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Web Fix By End Of November; More Democrats Say Extend Obamacare Sign-up; Reports Of Cell Phone Taps Anger Allies; Germany's Merkel Slams NSA Spying; Reports of Cell Phone Taps Anger Allies; Eavesdropping on a Former Spy Chief; JP Morgan Settlement

Aired October 25, 2013 - 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: Hello, I'm Wolf Blitzer, reporting today from Washington.

Let's begin with some new information about how long it will take potentially to fix all the problems with the Obamacare website. Jeffrey Zients was brought in to help lead the trouble shooting for the healthcare.gov website. He's updating reporters on efforts to get the site fixed. Athena Jones, once again, joining us from the White House.

Athena, this timeline not very necessarily encouraging. What, the end of February at the earliest that they might be able to have everything working properly. Is that right?

ATHENA JONES, CNN CORRESPONDENT: Hi, Wolf. It's the end of November. This is what Jeff Zients told reporters on this call. And this is the answer to the question we've all been asking ever since it became clear that this site was not working as well as it should. He said, the site should be fully functioning by the end of November which means that the vast majority of folks trying to sign up for health insurance and shop around and make a choice for health insurance should be able to do so by then. And now, of course, this is the answer we've been waiting for. But the end of November isn't all that encouraging because if it does take until then, that will be two months, about two months since the site launched.

One more thing we learned from the call is that they're appointing QSSI, that's one of the contractors who's been working on this -- on this site. They're appointing them to head up the entire effort to fix HealthCare.gov. And you'll remember one of the big criticisms of all of this is there wasn't one person or one organization, apart from CMS, the government, that was in charge of making sure that this site could run properly and fix it properly. And now, they're answering some of those criticisms by appointing Jeff Zients to head up the tech surge and by making sure that QSSI knows that they are in charge of making sure everything works all together -- Wolf.

BLITZER: Yes, Jeffrey Zients is a highly respected official, worked in the private sector, was CEO of some major corporations. The acting OMB director is going to be taking over as director of the National Economic Council. But he's got this assignment right now trying to make sure it works. What they're saying in the statement is that they expect it to be almost fully functioning by the end of November. End of November. So, that's two months. It started October 1st, so all of October. All of November basically it won't be fully functioning. Are they going to delay the penalty by two months? In other words, keep the open enrollment going an extra two months because of these problems?

JONES: Well, that's another question that a lot of folks have been asking and some Republican -- many Republicans and also a growing number of Democrats are saying that they need to look at shifting this idea that people have to buy health insurance by the end of March or face a penalty. There's no news on that. That hasn't changed. The White House, the administration, knows that they need to work hard to fix this. Jeff Zients said HealthCare.gov is fixable but it's going to take a lot of work. And, of course, they say by the end of November. If they're lucky, it could happen sooner. But that's the estimate we have right now. And, of course, by -- if people enroll by December 15th, they'll be able to have their health insurance kick in as of January 1st. But they have until the end of March to sign up so that they can avoid any sort of penalties. So, no news on changing the penalty, Wolf. But big news today on when they think they can fix all of these problems that have been plaguing this site and this very important effort, this signature law of the president's -- Wolf.

BLITZER: Yes, it's interesting they use the words, almost fully functioning. I asked the question about delaying the penalty. Ten Democratic senators sent a letter to Kathleen Sebelius today saying, you got to delay it. You got to keep it open for a little extra time to give consumers critical time in which to become familiar with the Web site and choose a plan best for them.

All right. Athena, thanks very much.

So, one question a lot of people continue to ask, will fixing the Web site give Democrats, give everyone, in fact, a lot more time to deal with this? Democrats, as you know, have been calling for an extension of this non-penalty phase.

Let's go to Lisa Desjardins. She's up on Capitol Hill. I got this letter in front of me, Lisa. You have a copy. Jeanne Shaheen, a whole bunch of other Democratic senators, some up who are up for re- election next year. Some who are not up for re-election next year. They want -- they want to delay any penalty because of all of these problems.

LISA DESJARDINS, CNN CAPITOL HILL CORRESPONDENT: That's right. That momentum's grown really fast. A really interesting development, as you say, Wolf. These 10 Senate Democrats sent a letter last night to the Kathleen Sebelius saying March 31st is too soon. There are too many problems and the Health and Human Services folks need to push back that enrollment deadline.

Let's take a really quick look at some of the big faces that have signed this letter. You'll see that they're from all over the country and moderates as well as liberals. Here you can Jeanne Shaheen who has really spearheaded this effort. Also signed this letter, interestingly enough, Dianne Feinstein of California, Mary Landrieu of Louisiana, Mark Pryor of Arkansas. And three of those four, Wolf, running for re-election. What did they say in the letter? They really didn't hold back.

Let's take a look at some quotes from this letter. It was about a page, a little bit longer. They wrote, our constituents are frustrated and we fear that the longer the Web site is not functional, opportunities for people to log on and enroll will be lost. Then later, individuals should not be penalized for lack of coverage if they're unable to purchase health insurance due to technical problems.

Wolf, that's the argument we keep hearing on Capitol Hill, this coming from Democrats to a Democratic administration. So, we'll see what happens next week when the senators return to town. They're not even in town right now.

I'm waiting for Health and Human Services to respond to this letter. They said they should get back to me later today.

BLITZER: Yes, we'll see what the House says, too. It's not every day you get --

DESJARDINS: Yes.

BLITZER: -- 10 Democratic senators --

DESJARDINS: I know.

BLITZER: -- writing the secretary of Health and Human Services saying delay the penalties because of all these problems.

Lisa Desjardins, thanks very much.

Kathleen Sebelius, by the way, is on the road again today urging people to sign up for Obamacare. She'll be in San Antonio, Texas later this hour after a stop earlier in (INAUDIBLE) Austin. Sebelius says the Obamacare Web site is improving day by day. She says her focus is on making the site perfect. At a stop in Phoenix yesterday, Sebelius sent a message for critics who say she should step down.

(BEGIN VIDEO CLIP)

KATHLEEN SEBELIUS, SECRETARY, HEALTH AND HUMAN SERVICES: Well, the majority of people calling for me to resign I would say are people who I don't work for and who do not want this program to work in the first place. I have had frequent conversations with the president and I have committed to him that my role is to get the program up and running and we will do just that.

(END VIDEO CLIP)

BLITZER: Sebelius is expected to testify before a House committee next week about the problems with the Obamacare Web site. That should be a lively, lively session.

The Obama administration also coming under fire outside Washington as international allies demand answers on spying. Is the U.S. monitoring their cell phones? We're going to go through all the allegations, the administration's response. That's next. (COMMERCIAL BREAK)

BLITZER: New details on the NSA and concerns over American surveillance programs. There are now three major stories we're watching related. Number one, France and Germany calling for talks with the United States after reports the NSA was plugged into the cell phone of the German chancellor, Angela Merkel.

Number two, Merkel may not be alone. "The Guardian" newpaper reports the NSA was given the numbers of 35 world leaders and kept tabs on all of them. Those numbers said to be passed on but to the NSA by a U.S. official outside the agency.

Number three, the Washington post reports the U.S. is reaching out to foreign governments to tell them that other secrets, potentially embarrassing secrets, may leak out soon. Among them, details of cooperative efforts between the U.S. and other nations to spy on Russia, China and Iran.

Our Chief National Security Correspondent Jim Sciutto is joining us from New York today. Jim, all this, I assume, or at least a lot of it Edward Snowden related.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: That's exactly right. That's the substance of the warning that you just talked about in "The Washington Post" story of the U.S. now warning other countries particularly in sensitive areas that they're going to be more revelations. And this is a real problem because for some of these countries, cooperating with the U.S. is dangerous.

We reached out to the National Security Council and this is how they responded. The United States takes the concerns of the international community seriously and has been regularly consulting with its affected partners.

We also heard today from the European Union that Angela Merkel and others saying these revelations could affect their intelligence cooperation with the U.S. And, of course, we're talking about allies like France, the U.K. and Germany that have been among our closest partners in terms of cooperating on fighting terror.

You also mentioned the 35 countries, the 35 leaders that the NSA was spying on. We now know one more of those countries or we he can surmise that one of those is Spain because the U.S. ambassador to Spain was summoned today to answer for these allegations as well. So, the U.S. causing some real problems with its closest allies.

BLITZER: What else are U.S. officials saying about all of this?

SCIUTTO: Well, we're getting the first public pushback, the strongest public pushback now from the administration. The Homeland Security advisor to the president, Lisa Monaco, wrote an op-ed in the "U.S. Today" today talking about this. And this is how she described it, we want to ensure we are collecting information because we need it and not just because we can. Administration officials have been telling us for the last couple of days that they are reviewing NSA surveillance to get a better balance, they said, between security concerns and privacy concerns. So, now we see them underlining that by saying, in effect, we've been doing -- the NSA has been doing too much.

The question that the administration has not answered clearly yet is this. They've said in their conversation with Angela Merkel that the president said, we are not doing this surveillance of your personal calls now and will not in the future. But when asked yet again today, did they do it in the past? They acknowledged that they did it in the past, the White House balking on that question. I think we can -- we can guess that the answer really is a yes.

And one more thing. They'll repeat the point that all countries spy on each to defend themselves to say, hey, wait a second. Yes, this may be -- the scale of this may be unusual but other countries do the same thing.

BLITZER: Yes. All right, Jim Sciutto working the story for us. Thank you.

The Florida Republican senator, Marco Rubio, weighed in on the controversy on CNN's "New Day" earlier today. Listen to what he said.

(BEGIN VIDEO CLIP)

SEN. MARCO RUBIO (R), FLORIDA: -- on the NSA programs three things. Number one, an ongoing review of our intelligence gatherings capabilities is the right approach because at the end of the day, you want to make sure your resources are being used where you need them the most. Number two, these leaders are responding to domestic pressures in their own country. None of them are truly stocked about any of this. They're aware of it because of my third point. And that is everyone spies on everybody. I mean, that's the -- that's just a fact. I mean, and whether they want to acknowledge that publicly or not, and every country has different capabilities. But at the end of the day, if you are a U.S. government official traveling abroad, you are aware that anything you have on your cell phone, your iPad could be monitored by foreign intelligence agencies, including that of your own allies.

So, I think a lot of what you're seeing from these European leaders is for the domestic consumption of their own public. But at the end of the day, everyone knew there was gambling going on in Casablanca.

(END VIDEO CLIP)

BLITZER: They certainly did know that.

Candy Crowley is here, our Chief Political Correspondent, the anchor of CNN's "STATE OF THE UNION." What do you make of this, Candy? Just business as usual, a little awkward, a little embarrassing, but not necessarily a big deal?

CANDY CROWLEY, CNN CHIEF POLITICAL CORRESPONDENT: A little awkward, a little embarrassing. It's like finding out your -- one of your best buddies has looked through your medicine chest or something. You kind of -- you know, it changes the relationship a bit. Certainly, the pushback has been everybody does this. But we have better stuff. So we are -- the U.S. is more able to tap into the phone of Angela Merkel and to do other things.

I think the most troubling thing for their administration, at least insofar as it oversees relationships are concerned, is that it's been a cooperative. They've been sharing intelligence. This is a new day and age of terrorism. So, if that comes out -- if, for instance, Germany is seen as, well, they gave the U.S. this information about the following six people, that is dangerous because then that turns the spotlight on -- in a way that certainly Merkel would not like. I think the administration is lucky in this way, you hear - you hear responses like Marco Rubio. And the truth is, there is no pressure on this administration to change this at this point.

BLITZER: Change the policy of eavesdropping -

CROWLEY: Absolutely.

BLITZER: Surveillance -

CROWLEY: Absolutely.

BLITZER: Even on friendly countries -

CROWLEY: And I think it's one thing to say, oh, we all spy on each other, and it's another thing for Angela Merkel to find out that her cell phone's been tapped. I think it's just -- the reality of that simple fact is different from, oh, yes, everybody spies on everybody.

BLITZER: Right. They had a conversation, the president and Angela Merkel, the other day.

CROWLEY: Yes.

BLITZER: It was probably not necessarily the best conversation they ever had before. What do they need to do? This U.S.-German relationship, a key NATO ally, they have to do something to repair it.

CROWLEY: They do. But bottom line, there is too much commonality of destiny, of how they view the world, of what's at stake and risk for this to be a permanent rift between the U.S. and Germany, or the U.S. and Britain, or the U.S. and Spain or the U.S. and France because there still is that. They fought a lot about a lot of different things, but those have been alliances that have held. And I - and they'll weather this. But it does bring up that trust thing. And if it means that everybody dials back what they give to the U.S., which is the other side of this coin, I think that's not great news for the U.S.

BLITZER: Yes.

CROWLEY: We - you need - we want the - we want the information we want, except for they never know whether they want it until after they get it, which puts it -

BLITZER: And more stuff is about to come. It's always breathtaking how much information -- sensitive information Snowden walked away with.

CROWLEY: Well, this is - that's -- that's scary, as well, is like I just doesn't even seem like the information is secure within the NSA, obviously.

BLITZER: Obviously wasn't all that secure. I think - and you've got a big show Sunday morning.

CROWLEY: Indeed we do. We're going to talk to Mike Rogers exactly about this sort of thing.

BLITZER: The chairman of the House Intelligence Committee.

CROWLEY: The chairman of the House Intelligence Committee. A couple of other subjects we want to bring up. But we're also going to talk to Zeke Emmanuel, who, as you know, is the brother of Rahm Emanuel. But he has been sort of knee deep in Obamacare. And we wanted to kind of move the conversation along and say, OK, let's say they fix the computer stuff, what's it going to look like? What's the relationship between you and your doctor going to be like after January 1 or whenever it all kicks into effect.

BLITZER: We'll be watching. 9:00 a.m. Sunday morning. "State of the Union."

CROWLEY: I'll be there. Thanks, Wolf.

BLITZER: Also replayed at noon.

CROWLEY: Yes.

BLITZER: Sometimes it's live at noon too, right?

CROWLEY: Yes, absolutely.

BLITZER: Thanks very much Candy Crowley reporting.

CROWLEY: Thanks, Wolf.

BLITZER: The tables are turned on a former spy chief. What he thought was a private phone conversation on an Amtrak train didn't exactly turn out to be so private after all.

(COMMERCIAL BREAK)

BLITZER: Eavesdropping on a former director of the National Security Agency. Michael Hayden was on a train yesterday having a private conversation on his cell phone. A nearby passenger overheard him, took to Twitter, live tweeting parts of Hayden's conversations. Here are a few of the tweets. "Former NSA spy boss Michael Hayden on Acela behind me blabbering on background as a former senior administration official sounds defensive." "Hayden was bragging about rendition and black sites a minute ago." "On Acela, phone ringing, I think the jig is up. Maybe somebody is telling him I'm here. Do I hide?" The man behind the tweets, Tom Matzzie, the former Washington director of moveon.org. He was on CNN earlier today and he defended his decision to tweet.

(BEGIN VIDEO CLIP)

TOM MATZZIE, TWEETED FORMER NSA CHIEF'S CONVERSATION: He has no expectation of privacy. He's in a public place. He's the loud guy on the bus, the loud guy on the train, the loud guy talking on his phone in the middle of the restaurant, and he's saying things that are newsworthy. It's actually news worthy whether or not the former head of the NSA is making disparaging comments about the president of the United States.

(BEGIN VIDEO CLIP)

BLITZER: Brian Todd has been looking into this story. So what's Hayden saying about all of this?

BRIAN TODD, CNN CORRESPONDENT: Wolf, he's pushing back on the notion that Matzzie puts out there that Hayden was bashing the president of the United States. Hayden issuing a statement today saying, quote, "had a nice chat with my fellow Pittsburgher. Not sure what he thinks bashing the administration means. I didn't criticize the president. I actually said these are very difficult issues. I said I had political guidance too that limited the things that I did when I was director of NSA. Now that political guidance is going to be more robust. It wasn't a criticism." So Michael Hayden pushing back on this notion that he was criticizing the president.

But Tom Matzzie kind of sticking to those guns, Wolf.

BLITZER: Yes, you spoke to Matzzie earlier today. You had a chance to hear his side of the story of what happened. He believes that Hayden opened himself up to this kind of thing.

TODD: He certainly does. He thinks it was inappropriate and undignified for Hayden to do that. Now, we have to say, Matzzie does describe himself as a partisan Democrat. He was a leader of moveon.org and he said that, you know, he didn't like what he was saying about the president of the United States. But he also pushed back on the notion that he was tweeting about sensitive things that Michael Hayden was saying. Take a listen.

(BEGIN VIDEO CLIP)

MATZZIE: I didn't suggest he was spilling state secrets. He wasn't sharing the location of, you know, secret government, you know, installations or any secrets like that. No, he was making political commentary about U.S. intelligence and U.S. foreign policy. And not -- and using all of his credibility to play a political game. And so if he's going to use that credibility to use a political game, he makes himself a target.

(END VIDEO CLIP)

TODD: And I said to Matzzie, I kind of challenged him over the phone when I talked to him saying basically, Wolf, you know, look, even if it was - if he was in public and he was saying these things rather loudly, you know, it was his conversation, what gave you the right to do that? And he said, you know, basically, you don't have an expectation of privacy. He said, again, he was being the loud guy on the train. So he felt he was justified in doing it.

BLITZER: Next time he should go into the quiet car.

TODD: Yes.

BLITZER: You know, you take the Acela from Washington to New York -

TODD: Right.

BLITZER: There's a car that's a quite car, no cell phone use allowed.

TODD: That's right. Matzzie did make the point they were not in the quite car.

BLITZER: They were not.

TODD: He said he -- they - if they were, it would have been worse.

BLITZER: But he did -- take a picture with him and Hayden and tweeted as well.

TODD: He did. I mean they kind of had a nice conversation.

BLITZER: They're both from Pittsburgh.

TODD: Right, and Hayden offered him an interview. And Matzzie said, hey, I'm not a journalist. But there you see the photo. They had kind of a nice moment together but I don't know if they'd have that moment now after all this fallout if they saw each other.

BLITZER: Yes, I know. You're going to have a lot more later in "The Situation Room" on this story.

TODD: Yes, sir.

BLITZER: It's generating some buzz out there.

TODD: Yes.

BLITZER: Thanks very much for that, Brian Todd.

TODD: Sure.

BLITZER: So is there any hope for what is called a grand bargain budget deal? Lawmakers on both sides of the aisle seem to agree to the answer on that. Congressman Tom Cole, he's standing by live. He'll weigh in.

(COMMERCIAL BREAK)