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Fed Stimulus Decision; Indian Diplomat Controversy; California Girl on Life Support; NSA Review Panel Recommends Changes

Aired December 18, 2013 - 14:00   ET

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

BROOKE BALDWIN, CNN ANCHOR: Here we go. I'm Brooke Baldwin. Great to be with you. Thank you for being with me.

We're waiting for a big, big moment happening right now involving your wallet. So in his very last move here, as the chairman of the Federal Reserve, Ben Bernanke, will soon reveal whether he intends to pull back on the stimulus that has been keeping many investors very, very happy. But whatever his decision, as we look at the big board, certainly, it will be reacting to the news we'll be getting any minute now. So we'll be watching for that. We'll take you to the New York Stock Exchange momentarily.

First, some of the biggest stories in a flash.

Roll it.

First up, happening right now at the White House, the president and first lady trying to sell healthcare.gov to a new group. This time, to moms. And I'll speak live with one mother about whether or not after this meeting she was convinced.

And speaking of the White House, after a judge ruled its NSA program, which collects phone surveillance on Americans, is likely unconstitutional, the administration now saying today it will release a review of the program sometime this afternoon. So we're on the lookout for that. Standing by for that.

It is also being called a, quote, "barbaric arrest." You heard about this today? This strip search of a junior Indian diplomat in New York leading to retaliation against U.S. diplomats in India. Her alleged crime, lying on a visa application about exactly how much she paid her housekeeper, which was allegedly all of $3 an hour. Our senior legal analyst, Jeffrey Toobin, standing by to weigh in on the arrest and whether she should, could go home. And next hour, we'll take you to New Delhi for the latest on the reaction there.

By now you know if you won or you didn't win the whopping $636 Mega Millions jackpot. But I can tell you today, at least two people are going to have a very happy holiday season because their tickets matched all six winning numbers from last night. So the tickets were sold in San Jose, California, and in Atlanta, Georgia. These still unidentified winners will split the second largest Mega Millions jackpot in U.S. history.

But back to the big story right now, Ben Bernanke making his last stand at chairman of the powerful Federal Reserve. This hour, he holds his final regular news conference after revealing whether the Fed will start phasing out its massive stimulus program. The Federal Reserve has been buying these Treasury mortgage bonds at a rate of $85 billion a month to help pump up the economy. And here to talk about this and break the news for us right now is CNN Money assistant managing editor Paul La Monica, CNN global economic analyst and "Time" assistant manager editor Rana Foroohar, and also business correspondent Maribel Aber at the New York Stock Exchange.

So I've been watching the two of you out of the corner of my eye here to see if you're getting anything on your Blackberry. You were handed notes. Rana, let me just begin with you. What's the news?

RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: Well, interesting news. It looks like in January we are going to see some tapering back of the buying of mortgage-backed securities and long-term treasuries.

BALDWIN: Really?

FOROOHAR: A very small amount, though. We're going on the mortgage- backed security buys from $40 billion to $35 billion a month, which is a small tapering, and also $5 billion a month down on long-term treasuries.

So what that signals is what we've been expecting, that the economy is improving, the labor markets are improving, inflation is still a little lower probably than the Fed would like, so that may be why we're seeing this very gentle move. I think that Ben Bernanke is probably also wanting to leave the door open for Janet Yellen to take the pace that she would like into the new year.

BALDWIN: We'll get to Janet Yellen in a minute because that is, of course, big news pending her Senate confirmation.

But Paul La Monica, I was talking to both of you before we started. You know, if you were betting people, will anything happen? And you both said, nah, no tapering. Are you surprised?

PAUL LA MONICA, CNN MONEY ASSISTANT MANAGING EDITOR: It's a -- it's a bit of a surprise. I thought that he would leave - that Bernanke would leave this to make it Yellen's decision, but I guess the Fed overall felt that the economy is strong enough that they can take away those training wheels, if you will. I mean they're only cutting back from $85 billion to $75 billion, so there still is stimulus there. I think it would be a mistake to say, oh, no, the Fed is pulling out.

BALDWIN: Yes.

LA MONICA: It's just pulling back.

BALDWIN: Just a little bit.

FAROOHAR: That's right.

LA MONICA: Yes.

BALDWIN: We'll talk about the economy minus the training wheels in a minute.

But Maribel Aber, to you at the New York Stock Exchange, walk me through some of the numbers. Are you seeing market reaction yet?

MARIBEL ABER, CNN BUSINESS CORRESPONDENT: I am, Brooke. I'm watching stocks move mostly higher in reaction to the Fed. It's going up and down right now. The Dow up 111 points. The Nasdaq down slightly, but it's up higher than it was before. The S&P up five points.

You know, we had been hovering on either side of that flat line for much of the session. So we see a big jump here after this announcement. A lot of people on Wall Street, Brooke, had started to expect this modest taper over the past few weeks, especially as we saw economic data improving. Rana talked about that earlier, right? This $10 billion pullback is about -- in the range of what we expected. It's not a huge shock to the market. In fact, investors seem OK with it. You could argue that the good thing is the decision is finally behind us. And, of course, Wall Street likes certainty.

BALDWIN: So the market is improving. I remember we talked recently when the latest job numbers were out, which were an improvement -

FOROOHAR: Yes.

BALDWIN: And you made this great point which was about the housing sector. We had great numbers in November. Housing really is a harbinger of things to come. And is this still like a little bit tenuous to be tinkering with tapering when we're just starting to get our heads above water?

FOROOHAR: Well, that's the big question. I mean you are seeing housing starts, so new housing projects that are coming online, really jumping up. And that's a very good sign because that will filter through the economy in the next few months.

BALDWIN: OK.

FOROOHAR: And housing is a big marker of consumption. So, much more so than stock wealth. When people feel that their home prices are going up and they feel secure in that way, they're buying more. When they're buying now homes, they're buying a lot of goods to fill it. So that is a really key piece of data that we should be looking at going forward.

BALDWIN: Staying on housing, Paul, what would you say to people who are hearing this news for the first time and thinking, OK, I was thinking of buying or selling a home maybe at some point early next year, or as an investor. What does this mean for them?

LA MONICA: Well, I think the good news is that the Fed obviously felt that the only reason to do this is because the economy's ready for it. And I think we have seen the market, you know, begrudgingly accept that this was going to be coming.

BALDWIN: Begrudgingly.

LA MONICA: As long as interest rates don't skyrocket on this new, and, remember, that was the main reason for all this bond buying to begin with, to keep long-term rates low. If interest rates stay relatively steady, then mortgage rates are not going to shoot up, and then that's also very encouraging for anyone that's looking to buy a home. Yes, you probably missed the, you know, the really great opportunities to buy a little bit earlier this summer when rates were really low, but they're still not that high.

BALDWIN: OK.

FOROOHAR: And, you know, and I think that demand is such that we aren't really going to see a huge jump in rates for the next year or two. Most people are expecting rates to stay low into 2015, possibly even 2016.

BALDWIN: OK. I was getting news in my ear. Still, we're watching the stock market. It's up 150 points as I speak. So that's good news, obviously, for folks who are watching those numbers very closely.

Finally, though, as we talk about this final news conference, Ben Bernanke, pending Senate confirmation, you know, Janet Yellen is the woman, is the Fed chair come January, what does this mean for her? And do you think she will continue this course that Ben Bernanke is leaving for her?

FOROOHAR: Oh, I think she absolutely will.

BALDWIN: Yes.

FOROOHAR: I mean she was one of the key lieutenants, one of the key architects of this program. And in a way, I like the fact that Bernanke decided to do this very minor tapering because it kind of sets the stage, creates a sense of continuity. I mean as we've been saying all today, markets like certainty. And you can be certain that Janet Yellen is going to carry this forward.

BALDWIN: OK. Rana Foroohar, Paul La Monica, thank you both, Maribel Aber for us at the stock market. We'll be watching those numbers, of course, with you. You can always go to cnnmoney.com to watch the numbers as well. Thank you, thank you very much. Big news there.

Now to this, coming up next, this wild story out of New York. A junior Indian diplomat arrested, strip searched over a maid, this housekeeper she hired here in America. And this has sparked a rift between both countries.

Plus, a girl is brain dead after routine tonsil surgery. Her parents are fighting to keep her on life support. Her mother says the girl has responded. She's moved parts of her body for her mother. Is that possible? We'll discuss what the next moves are here coming up.

(COMMERCIAL BREAK)

BALDWIN: Right now, the safety of American diplomats in the Indian capital of New Delhi is in doubt as Indian forced dismantle these security barriers here. These are on streets right around the U.S. embassy, and revoke privileges given to American counselor officials. U.S. Secretary of State John Kerry calling a top Indian official to, quote, "express his regret" about the events that unfolded. Why?

Let me take you back. It all happened right here in New York City. You had this junior Indian diplomat. She was arrested on charges of visa fraud and underpaying her housekeeper. So this diplomat was then arrested, held in a cell. She was strip searched and this junior diplomat's treatment while in custody described as barbaric by the Indian government. Jeff Toobin, CNN's senior legal analyst, joining me to walk me through what this means, what we do going forward.

So, let's just begin with, we were talking, there is minimum wage -- beginning with what she was paying apparently her housekeeper, $3 or something an hour. Minimum wage is minimum wage for a reason. If you're not paying minimum wage, that is against the law.

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: That is against the law and that's one of the things she's accused of doing with regard to this housekeeper.

BALDWIN: Also visa fraud.

TOOBIN: Lying about what she's paying her and about the circumstances of her employment. That's the criminal charge that's at the heart of what she's charged with.

BALDWIN: OK. So then that said, then learning about her being handcuffed in front of her child's school, apparently strip searched. Does the punishment fit the crime?

TOOBIN: Well, we have to see. I'd like to reserve judgment on that. You know, I think everybody who's arrested should be treated the same way as everyone else who's arrested. When you get arrested, you don't - you are often searched. Now, what some people call a strip search may be somewhat different from what other people call a strip search.

BALDWIN: (INAUDIBLE). OK.

TOOBIN: She was arrested. She was searched. How she was treated, I don't know, but the appropriate way to treat her is simply the same way as everyone else. If everyone else is strip searched, she should be strip searched.

BALDWIN: OK. So then -

TOOBIN: A word I seem to have trouble saying.

BALDWIN: Easy for all of us to say, strip searched.

TOOBIN: Right.

BALDWIN: Then the next question is, should she have diplomatic immunity? And I think part of that issue is whether or not she was acting in a capacity as a diplomat as well.

TOOBIN: Right. And here's where the law gets complicated and difficult.

BALDWIN: OK.

TOOBIN: The - she is a lower-level diplomatic official. She's a consular official. She's not an ambassador. So she has a lower level of protection from diplomatic immunity. Under the law, she is only protected from prosecution against acts that she does in the course of her actual work. Now, here, the question is, is hiring someone within the scope of her work? You could sort of make the argument either way.

BALDWIN: OK.

TOOBIN: It's actually kind of - kind of a tough one, and that's going to be the subject, clearly already is the subject of negotiation between the Indian government and the American government.

BALDWIN: We're already seeing some reaction in New Delhi. We're going to go to New Delhi next hour. But in the meantime, what's next? How does this move forward? How does this get resolved?

TOOBIN: Well, they tend not to be resolved in the courts. They tend to be resolved country to country diplomatically. And the resolution often is, you just send the person home. That gives everyone something - that protects the woman from going to prison, from being searched, from having any other problems, and it allows our government to say, you know, we're not going to allow a law breaker in this country. So, at the end of the day, that's usually how situations like that are resolved. But in the meantime, the case is pending. Obviously it's a big diplomatic crisis and people want to get it done - you know, people want to get it resolved.

BALDWIN: Yes. We'll see. Jeff Toobin, thank you.

TOOBIN: It's kind of weird, huh?

BALDWIN: Kind of, totally weird. A totally strange story.

TOOBIN: Yes.

BALDWIN: Thank you, my friend.

TOOBIN: All right.

BALDWIN: Now to -- speaking of strange stories, Dennis Rodman. You ready for this? You like that segue, Toobin?

TOOBIN: Speaking of weird, foreign.

BALDWIN: He is headed - he is headed back to North Korea. This is his third trip there. He is to arrive tomorrow, at least that is the plan, despite what we will call the recent unpleasantries in Pyongyang. Keep in mind, late last week, the communist government's number two leader was shot and killed by firing squad. This is him right there. He had been considered to be a mentor to the smallish dictator, Kim Jong-un. That is the uncle on the left, Kim there on the right in the black. The group sponsoring Rodman's trip says they have spoken with a lot of experts and these experts say it is absolutely fine for the NBA baller to travel. Now, Rodman's established a friendship, as we have reported, based upon previous trips with the dictator Kim. He is supposedly going to train a basketball team. OK.

Coming up, dramatic video of a man trapped in a crane right above the flames. You will see how this ends.

Plus, the mother of a girl who went in for tonsil surgery but is now brain dead, says the girl has reacted to the mother's touch. This as the mom continues to fight to keep her daughter on life support. That's next.

(COMMERCIAL BREAK)

BALDWIN: Want to show you some dramatic video out of Canada, because you will see this crane operator precariously high above this massive fire. You know, obviously terrified and trapped. This is all that played out Tuesday. This is Kingston, Ontario. And this helicopter crew, look at this, swooping in from a nearby base to rescue this man, plucked him to safety, thank goodness. The crane operator escaped with minor injuries. Wow.

The medical scan that a California mother begged for has confirmed the worst. Her 13-year-old daughter, who went in for a tonsillectomy, is brain dead, but Jahi McMath's heart still beats. That is why her mom is keeping Jahi on life support.

(BEGIN VIDEO CLIP)

NAILAH WINKFIELD, JAHI'S MOTHER: I feel her. I can feel my daughter. I just kind of feel like maybe she's trapped inside of her own body and she wants to scream out and tell me something. That's why every time I go in there, I let her know, I will not let them take you to the coroner's office, Jahi. I won't.

(END VIDEO CLIP)

BALDWIN: Jahi underwent surgery nine days ago. Her family says at first she was alert, but then she bled excessively. She went into cardiac arrest, and then they were told she was brain dead. However, Jahi's mother says the 8th grader reacted to her touch.

(BEGIN VIDEO CLIP)

WINKFIELD: I know when I touch her feet, I can take my fingernail and run it up her feet and she'll move them. The first time when I finally built up the courage to go see her, I leaned over her ear and I yelled, Jahi, you need to wake up because we need to go home. And she threw both of her arms in the air. And they said, oh, that just normal reflexes. That's just nerves. And when I touch her, she's still warm, she's still soft. And I kiss her, and I can just feel her, that she will wake up. I really do. I just feel like if we give her a chance and give her time, she'll wake up.

(END VIDEO CLIP)

BALDWIN: The family has sent a cease and desist order to Children's Hospital and Research Center in Oakland to keep doctors from pulling Jahi's ventilator. The hospital says, in cases like this, doctors work with the family, but Jahi is technically dead, and the coroner here now has the authority. An official says keeping Jahi on a ventilator could hinder finding a cause of death.

(BEGIN VIDEO CLIP)

CHRISTOPHER B. DOLAN, MCMATH FAMILY ATTORNEY: Jahi is a person, not evidence. And that's part of what's been troubling the family. To classify her as evidence and to end life support so that they can find out what happened, I think, is a ruse.

(END VIDEO CLIP)

BALDWIN: Joining me now, medical ethicist Arthur Caplan from NYU's Langone Medical Center.

Nice to see you, sir.

ARTHUR CAPLAN, DIV. OF MEDICAL ETHICS, NYU LANGONE MEDICAL CENTER: Thanks for having me.

BALDWIN: I can't imagine as a mother feeling the body of your warm baby and thinking, well, of course, we just need to go home. You know it just makes sense.

CAPLAN: It's such an awful case because this little girl came in to get an elective procedure for sleep apnea. Who expects this sequence of events? That said, when you're on those machines, they do circulate the blood. You do look pink. You haven't gone stiff, if you will, like a corpse would, because the artificial machines can maintain the illusion that you're still alive.

BALDWIN: It's an illusion. But she is brain dead. I mean she is dead.

CAPLAN: And you have to be careful here. People hear about words like coma and they say, I've read people wake up from comas.

BALDWIN: Of course.

CAPLAN: They do. Brain death means total irreversible loss of all brain function. Remember, the doctors who came and diagnosed her as dead are not the treating docs, they're not the people who might have been involved in this tragic sequence of events. They're independent. They came twice, didn't see anything. Reconfirmed today. When you don't have integrated brain function, you are dead. And it's the same as if your heart has stopped. So, tragically and sadly, I know the mom wants her daughter to wake up, but that's not going to happen.

BALDWIN: We heard from the mother. Let me just read this. This is what we have from the hospital. They say this. "Our hearts go out to this patient and her family. Unfortunately, we have not been authorized by the family to share information with the public about this matter. Consequently, we are not able to correct misperceptions created about this sad situation. Nonetheless, we want to assure the community that we are doing everything in our capacity to provide support to the grieving family." So that said, how does this get resolved? CAPLAN: The authority to stop this treatment is still in the hands of the hospital. I know we just heard that they said the coroner might have the authority. I'm not buying that.

BALDWIN: You're not?

CAPLAN: No. When they say she's dead, they can stop treatment. What's happening is, they're so sorrowful that this tragic sequence of events happened, that they're tolerating the mom saying, give me some more time. They're hoping she accepts the death.

BALDWIN: They're allowing this to be strung out (INAUDIBLE).

CAPLAN: They're allowing it to be strung out. Ultimately, doctors decide when you're dead. And, ultimately, you don't treat the dead.

BALDWIN: So if this becomes a lawsuit --

CAPLAN: And I think we can bet on that.

BALDWIN: I think we can bet on that. Then would the hospital help the family potentially?

CAPLAN: Well, potentially, you would be in a position to say, look, we tried our best, we gave you extra time, we were trying to let you adjust, take that into account as part of our trying to help you cope with this tragic sequence of events. And I'm sure that's what they're doing. There is no doubt in my mind whatsoever, once she's been pronounced dead, they can stop if they want to. It's the way she died that's holding up their stopping the treatment.

BALDWIN: A routine tonsillectomy.

CAPLAN: A routine tonsillectomy.

BALDWIN: Horrendous.

Arthur Caplan, thank you very much.

CAPLAN: Thank you.

BALDWIN: Thank you.

Now to this. Let me switch gears quickly here. We are now getting word of a preview of that report being released today on the controversial NSA program. Jim Sciutto has just called in here.

And, Jim, tell me, what do we know about this today?

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT (via telephone): Hi, Brooke.

I have just spoken to a senior administration official to get some details on what's going to be contained in this report. Big headline here is that this metadata collection program, the one that collects phone number data from so many Americans under the NSA will largely stay as recommended by this panel, though under tighter constraints and transparency, including with the president making a speech to the nation in January that explains these new constraints and transparency.

And here is some of the recommendations that are going to be in this panel report. One is that there will be presidential oversight now of the monitoring of the communications of foreign leaders. You remember all the outrage when it was revealed that the NSA was monitoring the phone calls, for instance, of Angela Merkel, the chancellor of Germany.

BALDWIN: Right.

SCIUTTO: This will now have presidential review. He will say yes or no to that kind of monitoring.

In addition to that, they will recommend that the U.S. negotiate bilateral agreements with countries such as France and Germany as to what is acceptable in intelligence collection and what is not. So reaching out to friends, some of these friends who we've made very angry with this kind of monitoring, to say, hey, going forward, this is OK and this is not OK to help avoid this from happening in the feature.

Now, part of that acknowledges that some of the spying will continue. That a lot of these countries do spy on each other, but to avoid these kinds of angry responses in the future.

Now, the senior administration official also tells me that there is an acknowledgment in the administration of a trust gap with American citizens, but also with foreign citizens, and that this has had an impact on American businesses abroad. You'll remember that yesterday you had the heads of all the major American tech companies in the White House complaining about these effects because they've lost business overseas to the tune of $35 billion because, you know, their customers, for instance, in Europe, don't want to have their communications monitored by the NSA or they're worried about it.

So, you have the administration here seeing that there's a problem, but still sticking to their guns on this most controversial of programs, which is this phone collection data. And we're going to get some more details later this afternoon, Brooke. I'm heading into a briefing right now where they're going to give us the full details of the report.

BALDWIN: OK, Jim Sciutto, we'll let you hop off the phone and head into that briefing. We appreciate you breaking some of the news here and telling - in this NSA review panel. And we'll stay on this because you are about to hear from an NSA whistleblower who says the agency committed a crime and that Edward Snowden should be granted asylum, that Edward Snowden is innocent. That's on the other side of the break.

(COMMERCIAL BREAK)