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Bodies of 3 Missing Israeli Teens Found; al Qaeda Group May be Working on New Bombs; U.S. Sending 300 More Troops to Iraq; ISIS Aims New Threats at America; Surprise Pick to Head VA; Tropical Storm Could Rain Out 4th

Aired June 30, 2014 - 17:00   ET

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

BRIANNA KEILAR, CNN HOST: Thanks, Jake.

Happening now, breaking news. Middle East on the brink. Israel vows a tough response after the bodies of three missing teenagers are found in the West Bank.

And new terror threats. The U.S. Weighs new airport security measures to counter next-generation undetectable bombs that could be delivered by western jihadists.

And dangerous weather. The Midwest has already been hit by massive flooding. Could a tropical storm drown out July 4th festivities along the East Coast?

Wolf Blitzer is off today. I'm Brianna Keilar, and you're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

KEILAR: We begin with breaking news. The Middle East could be on the brink of a new conflict. Tonight, Israel is poised for a tough response after the bodies of three missing teenagers are found in the West Bank more than two weeks after they disappeared.

Israel accusing the militant organization Hamas of kidnapping the teens and a massive crackdown already underway. Prime Minister Benjamin Netanyahu has convened an emergency cabinet meeting and vows that Hamas will pay. All of this comes amid chilling new terror threats aimed at the United States from the Middle East.

Let's go now straight to our CNN senior international correspondent Ben Wedeman in Hebron. Ben, what's the latest from there?

BEN WEDEMAN, CNN CORRESPONDENT: Well, about six hours ago, Brianna, the Israeli authorities say that with the help of local Israeli volunteers from a nearby settlement, they found a body under a pile of rocks. They alerted the police and the military in the area who came and found two more bodies, so a total of three bodies. It's believed that they are the bodies of the three Israeli teenagers who went missing on the night of the 12th of June.

We heard that the Israeli prime minister, after holding an emergency security cabinet meeting, he described the killers of these three teenagers as animals. He pointed the finger directly at Hamas, saying that Hamas will pay for what has happened here -- Brianna.

KEILAR: All right. Ben Wedeman in Hebron. Thank you. And President Obama, I should tell you, has just issued a statement on these deaths, saying, quote, "As a father, I cannot imagine the indescribable pain that the parents of these teenage boys are experiencing. The United States condemns in the strongest possible terms this senseless act of terror against innocent youth. From the outset I have offered our full support to Israel and the Palestinian Authority to find the perpetrators of this crime and bring them to justice. And I encourage Israel and the Palestinian Authority to continue working together in that effort. I also urge all parties to refrain from steps that could further destabilize the situation. As the Israeli people deal with this tragedy, they have the full support and friendship of the United States."

Let's go in depth now with the former Israeli ambassador to the United States, our CNN Middle East analyst Michael Oren. I want to ask you first, Ambassador, about that statement that we just heard from President Obama. In it, he's obviously urging caution and restraint. What do you make of that?

MICHAEL OREN, CNN MIDDLE EAST ANALYST: Good afternoon, Brianna.

Well, Israelis will certainly welcome this statement from the president. It is very strongly worded. But they'll also ask the question what's not in the statement. What is not in the statement is any retreat or even intimation of a retreat from the very swift American recognition of the unity government between Hamas and Fatah. And the Israeli government had strongly objected to that unity government. It still objects to that government. Now you have Hamas, which is implicit in these three terrible murders, being recognized as part of a government with Fatah.

Now, there was no -- again, no hint of that -- retreating from that position in the president's position and, beyond that, Israel is now going to probably take military action against Hamas. The president did not support that military action. On the contrary, he called for restraint on the part of all parties.

KEILAR: Yes. And that's certainly something you really know in that statement. So when we hear the prime minister saying that Hamas will pay and you say military action appearing likely, what are all the options on the table for Israel?

OREN: Well, if the past is any guide, Brianna, Israel will strike back at Hamas positions in Gaza. It chooses these positions well in advance. They could be physical facilities, but they could also be individuals, high-ranking members of Hamas that could be -- could be singled out.

Either way, the Israeli government will have to respond to this in a very forceful robust way. Public opinion in Israel now, which has been deeply traumatized by this kidnapping and murder of the three teenagers, will demand a very robust response. KEILAR: Do you worry, Ambassador, that this is just the beginning of

many, many more lives being taken?

OREN: Well, I'm sure there's a debate within the Israeli government. The Israeli government met today. My sources have told me that there was a debate over the extent of Israel's pride and retaliation for this murder. There's an awareness that, once you get into a military action, you know how it starts; you don't necessarily know how it ends.

Hamas has well over 10,000 rockets. Their ranges could hit Tel Aviv. Some of them could go by the last round, hit the outskirts of Jerusalem. So there's going to be a big debate over the extent of Israel's retaliation, and to -- there will be those within the government who say, "Let's keep it calibrated, and let's make Hamas pay a painful price but not trigger another major round of fighting."

KEILAR: Well, but there's obviously that risk in all of this, of course, Ambassador. And I wonder as people are looking at this region, they see Syria in crisis, Iraq in crisis. Now, this going on. Is this now a region on brink of crisis, sort of in a much wider swathe?

OREN: Well, prior to this incident, if you look around the Middle East, perhaps ironically, one of the quietest and most stable regions has been the West Bank and Israel. And even Hamas, even in Gaza has been relatively quiet since the latest round of fighting in 2012.

But yes, the possibility does exist that this could become another active front, not of the magnitude of Syria, where you have 160,000 people being slaughtered, or Iraq where thousands have died in the ISIS advance on Baghdad but still, a flash point in the Middle East.

To go by history, we have every several years, we've had -- Israel has had a round of fighting with Hamas and other terrorist elements in Gaza. I think the idea again is to strike a balance between retaliating for this atrocious murder of the three Israeli teenagers but not triggering off another round of fighting.

KEILAR: Yes, and we'll see obviously how that proceeds from here. Ambassador Oren, thank you so much for being with us.

OREN: Thank you.

KEILAR: The al Qaeda spinoff that sent the underwear bomber on a flight to the U.S., or it may be working on more frightening explosives, if you can imagine, that cannot be detected by today's airport screening -- airport screening devices.

U.S. authorities are racing to catch up here. And CNN chief national security correspondent Jim Sciutto has been digging on this, as well. Do we know exactly what we're talking about, these devices?

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: We know this is a threat that involves al Qaeda in the Arabian Peninsula, and the means of attack, concealed bombs on airplanes, that truly keep the counterterror officials up at night.

We're told that the U.S. is now considering new screening measures at airports due to new information about attempts to build explosive devices designed to get past those airport screeners.

(BEGIN VIDEOTAPE)

SCIUTTO (voice-over): They are homeland security's most dreaded threats. Explosive devices hidden in objects from shoes to toothpaste tubes and undetectable by airport security.

Now the U.S. is considering new airport security measures, due to increased concerns that terrorists from al Qaeda in the Arabian Peninsula or AQAP are developing new bomb designs to fool current security screening.

GEN. PHIL BREEDLOVE, COMMANDER, U.S. EUROPEAN COMMAND: We remain concerned about the capability of some of these elements to develop weapons that could be thwarted by our current security systems.

SCIUTTO: Officials tell CNN there is no imminent threat or plot. However, an additional vulnerability has been identified, which the Department of Homeland Security is currently working to address.

JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: The Department of Homeland Security is regularly reviewing our security procedures to adapt to the threat that we -- that is faced by our transportation system. As advisories are required to adequately inform the traveling public, we'll make those announcements.

SCIUTTO: Representative Peter King discussed the threat on ABC's "This Week."

REP. PETER KING (R), NEW YORK: A number of airports do not have the type of security they should have. Basically, we're saying anyone that will be having someone that can fly to the United States. They have to increase their security. We're going to be pushing it, but overseas airport security is a real concern.

SCIUTTO: This is the man believed to be behind the threat. AQAP master bomb maker Ibrahim al-Asiri. In recent months U.S. officials have warned that Asiri and AQAP terrorists trained under him were improving designs of new explosive devices such as shoe bombs that could fool screening systems.

The threat has grown all the more severe as chaos in Syria and Iraq has created a safe haven for terror groups to train, plot, and recruit westerners to join their fight.

REP. MIKE ROGERS (R) MICHIGAN: Allowing them to pool up in Syria, allowing them to have safe haven the size of Indiana between Syria and Iraq, and I say "they," I mean al-Qaeda-minded individuals that now have an army. That is as dangerous a time for an al Qaeda threat to the United States as I've ever seen.

(END VIDEOTAPE) SCIUTTO: U.S. officials have been tracking both AQAP and ISIS closely for some time. What's different now is that ISIS now has a huge expanse of territory virtually unchallenged. The closest we've come to that is al Qaeda in Afghanistan. That's before 9/11 and perhaps al Shabaab in Somalia, but not on this scale.

And that new reality is really a factor in why counterterror agencies are very much on alert for all kinds of threats. They are always watching, but right now they're particularly concerned. And one thing that we -- you and I have talked about this, talked about it with Wolf before, is the idea of the foreign fighters who have been recruited to go fight in Syria and now Iraq. Many Europeans, hundreds of Europeans, dozens of Americans, what do they do when they come home? They have -- they have what they call clean sheets. In other words, they have travel documents that will allow them to get on a plane. That doesn't necessarily raise alarm. That's a real worry going forward, as well.

KEILAR: It seems talking -- I talked to -- we talked later in the show to Congressman King. One of the big concerns, it seems you almost registered the fear of the idea of these different groups working together. That's really the source of so much of it.

SCIUTTO: It is. And that's a complicated thing. We do know I've spoken to intelligence officials. There is some connectivity between, for instance, AQAP and ISIS.

But there's also some division, because ISIS has fought, you know, we know in Syria there have been divisions within these radical groups, as well, fighting amongst themselves. So sometimes they're marriages of convenience. Sometimes they work together well. Sometimes, frankly, they don't work together well. I mean, a big concern we do know about is the most, you know, radical groups fighting in Syria have had communication with al Qaeda core back in Afghanistan, which I've been told has encouraged them to sort of look abroad and think, you know, ambitiously about the kinds of places they're going to attack, including in Europe and the U.S. It's of real concern. You know, we'd like to think that this problem is going to stay contained over here, but the trouble is, it has a real danger of hitting the U.S. homeland.

KEILAR: And I want to ask you, while I have you hear, about Israel as we watch our breaking news that has happened. Three teens found dead, three Israeli teens. It sounds like talking to Ambassador Oren, we're expecting retaliation from Israel. It just seems almost guaranteed if past is prologue.

When you look at the hot spots, and I asked him this, Syria, a huge conflagration, Iraq, as well. Obviously, and he says this is a smaller scale thing. Israel is trying to certainly strike a balance between something that doesn't provoke too much from Hamas, but isn't that the risk that there could be a great provocation here?

SCIUTTO: It's interesting. Michael Oren made this point. That actually, Israel has been an area of peace, you know, for these last couple of years. So to have this attack now disrupts that. But concern -- first of all, Syria spills over to Iraq. We've already

seen that. You're worried now about ISIS crossing the border in Jordan and Saudi Arabia. They've taken the border crossings there. Those countries are very nervous. But you also have fears about those battles going into countries like Lebanon. It's been relatively peaceful, but there have been threats exchanged now.

Hezbollah, you know, which has had tremendous activity in Syria, what is ISIS going to do with them there? They've made threats against -- against groups like Hezbollah in Lebanon. This is a region that's always, it seems, on the precipice, right. And it doesn't take much to push these countries into violence -- into violent conflict. And I think that's where we are now.

KEILAR: Feels so much that way right now. Jim Sciutto, thank you so much.

And next, passions are running high over a stunning Supreme Court decision involving religious freedom, Obamacare and birth control. What the ruling by the deeply divided justices could mean for you.

And a furious President Obama blaming Republican inaction for a surge of undocumented children on the border.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: They've proven again and again that they're unwilling to stand up to the Tea Party in order to do what's best for the country.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

KEILAR: Busy day here in THE SITUATION ROOM. We have more breaking news. For that, we want to get straight to CNN's Barbara Starr at the Pentagon where she's learning new information on additional U.S. personnel being moved into Iraq. What can you tell us, Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Brianna, the Pentagon announcing just a few moments ago that an additional 300 -- 300 -- U.S. troops are moving into Iraq.

Let's explain this to everyone. Two hundred of these additional troops will be moving directly into providing security for the U.S. embassy for U.S. facilities in Iraq and also for the U.S. positions at the Baghdad Airport.

An additional 100 troops who were already on stand-by close by in the Middle East also moving in. They are going to have additional helicopters, additional unmanned aerial vehicles. Their job, all of these additional 300 troops, will be to provide security for the U.S. troops and people at the embassy already there.

You have your 300 advisors. And plus, these -- plus some additional people at the embassy. It's basically all now adding up to about 800 troops on the ground in and around the Baghdad area. And these additional new troops now being announced this afternoon, 300 more. Their main job will be security. Help protecting U.S. facilities and protecting the personnel already there -- Brianna.

KEILAR: And Barbara, when we heard this announcement first from the president from the administration about sending members of the U.S. military or from the U.S. government in, it was up to 300 advisers is what we were told.

Obviously, this is different. This is troops. But do you have a sense that this is more of a ramp-up than what was initially expected or is this just sort of what goes along with those advisors, and maybe we didn't have a number on it before?

STARR: No, I have to tell you, I think this is an indication that they do feel they need to really make sure they have security for Americans working at the embassy, for any Americans at the airport, for the American military advisors. They have got to have security nailed down for these people.

We knew, for example, that there were 100 troops in a nearby country ready to move in to provide security if needed. Those troops going in now. But another 200 going in to do the same thing, to provide security. They will have helicopters. They have arms. They will have unmanned aerial vehicles, drones, flying overhead to keep watch.

Clearly, they are feeling that they need to have more security around the Baghdad area, which is supposed to be under government control, and as troops, these advisors may in the coming days move north out of Baghdad where they might run into some of these ISIS fighters. So clearly I think they feel they've taken another look at it, and this is the additional security that they need.

Because I have to tell you, every reporter covering the Pentagon has asked for days the obvious question -- is this it? Are any more troops going in? And the answer you have until about five minutes ago was no, that is it. But now we see another 300 going in, Brianna.

KEILAR: So this is just in response to the strength of ISIS?

STARR: Well, I think perhaps the strength of ISIS, the general uncertainty in Iraq right now about the security situation, and the fact that you're going to have eventually first 300 military advisors moving around the country. They have to be protected. If you're going to have helicopters and unmanned aerial vehicles, perhaps operating out of Baghdad International Airport, that has to be protected. The Americans at the embassy have to be protected.

You know, they had a lot of firepower already there supposedly to do that, Marines at the embassy. Extra security personnel. But now, it looks like, you know, they realize what they're dealing with. And that they just simply need to have more security, more military security on the ground for the Americans -- Brianna.

KEILAR: Yes. What they had not enough.

STARR: It appears.

KEILAR: Barbara Starr, really appreciate it.

Now Iraq's state TV is reporting mortar rounds have struck one of Shiite Muslim's holiest shrines in the city of Samara. An al Qaeda attack on the same shrine back in 2006, you may recall, it destroyed its dome, and it set off bloody sectarian violence.

The incident comes as the brutal jihadist group that has captured a vast swathe of Iraq and Syria, which we've been talking about, is making a brazen new proclamation and is aiming new threats at America.

Let's go live now to CNN's Mohammed Jamjoom. He is in Beirut with the latest-- Mohammed.

MOHAMMED JAMJOOM, CNN CORRESPONDENT: Brianna, it's a dangerous new declaration by ISIS. This is a threat that showcases not just how brutal the group remains, but it also constitutes a new propaganda effort by this group.

(BEGIN VIDEOTAPE)

JAMJOOM (voice-over): They've changed their name but not their tactics.

ISIS, which stands for the Islamic State in Iraq and Syria, says now it will simply be known as the Islamic State. And it declared all areas it's overtaken in Syria and Iraq to be a caliphate or Islamic state. A significant move.

NOAH BONSEY, INTERNATIONAL CRISIS GROUP: Announcing the Islamic state and using the word "caliphate," you see the full extent of ISIS's ambitions.

JAMJOOM: They include taking over more territory, requiring all Muslims to swear allegiance to the group, and to continue waging a chilling propaganda war.

UNIDENTIFIED MALE: There is no place on this earth that these buildings are safe.

JAMJOOM: Like in this newly-released videotape. Just minutes before blowing this Iraqi police station to bits, the video shows a member of ISIS smiling as he reveals what appears to be men held captive in that building.

UNIDENTIFIED MALE: So we take a look inside, shall we? Exclusive footage. You see here prisoners. This is just some of the hundreds of prisoners that we have.

JAMJOOM: Analysts say it highlights how mercilessness is very much a part of the group's strategy.

BONSEY: It gets to the extent to which ISIS relies on threat of force, brutal threat of force to assert its dominance both in Iraq and in Syria. JAMJOOM: And showcases also how comfortable and confident the

organization feels in Iraq.

UNIDENTIFIED MALE: This car right here belongs to the border patrol. So do the other cars. Message to the people in the west, just keep giving and we will keep taking.

JAMJOOM: It's one more way ISIS hopes to continue to appeal to non- Arab jihadists.

BONSEY: ISIS has become particularly dependent upon foreign fighters.

JAMJOOM: Analysts say it's a simple equation. The more videos are produced in English, the more threats are directed at America, the more fighters will flock to Iraq.

UNIDENTIFIED MALE: The question that Obama, did you prepare enough diapers for your soldiers or not?

(END VIDEOTAPE)

JAMJOOM: Brianna, this is the second such video in as many weeks to be produced in English. Clearly, a campaign that's very much designed by ISIS to try to appeal to foreign fighters, and this is really what analysts are telling me is a dangerous new front in this propaganda war. They believe that the group may be able to recruit a lot more fighters from western fighters, a lot more jihadists to come join the fight in Iraq -- Brianna.

KEILAR: Chilling. Mohamed Jamjoom in Beirut, thank you.

And next, we'll have details of a stunning Supreme Court decision involving religious freedom, Obamacare and birth control that could have some serious and wide ranging ramifications.

And a furious President Obama blames Republican inaction for a surge of on the border. He's now ready to take action on his own.

(COMMERCIAL BREAK)

KEILAR: President Obama says that he will sidestep Congress and use executive action to deal with immigration reform, citing the urgency of a dramatic increase of children crossing the border from Mexico. And he pointed a finger at House Republicans who are blocking a vote on an immigration bill that's already passed the Senate.

CNN's Athena Jones has more from the White House.

Tell us what the president said, Athena.

ATHENA JONES, CNN CORRESPONDENT: Hi, Brianna.

That bill you mentioned, that Senate bill, passed a year ago. That's the bill that's been stalled in the House. And we heard from a fired- up President Obama today really sticking it to House Republicans, this after the White House said that, last week, House Speaker John Boehner at an event -- before an event here at the White House, told the president there's not going to be any vote in the House on immigration reform this year.

Let's listen to what the president said earlier in the Rose Garden.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Our country and our economy would be stronger today if House Republicans had allowed a simple yes-or-no vote on this bill, or, for that matter, any bill. They would be following the will of the majority of the American people, who support reform.

And, instead, they have proven again and again that they're unwilling to stand up to the Tea Party in order to do what's best for the country.

(END VIDEO CLIP)

JONES: So, there you heard the president really keeping the pressure on House Republicans. But he also said he's not going to stand by and wait for Congress to act.

And so today he announced what the White House is calling a new effort to fix our broken immigration system as much as possible through executive actions. That means he's asked his team to come up with additional actions he can take, additional steps he can take without the help of Congress on immigration -- the immigration issue.

He's asked for those recommendations to be presented him by the end of the summer. But he also anticipated some of the Republican criticism he's likely to get on this, because Republicans have already been accusing him of abusing his executive power.

Let's listen to what he had to say on that.

(BEGIN VIDEO CLIP)

OBAMA: I take executive action only when we have a serious problem, a serious issue, and Congress chooses to do nothing. And, in this situation, the failure of House Republicans to pass a darned bill is bad for our security, it's bad for our economy, and it's bad for our future.

(END VIDEO CLIP)

JONES: Really strong words from the president.

And on that Republican criticism, as you know, Speaker Boehner last week vowed to sue the president over his use of executive actions, and today in response to that announcement in the Rose Garden, he said, in part: "I told the president last week what I have been telling him for months. The American people and their elected officials don't trust him to enforce the law as written. Until that changes, it's going to be difficult to make progress on this issue." So, there you have it, a bit of a chicken-and-egg sort of situation, the White House saying the president has to act because Congress won't act, and then members of Congress, Republicans in the House, saying that if they pass a bill and the president doesn't uphold it, that's what left them in the stalemate situation. So, we can expect the debate to continue -- Brianna.

KEILAR: I think so. I think, well into November, it certainly is a midterm election year.

Athena Jones at the White House, thanks.

It is a hot-button issue that really has something for everyone, religion, Obamacare and health coverage for birth control. Today, a deeply split Supreme Court ruled that the private Hobby Lobby chain and certain other companies can't be required to pay for specific types of contraceptives for their employees.

CNN justice correspondent Pamela Brown is at the Supreme Court with this -- Pamela.

PAMELA BROWN, CNN JUSTICE CORRESPONDENT: Well, Brianna, today's ruling has major social and political implications and could impact tens of thousands of women.

This is a ruling that was divided along ideological lines, with the conservative major favoring Hobby Lobby and religious liberty and dealing a big blow to President Obama's signature health care law.

(BEGIN VIDEOTAPE)

BROWN (voice-over): Fiery protests on a ruling that converged three contentious issues into one, religious freedom, abortion and Obamacare.

Today, the high court striking down a key provision in the Affordable Care Act that requires for-profit companies to provide comprehensive birth control coverage. The main plaintiff, the evangelical Christian owners of Hobby Lobby craft stores, challenged the law, saying it violated their religious beliefs.

LORI WINDHAM, ATTORNEY FOR HOBBY LOBBY: The court reaffirmed that American families don't give up their constitutional right to religious freedom just because they open a family business.

BROWN: Obamacare covers 20 types of birth control. This Supreme Court case focused on four of those, Plan B, the morning-after pill, and the week after pill known as Ella, also two types of UIDs. Hobby Lobby equated those four firms of contraceptives with abortion because they say they prevent a fertilized egg from attaching to the womb.

Supporters of the contraception mandate say this ruling unfairly brings a woman's boss into her private medical affairs and will dump a huge financial burden on female employees.

ILYSE HOGUE, PRESIDENT, NARAL PRO-CHOICE AMERICA: I think immediately tens of thousands of women who are employees of these companies will either be out of their birth control or will absolutely have to double-pay, because we already pay. And that adds up at the end of the month.

BROWN: The five conservative justices on the court used a 20-year-old federal law to make the case that closely held for-profit companies have religious liberty rights, just like individuals do.

Writing for the majority, Justice Samuel Alito said: "The plain terms of the federal law make it perfectly clear that Congress did not discriminate in this way against men and women who wished to run their businesses as for-profit corporations in the manner required by their religious beliefs."

But in a strongly worded dissent, Justice Ruth Ginsburg says now company owners can force their own religious beliefs on their employees. She says: "It would deny legions of women who don't hold their employers' beliefs access to coverage that the ACA would otherwise secure."

While the court settled this specific fight, the ruling could open the door to even more legal challenges to Obamacare.

(END VIDEOTAPE)

BROWN: And this could set the stage and be a primer for other pending lawsuits that are in the pipeline right now, Brianna, challenging the contraception mandate and other provisions in the Affordable Care Act. This could be just the beginning -- Brianna.

KEILAR: No, certainly, Pamela Brown at the Supreme Court for us there.

And let's talk about that.

Let's bring in chief political analyst Gloria Borger, CNN senior legal analyst Jeffrey Toobin and CNN political commentator Ryan Lizza, also Washington correspondent for "The New Yorker."

So, Jeffrey, you have got the majority and they're saying this is a narrow ruling. But is it really? You're hearing all of these other concerns that we hear Pam bringing up.

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Well, certainly, it is broader than anything we have seen before.

Before today, the Supreme Court had never even said corporations have the right to freedom of religion. That is clearly established now. And now the court is going to having to define how broad that right is. Who can exercise it? Is it just a corporation controlled by a single family or what about other for-profit privately held companies?

And how much religious freedom can they ask for? Contraception, these four areas. What about other forms of contraception that many religions have objection to? What about blood transfusions? What about Christian scientists, who have objections to broad ranges of medical treatment? All of those questions are now up in the air.

KEILAR: And we saw so many people, so many political figures weighing in about this. That included Hillary Clinton. She weighed in while -- on the decision while at a Facebook event in Aspen. Here's what she said.

(BEGIN VIDEO CLIP)

HILLARY RODHAM CLINTON, FORMER U.S. SECRETARY OF STATE: It's very troubling that a sales clerk at Hobby Lobby who needs contraception which is pretty expensive is not going to get that service through her employer's health care plan, because her employer doesn't think she should be using contraception.

There are companies that may be closely held by employers who don't believe in blood transfusions. That's a religious belief that certain people hold. Does that mean if you have need for a blood transfusion, your insurance policy doesn't have to cover it? So, I mean, this is a really bad slippery slope.

(END VIDEO CLIP)

KEILAR: So, she's saying it's a slippery slope. Everyone is weighing in on this.

Ryan, do you think, is this something that threatens the core of Obamacare or is this a lot about politics?

RYAN LIZZA, CNN CONTRIBUTOR: Well, look, I don't think it threatens the core of Obamacare.

If you think of the -- Obamacare defines very clearly what should be covered by insurance companies. This takes away certain kinds of contraception for certain kinds of companies. So, this doesn't -- this is not about gutting Obamacare. Right? This is one kind of coverage for one type of company.

Politically, I think it shows us that the 2014 midterm elections are maybe a little bit more important today, right?

KEILAR: Yes.

LIZZA: The Senate -- the big prize for these elections is who is going to control the Senate. The House is going to be Republican, barring some catastrophic collapse of the Republican leadership in the House.

And voters are going to have a very clear choice. Do they want the Democrats or Republicans control that Senate and help Obama confirm a justice if one were to retire a justice in the last two years?

(CROSSTALK)

KEILAR: And that was the point that saw in some of the statements today, was it all came down to midterm election and politics.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, it comes down to midterm elections; it comes down to the presidential election.

I mean, look, the president can probably through regulations say to these women who are affected, OK, guess what, the government's going to pay for this kind of contraception for you, so you don't fall between the gap. In fact, conservative Justice Alito actually kind of suggested that. Oh, let the government pay for it.

What the Democrats are likely to do is bring this up on the floor of the Senate. Why are they going to bring it up on the floor of the Senate? They know that Republicans are going to stand opposed to it. They want to bring it up on the floor of the Senate because they can talk about, guess what, the old war on women, which we have heard about before and which will become a campaign issue not only in 2014. But if you listen to Hillary Clinton, sure sounded to me like a candidate for president.

KEILAR: Sure. And she's talking so much about women.

(CROSSTALK)

BORGER: And, by the way, maybe she would not support a nominee for the Supreme Court who would have ruled as Alito ruled.

(CROSSTALK)

LIZZA: Alito was almost defensive -- defensive in that, in saying, hey, look, I want you to realize that there is a path here.

BORGER: You can cover this.

(CROSSTALK)

LIZZA: For the president. They have done it already with religious institutions. They call it this regulatory accommodation. And he said, you can do the same thing with Hobby Lobby or with the workers at Hobby Lobby. You can have them get their contraception coverage with the government paying for it.

(CROSSTALK)

BORGER: Big government? Big government, so a conservative justice talking about big government paying for solutions to problems.

KEILAR: Well, can we talk about -- can we talk about the women issue here? Because -- and I wonder, is this...

(CROSSTALK)

KEILAR: Well, 4-5 is the ruling. All of the women are in the minority.

TOOBIN: Yes, there are 112 justices in the history of the Supreme Court. Four have been women. Three are currently on the Supreme Court right now.

All of them voted with Stephen Breyer in the minority in this case. But just as significant, I think, is the five justices in the majority were appointed by Republican presidents. The four justices in the minority were appointed by Democratic presidents.

When you are electing a president, are you electing Supreme Court justices. And they hang around a lot longer than presidents.

(CROSSTALK)

LIZZA: Sandra Day O'Connor, don't you think she would have been on the side of the...

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BORGER: She might have.

(CROSSTALK)

TOOBIN: Certainly, the later Sandra Day O'Connor might well have been.

BORGER: But look at Justice Kennedy, swing vote.

KEILAR: And this is going to be a big issue in this election.

(CROSSTALK)

KEILAR: Jeffrey, Gloria, Ryan, yes, thanks to all of you.

And straight ahead, millions of Americans could see their Fourth of July celebrations maybe rained out. Bummer, I know, but we're going to have details of the brewing storm where this thing is heading.

And President Obama chooses a man to rescue the VA. But does he have what it takes? We have details on the nomination that he just announced.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Good afternoon, everybody. Please be seated.

(END VIDEO CLIP)

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KEILAR: I guess you could say it's an unusual choice to take over a troubled department. President Obama nominating the former CEO of Procter & Gamble to be the next secretary of Veterans Affairs.

Now the VA, as I'm sure you know, is embroiled in a scandal right now over long waits for medical care that resulted in possibly dozens of deaths. A story that was first reported by CNN. The president introduced Bob McDonald just about an hour ago.

(BEGIN VIDEO CLIP) BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Bob is an expert in making organizations better. In his career, he's taken over struggling business units. He knows how to roll up his sleeves and gets to work, putting an end to what doesn't work, adopting best practices that do, restructuring, introducing innovations, making operations more efficient and effective. In short --

(END VIDEO CLIP)

KEILAR: Can McDonald get those results? That's the question and senior Washington correspondent Joe Johns is here to try and help us out with that.

What do we know about him?

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Well, Brianna, the White House is billing this former CEO Bob McDonald as a transformational leader to guide the scandal ridden department through some of its worst times. He's been picked to hold a job that used to be reserved for top military brass.

(BEGIN VIDEOTAPE)

JOHNS (voice-over): The man who once made big bucks selling Tide laundry detergent and Crest toothpaste was a surprise pick as the new VA chief.

BOB MCDONALD, NOMINEE FOR SECRETARY OF VETERANS AFFAIRS: At the VA, the veteran is our customer and we must all focus all day every day on getting them the benefits and the care that they have so earned.

JOHNS: Bob McDonald graduated top of his class at West Point and served five years in the Army which the president underscored while talking about him today.

OBAMA: Let me state the obvious. This is not going to be an easy assignment. Bob knows that but like any Army Airborne ranger, Bob has a reputation for being ready, jumping into tough situations, taking charge and going all the way.

JOHNS: Still, McDonald is best known for his career leading Procter & Gamble, his commonsense approach to business and innovation is laid out in this video now on YouTube.

MCDONALD: Where to play, how to win, what to do, and importantly, what not to do.

JOHNS: The choice of McDonald may also be a political plus for the White House in its dealings with congressional critics. He's donated to Republicans including Mitt Romney and House Speaker John Boehner and he's registered as a Republican. McDonald's former company is headquartered in Boehner's hometown of Cincinnati. Boehner has been a harsh critic of the administration's VA problems but he praised McDonald in a statement.

The White House is hoping McDonald can even appease people on the Hill who are calling for heads to roll at the VA.

JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: There are some important changes that need to be made to make sure that that important work is actually getting done. And so having somebody that has experience in the military, has strong bipartisan support for taking the job, and has a proven track record at implementing changes in large organizations to great effect makes him the right choice for this task.

JOHNS: Paul Rieckhoff, chief executive of Iraq and Afghanistan Veterans of America said he has mixed feelings about the choice.

PAUL RIECKHOFF, IRAQ AND AFGHANISTAN VETERANS OF AMERICA: He doesn't come from the military, he doesn't come from the health care community. He doesn't come from inside the VA. So he is not a name that was on anyone's radar.

Look, we need a turnaround artist. And if he's got experience that can help turn around the VA, that's exactly what our veterans are going to need because the trust is broken.

(END VIDEOTAPE)

JOHNS: The White House is clearly thinking outside the box with this pick. The challenge for McDonald will be tackling a huge government department as an outsider, countless studies have shown how entrenched bureaucracies do not respond well to agents of change.

KEILAR: Yes. Can he be that turnaround artist? I guess, we'll have to see if he can fight against the bureaucracy, right?

JOHNS: Yes. It's going to be a very tough job for him and it's probably going to last for a while.

KEILAR: Sure. But let's hope that he has success with that.

Now straight ahead, millions of Americans could see their 4th of July celebrations rained out. We'll have details of what could be a major storm brewing.

Plus chilling or I should say what Kim Jong-Un plans to do to two Americans who are being held by North Korea.

(COMMERCIAL BREAK)

KEILAR: A tropical storm on the 4th of July and there is a good possibility that millions of people on the East Coast could see their celebrations rained out. Thanks to what's right now a low pressure system in the Atlantic and our severe weather expert meteorologist Chad Myers is tracking all of this for us.

Chad, what are you seeing?

CHAD MYERS, AMS METEOROLOGIST: You know, we're seeing that what will be Arthur, I know it will be, it will run up the East Coast and will make rip currents up and down the East Coast, significant weekend and even midweek rip currents. I don't want anybody, no kids, no adults in the ocean without a life jacket on. It's going to be that treacherous out there.

Something a little bit more imminent right now in Chicago.

Chicago, I need you to be looking to your west and get inside. This is a very dangerous squall line headed your way like a bulldozer pushing air ahead of it at 80 miles per hour. That air is going to blow through Milwaukee, to Waukesha, Kenosha, all the way down to Chicago and even some of these storms could rotate enough to make a couple of tornadoes today. That's the first order of business.

Here's number two. Here's the first order right now, the immediate threat, Chicago and northern Illinois, with a moderate risk. That's the second tier risk of severe weather tonight. I've seen wind gusts of 80 miles per hour already tonight. This, about 30 miles per hour. Doesn't look that bad, looks like what Florida would call just kind of a blow. But I tell you what, this is going to get its act together and it's going to run up the East Coast. It's going to make a run somewhere between Charleston and the outer banks.

That's what the computer is saying right now. And if we do have all of those winds on shore, 60, 70, maybe 80 miles an hour, what we're going to get is that water piling up on the beach and then rushing out into the ocean and we're going to lose people to these rip currents.

It's a big weekend to be on the shore. This is over by July 5th. Right there, July 4th. And then gone. But you need to take precautions right now.

KEILAR: And Chad, obviously so many people will be vacationing in those areas. What should they do?

MYERS: Well, if you can cancel plans, especially for the next couple of days, I would. I wouldn't even go towards the beach until Friday. If you're planning on being there Tuesday and Wednesday, it's not going to be very pleasant anyway.

KEILAR: OK.

MYERS: So just get out of the way and wait a couple of days. This will be long gone by the weekend.

KEILAR: OK. Thanks, Chad.

And coming up, is the Middle East at a dangerous new tipping point? We'll have more on that.

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