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Will Obama and Iranian President Meet?; Kenyan Mall Attack Turns Focus to Minneapolis; Six Days Until Possible Government Shutdown; Home Prices Climbing Faster; Call National Guard in to Chicago?

Aired September 24, 2013 - 09:00   ET

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

(BEGIN VIDEOTAPE)

CAROL COSTELLO, CNN ANCHOR: Should they sit down together and talk nukes?

Also --

MARTIN SAVIDGE, CNN CORRESPONDENT: This week's terror rampage in Kenya has many Americans wondering how long until those behind it come to the U.S.?

COSTELLO: The terror rampage in Kenya has many wondering if al Qaeda- linked groups could again strike the United States. Martin Savidge on fears young radicalized boys in Minneapolis may be plotting terror here at home.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This is the United States of America. We're not some banana republic. This is not a deadbeat nation.

COSTELLO: Frustration with Washington growing, so says the senator from Texas, insisting Obamacare is to blame.

Plus, imagine winning $400 million, and the only one to share it with is your dog.

And this.

JUSTIN TIMBERLAKE, ACTOR/SINGER: I had imaginary friends. I was weird.

(LAUGHTER)

NISCHELLE TURNER, CNN ENTERTAINMENT CORRESPONDENT: I did, too.

TIMBERLAKE: I could tell.

COSTELLO: Nischelle Turner goes one-on-one with Mr. Suit and Tie.

You're live in the CNN NEWSROOM.

(END VIDEOTAPE)

COSTELLO: And we'll talk to Justin Timberlake in just a bit.

Good morning to you. I'm Carol Costello.

A frosty relationship, a handshake, a thaw? It could happen. We just got word the White House has left the door open to some kind of face- to-face meeting with the Iranian president.

The General Assembly of the United Nations is getting under way in New York City. Seven days of speeches, meetings and a really, really big lunch. Headlining day one, addresses by President Obama and the Iranian president. The two heads of government were invited to attend the U.N. luncheon later this afternoon.

This would be the first time the two men would be in the same room since Iran elected its new president. So will they meet face-to-face at this luncheon?

Let's ask CNN's chief national security correspondent Jim Sciutto.

If this face-to-face meeting takes place, it will be huge.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Well, we don't know. And the truth is the White House and State Department officials have been saying the same thing for the last several days, which is that they are leaving the door open to such a meeting but that there is no meeting on the schedule.

It may be that this meeting is up to the Iranians at this. The question is, whether that's a step that they want to take. And we have seen some expectations, management coming from U.S. officials. And I think the reason for that is if a handshake doesn't happen, if a bilateral doesn't happen on the side, they don't want that to signal to people that this new diplomacy between the two countries has fizzled.

And there's some truth to that. We're going to see the U.S. Secretary of State John Kerry in the same room as the Iranian foreign minister on Thursday as part of the P5 Plus One talks, that the permanent five members of the U.N. Security Council plus one. And plus you have many other changes coming out of Iran now, the release of 80 political prisoners yesterday. So there is some real change whether or not this iconic meeting happens.

(BEGIN VIDEOTAPE)

SCIUTTO (voice-over): For years it a U.N. General Assembly annual ritual. Iran's president shouts at the U.S. --

MAHMOUD AHMADINEJAD, FORMER IRANIAN PRESIDENT: Continued threat by the uncivilized Zionists to resort on military action against our great nation is a clear example of this bitter reality.

SCIUTTO: The American president fires back.

OBAMA: In Iran, we see where the path of a violent and unaccountable ideology leads. SCIUTTO: This year New York is brimming with talk of a new diplomacy. U.S. officials repeated no meeting between the presidents is on the schedule, though they remain open to engagement. One direct contact confirmed, however, Secretary Kerry, with his Iranian counterpart, Foreign Minister Zarif, they'll meet Thursday with the five permanent members of the Security Council, plus Germany. The topic? Restarting talks on Iran's nuclear program.

CATHERINE ASHTON, EUROPEAN UNION FOREIGN POLICY CHIEF: In terms of whether we're on the verge of a breakthrough, I would put it like this. That I was struck, as I've said, by the energy and determination that the foreign minister demonstrated to me.

SCIUTTO: So what are the chances of concrete progress here?

KARIM SADJAPOUR, CARNEGIE ENDOWMENT FOR INTERNATIONAL PEACE: There's a lot of signs to suggest that Iran is preparing for nuclear compromise but there are few signs to suggest that Iran is preparing to cut loose Bashar al-Assad.

SCIUTTO: And Syria's president, Assad, grabbed some of the spotlight back, saying inspectors trying to access Syria's chemical weapons could face security threats.

PRES. BASHER AL-ASSAD, SYRIA (Through Translator): If some countries give orders to those terrorists to stop exports arrival, and accuse the Syrian government for doing it, this remains a possibility.

(END VIDEOTAPE)

SCIUTTO: Syria, of course, the other focus for U.S. officials here and some positive signs about a U.N. Security Council resolution backing the U.S./Russia deal on Syria, giving up its chemical weapons stockpiles that was negotiated just a week ago in Geneva. Talks that the U.S. and Russia may be reaching a compromise on how Syria would be punished if it fails to comply with that agreement. So we might see some progress on Syria, Carol, as well this week.

COSTELLO: I know you'll be watching. Jim Sciutto, thanks so much.

And the pictures to the right of Jim Sciutto, if you're facing the television during that, that's Ban Ki-Moon, the secretary general of the United Nations. As you can see the General Assembly getting under way. And for complete coverage of all of this -- because, as you know, President Obama is expected to speak before the General Assembly in the next hour.

Wolf Blitzer will join us next hour for that.

In other news this morning, Kenyan police tweeting this morning that a besieged Nairobi mall is now under full government control, but several gunmen, including snipers, are still believed to be inside that mall.

Explosions and gunfire could still be heard coming from the Westgate Mall. That's, of course, where members of the terrorist group, al- Shabaab, went store to store, shooting and killing shoppers on Saturday. The group is blamed for at least 62 deaths.

And we just learned today that three Kenyan soldiers have died suffered while rescuing others. Sixty-five other people remained unaccounted for. It's not clear if they're hiding out somewhere inside the mall or if they're being held as hostages. More than 10 people have been arrested for questioning in connection with that mall attack.

Even though the attack happened half-way around the world in Kenya, it's turned attention right here at home to Minneapolis.

Let me put my ear thing in so I can hear Martin here.

Investigators say the city is a hot recruiting ground for al-Shabaab. In fact, Kenya's foreign minister tells PBS that two of the three attackers in the mall rampage were Americans.

CNN's Martin Savidge is live in Minneapolis with more.

Good morning, Martin.

SAVIDGE: Morning, Carol. Yes, a lot of Americans are probably -- they've grown accustomed to the idea of terror coming from the Middle East. But from the middle west? And yet that is a possibility that some are concerned about.

Here in the Somali-American community, events in Kenya prompted an emergency meeting of civic and religious leaders. They condemned the violence that's been taking place. But they also know their community has been rich picking grounds for al-Shabaab. They're worried.

(BEGIN VIDEOTAPE)

SAVIDGE (voice-over): At the Abubakr mosque men bow at midday prayer in this Minneapolis neighborhood, home to the nation's largest Somali- American population. Seventeen-year-old Berhan Hassan was a straight A student who wanted to be a doctor. Then he disappeared in 2008.

ZEINAB BIHI, BERHAN HASSAN'S MOTHER: Sometimes I can't sleep.

SAVIDGE: His mother, who at the time didn't want to be identified, told CNN she had no idea where he'd gone until he called.

BIHI: Mom, I'm in Somalia. Don't worry about me. I'm OK.

SAVIDGE: But he wasn't OK. Hassan was fighting for the terrorist group al-Shabaab. Not long after, she was told he was dead.

This weekend's terror rampage in Kenya has many Americans wondering how long until those behind it come to the U.S. Omar Jamal (ph), a Somali diplomat, tell me al-Shabaab is already here.

(On camera): How many people -- how many young people, do you think, have been taken from this community by recruiting?

UNIDENTIFIED MALE: Approximately 30 to 40. And that has been the most often asked question and I think nobody can nail down exact figure.

SAVIDGE (voice-over): Even as we sip coffee in middle America, he is sure the terrorists are recruiting nearby. Hassan's uncle says teens here often raised in single parent homes with no hope become perfect targets.

ABDIRIZAK BIHI, BERHAN HASSAN'S UNCLE: Right now you have young people, young boys, who never have seen their dad, who live in this poverty, environment, and need badly to find a role male model and al- Shabaab recruiter becomes that father they never had.

SAVIDGE: Unless something is done, Jamal predicts one day, instead of leaving the U.S. to fight for al-Shabaab, they will stay, he says, and fight here. Explaining the logic this way.

UNIDENTIFIED MALE: It's just a fraction of second. Where should I do that? Well, I'm in Minneapolis. What the heck. Might as well do it here.

(END VIDEOTAPE)

SAVIDGE: Community leaders say that just earlier this month, two other young men from this area disappeared.

I will point out, though, Carol, I had a long conversation with a number of young people that were very agitated with this kind of coverage. They say al-Shabaab does not represent them. They do not listen to al-Shabaab. In fact they say that al-Shabaab has been driven from this community. They're Americans first and foremost. Their future and their hope is here -- Carol.

COSTELLO: I hope they're right. Martin Savidge live in Minneapolis this morning. Thank you.

The drama on Capitol Hill drags on. Do I even need to say it? I know I don't, but here it goes. We are six days away from a government shutdown. Senator Ted Cruz continues to sound the call to fellow Republicans to join in his filibuster. Cruz says this would prevent Senate Democrats from stripping the House bill of language that would cut Obamacare funding. But not everyone in the Republican Party is standing by Cruz's side.

CNN's chief congressional correspondent Dana Bash talked with Cruz. She's live on Capitol Hill this morning.

Good morning, Dana.

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Good morning, Carol. That is an understatement that not everybody in Ted Cruz's own party is on his side. But that is not a new phenomenon for Cruz. He came into the Senate because he won in a Republican upset in Texas with the backing of Tea Party supporters. They want him to stand his ground, stand for principle, not negotiate. That's exactly what he's doing.

(BEGIN VIDEOTAPE) BASH (voice-over): The way Ted Cruz sees it --

SEN. TED CRUZ (R), TEXAS: Obamacare is a disaster.

BASH: He's simply keeping a campaign promise. Do whatever it takes to destroy Obamacare.

CRUZ: That should be our priorities, not simply continuing business as usual in Washington.

BASH: Cruz's scorched earth strategy, tying defunding Obamacare to a must pass spending bill, is inflaming many fellow Republicans, who think if this causes a government shutdown, they're going to get burned.

Republican Peter King called him a fraud.

REP. PETER KING (R), NEW YORK: The issue is too important. They're too serious. They require real conservative solutions. Not cheap headline hunting schemes.

BASH: In the Democratic-led Senate, the votes are not there.

UNIDENTIFIED FEMALE: Mr. Cruz, no.

BASH: Some of Cruz's Republican colleagues are so miffed, it has gotten really personal. Bob Corker tweeted, "I didn't go to Harvard or Princeton, the schools Cruz graduated from, but I can count."

(On camera): They don't like what you're doing. They don't like what you're putting them through. These are fellow Republicans.

CRUZ: Well, you know, individual politicians can choose to say whatever they want. They can launch whatever personal insults they want. I would note in the House that the Republicans, including those who have criticized me, voted to defund Obamacare. And in the Senate, I think the votes are very fluid.

BASH: To be sure among many grassroots conservatives, Cruz is a hero. But in the Senate, one on relationships, he's rubbed GOP veterans the wrong way. John McCain called him a wacko bird, but now Cruz is now embracing.

CRUZ: If they want to insult me, they can knock themselves out. My focus is on the substance on stopping Obamacare. Why? Because it's hurting the American people.

BASH: Now he's warning Senate Republicans -- support his filibuster.

CRUZ: Any senator who votes for cloture on this bill is voting to give Harry Reid the authority to fund Obamacare with just 51 votes.

(END VIDEOTAPE)

BASH: But even Cruz's party leaders are not listening to that, Carol. Minutes after we spoke, the top Republican in the Senate, Mitch McConnell, said he is not going to support Cruz's filibuster. That means the top two Republicans are saying no way. We are going to see what happens with the rest of the Republican caucus after they have their weekly lunch today.

But what that likely effectively means is that Democrats in the Senate will be able to strip out that defunding Obamacare from this bill, keeping the government running and they're going to send it back to the house, and leaving it in their court to decide whether or not the government should shut down or not. It just depends on when that's going to happen. It could very well go right up to the deadline next Monday.

COSTELLO: Well, you're going to have a busy week. Dana Bash, reporting live from Capitol Hill this morning.

Who would you tell if you won the -- lottery, like a $400 million jackpot I'm talking about? How about your dog? That's what the latest $400 million Powerball prize winner did when he realized he really hit it big. According to lottery officials the lucky winner has stepped forward, but is choosing to stay anonymous. That's why we're showing you those weird pictures.

What we do know is that the man is from Columbia, South Carolina. It was the second time he ever played the lottery. And get this. He made the lucky purchase after his wife called him to pick up some hotdog buns. The store happened to be out of hotdog buns so he bought that lottery ticket instead. Twenty bucks worth. And guess what, he won. We'll keep you posted.

Still to come in the NEWSROOM, shootings, murder, tragedy? It's been happening so often in Chicago. So could the National Guard help? We'll ask a man who knows all about doing that, next.

(COMMERCIAL BREAK)

COSTELLO: Checking our top stories at 17 minutes past the hour.

About 150 firefighters now on the scene of a brushfire at California's Angeles National Forest. Fire broke out yesterday afternoon and has burned about 200 acres. Some evacuations have been ordered but no homes are in danger right now.

Utah boy suffered first and second-degree burns after his mother's e- cigarette exploded while she was driving. An electric cigarette, that's what I'm talking about. The 3-year-old's car seat caught fire. Flames shot up the little boy's body. The mother was able to douse the fire by pouring a cold drink on the boy. He has recovered but mom says she will never, ever again smoke an e-cigarette.

In money news, Toys "R" Us is hiring 40,000 worker for the holiday season. About the same number added last year. The company says hiring for its stores and distribution centers will start this week. A consulting firm predicts that retailers overall holiday hiring will be down from the 2012 season.

President Obama probably didn't think anyone could hear him when he started talking about his smoking at yesterday's United Nations meeting.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I hope you've quit smoking.

MAINA KIAI: Sometimes.

(INAUDIBLE)

OBAMA: No, no, I haven't had a cigarette in probably six years. That's because I'm scared of my wife.

(END VIDEO CLIP)

COSTELLO: The president joked that the reason he quit smoking was because he's afraid of his wife. President Obama admits that he still smoked in 2009. His friends say when he signed the healthcare bill in 2010, he quit smoking cold turkey.

Another positive sign to pass along with you the housing market is recovering.

CNN business anchor Christine Romans is with us now.

Give us the numbers.

ROMANS: Another very strong report here. This is from Case-Shiller. And it's showing us, Carol, that for 20 cities that this particular report tracks, the best year-over-year gain since 2006.

Think of that, since the height of housing bubble. Twelve percent gain year over year in home prices for that average, home prices climbing faster than July. Look, the rising annual rate of 12.4 percent.

What's interesting here is that all of the 20 cities measured by this, performance in a row have been rising. And, Carol, some of these hot spots like Phoenix and some others are showing 20 percent plus year- over-year gains in home price appreciation.

Now, here's what we're watching very closely in all of these housing numbers, are there signs this is maybe the last hoorah, that it's going to go slow down a little bit because of rising mortgage rates? So, in some cities, the pace of acceleration has been starting to slow. That's what we're watching very, very closely.

And remember, Carol, we're still 20 percent below the peak of the bubble. So, some homeowners here, when we say how good this housing news is, they're like, I don't feel it. I'm still underwater.

I get you. But when you look year over year, 12.4 percent.

COSTELLO: I'm still waiting. I am. I'm still waiting. I have a home in a city where they're showing positive signs, but I'm still not selling. Not yet, because it hasn't caught up yet. ROMANS: Yes, all real estate is local. When you look at some of these spots -- for example, Chicago, New York metro area, home price appreciation has been much more shallow than you've seen in other places like the big bubbles that popped, Phoenix, San Diego.

Some of these places are going -- there are record home prices in a few places, Dallas, Denver, some cities like that are having record home prices right now. But depending on where you live, you're seeing different kinds of housing market activity. Closely watching mortgage rates, Carol, 30-year fixed rate mortgage 4.5 percent. Closely watching mortgage rates, if those keep going up, will that hurt the recovery further next year?

COSTELLO: Christine Romans, thanks so much.

ROMANS: You're welcome.

COSTELLO: Coming up in the NEWSROOM: should troops step in to protect the citizens of Chicago, since the violence shows no signs of easing? We'll talk to Genera Russel Honore about that after a break.

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COSTELLO: Thirteen people shot at a Chicago park. It's a story that still grabs our attention.

Now, several days later, arrests have been made in the case, two men taken into custody last night on charges of attempted murder and aggravated battery with a firearm. Police say neither man is believed to be the shooter, though. But Thursday's shooting is just another example of a problem that shows no sign of easing -- more violence and no way to stop it.

Even Illinois governor has said, if asked -- Governor Quinn said he would consider using state police or even the National Guard to help stop the violence in Chicago. And while highly controversial, it wouldn't be the first time the National Guard was called out to help curb violence on our city streets. The Illinois governor's comments are not even the first time someone suggested the National Guard come to Chicago.

Retired Army Lieutenant General Russel Honore floated that idea earlier this year. You remember, Honore was in charge of the situation in New Orleans following Hurricane Katrina.

General Honore joins me this morning.

Good morning.

LT. GEN. RUSSEL HONORE, U.S. ARMY (RET.): Good morning, Carol.

COSTELLO: Thanks for being here.

You experienced this after Katrina. You led troops in New Orleans and restored order. Could the National Guard help stem the violence in Chicago? HONORE: Well, they certainly could. They certainly have the mission set. They have the capacity and they have the capability to do it.

Something has to be done when our great city of Chicago is making news headlines like places like Pakistan, Iraq and now Kenya on the same level of violence over the weekend. Something has to be done, hundreds of people being lost in Chicago every year and the police don't seem to be able to get a handle on it. So, something has to be done.

They could use state police. They could ask for federal assistance. You know, Carol, if this was a terrorist offense or a natural disaster, it wouldn't be a question. The National Guard would be there.

For some reason, the city of Chicago, who has spent a lot of time and money, advertising themselves as a destination, I think are reluctant to ask for outside help because it's a tourist destination and it may not look good. But the people on the south side of Chicago, they need some relief because they are not free. They're being held captive by these gangs.

COSTELLO: As you said, Chicago does not want the National Guard to be called in. As you say, the violence continues.

You say the mayor is practicing basketball diplomacy to stem the violence. What do you mean by that?

HONORE: Well, he is attempting to try to get these gangs to talk to each other, some type of a diplomatic approach.

I think the number one thing we have to do is take the gangs down. Number two, cut off the cartels who are shipping the drugs in there that the gangs make their money on to survive. And, number three, secure the streets of Chicago, specifically on the south side.

If this was happening in downtown district of Chicago, trust me, the entire police in the entire state would be used. But this is happening on the south side where people are struggling economically, poor schools, poor economic conditions.

So, tactically, you've got to fix this shooting but strategically, they have to do more on the south side of Chicago to restore that community.

COSTELLO: I think many cities would be reticent to do this, because it sort of sounds like martial law. Do you really want them coming into your city and taking over?

HONORE: Absolutely not. There's no need for martial law if they bring in more police.

They have not optimized the use of state police nor the federal police to come in and help take the cartels down, do some sophisticated surveillance and help to take the gangs down. But the city will have to ask for that help and accept that help. And that is a challenge they've got to do. The National Guard is an option. I don't think it's time now to call the National Guard in, until they've exhausted the state police and the federal assistance that's available.

COSTELLO: General Russel Honore, thanks for your insight this morning. We appreciate it.

Still to come in the NEWSROOM, a key fact about the violent history of the naval yard shooter and why the Navy had absolutely no clue about it. Barbara Starr, after a break.

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