? Is it the federal agencies, the -- you know, whether it's the Air Force or the Department of Energy, whoever?

COBURN: No.

TAPPER: Or is it Congress?

COBURN: No, it's Congress. Congress doesn't want to do the hard work of overseeing these agencies, of doing the hearings that are required to get the information, to holding the agencies accountable so that they are fearful that if they continue to make really stupid decisions, that there might be a consequence.

You know, accountability is key in any type of management structure, and when the members of Congress won't exercise that constitutional duty of holding the agencies accountable, you're going to have this continuing. It hasn't declined any. I mean, we've been doing this I think the fourth or fifth year, and, you know, we continue to see the same amount of stupid stuff.

I mean, there's even one in there where the National Science Foundation did a study at Yale to see how stupid Tea Party voters were and what they found out is they are smarter than the average voter by far. It's totally untoward expectation because the reason that they wanted the grant was to undermine people who are constitutional conservatives.

I mean, you know, it's that kind of stuff where we see people doing political things and things that -- even if you disagree with everything in my book, you would agree that with a $740 billion deficit this last year, probably we shouldn't have spent any of this money on any of these things.

TAPPER: Have you been -- have you gotten any blowback from groups that you're criticizing --

COBURN: No, you know --

TAPPER: -- including the Pentagon?

(CROSSTALK)

COBURN: No, we --

TAPPER: Not at all.

COBURN: Well, we'll get some of the one of the things we do, Jake, is we let them know it's coming. Be prepared because here's what we think. So, we tell them ahead of time. We're going to put you in our waste book, and the fact that we don't hear back from them, you don't hear much from them is they're pretty red-faced over the fact that they are spending the money and most of their department heads and secretaries had no idea that they spent that money, which shows you the incompetency of the management of the federal government.

TAPPER: Senator, you're going to vote no on the budget compromise today. How do you respond to Republicans like Congressman Paul Ryan who put this compromise together with Democratic Senator Patty Murray who says, look, this doesn't raise taxes, it's going to reduce the deficit, this is -- this is a winner? Why are you voting against it?

COBURN: First of all, it's not going to reduce the deficit. Number two, it does raise taxes.

If every time I get on an airline and you're raising the fee I'm getting on there, you can call it a fee, but you're sucking money out of U.S. economy to the tune of $28 billion. The other thing is the age-old adage, just like we're showing with this bill, two years ago, we promised the American people we'd live at the Budget Control Act numbers. We promised them we would.

We're now two years later, and in this bill, we're saying we're going to make up for all this in the last 10 years of the next 10-year budget window.

Well, how many people would really believe that? You know, we're dishonest with the American public. Number two is there's so much waste. There's a quarter of a trillion waste just in the discretionary program in the federal government, as outlined by the GAO. That's not their number, that's mine.

The fact is, if Congress hadn't acted, there wasn't one of the things in this waste book that has even been thought about being put into a budget deal. When we have that kind of waste and people making decisions that say we're not going to look at where the real waste, is we're going to take injured veterans and limit their pensions -- yes, it doesn't fit. And the American people shouldn't believe us.

Does this solve a political problem for the politicians? Yes. There's not going to be a blowup for the next year and a half over budget numbers.

So, we've solved the problem for the politicians, but what we've done is damaged the future of the country by continuing to be dishonest about the numbers and the way we go about solving the problems.

TAPPER: All right. Senator Tom Coburn, Republican of Oklahoma. Thank you so much for coming on the show.

COBURN: You're welcome. Good to see you, Jake.

TAPPER: We appreciate it.

COBURN: All right.

TAPPER: Coming up on THE LEAD: an Indian diplomat arrested and strip- searched. Now, that country's prime minister is calling her treatment deplorable. Did U.S. officials violate her diplomatic immunity?

And the pop culture lead, stay right where you are, San Diego. You do not change the channel when Ron Burgundy comes on the tube. My sit- down with Will Ferrell still to come.

(COMMERCIAL BREAK)

TAPPER: Welcome back to THE LEAD.

In world news, the arrest of one woman in New York has an entire country seemingly ticked off with the U.S. The Indian diplomat was taken into custody and strip-searched because the feds say she submitted false document to get a work visa for her housekeeper and then paid the woman less than the minimum wage.

Devyani Khobragade is accused of visa fraud, but the Indian government says she has diplomatic immunity, so they say she never should have been arrested in the first place. There's also outrage over how the arrest was handled, that's because in India, a public arrest and strip search of someone, of Khobragade's pedigree, is virtually unheard of.

Dozens of protesters gathered outside the U.S. embassy in India to show solidarity with Khobragade. And Indian officials retaliated by removing the security barriers outside the U.S. embassy in New Delhi. That's nice.

The State Department says Secretary of State John Kerry called a top Indian official expressing his regret, but the U.S. Marshals who arrested her say they followed standard policy.

As THE LEAD has reported before, the U.S. State Department has been taking more steps to more aggressively police the practice of some foreign diplomats, having essentially indentured servants on U.S. soil. The punk protest band Pussy Riot could be among thousands of Russian prisoners getting an unexpected get-out-of-jail-free card. Today, Russian lawmakers back the sweeping amnesty law, according to a state- run news agency. The law which does not require President Vladimir Putin's signature will likely mean freedom for two jailed members of the band. They were arrested as you might recall last year for hooliganism for a performance that included harsh criticism of Putin.

Russian lawmakers say the new law coincides with the anniversary of the country's post-communist constitution. But others suspect it has much more to do with curbing criticism of human rights violations leading up to the 2014 Olympics.

Let's check in on the political panel there in the green room.

Kristen Soltis Anderson, the latest push for Obamacare is coming from a guy in plaid pajamas. Check out this tweet from the Barack Obama Twitter account. It says, "How do you plan to spend the cold days of December? Wear pajamas, drink hot chocolate and talk about getting health insurance." Well, to that, Governor Chris Christie, Republican of New Jersey, says, "Get out of your pajamas, put on an apron, and get volunteering."

Kristen, anything wrong with the nice pair of footy jams?

KRISTEN SOLTIS ANDERSON, REPUBLICAN POLLSTER: Oh my gosh. Yes, it's not that they're plaid, it's that it's a onesie. That's the real problem here. I think Governor Christie more accurately captures the holiday spirit.

TAPPER: No onesies, got it.

More politics when THE LEAD continues.

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