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Senator Skips Obama Speech; Christie's Bully Rating Improves; Michelle Obama's 50th Birthday; Christie's Scandal Subpoena Vote Thursday; Jobless Benefit Extension On Hold; Proof of Life: Video of Sergeant Bo Bergdahl; Captive U.S. Soldier; Live Coverage of Obama's Speech

Aired January 15, 2014 - 13:00   ET

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

WOLF BLITZER, CNN ANCHOR: Right now, President Obama only minutes away from giving an important speech on the economy in North Carolina. But that state's Democratic senator notably absent from today's event. Has the president become a campaign liability this year?

"I am not a bully." Chris Christie said it and apparently New Jersey voters believed it. New polls show an improvement in the governor's bully rating.

And Michelle Obama gets ready for her 50th birthday and opens up about plastic surgery, Botox and one day becoming a grandma.

Hello, I'm Wolf Blitzer reporting from Washington. President Obama is expected to walk to the podium in North Carolina at any moment now. He's there to talk about the economy and the White House's push for new manufacturing, jobs and hubs. The first of those hubs, by the way, will be there in the research triangle in Raleigh and Durham, North Carolina where the president is speaking today. We're going to bring you some of the president's speech once it gets under way. Stand by for that.

There will be one noted absence at the president's speech. The North Carolina Democratic senator, Kay Hagan. Her office says she stayed in Washington because the Senate is still in session.

Let's bring in our Chief Political Analyst Gloria Borger. She is also up for re-election. There is a lot of suspicion she decided to stay in Washington, not welcome the president in her home state of North Carolina, because she doesn't necessarily want to be photographed with the president.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Sure. Notwithstanding what her staff said, it's very clear that there are about a handful of red state Democrats who were up for re-election, who don't want to be photographed an awful lot with President Obama who is seen as a political liability in their state, particularly after the Obamacare rollout.

So, right now they just want to keep their distance and not give their opponents anything to use in a campaign ad against them. This certainly would be. She's not the first Democratic senator to do that. Mary Landrieu of Louisiana also did that. And I think -- I think -- look, it's completely understandable. She has an excuse. There's business in Washington. But believe me, if she wanted to be there, she would have been there.

BLITZER: Yes, Mary Landrieu is up for re-election this --

BORGER: Exactly.

BLITZER: -- year --

BORGER: Louisiana.

BLITZER: -- as well. So, when the president went to Louisiana a few weeks ago, she was notably absent.

BORGER: Right.

BLITZER: I wonder if this trend is going to continue. It's happened with the Republican Presidents --

BORGER: Look, --

BLITZER: -- who weren't necessarily all that popular. It's happened with other Democratic presidents who weren't all that popular. So it's not unusual.

BORGER: Right. And by the way, this is something the White House would say, do what you have to do. You know, if this is going to help you get re-elected, we need to keep you in the Senate. So, do what you have to do to get re-elected.

BLITZER: Let's talk about Chris Christie, the governor of New Jersey, right now. He's going out this weekend to do fund-raising. He's the chairman of the Republican Governors --

BORGER: That's right.

BLITZER: -- Association. He's going to be in Florida with Governor Rick Scott, among others. Tell us how this is going to play out in the aftermath of the --

BORGER: Well, look, --

BLITZER: -- week-long scandal now.

BORGER: -- he's got a job to do as head of the Republican Governors Association. He gave a State of the State last week. He's got to be governor and chairman of these group of governors. He's got to -- he's got to do his work, Wolf, and move on. He has to show the American public, not only in the state of New Jersey, but also nationally, because he wants to be a presidential candidate, obviously, that he has the right temperament to be president of the United States.

And I think there are a lot of questions about that right now, given the pettiness of the George Washington Bridge controversy. So, I think one way he could do it is by -- is by moving straight ahead. So, in the end, he may be judged not only by the scandal itself, but how he handled --

BLITZER: And if he handles --

BORGER: -- the scandal.

BLITZER: -- it well, potentially --

BORGER: That's right.

BLITZER: -- it could help him.

BORGER: It could help him.

BLITZER: Assuming he's telling the truth, --

BORGER: Don't forget, --

BLITZER: -- too.

BORGER: -- there is a lot of layers to this onion that have yet to be peeled. So, there are going to be subpoenas issued. There are going to be witnesses who are going to testify. There are going to be documents that the legislature is going to get. And Chris Christie has said he did not know about it nor did he have anything to do with it. And we're just going to have to see how that plays out.

BLITZER: There is a new Quinnipiac University --

BORGER: Right.

BLITZER: -- poll asked this question, is Chris Christie more of a bully or a leader? 40 percent said bully, 54 percent said leader. That's still pretty good.

BORGER: That's pretty good in his own state. And there is a question of how it plays nationally. And I think what we see, there is some contradictions in the polls, some of the polls we looked at say he doesn't have the right temperament to be president. So, I think people are kind of taking stock of this. Not everyone has been paying really close attention to it. So, there is the controversy. He's reintroducing himself right now to the American public who doesn't know him. Obviously, he has a clear shot at turning this around. But he's got to go straight ahead and do -- you know, do his job.

BLITZER: He's got to do the job as governor of New Jersey and a leader of the Republican Party.

BORGER: And, in the meantime, the investigations will have to unfold. He said yesterday that he is going to cooperate with them. And he's got -- that's on a -- that's on a separate track. So, he's going on one track and the legislature is going on another.

BLITZER: He's got to be transparent, open, tell the truth and potentially can overcome this current standing. BORGER: Right.

BLITZER: All Right, Gloria, thank you.

BORGER: And show that he's learned from it, by the way. That's a big thing.

BLITZER: That's very important.

There is new information today on the traffic scandal investigation. Our own John King reporting that the special investigative committee is expected to name a special counsel today. Today, could start serving subpoenas as early as tomorrow. The New Jersey assembly is scheduled to vote tomorrow on approving subpoena powers for the committee. Governor Christie's senior staff likely will top that subpoena list.

The Senate here in Washington is at a stalemate over extending long- term jobless benefits. Votes yesterday failed to move the issue forward, meaning no immediate help for the 1.3 million Americans who lost benefits at the end of the year. And anxious moments ahead for the more than 1 million who will lose those benefits in the first half of this year.

Our Chief Congressional Correspondent Dana Bash is joining us right now from Capitol Hill. So, what's at the heart of the current standoff, Dana?

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: It's several things, Wolf. But it all really boils down to the fact that those 1.3, 1.4 million Americans who don't have benefits right now are the victims, the latest victims of dysfunction here in the Senate. One of the things is -- the issues is policy, of course. Democrats believe that these jobless benefits should be extended, should be done without necessarily being offset by our budget cuts. And if they agreed to those offsets, they want it to be long term, through almost the end of the year. Republicans, on the other hand, say that they believe that it should be a shorter-term kind of extension, and the kinds of cuts that they propose Democrats didn't like.

So, there are lots of differences policy wise. But then, of course, there is process. And in Congress, process is all about politics. And you have a lot of fighting over the number of amendments that Republicans who are in the minority would be allowed to have or not. And the vote threshold that they would be allowed to have.

So, these are lots of differences that they have. There were lots of talks going on but they never got to the point where they came even close to having a real deal. People out there listening to this are going -- are scratching their heads, I'm sure, saying, are you kidding me? I'm here without unemployment benefits. And I've been unemployed for 26 weeks-plus. And this is what talking about here in Washington. Probably a lot of frustration.

BLITZER: Yes, it's not just 1.3 million individuals who are losing those benefits, aren't going to get anymore benefits, but they have another 2 or 3 million children, dependents, who are going to be suffering as a result of that as well.

The majority leader in the Senate, Harry Reid, says they're in what he calls a cooling-off period right now. What does that mean? Is it going to come back any time soon?

BASH: The translation that I will give to you for cooling off period, Senate speak, that's Senate speak for it's just as good as dead for now. They're not giving up hope completely. But in the near future, it's hard to see this coming back up. We're told that it's on the back burner. And as you well know, most things that end up on the back burner end up dying there, Wolf.

The only question mark, though, is because we are talking about so many people, because we're talking about such a palpable and powerful issue for many, many people who are really suffering out there, perhaps this is one of those things that will come back up. Never mind the fact that the Democrats run the Senate and they have made clear from the get-go, along with the president, that this is issue, income inequality and helping people still hurting from the bad economy or what was a bad economy, that that's atop their agenda, Wolf.

BLITZER: And remind me, Dana, why the Democrats in their negotiations with the Republicans over the budget compromise that was passed, the Paul Ryan-Patty Murray compromise that went through, in the end, the Democrats who were on that House Senate conference committee, they failed to mandate that these extended jobless benefits would be included as part of that deal. Remind me why that wasn't included.

BASH: The main reason is because of what we're seeing right now. It is a very divisive issue. Not just whether to extend those -- these unemployment benefits. And we should say that there are lots of people up here who are elected to Congress who don't believe that they should be extended. It is an emergency system, an emergency fund that is on top of the regular unemployment benefits that people get.

So, that's really the main reason is because it was so partisan and the whole goal of Patty Murray, the Democrat in the Senate, Paul Ryan, the Republican in the House, was to find compromise. And this is something that probably would have held it up. But I think your point is exactly right. There were a lot of Democrats who were very unhappy that they didn't put this into the larger must-pass budget compromise and then this may not have happened. But it would have been very, very difficult to do.

BLITZER: Yes, a lot of people looking back now, scratching their heads. And Democrats specifically saying, you know, I think they -- I think we could have pushed a little bit harder to make sure there was a deal. The Republicans say they'll support it if you pay for it. You pay for the 5 or 6 billion for a three-month extension or the 25 billion for a year-long extension. But the -- but the argument is, how do you pay for it?

BASH: Exactly.

BLITZER: Democrats have one idea. Republicans have a very different idea. That's the big problem right now.

BASH: Right, exactly. For example, there are eight Republican senators who were working very hard this week on trying to find a compromise. They did come up with one. It was to extend these emergency benefits for three months. But the way that they propose paying for it was a nonstarter for Democrats, because they would effectively increase the cut on many of the government programs, Democrats say, that are supposed to go to these same people who need the unemployment benefits.

So, that's just one example of the point you're making, Wolf. There are really big differences over not just whether to offset the cost, not just whether to extend these benefits, but how to do it. And one last point I should make, we're talking about the Senate right now. Never mind the House, which, of course, is run by Republicans and John Boehner and other House Republican leaders have made very clear it would -- it is -- they really have no desire to bring this issue up. The only way they would do it is if it were fully paid for but then they had other caveats, other requirements which would be difficult to meet.

BLITZER: Dana Bash up on the Hill. Thank you very much.

Other news here in Washington, the national security agency reportedly has bugged about, get this, 100,000 computers around the world. Not only that, the NSA has the ability to access and change the data on those computers in places like China, Mexico, Russia, elsewhere. And even without an Internet connection.

The story in the "New York Times" is just the latest example of the NSA's global reach in the name of national security. President Obama is considering some 46 specific recommendations to reform the NSA. On Friday, this coming Friday, he'll reveal which ones he plans to adopt.

Our Chief National Security Correspondent Jim Sciutto is here with more on what's going on. So, are there specifications you're checking with your sources on how the president will, quote, "rein in the NSA?"

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Well, I think the headline here is that the biggest bulk collection of the phone metadata, the one that's caused most controversy since Edward Snowden's revelations, that's going to stay. The "New York Times" reporting today that the president won't ask phone companies to hold on to this data which had been one of the recommendations of that panel, something the president said a couple weeks ago he was going to consider. But -- and we had reported earlier that the phone companies had been reluctant to do so.

So, looking at that big program, it's going to stay. And the panel, to be fair, had not recommended that it go. But that had been one of the key changes they had recommended. That's not going to happen.

Other things he's considering, putting a public advocate on this foreign intelligence court so that you don't just hear, in effect, the government's point of view. You have someone from the other side to say, hey, wait a second, you know, make the -- make the argument to justify why you're accessing this particular data.

BLITZER: Because the critics say this FISA court is just a rubber stamp.

SCIUTTO: Well, absolutely. You know, it's not like any other court is set up, right? You only have advocates from one side. So, the president putting an advocate for you and me, in effect, on that court.

Other things, limits on access to the conversations of foreign leaders, as well as developing agreements with our allies to say, hey, this is OK, in terms of gathering data, because we all spy on each other. But this isn't okay. Things like that.

Now, I spoke just a short time ago to Senator Bernie Sanders, one of the chief critics of this program. You'll remember, he made headlines because he asked the NSA director, hey, wait, does the NSA spy on Congress? He didn't get a straight answer, still hasn't got a straight answer. He said -- he told us that this is not anywhere near going far enough in terms of what the president is considering. Based on what he's heard so far, these are very modest changes. And I think you're going to hear that kind of thing from a number of critics.

BLITZER: All right. There is -- totally unrelated to the matter. You're getting some new information about an American captive who has been held, what, for five years in Afghanistan, Bo Bergdahl. What are you learning?

SCIUTTO: That's right. We're told by a U.S. military official that there is a new video, a proof of life video of Sergeant Bo Bergdahl. He's been held in -- since he was taken captive in Afghanistan in June 2009. It's believed by the Haqqani network, a Taliban aligned network inside Pakistan, I believe he's being held. Details from this video. One, it shows some sort of time reference to December 14th this past year, just a month ago. So, in that sense, there is some good news here.

BLITZER: This is not the video, by the way.

SCIUTTO: This is --

BLITZER: This is the previous video.

SCIUTTO: The last video we had of him is three years ago. So, this would be the first time in three years we've seen evidence in video form that he's still alive. Now, this new video, which I should again say is not this particular video.

BLITZER: Right.

(CROSSTALK)

SCIUTTO: We don't have it, but do have deals details of this new video. The new video does show him in diminished health. He's been in captivity for five years. That would be expected. And remember, when these videos come out, you'll have military doctors poring over it for signs of their physical state. And what I'm being told is that it shows that he has shown physical decline since then.

So, you know, there's some good news here. You now have proof that he was alive at least up until a month ago. The harrowing news is that he is showing the effects of all this time there. And really, there's been a lot of frustrated efforts to release him. But I was told by a Pentagon official today, say, listen, we have not let up the pressure here. We're working every available asset and ability to try to get him free.

BLITZER: Five years as a captive in Afghanistan.

SCIUTTO: Yes.

BLITZER: That's way, way too long.

SCIUTTO: No question. No question.

BLITZER: Hope he's released soon. All right, thanks very much.

Once again, President Obama is in North Carolina right now. He's getting ready to talk about his economic plans for 2014. Also, right now, he's making some introductions, thanking some of the folks who've showed up. Once he gets to the real meat of his speech, we'll go there live. Stay with us for that.

A 12-year-old boy, meanwhile, may have delivered a message to some students before he allegedly opened fire at a school. We'll have that story. That's coming up, as well.

(COMMERCIAL BREAK)

BLITZER: President Obama now getting to the meat of his speech. He's outlining some new plans over at North Carolina State University to create jobs and to promote the economy. Let's listen in.

(BEGIN LIVE FEED)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Wages and incomes were flat-lining, so even if you had a job, you didn't see is your standard of living going up very much.

Meanwhile the cost of everything from college tuition to groceries did go up. So when I took office, we decided to focus on the hard work of rebuilding our economy on a new foundation, for growth and prosperity and to make sure that everybody had a chance to get ahead. And thanks to the hard work and sacrifice of the American people, the good news is the economy is growing stronger.

Our businesses --

(APPLAUSE)

Our businesses have now created more than 8 million new jobs since we hit bottom, because of an all of the above strategy for American energy, for the first time in nearly two decades, we produce more oil here in the United States than we buy from the rift of the world. That hasn't happened in a very long time.

(APPLAUSE)

We now generate more renewable energy than ever before, more natural gas than anybody on the planet.

(APPLAUSE)

We're lowering energy costs, reducing pollution, health care costs are growing at their slowest rate into 50 years.

For the first time since the 1990s, health care costs eat up a smaller chunk of our economy.

OBAMA: And part of that, yes, has to do with the affordable care act.

(APPLAUSE)

And so over time, that means bigger paychecks for middle-class families, bigger savings for companies that are looking to hire, and along with all this, since I took office, we've cut our deficits by more than half.

So -- so we've made progress. And that's what I mean when I say this can be a breakthrough year for America. The pieces are all there, to start bringing back more of the jobs that we've lost over the past decade.

A lot of companies around the world are starting to talk about bringing jobs back to the United States, bringing jobs back to places like North Carolina, partly because we've got cheap energy costs, we've got the best workers in the world. We've got the best university systems in the world.

(APPLAUSE)

And we've got the largest market in the world. So the pieces are there to restore some of the ground that the middle class has lost in recent decades, to start raising wages for American families. But it requires us to take action. This has to be a year of action.

And here in North Carolina, you're doing your part to the create good jobs that pay good wages. Congress has to do its part too, because restoring the American dream of opportunity for everyone who's willing to work for it is something that should unite the country. That shouldn't divide the country. That's something we should be aspiring to, that everybody has a shot if they're willing to work hard and take responsibility.

(APPLAUSE)

So on the short term one thing Congress could do is listen to the majority of the American people and restore the unemployment insurance for Americans who need it.

(APPLAUSE)

And just -- let me just make an aside here. North Carolina still has a higher than average unemployment rate. So this is important to this state. Folks aren't looking for a handout. They're not looking for special treatment. There are a lot of people who are sending out resumes every single day, but the market, the job market, is still tough in pockets around the country. And people need support, a little help. So they can look after their families while they're looking for a new job.

(APPLAUSE)

So Congress should do the right thing and extend this vital lifeline for millions of Americans. Of course, that's just short term. Long-term the challenge of making sure everybody who works hard can get ahead in today's economy is so important that we can't wait for Congress to solve it.

Where I can act on my own without Congress, I'm going to do so. And today I'm here to act, to help make Raleigh, Durham and America a magnet for the good high-tech manufacturing jobs that a growing middle class requires, and it's going to continue to keep this country on the cutting an edge.

(APPLAUSE)

So we've already got some success to build on. Manufacturing is a bright spot in this economy. For decades, we've been losing manufacturing jobs. But now our manufacturers have added over the last four years, more than 550,000 new jobs, including almost 80,000 manufacturing jobs in the last five months alone.

So we want to keep that trend going. We want to build on the kind of work that's being done in places like N.C. State to develop technology that leads to new jobs and entire new industries.

So a little over a year ago, we launched America's first manufacturing innovation institute in Youngstown, Ohio and what it was is a partnership. It includes companies and colleges. They came up with a joint plan. They were focusing on developing 3-D printing technology, and training workers with the skills required to master that technology.

Now, that was a great start. We got one going, and some of the folks from Youngstown are here today and we congratulate them on the great work they're doing. But here's the problem. We've created one. In Germany, they've already got about 60 of these manufacturing innovation hubs. So we've got catching up to do.

I don't want the next big job creating discovery, the research and technology, to be in Germany, or China or Japan; I want it to be right here in the United States of America. I want it to be right here in North Carolina.

(APPLAUSE)

So what I said was in my State of the Union Address last year, I said to Congress, let's set up a network of at least 15 of these manufacturing hubs all across America, focusing on different opportunities where we can get manufacturing innovation going, create jobs, make sure that the research is tied to businesses that are actually hiring.

And those synergies are going to grow the economy regionally, and ultimately across the whole country.

And last summer as part of our push to create middle class jobs, I said you know what, let's not settle on 15; let's just go ahead and do 45. Republicans and Democrats in the House and the Senate introduced bills that would get this going. That's good. But they haven't passed the bills yet.

So I want to encourage them to continue to pass the bills that would create 45 of these manufacturing hubs. In the meantime, I'm directing my administration to move forward where we can on our own.

So today, after almost a year of competition, I'm pleased to announce America's newest high-tech manufacturing hub, which is going to be focused on the next generation of power electronics, is going to be based right here in Raleigh, North Carolina.

(APPLAUSE)

That's good news. That's good news.

(APPLAUSE)

That's good news. That's great.

(APPLAUSE)

So just like the hub in Youngstown, what we're calling the next- generation power electronics innovation institute is bringing together leading companies, universities, and federal research all together under one roof. Folks at this hub are going to develop what are called wide band gap semiconductors.

Now, I was just schooled on all this. I'm not sure that I'm fully qualified to describe the technical elements of this. Raise your hand if you know what it is.

(LAUGHTER)

See, we got some. For all you non-engineers out there, here's what it means in the simplest terms. Semiconductor obviously are at the heart of every piece of electronics we use every day, your smartphone, your television set these days, everything. Public research helped develop them decades ago, and then that research allowed commercialization, new products, new services, and obviously not only improved the economy, but greatly enhanced our lives.

So we want companies to run with the ball also, but first we've got to make sure that we're also doing the research and linking it up to those companies. Wide band gap semiconductors, they're special because they lose up to 90 percent less power. They can operate at higher temperatures than normal semiconductors.

So that means they can make everything from cell phones to industrial motors to electric cars smaller, faster, cheaper. They're going to be still applications for the traditional semiconductors, but these can be focused on certain areas that will vastly improve energy efficiency, vastly improve the quality of our lives.

And the country that figures out how to do this first and the companies that figure out how to do this best, they're the ones that are going to attract the jobs that come with it. So this manufacturing hub right here, focused in North Carolina.

(UNKNOWN): Go Pack!

OBAMA: Go Pack.

This hub is going to make it easier for these wide band gap semiconductors to go from the drawing board to the factory floor to the store shelves, or not necessarily the store shelves, because what I just saw, for example, were these really big pieces of equipment that are attached to utility companies, or help windmills translate the power they're generating, actually and get transmitted to where they're going to be finally used.

It's going to bring together chip designers, manufacturers with companies like Vacon and Delphi that stand to benefit from these new technologies. And this will help big companies, but it's also going to help small companies, because they're going to be able to use equipment they otherwise wouldn't be able to afford to test and prototype new products and, of course, American workers will be able to come right here to North Carolina to learn the skills that companies are looking for.

And the next generation of manufacturing will be an American revolution. So in the coming weeks, we're going to be launching two more of these innovation hubs. We've already got them all planned out. One's going to focus on digital design and manufacturing. Another is going to be developing lightweight metals that could transform everything from wind turbines to military vehicles.