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Investigation into Water Contamination; Senate Looks into Massive Data Breach; Dow Rebounds After Heavy Losses; Christie Taking New Questions; Possible Job Loss Due to Obamacare; Christie on Scandal; Clinton Leads Christie; Obama Approval Rating

Aired February 4, 2014 - 13:00   ET

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


WOLF BLITZER, CNN ANCHOR: Right now, major news on that chemical spill in a West Virginia river that made tap water undrinkable for hundreds of thousands of people. Now, there's a criminal investigation.

Also right now, Target officials testifying up on Capitol Hill. They say they'll start using a new kind of credit card technology that will better protect your personal information.

Also right now, more than 2 million jobs. That's what Obamacare could cost over time. This according to a just-released Congressional report. We're going to get live reaction this hour from a top White House adviser.

Hello, I'm Wolf Blitzer reporting from Washington. We start with news on a criminal investigation into last month's water contamination in West Virginia. Nine counties were affected when a company released chemicals into the Elk River. Some schools are still using only bottled water.

Our Investigative Correspondent Drew Griffin is joining us from the CNN center in Atlanta. Drew, tell our viewers what you have learned.

DREW GRIFFIN, CNN INVESTIGATIVE CORRESPONDENT: What we have learned is that a federal grand jury is now hearing testimony or issuing subpoenas in this case. That seems to be an elevation of the criminal investigation that is under way, Wolf. Not just looking at Freedom Industries, the company whose tank has two holes in the bottom of it and those leaks led to this contamination of the water. But also, at the water company itself and questions about why the water company in this valley was not able to detect this chemical in the water supply that has led to this contamination.

We ourselves have done our own testing, testing yesterday, which we will get the results back later this afternoon, Wolf. But in the meantime, hundreds of thousands of people are still not drinking the water out of their taps, because they're afraid they're not being told the truth and it's easy to understand why. The hearing last night, we asked the question to the head of the water company, it's called the West Virginia American Water Company, whether this water is safe to drink. Here's what he said.

(BEGIN VIDEO CLIP) TOM MCINTYRE, CEO, WEST VIRGINIA AMERICAN WATER: Our customers' concerns are paramount to us. But the water is below the 1ppm health guidance provided by the CDC and that's what I have to tell customers. I can also tell you, I'm using it. My wife is using it. My employees are using it. Many people I've talked to are, in fact, using it.

(END VIDEO CLIP)

GRIFFIN: Now, listen to this, Wolf. From the Kanawha County health director, his name is Dr. Rahul Gupta, he asked the same question just within minutes of that interview.

(BEGIN VIDEO CLIP)

DR. RAHUL GUPTA, DIRECTOR, KANAWHA COUNTY HEALTH DEPARTMENT: It's very alarming and it's very concerning because that raises the issue of trust. When state officials come out and say the water is safe and now we have almost three weeks into it that people are not drinking their water. They're demanding distribution of free water. And they're feeling like their water is not safe.

UNIDENTIFIED MALE: Are you drinking the water?

GUPTA: I have drank the water. And my wife, who is also a physician, has told me, I better not be drinking the water.

(END VIDEO CLIP)

GRIFFIN: So, this is the confusion that's happening there, people just not secure in what they're being told about this water supply. In the meantime, there is this criminal investigation going on which could lead to some very, very serious charges, Wolf. But as I said, in the meantime, hundreds of thousands of people literally don't know what to do. Should they drink this water or not?

BLITZER: Yes, I remember when the scare first erupted, they were told, don't even shower with the water, don't even boil the water because potentially it could be very, very dangerous. I know one of the issues -- they keep referring to the CDC. But that study apparently -- correct me if I am wrong, Drew, that CDC study is a 20- year-old study and dealt with rats. That's one of the reasons like Dr. Gupta and some of these others in West Virginia are suggesting maybe it's not so safe yet.

GRIFFIN: And that is the problem. So, what's the -- what's the long- term, you know, problems that happen to rats? What's the long-term problems that happen to humans? What is the level that is safe and unsafe? I don't think they have the science there to definitively tell you which is why you're hearing one thing from the water official and the other thing from the Health Department.

I mean, obviously, right now, the safe thing to do is not drink the water until they figure it out. But that is creating long lines of people like you see right there, waiting for this water, demanding that bottled water be given to them. It's a real mess. And I might also add, Wolf, that this should not just be looked at in terms of a West Virginia perspective. I talked to the U.S. Attorney there in Charleston and he said, look, this is a cheap wake-up call for the country. He said he can't believe that West Virginia has the only tank in this country above ground that is leaking right now. And he thinks this should really be a wake-up call to everybody in the United States.

<13:05:03>

BLITZER: You're in Atlanta where the CDC is headquartered. Have they issued any statements as far as you know?

GRIFFIN: I have not seen one. I will check with them and get back to you.

BLITZER: All right. Thanks very much, Drew, for that report. Worrisome stuff coming out of West Virginia.

Here in Washington, the Senate is today looking to massive credit card data breaches that entangle Target and other retailers. Target's chief financial officer faced questions from members of the Senate Judiciary Committee as they looked deeper into the breach that may have compromised the information of more than one-third of all Americans.

(BEGIN VIDEO CLIP)

JOHN MULLIGAN, CFO, TARGET: To begin, I want to say how deeply sorry we are for the impact this incident has had on our guests, your constituents. We've had ongoing relationships and information-sharing with law enforcement. That needs to happen more broadly between our organization and private organizations, more broadly, and the government to find solutions here.

FRAN ROSCH, V.P. SYMANTEC CORPORATION: This is kind of an ongoing war. And the types of threats are changing all of the time. And the new technology comes on the market to protect all of the time. So, we're constantly kind of raising the bar. So whatever gets developed needs to allow for that to happen versus locking in at any particular time what might seem acceptable.

(END VIDEO CLIP)

BLITZER: Our Joe Johns is up on Capitol Hill watching all of this. Joe, what's the purpose of this hearing? What is Congress trying to get at?

JOE JOHNS, CNN CORRESPONDENT: Well, they're talking about legislation, for one thing, Wolf, but they're also trying to get a sense of just what happened here. What was the time line? All of this in anticipation of legislation that would require some type of a notice for consumers whenever their data is breached.

In the incidents of Target, we learned today that they found out just a little bit earlier than we had known before, on December 12th, about this data breach that had occurred in their systems. And it wasn't until seven days later that they actually ended up notifying their consumers. And you have to point out that this data breach, they believe, actually began right around Thanksgiving -- Wolf.

BLITZER: You know, Target's chief financial officer also spoke about adding microchips to the company's credit cards by 2015. It's a standard in Europe right now. Is this something Congress could require of all credit card companies in the United States?

JOHNS: Well, I say it's probably a little bit more likely that the Congress might pass a bill that requires notification of consumers before they actually get to passing legislation on something like that simply because of the cost. There's a huge cost involved in putting smart chips into the payment card system. In fact, for Target, it's about $100 million to do this just next year. If you were to impose that across the board, it would be a huge cost to consumers and the safest system is a system that has both smart chips and personal identification numbers, PINs. A lot of stores don't have the PIN pad. So, that would be another cost that Congress might be imposing on consumers. All things for the lawmakers to think about -- Wolf.

BLITZER: It certainly is. Joe Johns on Capitol Hill. Thank you.

On Wall Street, a very different story today. After making a huge loss yesterday, 325 points, the Dow is actually getting some gains today. These are live pictures from the board over there, 102 point up right now, 15,475.

Alison Kosik is over at the New York Stock Exchange. Alison, help us make some sense of this. Is this a rebound? What's going on?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: You know what this is, Wolf? It's a lot of push and pull that's very normal to see with stocks. And you're seeing the market pretty much trying to find its footing again. But, you know, overall, analysts are still saying, get ready because a correction is coming. The Dow is actually closer to it.

But you look at the S&P 500. This index is bigger. It's more important. And here's a level that you want to keep your eye on, 1665.75, if you're really watching to the penny. It's right now at 1758. Still, the S&P 500 has got four percent to go. The jury is still out whether or not it will actually hit correction territory. But if it does, it really shouldn't be a big surprise because you look at job growth right now, it's not great. The feds also ending its stimulus which has really been the main reason that you're -- that we saw the market run up so high last year -- Wolf.

BLITZER: Well, I guess a lot of folks who have 401Ks, other investments, their portfolios, they're wondering, how worried should they be given the losses? What, the Dow Jones has gone down, what, a thousand points over the last few weeks.

KOSIK: That's a good point. And that's a lot of points, right? And it's not easy when you open up your portfolio and see it drop so much from last year. But last year was really unique. I mean, you saw double-digit gains for the major indices.

But, at this point, Wall Street isn't too worried about what's happening and many analysts aren't either. Something to keep in mind. A correction doesn't mean recession. It doesn't mean, you know, a repeat of 2009. What it does mean is the market is resetting. It's a way to avoid bubbles. And you know what? Everybody is saying it's time. Many are saying we're overdue for a correction, that a correction is actually the understatement of the year, especially since the market hasn't had one in more than two years.

<13:10:05>

Now, there are a lot of concerns about how the economy will do without the fed stimulus. So, what you're seeing is Wall Street really taking a breath -- Wolf.

BLITZER: All right. Alison, thanks very much. Alison Kosik is at the New York Stock Exchange.

The New Jersey governor, Chris Christie, taking new questions about the so-called bridgegate scandal rocking his administration. But his answers remain the same. He tells radio listeners, I knew nothing about it. We're taking a closer look at the controversy, how it's affecting his poll numbers, and a whole lot more.

(COMMERCIAL BREAK)

BLITZER: There's a potentially explosive Congressional report that just has been released that recalculates the economic effects of the Affordable Care Act. And the highlight is a jump in the effect on the work force.

Let's go to Capitol Hill. Our reporter, Lisa Desjardins, has been going through it. It's a lengthy report. The Congressional budget office, tell us what they're expecting the impact of the Obamacare program, the Affordable Care Act, what it means.

LISA DESJARDINS, CNN CAPITOL HILL CORRESPONDENT: This is significant, Wolf. I just got back from the briefing on this report. This report estimates that the effect on the work force will be far more significant than we had previously seen. The Congressional Budget Office has effectively said they think it will be double the hit to the number of people in the work force as they thought. Specifically, Wolf, the CBO estimates that by the year 2017, the Affordable Care Act will have the effect of taking out the equivalent of 2 million U.S. workers. Now, want to say, first of all, that's not necessarily because they will be laid off.

<13:15:00>

Instead, CBO says those workers, most of them, will choose to leave their jobs, because they will be able to get health insurance outside of work through a subsidized government health exchange. So these workers will have a choice that they don't have now, and that's what the White House is pointing to as something good in their response to this report.

But, Wolf, this is a hit to the economy. There will be 2 million fewer workers in the U.S. workforce at a time when we already see our labor contracting because baby boomers are getting older, those kinds of things. So this will affect the economy overall.

BLITZER: And what is this new CBO report, it's the non-partisan CBO report, suggesting the impact of the Affordable Care Act would be on the nation's budget deficits?

DESJARDINS: Right. That's an easy one. There's actually no change in the expectations there. The Congressional Budget Office is not giving an overall estimate of the deficit. They're sticking by their previous ideas. They say they still think that the Affordable Care Act overall will reduce the deficit by a little bit.

Now, this report does sort of slice up what different parts of the Affordable Care Act and they do say that the insurance provisions of the bill will cost the government, but they say overall -- and I asked the CBO's director about this specifically -- they say overall they're sticking by their expectation that this health care law will end up reducing the deficit overall.

BLITZER: Lisa Desjardins, I'm going to question the -- one of the top economic advisers to the president -

DESJARDINS: Yes.

BLITZER: Gene Sperling (ph) on this new report, other issues. That's coming up later this hour, as well. Lisa, thanks very much for that.

Meanwhile, new poll numbers may mean more bad news for the governor of New Jersey, Chris Christie. We'll have the latest on that front when we come back.

(COMMERCIAL BREAK)

<13:20:00>

BLITZER: New Jersey Governor Chris Christie is adamant in a new interview. He insists he had nothing to do with the so-called bridge- gate scandal that has rocked his administration. He told radio listeners he first found out about the lane closures at the George Washington Bridge from news reports. The resulting traffic jams were thought to be political payback for a mayor who didn't support Governor Christie. Dana Bash is here with us, watching this story.

What's the latest -- his latest strategy, his latest approach in dealing with this scandal?

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Well, it's effectively to try to stay above it all. It's more of what we heard from that press conference, but I think in a more emphatic way. He did reveal that the U.S. attorney, the one doing the federal probe, did subpoena his office, but he tried to take it in stride saying he wants to get to the bottom of what happened, just like everybody else.

(BEGIN VIDEOTAPE)

BASH (voice-over): On the key question, did Chris Christie know anything about GW Bridge lane closures before they happened, he emphatically repeated his denial.

GOV. CHRIS CHRISTIE (R), NEW JERSEY: Did I authorize it? Did I know about it? Did I approve it? Did I have any knowledge of it beforehand? And the answer is still the same. It's unequivocally no.

BASH: Over --

CHRISTIE: I had nothing to do with this.

BASH: And over again.

CHRISTIE: To make clear to everybody in the midst of, you know, all the things that were reported over the weekend, that nobody has said that I knew anything about this before it happened. And I think that's the most important question.

BASH: But Christie did leave wiggle room on what former aide, David Wildstein's attorney says he has evidence of, that Christie knew about the lane closures while it was happening in September.

CHRISTIE: If I either read that or someone said something to me about traffic issues up there, it wouldn't have been meaningful to me because I didn't know that there was any problem up there.

BASH: Christie said the first time he remembers hearing about the problem was when he read this October 1st "Wall Street Journal" article about the Port Authority executive director calling lane closings "abusive."

But what may have been most noteworthy about this radio appearance was what Christie did not say. No attacks on David Wildstein, like in this memo Christie supporters sent around this weekend attacking Wildstein's character with examples from high school, saying of Wildstein, "as a 16-year-old kid, he sued over a local school board election," and, "he was publicly accused by his high school social studies teacher of deceptive behavior." This was an embattled politician trying to stay above the fray.

CHRISTIE: And I'll be damned if I'm going to let anything get in the way of me doing my job.

BASH: Determined not to feed the image of a bully.

CHRISTIE: While I am disappointed by what happened here, I am determined to fix it.

BASH: Trying to come across as a politician scorned.

CHRISTIE: But I'll tell you something, I'm not warrantying anything anymore after what happened.

(END VIDEOTAPE)

BASH: A source familiar with the investigation in the New Jersey state legislature says that they have now received documents from four of the 20 subpoenas that were sent out last month. No word as to what's in them. But we do understand that they have not got -- they have not gotten back evidence or any documents from Wildstein, which, of course, is going to be the key person that they're going to look for.

BLITZER: And aide after aide after aide now, they're all pleading the fifth and refusing to cooperate, to testify, if you will, which is their constitutional right.

BASH: It is. Two of the key aides that we know about, Bridget Kelly and Bill Stepien. Bridget Kelly, of course, was the one who sent the e-mail, ready - to get ready for some traffic in Fort Lee. She has decided to invoke her constitutional right of the Fifth Amendment, and Bill Stepien, who was really Chris Christie's right hand, his campaign manager for (INAUDIBLE) --

BLITZER: And Wildstein earlier did the same thing as far as his Fifth Amendment -

BASH: To testify, but not for documents yet. We're not sure about documents.

BLITZER: We'll see if he gives those documents. He gave some earlier.

BASH: Yes.

BLITZER: All right, hold on for a moment because Gloria is with us, as well, Gloria Borger, our senior political analyst.

Look at these poll numbers. This is the new CNN/ORC poll numbers. All Americans, registered voters, choice for 2016. Back in December, it seems like a long time ago, Christie was slightly ahead of Hillary Clinton, 48-46 percent. Now, Hillary Clinton's way ahead of Christie, 55-39 percent. That's a pretty striking switch.

GLORIA BORGER, CNN SENIOR POLITICAL AN ANALYST: Yes, she's clearly been the beneficiary on a national scale of his downfall, and that's because of independent voters. Christie, if you look deeper into these poll numbers, Christie has lost 20 points with independent voters and Hillary Clinton has picked up those independents. And so she's really gaining from his problems. Whether that would last in the long-term, whether those independents would end up voting for Hillary Clinton, of course, it's early. We do not know. But right now, this is a good -- has been good for her.

BASH: And we should say - I just was talking to a Christie source before coming on with you who really underscored sort of the point that I made in the piece, which is that he wanted to stay above the fray.

<13:25:00>

He wanted to be somebody who was not going to say the kinds of things that you saw in that memo. And a large part of it is because, a, they realized that maybe he antagonized Wildstein by making comments about him -- Christie being the high school football star and he didn't know what Wildstein was doing. But more importantly because of his image that they really need to get back so that he doesn't lose 20 points with independent voters (INAUDIBLE).

BORGER: But you can't do both. I mean, the point is, if an e-mail goes out to all of your supporters from your folks in New Jersey and says Wildstein had a tumultuous time in high school and totally tries to destroy his credibility, and the governor goes out on the show -- on a radio show and says, you know, I've got to do my job as governor of New Jersey -

BASH: I don't know (ph) -

BORGER: I think it's very difficult line for - for him to walk.

BASH: It is - it is difficult, but it's one thing to have, you know, the under the radar e-mail that we're talking about. It's another thing to actually hear those words come out of Christie's mouth. (INAUDIBLE).

BORGER: Right. Of course we'd like to ask him the question, OK, what about that stuff in your e-mail? Let's talk about it. But that didn't occur.

BASH: No.

BLITZER: The president of the United States, let's show our viewers this current job approval numbers in our brand-new CNN/ORC poll. All Americans, how is President Obama handling his job as president. Right now, 45 percent approve of the job he's doing. In December it was 41 percent. A couple months before, then it was 44 percent.

Gloria, within the margin of error, there's not a whole lot of change.

BORGER: No. No.

BLITZER: Forty-five percent is better than 41 percent.

BORGER: Right.

BLITZER: But it's not 55 or 60 percent.

BORGER: Well, no, it's not. And then there's this question of hoping that the president will succeed. And that's the number that's really down. You know, the 58 percent, whereas when he was inaugurated in 2009, that number, that 58 percent number, was at 86 percent. When he was inaugurated the last time around, you see it was at 70 percent. So people have kind of lost hope that the president is going to get things done. And 56 percent of the people in our poll, Wolf, believe that his policies are going to fail.

BASH: And that - that is so interesting because the fewer people who are rooting for the president to win, the more that hurts Democrats on Capitol Hill because -

BORGER: Right.

BASH: In any midterm election, it's a referendum on the president. But in this one in particular, they're hoping that there's still enough people out there in the base, especially, who understand the importance of having a Democratic Congress or Democrats in Congress to help the president.

BLITZER: In this -- you cover Congress.

BASH: Yes.

BLITZER: In the Senate right now, let's say there are eight or 10 potentially vulnerable incumbent Democrats. Maybe six, seven. The Republicans need a net gain of six in order to become the majority in the United -

BASH: Right.

BLITZER: Are these vulnerable Democrats all running away from the president of the United States?

BASH: They're not running towards him, let's put it that way. I mean you heard the interviews and discussions that we had in and around the State of the Union, a time when people in the president's party generally rally around him. Mark Udall of Colorado wouldn't - he wouldn't allow himself to be pinned down on whether he'd appear with him. Mark Begich said come with me to Alaska so I can tell you how much your policies are not good.

So that's where things are right now. They would really take his money. There is nothing on the books right now for the president to fund raise for Senate Democrats. I'm told that it's probably going to happen soon. But I think too much to say they're running far as sort of a mass exodus, but they're certainly not holding hands.

BLITZER: I'll be curious, Gloria, Jeanne Shaheen, the Democratic senator from New Hampshire -

BORGER: Right.

BLITZER: She's up for re-election. Scott Brown, former senator from Massachusetts, he sold his house in Massachusetts, he now lives in New Hampshire and he may challenge her. In a race like in New Hampshire, would she be willing to side with the president if he came to New Hampshire -

BORGER: She might. I mean, you know, she might.

BLITZER: Or would she run away from him?

BORGER: She'd be more likely than somebody from a red state, obviously.

BASH: Right.

BORGER: But again, you know, you have to sort of keep your distance, gauge the approval of Obamacare in your state. And, you know, I think the problem for all of these candidates is this question - and it's a problem for the White House -- this question of whether the president has reached a set point that he's not going to get much of above it and he's not going to go much below it. It's in the 40 to 45 percent range. And the question is whether people have given up paying attention to what the president is saying. You saw the viewership overall for the State of the Union was way down. And so each politician has to weigh, you know, whether it's really cost effective for them to have the president standing next to them and campaigning publicly. As Dana says, they'll always take his money.

BLITZER: And one of the problems that in New Hampshire is that -- for Jeanne Shaheen potentially -

BORGER: Yes.

BLITZER: That those people who've signed up for Obamacare, who may have lost their health insurance, even if they had liked their health insurance, they signed up for Obamacare. You know how many health insurance companies compete for their business in New Hampshire?

BASH: Zero.

BLITZER: One.

BASH: One. That's right.

BLITZER: One company. So there's really no competition.

BORGER: Right. Which is why - right, right.

BASH: Right. Which is why I think Jeanne Shaheen, she did, she sort of lead the way for a lot of these -- they call them front-liner 2014 Democrats, to propose changes to Obamacare.

BORGER: Right.

BASH: That's why she's really one of the people who gets that.

BLITZER: We'll see if Scott Brown runs. We'll see what happens there.

<13:30:00>

BASH: My bet is no.

BLITZER: We'll have a lot of fun covering all these races this year, guys.

BASH: We will.

BLITZER: Thanks very much.