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ERIN BURNETT OUTFRONT

Obama Snubbed By Iranian President?; Senator Cruz "Fauxlibusters" Plan He Supports; Woman Among Terrorist Attackers; Obama, Clinton Join Forces at Conference; Obama: "I Believe That America is Exceptional"

Aired September 24, 2013 - 19:00   ET

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


ERIN BURNETT, CNN HOST: Good evening, everyone. I'm Erin Burnett.

OUTFRONT on this Tuesday, President Obama snubbed. The White House says it offered to have a new encounter with the new Iranian president, Hassan Rouhani at the United Nation's today. Iran's response according to a senior U.S. official, quoted, "It was too complicated for them back home." Still, both leaders did find the time to send a message to the other one.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: We are determined to prevent Iran from developing a nuclear weapon.

PRESIDENT HASSAN ROUHANI, IRAN (through translator): Iran poses absolutely threat to the world or the region.

(END VIDEO CLIP)

BURNETT: They were in the same place at the same time. So why did not they meet? Jim Sciutto is with me now. He is at the U.N. Jim, you know, there was a lot leading up to the U.N. meeting. They were in the same place at the same time and the White House made it clear that they were willing for there to be some sort of a meeting. Why was it so difficult to have one?

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Well, as you say, the White House put itself out there. I was listening to an interview right now that President Rouhani is giving to our own Christiane Amanpour. She asked him this question and he said he had permission from Tehran to do the meeting. That he and his team discussed it. They considered it seriously, but decided that diplomacy takes time and the time was not right.

It may very well be that he made a political calculation that is a domestic political calculation. He is getting a lot of grief from hard liners back in Tehran for the outreach he's done so far including, for instance, his statement during his speech before the U.N.G.A. saying that Iran has no intention of building a nuclear weapon, this kind of thing.

So he may have calculated that he's gone as far as he can and is withstanding as much political opposition back home as he can. And then a meeting with Obama would have been a step too far. As you say, the U.S. put itself out there and in effect was snubbed.

BURNETT: And at the end of the day, Jim, you know, the Ayatollah is still pulling the strings here. I mean, in a sense, right, just look at the words the White House used to explain why Iran chose tonight meet the president, right? Quote, "It was too complicated for him back home." You were just talking about that.

But is that an essence of reference to the fact that the man calling the shots isn't Hasan Rouhani, it is the supreme leader. If Ayatollah Khomeini said no, could it be a warning sign that the president may say what he is going to say, the president of Iran. But the guy calling the shots on the nuclear program is back in Tehran right now and there may be no change in the relationship.

SCIUTTO: True. Well, we do also know that what Rouhani has been able to say, so far, he couldn't have done without the supreme leader's blessing as well. But this is a very difficult man. Sixteen years ago, we had another reformist president of Iran. There was a lot of excitement similar to what we have today and it was the supreme leader who allowed him to do that kind of thing, make those gestures and pull him back.

I think when you look at Iran, even the supreme leaders is a rational cagey man. I think what's really driving this is that the economic sanctions are hurting Iran and he like everyone else there is looking to see if there is a window where they can get out from under those sanctions without giving up too much. And that's going to be the real secret here.

BURNETT: Yes, it's interesting. During the elections, we saw the sanctions and there was no question they were hurting. All right, Jim Sciutto, reporting there live from the United Nations tonight.

Our second story OUTFRONT is fauxlibuster. Yes, I didn't misspeak. Senator Ted Cruz has been talking on the Senate floor for four and a half hours, and he says he is going to go all night long. Now at this very instant, some of his friends have come by to help him fill the time in case he needs to eat a candy bar or something like that.

Mike Lee, Marco Rubio has come by, Rand Paul has come by to offer their support like we said Rand Paul bring him a candy bar to get him through the night. Now the reason for this theatre, Cruz is trying to block a Senate vote on the House plan to defund Obamacare in exchange for not shutting down the government. Cruz supports the House bill, but he knows it won't pass the Senate. It is messy. It's ugly. It's Washington at its best. Dana Bash is OUTFRONT.

(BEGIN VIDEOTAPE)

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT (voice-over): Ted Cruz seized the Senate floor and vowed not to let go.

SEN. TED CRUZ (R), TEXAS: I intent to speak in support of defunding Obamacare until I am no longer able to stand.

BASH: To be sure, this is theatre. Whether he speaks for hours or not, the vote timing and the outcome will be the same. Cruz's aides fully admit he is using the Senate floor stage to speak directly to his audience. Conservative grassroots activists who fuelled his Tea Party upset last year.

CRUZ: Where is the outrage? Where are the senators standing here saying what a travesty that young people are being denied a fair shot in the American dream because of what we have brought, because of Obamacare.

BASH: Cruz's talk fest is exactly what his Republican leadership who opposed his tactics were trying to avoid. In fact as even as Cruz started, the GOP leaders were talking to reporters a few feet away, urging him to abandon what they consider a complicated fool's errand. For procedural reasons, Cruz is opposing the bill he supports, funding the government but defunding Obamacare. If you don't follow, that's exactly why many worried Republicans are exasperated.

(on camera): Effectively he is saying that you are not standing with him means it is Washington's business as usual. Does he have a point?

SEN. MITCH MCCONNELL (R), MINORITY LEADER: Well, look, we would be hard pressed to explain why we were opposed to a bill we were in favor of.

BASH (voice-over): Cruz' 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 are going to get burned. We asked him the question many of them are asking.

(on camera): What's your end game here? You knew from the start you were not going to be able to defund Obamacare. Why put Congress through this?

CRUZ: Dana, with respect I disagree with your premise. I believe we can and if we stand together, we will defund Obamacare.

BASH (voice-over): Cruz's supporters call all this determination, his GOP detractors, delusional. GOP Senator Bob Corker tweeted, "I didn't go to Harvard or Princeton," the schools Cruz graduated from, "but I can count." Part of Cruz's problem is the Senate runs on relationships and he doesn't have many. Something he acknowledged with uncharacteristic humor.

CRUZ: This fight is not about personality. Look, most Americans could not give a flying flip about a bunch of politicians in Washington. Who cares?

(END VIDEOTAPE)

BURNETT: Yes, at least he used the word flip. But Dana, it's amazing when you talk to him. He said he believes. He questions the premise about whether this has a chance of passing. But now what? You have Marco Rubio, Rand Paul, Mike Lee, coming to help him and relieve him to keep this talkfest going. I mean, is it really going all night?

BASH: That's what their plan is. I got to tell you, Erin, a lot of the focus is going to be on whether or not he kilt over between now and tomorrow maybe around noonish. As much as what he is actually saying substantively. You mention the fact that some of his compadres are going down there to talk to him. Maybe to relieve him but let's be honest, it is to be a part of what he is doing because he is very much riling up the base right now. They have a hashtag, #makedclisten. They're getting all kinds of support on Twitter from the very grassroots supporters that have fuelled many of their campaigns, Ted Cruz, Rand Paul and others.

BURNETT: Dana, he's back now. I'm looking at a live picture. He is back. I mean, to fill this time he can talk about anything he wants. There's been some kind of ridiculous conversation going on, too. It is not all serious stuff about Obamacare.

BASH: That's right. We had a lot of information about his shoes, about the fact that he is not wearing his ostrich boots, which he wore as solicitor general of Texas many times when he made arguments before the Supreme Court. They are generally his good luck shoes, but today he is wearing sneakers. So those are important facts that we're learning on the floor of the Senate, Erin. Most of it to be fair is really about Obamacare and why substantively he does not think this is the right way to go for Americans.

BURNETT: All right, Dana Bash, thank you very much. Hopefully you don't to have stay up all night too.

All right, but you know, all the joking aside, all this delaying in Washington makes it worth remembering what is at stake that is so very serious, the full faith and credit of the world's biggest and most important economy. That reputation has already taken hit. It has been 780 days since the U.S. lost its top credit rating. It is not too late to get it back if Washington stops this stuff and shapes that.

Still to come, four days ago, 67 people murdered when armed militants stormed a mall in Kenya. Now a source telling CNN that a woman was one of the attackers. Is she an infamous terrorist? We have a special report next.

And then with the fiscal year almost over, because they do everything a little twisted in Washington so it ends on September 30th. That means this is like a gusher of a week, so much money is being spent, so much money on such strange stuff. Christmas in September and there's an OUTFRONT investigation.

Plus we've all heard stories about embarrassing online photos and videos coming back to haunt people. We're going to explain why all that could be a thing of the past. And one photo got the internet so excited, it is absolutely dumb how much money this means.

(COMMERCIAL BREAK)

BURNETT: Our third story OUTFRONT, we have news from the terror attack, a woman among the terrorists because according to a senior Kenyan government official, a woman appears to have been involved on the attack on the upscale mall in Nairobi. Kenyan security forces finally took control of the shopping center today. We're just starting to learn more about the attackers who massacred at least 67 people in the rampage. Kenya's president today said his nation is bloody but unbowed.

David McKenzie is OUTFRONT in Nairobi. David, I know it is unclear who the woman attacker was. There is speculation it might have been the, quote/unquote, "white widow" whom you first told us about on this program and a special report over a year ago. What can you tell us tonight?

DAVID MCKENZIE, CNN INTERNATIONAL CORRESPONDENT: Well, that's true. That senior government official telling CNN, based on photographic evidence that they have evidence that a woman was in this attack. In this terrible attack that killed more than 60 here in Nairobi, Kenya. That photographic evidence doesn't suggest the ethnicity of the woman, according to that official.

But they did say that she died early on in the siege that has caused so much havoc, destruction and loss of life in Africa, in East Africa's hub. Earlier last year, we went and investigated the case of a white woman from Britain who may be a very unusual terror suspect and there's a lot of speculation swirling about her right now.

(BEGIN VIDEOTAPE)

MCKENZIE (voice-over): This British mother is a wanted woman. Samantha Lewthwaite was once cast as a victim, the pregnant wife of one of the suicide bombers who hit London in 2005. She condemned the attack in an interview with the British newspaper and then vanished.

(on camera): And she surfaced here in Mombasa. Intelligence sources Samantha Lewthwaite was now part of an East African-based terror cell became known as the "White Widow."

(voice-over): We're here to track her down. In December of 2011, the Kenyan police helped by British authorities, raided these three homes in the dead of night in pursuit of a complex wave of terror. They found enough bomb making equipment to wreak havoc.

ERIC KIRAITHE, KENYA POLICE CHIEF SPOKESMAN: The nature (ph) and among the weapons recovered in that house, the information listed prior and after that, it would mean the intentions must have been sinister.

MCKENZIE: Kenyan intelligence officials stay the cell planned to destroy the Niali bridge, the Mombasa ferry, and unspecified Western targets. Police arrested several Kenyans and a Britian, Jermaine Grant. Grant faces trial in Kenya on terror-related charges. He showed up in a Mombasa court Tuesday, charged with conspiracy to commit a felony and possession of explosives. He pleaded not guilty.

But Kenyan police say Grant knew Samantha (INAUDIBLE), who entered on a South African passport and moved among Mombasa's radical Islamists. One of them Luthwait (ph) is on a U.S. terror watch list, though he denies any links to terror groups.

Didn't come across her or -

ABUBAKER SHARIF: Nobody in Mombasa came across her except the anti- terror police unit. Nobody knows about her. Nobody has seen her. She is a myth. And I am giving you a challenge: go out in Mombasa, find somebody who has seen her.

MCKENZIE: So we tried. First heading north out of Mombasa on the tip.

Intelligence officials believe that Luthwait (ph) spend a significant amount of time in this luxury villa north of Mombasa.

The caretaker says an Arabic looking man paid three months upfront, but he never saw a woman.

In another upscale neighborhood, we get a lead.

UNIDENTIFIED MALE (through translator): She did not want to say her name. She used to hide her face.

MCKENZIE: A security guard, didn't want to show his face, said a white woman moved into the compound with her three young children. She was (INAUDIBLE).

UNIDENTIFIED MALE: She never wanted people inside her house. It was just her and her children. So when she wanted to send me, she would give me money through the hole in the gates. She would send me to the shop to buy water or meat.

MCKENZIE: Did you think that was strange at the time?

UNIDENTIFIED MALE: Yes, it was very strange.

MCKENZIE: Authorities say Luthwait (ph) was living with Habib Ghani (ph), a naturalized Britain. They are both accused of planning terror attacks.

One day, the security guard watched the woman leave with her children. That night, the police raided. She had vanished. Some intelligence officials believe she has been a committed jihadist, while others say she has been little more than a sympathizer. The mystery of the white widow remains.

(END VIDEOTAPE)

MCKENZIE: Well, it certainly is a complex story and very intriguing. The speculation is that there were three Americans and possibly two Britons involved in this attack about Kenya's president. Uhuru Kenyatta said he could not confirm those reports in an evening address today. He said the key now is to try to get forensic evidence from the mall that was nearly destroyed behind me to painstakingly figure out who was involved in this attack, what were those leads that led them to kill more than 60 people in such a heinous fashion here in Nairobi?

BURNETT: All right, David McKenzie, thank you very much. The first to report there on the White Widow.

Well now "Money and Power." The money and power of being dumb. I want to show you a photograph that took the Internet by storm today. Yep, this of actors Jim Carrey and Jeff Daniels preparing to film "Dumb and Dumber 2." Yes, the sequel to the 1994 comedy in which they brought in a quarter billion dollars worldwide.

Now, both actors had successful careers before the film. But it launched them to a whole new level. Despite its name, it sure was smart. Over the next 10 years, they both hit creative highs. But lately, the box office totals were both -- have been a little hit or miss. For Jim Carrey, if you don't include animated film, he hasn't had a $100 million movie since 2005. Another "Dumb and Dumber" would clear that figure with or without marketing.

And speaking of marketing, there was another photo that they tweeted out today. Immediately it went viral. Just hold this up for a second so you can see it. Yes, two actors reading a book. But if you take a closer look, you will see it is the new children's book written by none other than, oh, Jim Carrey. A book that happens to go on sale tomorrow. Pretty clear they're not so dumb after all.

Still to come, we all followed the dramatic kidnapping and rescue of Hannah Anderson this summer. And tonight there are new details that have come out on what happened just before she was taken from her family. We have the very latest report on that tonight.

Plus, a massive earthquake hit southern Pakistan today. Forty-six people killed. It was so powerful, it created a completely new land structure.

And what made President Clinton say this?

(BEGIN VIDEO CLIP)

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: I must be really easy to make fun of.

(LAUGHTER)

(COMMERCIAL BREAK)

BURNETT: Our fourth story OUTFRONT: bound, beaten and burned. Tonight, we have the newly released autopsy report that details the deaths suffered by the mother and brother of Hannah Anderson, the California teen that we all know was kidnapped by James Dimaggio.

Authorities say Dimaggio killed Christina and Ethan Anderson back on August 3rd. Then, of course, he kidnapped Hannah Anderson and headed east. He was later killed during a shoot-out in Idaho.

Stephanie Elam is OUTFRONT with the new details we have just learned tonight from that report.

(BEGIN VIDEOTAPE) STEPHANIE ELAM, CNN CORRESPONDENT: The newly released autopsy reports revealed that kidnap victim Hannah Anderson's 44-year-old mother Christina, fondly known as Tina, died from being bashed in the head at least a dozen times. The bones in her right arm, fractured. Her ankles, bound in a plastic cable tie. And her neck covered with several layers of silver duct tape. Some of it was in her mouth. Her body, which was partially burned, was discovered in the garage belonging to a family friend who was Hannah's alleged kidnapper.

The remains of her Hannah's eight-year-old brother, Ethan, were found in the next day of the family friend's burned down two-story log cabin. Early on in the investigation, their father, Brett Anderson said he was hoping the body was not his son even though deep down, he knew it was him.

BRETT ANDERSON, HANNAH ANDERSON'S FATHER: Ethan wore his heart on his sleeve. He would give, do anything for anybody, loved everybody. He was just my buddy.

ELAM: Medical examiners say his body was burned beyond recognition. So badly that the cause of death could not be determined. A DNA test confirmed the remains were his. Since neither Ethan nor Tina had soot in their lungs, it is likely that both was dead before their bodies burned. But officials cannot say for sure. With the investigation officially closed and the media spotlight dimmed, Hannah and her family can put the focus on life ahead.

Stephanie Elam, CNN, Los Angeles.

(END VIDEOTAPE)

BURNETT: Still to come, Christmas in September for the government. Yes. Right when it is talking about shutting down and hurting Americans, they are having a huge payday. We'll going to tell you about these paydays, thanks to your tax dollar that is coming in the next five days.

Then imagine fast food French fries with less calories and less fat. Burger King says they've done it. But does it add up?

And President Obama sat down today with former President Clinton. Who was helping whom? That report coming up.

And our "Shout Out" tonight actually is an awkward moment involving president Clinton because at his Clinton Global Initiative meeting, he was announced to come on stage and begin a panel discussion. He is always lovely, chatting with behind people behind stage. So anyway, he was busy and he did not out. So U2 front man Bono took things into his own hands.

(BEGIN VIDEO CLIP)

BONO, FRONT MAN OF U2 (acting as Bill Clinton): When I first met Bono, he walked into the Oval Office. And I actually thought it was a member of his own road crew. He wasn't really dressed right. Actually, I felt like the rock star on that occasion. (END VIDEO CLIP)

BURNETT: Even down to the chair rocking back. Our "Shout Out" goes to Bono because that was truly an awesome impression.

(COMMERCIAL BREAK)

BURNETT: Welcome back to the second half of OUTFRONT.

A 7.7 magnitude earthquake ripped through southern Pakistan today. At least 46 people were killed. Many others injured.

The quake had a depth of about nine miles. It was so powerful, it created a new island. A mass 30 to 40 feet high emerged from the ocean, which you actually see right there. I mean, this is just incredible, to actually get to see something like this.

Many millions of people live in the area, so it is incredible that more of them were not killed, when you consider the violence of this, especially compared to the 2005 earthquake in which 70,000 people were killed. It had a lower magnitude of 7.6 on the Richter scale.

South Dakota's attorney general confirms skeletal remains have been recovered from a car found at the bottom of a creek, believed to be linked to a cold case 42 years old. A 1960 Studebaker Lark matches the car that two 17-year-old girls were driving when they disappeared on their way to a party in 1971.

Now, a lot of theories have swirled over the years about what happened to them, including whether it was an accident or foul play. A convicted rapist was charged in their murders but eventually the charges were dropped. Now, the car could shed light on what actually happened to them and solve this cold case.

Well, Oracle Team USA has made an extraordinary comeback today. I mean, they were done. They had completely lost America's Cup, but not anymore. The most difficult and prestigious trophy in the world, some say, is the America's Cup. The yachting team backed by billionaire Larry Ellison won both the day's races in the San Francisco Bay, which it needed to move forward. California Lieutenant Governor Gavin Newsome was so excited, he tweeted, unbelievable. Oracle Team USA has tied the race for the 34th America's Cup.

They really wanted viewers, I don't know. Why am I so cynical? I think a tie will make them do even better when it comes to the ratings, but we will see who will win this race. Anyway, it's fun to watch.

Now our fifth story OUTFRONT: the presidents club, Obama and Clinton together at the Clinton Global Initiative meeting, the past and present occupants of the White House together. And maybe the future occupant?

So, just take a look at the person who introduced the president.

(BEGIN VIDEO CLIP) HILLARY CLINTON, FORMER SECRETARYR OF STATE: They're both left- handed. They both love golf, a game that does not often reciprocate the love they put into it. They both are fanatic sports fans, and go to great lengths to be in front of the TV, or on the side of the court or the field.

They both are master politicians. Each of them has only lost one election. They are both Democrats. They have fabulous daughters.

They each married far above themselves.

(APPLAUSE)

And they each love our country.

(END VIDEO CLIP)

BURNETT: And now, you know, I'm sitting here with John King. And, you know, it is interesting here. You know, there's some hyperbole in there about sports perhaps. Definitely not about the wives, I think that is a clear fact.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Not going there.

BURNETT: It's my opinion.

But, no, did she steal the show and maybe tell us a little more about her intentions?

KING: Well, that she got a role in this obviously is part of the intrigue. And they want us talking about this.

To see the two presidents together is a rear deal. You know, President Obama is helping President Clinton by showing up at his big event, having a sitting president there helps a lot. Why does the secretary of state and possible future presidential candidate, why does she get a role?

Well, that allows here to get -- that was a health care discussion. She didn't talk much about health care, not too much about it, but allows her to put her toe back into that.

And so, President Obama is helping President Clinton now. President Clinton was helping President Obama explain his health care plan at a time when Ted Cruz is on the floor trying to block funding, when a lot of Americans are confused about it. So, they're helping each other out.

And then, what does that mean for 2016, right? If she runs, Joe Biden doesn't run, she probably doesn't need the president's help in the primaries. However, remember how much Al Gore got criticized for not taking advantage of Bill Clinton?

BURNETT: That's right.

KING: And then, President Obama did take advantage of Bill Clinton. BURNETT: Yes.

KING: Well, the next Democratic nominee is going to need President Obama, because you won't have an African-American nominee unless somebody runs we're not thinking of, and they'll need his help.

And so, this is part of -- the president's president for three more years and he wants you to remember that. But this is part of the transition in the party. And the return of the Clintons is something everybody is talking about.

BURNETT: We want you to keep -- that's the key.

KING: Yes.

BURNETT: Keep talking. When everybody says, is she going to announce in this interview? And I say, of course, she isn't. Why would she do that so early? It's like an auction. The highest value is right before expiration.

KING: Exactly. So, we're going to go through this for months. Not weeks but months. At least all of next year.

She has no reason to announce now.

BURNETT: Right.

KING: But she is -- most candidates are not running until they run. She is running until she doesn't run. She is clearly running now without saying so. Dipping her toes back in.

BURNETT: Yes.

KING: And any time she can be around two popular Democrats, presidents, her husband and the current president, it's good for her, period.

BURNETT: That's right. Even though, of course, they did both marry far, far above them.

Thank you very much, John King.

(LAUGHTER)

BURNETT: All right. Now, our sixth story OUTFRONT: America the exceptional.

So, despite what Russian President Vladimir Putin thinks, today, again, President Obama at the U.N. said he believes the United States is in fact exceptional.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: But I believe America is exceptional. In part because we have shown a willingness through sacrifice of blood and treasure to stand up, not only for our own narrow self-interests but for the interests of all.

(END VIDEO CLIP)

BURNETT: Does America deserve those bragging rights?

Tavis Smiley is the host of PBS' "Tavis Smiley."

And, Tavis, good to have you with us.

So, the president has been doubling down on this. He said it in his speech about Syria. Putin obviously came back punching. And now the president said it again.

Is America exceptional?

TAVIS SMILEY, HOST, PBS'S "TAVIS SMILEY": Well, this war of words between President Obama and Mr. Putin is amateur hour-ish. This war of words doesn't do anything about the real issues that need to be addressed in this country.

Richard Haas has written a powerful book called foreign policy begins at home, Erin, and he is right about that. It's hard to make the argument that we are exceptional, when poverty is out of control. We can't feed our hungry. We can't house our people.

We have an education crisis. We have environmental degradation, and government is on the verge perhaps of shutting down. And we want to continue with this notion that we are exceptional?

I don't know how rubbing our noses in the face of the rest of the world, telling them how bad we are, I don't know how that advances our cause.

BURNETT: It's an interesting point, Tavis. And I'm also curious about what you think about this because, you know, this is a president who has not been perceived in the past as being so gung-ho about American exceptionalism. This is something you associate more frankly with people on the right running for the presidency.

You know, in fact, here's what he said in 2009. Totally different than what he said the past couple weeks.

(BEGIN VIDEO CLIP)

OBAMA: I believe in American exceptionalism, just as I believe the British believe in British exceptionalism and the Greeks believe in Greek exceptionalism.

(END VIDEO CLIP)

BURNETT: I mean, that's totally different than how he is talking now. Does it frustrate you? Do you think it is him sort of saying, I have some popularity issues? I need some backing and I need to play more to the other side of the aisle?

SMILEY: It is a sort o cheap populism. There is a distinct difference between patriotism and nationalism. The reality is that USA chants and flag waving does nothing to gain to get serious about the real issues threatening our very democracy.

Poverty, I believe, Erin, is threatening our democracy. I believe that poverty is a matter of national security. And once again, we get past this war of words between Obama and Putin.

We have to focus on the real issues, which is that in this country, the gap between the have-gots and the have-nots continues to widen. And we have to do something about this gap between rich and the rest of us. This is not sustainable.

And if we keep advancing this notion of American exceptionalism, but not getting serious about what really threatens to implode this country, as I said the other day, we're going to just lose our democracy. It's that serious, and it's that simple.

BURNETT: And before we go, Tavis, I'm going to ask you this, though, because, you know, interesting, the word American exceptionalism, the actual phrase in that way was actually coined by Joseph Stalin, criticizing the United States, ironic given the whole Putin conversation, right? But, you know, this is a phrase that has come and been used in different words by many presidents.

Let me just play you Reagan and Clinton.

(BEGIN VIDEO CLIP)

RONALD REAGAN, FORMER PRESIDENT: I've spoken of the shining city all my political life.

WILLIAM J. CLINTON, FORMER PRESIDENT: America stands alone as the world's indispensable nation.

(END VIDEO CLIP)

BURNETT: Is what they're saying anything different than what he is saying now?

SMILEY: Well, we're all proud to be Americans, Republican and Democrat. There is nothing wrong with loving your country. But a true patriot loves his country, love her country enough to correct it, to challenge it, to make it better, to do the kind of hard work to make America a nation as good as it promised.

The problem with this notion of American exceptionalism right now is that there is a huge gap between the promise of America and the possibility in America for all of our citizens. America can be an exceptional nation. We can be a greater nation. But running around again thumping our chest doesn't do anything about the real issues that we've got to get serious about.

BURNETT: All right. Tavis Smiley, thank you very much for your time.

And now our seventh story OUTFRONT: Christmas in September. I have been waiting for this story. It is such a frustrating story. But only just a few days left in the fiscal year, right? So, September 30th is when it ends. And what that means is if you work for an agency in Washington which is supposedly so upset because it's about to be shut down, you actually have all this money and you're racing to spend cash in your budget. That means it is absolute payday for a whole lot of people.

And CNN's Tom Foreman is OUTFRONT.

(BEGIN VIDEOTAPE)

(MUSIC)

TOM FOREMAN, CNN CORRESPONDENT: Just like the cast in the classic movie, "Maine", every September, Washington belts out a chorus of we need a little Christmas with the spending spree.

As the fiscal year winds down to October, many government offices rush to spend every dime left and critics say that means money for furniture, electronics, office supplies, scientific studies and much more.

Why?

Tom Schatz from Citizens Against Government Waste.

TOM SCHATZ, CITIZENS AGAINST GOVERNMENT WASTE: If money is not spent, the agencies are penalized for not spending the money. They will get less money in the next fiscal year.

FOREMAN: That's right. Billions are spent because agencies are terrified, if they don't use all the money they have, Congress may assume they didn't really need it. Public Notice is a nonprofit aimed at helping taxpayers understand such things.

GRETCHEN HAMEL, EXECUTIVE DIRECTOR, PUBLIC NOTICE: There are actually businesses in Washington, D.C. that are meant to help contractors to identify where resources are left and then go after those dollars and help these agencies spend that money that they have left in their budget.

FOREMAN: To be fair, some argue this is just a natural result of running a massive government.

STAN SOLOWAY, PRESIDENT & CEO, PROFESSIONAL SERVICES COUNCIL: It's not as if they are line up throwing money around willy-nilly. What they're doing is rushing to execute their programs and they just get delayed throughout the year, and all of a sudden, end up in that last six or eight weeks and really have to move quickly.

FOREMAN: Still, critics say the rapid fire spending short changes competitive bidding and side steps congressional oversight, problems that could be solved if agencies were allowed to roll over surpluses or forced to even out their expenditures.

(on camera): Do you think if this is brought under control, that the government could actually save money?

SCHATZ: Cutting off these expenditures at the end of the year will certainly save money, because the items that are being purchased that are not necessary would then not be purchased.

(END VIDEOTAPE)

BURNETT: Tom, it's incredible. You talk about things like, I don't know, stock up on clarinets for the military band in three days. It is funny except for it's not. I mean, has there been any effort to reform the system and end this Christmas in September attitude?

FOREMAN: Erin, people have been talking about this for more than 30 years, saying this just doesn't make sense. And yet, it never really goes anywhere. In the end, people basically say, this is how it works. So, this is what we wind up with, studies like this which show the spending goes up and down, and up and down, and up and down, and up and down, and then here you get to the end of the year.

BURNETT: Whoa!

FOREMAN: Look at that -- massive number up there. That's what keeps happening year after year no matter how much they say we ought to fix it.

BURNETT: That's a nauseating chart.

Do these agencies even try to defend what they're doing?

FOREMAN: Yes. Well, look, most agencies can come up with an explanation for anything they purchase out there, even at the end. They can say, look, it's just the way it work out.

And some things are easy to defend -- for example, very popular to go out and buy computers and printers and things like that, because they say, you know, we always need them. They're basic tools. What drives the critics crazy is when they see money being spent on thing like promoting vineyards or as you mentioned, buying clarinets for the military, which is one of the things that have been purchased. Although, in fairness, I guess they could use them to play more holiday tunes -- Erin.

BURNETT: Yes, I guess they could. And then it would be appropriate. They need them this week since it's Christmas.

All right. I guess we can try to end with it a smile. Thanks to Tom Foreman.

Still to come, easing -- I'm sorry, erasing your digital footprint. So, just imagine this, you know, with all this talk about the NSA and everything else, what if you could just completely scrub, and I mean it would go away forever, embarrassing photos, videos and posts. That actually could be a reality very soon. Surprising? We have an OUTFRONT investigation.

And then, healthier French fries. It could be an oxymoron. But, anyway, Burger King says they have figured out how to crack the code. We tasted them today and we'll tell you if the claims add up.

And an 18-year-old from California doing things on a board that no woman or man has done before.

(COMMERCIAL BREAK)

BURNETT: Our eighth story OUTFRONT: California's new eraser laws.

We've all heard horror stories of teenagers positing ridiculous and embarrassing photos of themselves on the internet, revealing scandalous information that we all know that they will one day regret terribly.

But now, thanks to a new California law, youthful indiscretions could be a thing of the past for real.

Kyung Lah is OUTFRONT.

(BEGIN VIDEOTAPE)

KYUNG LAH, CNN CORRESPONDENT (voice-over): The Internet is jammed with self-made videos of teenage boys jamming, as well as teen girls, and plenty of embarrassing episodes.

UNIDENTIFIED FEMALE: Did you eat those sprinkles?

UNIDENTIFIED KID: No.

LAH: Of candy covered kids covering their tracks. Oh, so cute now. Maybe not in 20 years when running for, say, political office or the CEO slot at a Fortune 500 company. The cost of our oversharing.

But a new California law wants to give children under 18 a chance to erase the digital footprint, literally, passing what's called the Eraser Button Law. By 2015, if a California minor wants something like a video or picture deleted, the web company has to do it.

JAMES STEYER, FOUNDER, COMMON SENSE MEDIA: They deserve the right to take it back, and the right to have that forgotten and not haunt them in their college admissions or trying to get a job or even in the way they interact with some of their peers.

LAH: James Steyer, founder of Common Sense Media, advocated for the law's passage. He admits it's not perfect, but it's a step forward and predicts it will be replicated in other states and even at the federal level.

STEYER: The reason this matters so much is it's an historic turning point, because privacy is about you, me and our kids. It's not necessarily about the data gobbling of companies in Silicon Valley. But up until now, most of the laws have been written in reality by the companies and they've just taken your data and your privacy.

ERIN LA ROSA, SENIOR EDITOR, BUZZFEED: The law, to me, shows how little lawmakers know about the Internet and how the Internet actually works. LAH: Erin La Rosa is a senior editor at "BuzzFeed", a site that feeds off buzz in the social online world. She supports attempts by advocates and lawmakers to protect children but says in the online world, this law won't do anything.

Here's why.

LA ROSA: So, let's just take a photo of us.

LAH (on camera): We'll do a selfie.

LA ROSA: Yes.

So, now, we've got this photo, right?

LAH: OK.

LA ROSA: So, I'm going to upload this, say to Twitter.

LAH (voice-over): Seconds after posting to Twitter, La Rosa's colleague downloads photo like millions of us do every day.

LA ROSA: This copy has now been shared on Facebook, on another person's Twitter. They can remove one copy. The other copies are still there forever.

LAH (on camera): So, trying to control this is ludicrous.

LA ROSA: Impossible.

LAH: Impossible.

LA ROSA: Yes, it's not going to happen, especially under this law.

(END VIDEOTAPE)

BURNETT: Kyung, amazing when your talk there with Erin. I mean, you know, just last week, we were talking about the story about, you know, the teenagers had the party at the former NFL player's home and they were busted because they posted photos on the Internet.

You know, to the point she's making, this law doesn't protect you if the photos get put online by someone else either, right?

LAH: Exactly. You're exactly right. It is a major hole, a weakness here. And that's what critics are pointing out.

It's a person who owns the photo, the person who took the photo. So, let's ay you post it yourself. Well, then, you can ask for it to be retracted if you are under the age of 18.

But those kids from that particular incident, Erin, they may be prominently featured. They have no right to ask for it to be taken down.

BURNETT: Right. Like she said, you know, the footprint starts like dominoes, right? Gosh.

LAH: Yes, exactly, chasing you forever.

BURNETT: Yes. All right. Kyung Lah, thank you very much.

All right. It's time for the OUTFRONT "Outtake", Burger King today said it wants to help you get healthy and the world's number two burger chain launched a new line of French fries called Satisfries. According to Burger King, the new crinkle-style fries, that's what they call them, taste exactly the same as current ones with 30 percent less fat, 20 percent fewer calories.

We went out and bought tons of them. Personally, they did taste normal, but they had a funky aftertaste. I don't know, just saying. Honest opinion.

It's all part of the change attempt to attract a new audience that is looking for a healthier option. But will it work? Does that add up?

Because while fast food places have found some recent successes by adding salads and smoothies to their menus, many of the, quote-quote, "healthier alternatives" introduced have been a total disaster. As far back as 1962, McDonald's noticed it was losing money on Fridays because Catholics weren't eating meat. So, it introduced the hula burger, which was a hamburger with a pineapple slice, instead of beef patty. I mean, that could have told you that would bomb.

But anyway, people ate the filet of fish instead and the hula burger died.

And then, three decades later, in 1991, McDonald's tried to go healthy again with the McLean Deluxe. They spent $100 million on marketing. The heart was in the right place. But, anyway, it's now considered the most expensive flop in history.

But it's not just fast food restaurants. Remember the Lay's Wow chips? When they were launched in 1998, they were supposed to be a healthy alternative. They were all the rage in my college suite. And we found out what something called olestra did. That was that.

None of these are healthier options. They were just less unhealthy. And that's the thing about fast food. It may be delicious but is never good for you.

Instead of looking for healthy options at fast food places, maybe we should just treat like they are, have an occasional treat there. It's call Burger King and McDonald's and those other guys, what they are, guilty pleasures. Healthy, they are not.

OUTFRONT next, an 18-year-old surfer taking her sport by storm. Wait until you meet Lakey.

(COMMERCIAL BREAK)

BURNETT: Male-infested waters -- for years and years, the world of surf was seen as a man's world. But that is changing as women prove themselves as equal. We are not talking about Gidget or the girls in "Blue Crush." We are talking about an 18-year-old from California who was doing things that women have never done competitively on the surf board until now.

(BEGIN VIDEOTAPE)

BURNETT (voice-over): This is Lakey Peterson. She's a normal 18- year-old with one exception. She's one of the top ranked surfers in the world.

UNIDENTIFIED MALE: She nails it. Lakey Peterson, unbelievable.

BURNETT: The wave crushing prodigy, Lakey became the first female, while still just 14, to land an aerial maneuver in a competitive event.

UNIDENTIED FEMALE: Lakey Peterson.

BURNETT: It's impressive feat for anyone. But surfing is still mostly a boy's sport. Girls have been at the bottom of surf hierarchy for generations. Some of its biggest competitions like Mavericks still don't allow women to compete on equal footing. When women are included, the men have more event s and earn more prize money.

LAKEY PETERSON, ONE OF THE WORLD'S TOP RANKED SURFERS: Last year, I competed and I won. The guy won $100,000. And I won $15,000.

So, it almost -- it's such a huge, insanely huge gap. And I think last year kind of brought it to people's attention to almost how it was embarrassing.

BURNETT: Lakey is in a mission to change that. She doesn't want gender to be a qualifying factor anymore. She hopes her ability to beat the boys will serve as an inspiration for more women to join her in a male-dominated sport and change the game.

PETERSON: It's giving a chance to be yes or no. Then, if we can't do it, then, yes, you'll see, we can don't it. Or if we can, then we'll prove them all wrong.

(END VIDEOTAPE)

BURNETT: It starts to look like she's going to prove them all wrong. And just love the way she says it.

Thanks so much as always for watching. Let us know what you think.

Anderson starts now.