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NEW DAY

Congress Faces Government Shutdown; Interview with Secretary of Health and Human Services Kathleen Sebelius; Iranian Foreign Minister to Meet with U.S. Secretary of State; New Video Released of Navy Yard Shooting; Owners of Aggressive Dog Breeds Dropped by Some Insurance Agencies

Aired September 26, 2013 - 07:00   ET

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


KATE BOLDUAN, CNN ANCHOR: The Navy Yard shooter caught on tape during his rampage. Well, now the FBI says he was delusional. We'll have more on what authorities found on his gun and his computer.

MICHAELA PEREIRA, CNN ANCHOR: We'll talk about home insurance. You need it to keep you safe from floods and quakes. We're going to tell you about one family that is about to lose theirs because of their pet. More and more people are trying to figure out how their insurance company can pull their coverage just because of their canines. We'll have both sides of the story, coming up.

BOLDUAN: Let's start this hour with developments on Capitol Hill. A possible government shutdown now four days away. Senate leaders hope to approve a spending bill in the next day or two, but that's not the only deadline Congress is facing now. The deadline -- the debt ceiling, rather, needs to be raised again so government can pay its bills. Democrats and Republicans already drawing battle lines for that fight. Let's do it all over again, I guess.

So let's go to CNN's chief congressional correspondent Dana Bash on Capitol Hill. I can almost hear people's heads just shaking when they hear this happening all over again, Dana.

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: That's right, Kate. I talked to lawmakers in the hallways in Congress and they will tell you their constituents are suffering from crisis fatigue. But if that's true, the next three weeks is really going to exhaust their patience.

(BEGIN VIDEOTAPE)

BASH: It would be one thing for the government to shut down in four days. National parks would close, medical research interrupted. But then economic catastrophe may come 17 days later when the U.S. could default on its loans if Congress doesn't raise the debt ceiling. The White House is warning not to use it as a bargaining chip.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: There is no negotiating over congress's responsibility to ensure that we do not default.

BASH: But GOP sources tell CNN that as soon as Saturday, House Republicans are planning to pass a bill that raises the debt ceiling but also adds several GOP priorities like the Keystone pipeline or tax reform or even delaying Obamacare for one year.

SEN. JOHN FLEMING, (R) LOUISIANA: The real play here is going to be leading up to the debt ceiling discussion where we could get a full delay for a year, including taxes of Obamacare, and I think the president is ready to do that.

BASH: Fat chance, say Democrats.

SEN. PETER WELCH, (D) VERMONT: Their strategy will fail because the financial markets will pistol whip the Republican conference into doing then what they should be doing now, and that is pay America's bills.

BASH: But let's go back to that first deadline, the looming government shutdown.

UNIDENTIFIED FEMALE: Senator, I know you're exhausted.

BASH: Ted Cruz finally sat down after his headline grabbing --

SEN. TED CRUZ, (R) TEXAS: I do not like green eggs and ham.

BASH: Conservative celebrity making --

CRUZ: I tweeted a speech that Ashton Kutcher gave.

BASH: -- 21 plus-hour talk-a-thon against Obamacare.

UNIDENTIFIED FEMALE: How do you feel standing there for so long?

CRUZ: To be honest I feel terrific, I feel energized that the American people had an opportunity, I hope, to engage in this debate and have their voice heard.

BASH: But Cruz only wants to fund the government if Obamacare is defunded.

(END VIDEOTAPE)

BASH: Assuming Cruz does not get enough Republicans to come his way on that, and looking at conservative editorial pages this morning it looks maybe even more unlikely, the Senate is expected to vote Friday or Saturday to fund the government but not defund Obamacare. Chris, that will put this back in the house's court and it will just be two or three days they have to decide what to do before that deadline happens.

CHRIS CUOMO, CNN ANCHOR: All right, Dana, thank you.

Whether one side wants to dismiss what Senator Cruz and others did as a fool's errand or as simply democracy in action, one thing is sure -- Obamacare is in the crosshairs and a lot of people have misgivings about it. So let's bring in someone who understands the law better than anyone else, trying desperately to get it implemented for October 1st and explain it to people. We are going to bring in the secretary of health and human services, Kathleen Sebelius. Secretary, I'm looking down at my notes as I'm introducing you. You can judge the politics any way you want, but one thing from polls and perceptions seems clear, the narrative on Obamacare is negative right now. People think it's big government at its worst. It's going to cost more money, it's going to restrict their lives. How do you attribute this loss in message if not in policy right now?

KATHLEEN SEBELIUS, HEALTH AND HUMAN SERVICES SECRETARY: I think, Chris, what we've seen for three-and-a-half years is a relentless battle driving misinformation, both from opponents of the law itself and a lot of media and now paid advertising continuing to give the American public information that just isn't correct.

So what we're trying to do is remind people what's already happened -- 3 million young adults already have insurance coverage on their parents plan. Lots of parents with a child with a pre-existing condition no longer have to worry about the company dumping their child out of the marketplace. Seniors have stronger benefits in Medicare and the slowest growth rate in 50 years. Lots of consumers across the country, millions of Americans got a check back from their insurance company because of the 80/20 rule.

So those patient protections are already in place and the final piece of the puzzle is going to start on October 1st on Tuesday of next week when a lot of -- about 15 percent of Americans who don't have affordable coverage at through their workplace or uninsured have new choices in the marketplace.

CUOMO: So let's go through the misgivings, OK? You put out the big sell there. Let me hit you with what the opposition is and you can answer them directly.

SEBELIUS: Sure.

CUOMO: The first is, you're helping, you're killing business, you have UPS, Trader Joe's, they are saying they'll have to cut benefits, Obamacare is costing too much. They're cutting back on people's hours to get around it. This is because you're forcing insurance down people's throats instead of letting the market work.

SEBELIUS: Actually that just isn't true. What we see is an increase in full-time jobs. There's a decrease in the number of Americans working part-time hours. And the good news for those folks who do work part time, and there will always be part-time workers in every business, is that they'll have an affordable insurance option for the first time ever. It used to be that only if you had certain kinds of jobs in this country could you afford health security for yourself and your family, could you take care of your family. Now people, individuals, entrepreneurs, small business owners, will have an affordable option, competition and choice.

And Chris, we've got some great news on the prices that are coming out. We know that six in 10 Americans are going to be able to have a policy for less than $100. And 95 percent of people will have two insurance companies and 53 plans to choose from. That's really good news. CUOMO: But the companies are saying that you're to blame, Obamacare, for making it more expensive, and that's what they're doing. So are you saying that they're lying, the small businesses who are saying it's so onerous that you yourselves had to push back the market which they had to meet the mandate, more proof that this is business?

SEBELIUS: Actually, no small business owner falls under the employer responsibility. If you have less than 50 full time workers, there is no responsibility to purchase health insurance for your employees.

But in fact those small business owners, a lot of whom find insurance to be the best recruitment and retention tool will have a new market to deal in. They often are paying a lot more in the market than their large competitors. They now will have some insurance products to deal with.

The big employers are already in the market. Their plans won't change, and actually that's one thing that we need to remind everybody. If you have insurance with your employer that you like, if it works for you, if your employer is a state or city government, a large employer, if you're in Medicare, if you have veteran's benefits, your patient protections are already in place. Nothing changes in this new market. This is really about the folks who have been outside the market and paying a lot more when they tried to get in.

CUOMO: All right, I hear the message, but a lot of people are not receiving it, secretary. So you've got some significant work, some triage going in front of you. Good luck going forward.

SEBELIUS: Now we'll have the facts to deal, to push back on some of the misinformation. At every point along the way the misinformation has been wrong, and I'm really anxious for the markets to be up and running so people see what prices are, what options they have. And what we find is that they're thrilled with the choice and the competition. Policies for under $100, less than your cellphone bill, and I think that's very good news for millions of Americans who don't have health security right now.

CUOMO: Thank you, Secretary Kathleen Sebelius. Appreciate you being on NEW DAY.

SEBELIUS: Good to visit with you, Chris.

CUOMO: Kate, over to you.

BOLDUAN: Chris, thanks.

Let's turn back to the showdown over the government shutdown now and the debt ceiling. We've heard the political back and forth and we'll continue to talk about it. Now Christine Romans is here to break down why it's so important and what it means for you, Christine.

CHRISTINE ROMANS, CNN ANCHOR: Because it is not just contained within Washington. This is something that is around the corner, but the administration officials I've spoken to are very concerned about he shutdown, more concerned about the debt ceiling. I want to tell you why. During a shutdown, mandatory spending wouldn't be affected. That means, for example, seniors, Kate would still get Social Security benefits payments, right. That's not the case if we have a crisis with the debt ceiling. No spending after the cash on hand runs out.

What is that date? October 17 is the day when the U.S. will have less than $50 billion and the government can't borrow any more money. that means, just like when your back account is empty and you can't find an extra source of cash, the government will have to stop paying some of its bills. It won't be able to borrow to pay some of its bills.

What are we talking about? We're talking about interest on our debt to people like China, right? We owe China billions in interest on those massive loans. We wouldn't be able to pay Social Security checks to seniors or Medicare and Medicaid payments to hospitals. Over 110 million people are on one of those programs.

Now, "catastrophic" is the word the treasury secretary uses if the debt ceiling isn't raised. What could be worse here? We don't know what would happen. How will the markets react? We don't know. How many hundreds of billions of dollars could we use in borrowing cost? We just don't know until we get there, if we do. Three weeks away, October 17th, that is the moment when you have $60 billion every day you have to pay out and only $20 billion coming in. That's math that is impossible and very dangerous when you mess around with the full faith of credit in the United States.

BOLDUAN: More dangerous and larger repercussions than a government shutdown. Even though it's maybe easier to understand a government shutdown, the debt ceiling could be far reaching.

ROMANS: Both are dangerous and stupid. The debt ceiling would be catastrophic.

BOLDUAN: Christine, thanks so much.

CUOMO: Politicians can't fix it. That's the problem.

BOLDUAN: Exactly.

CUOMO: All right, so, big meetings at the U.N. Did you know that history is being made there? It could be made today. Why? For the first time ever in more than three decades, really, top officials from the U.S. and Iran will sit down and talk face to face, first time in three decades. Think about that. They're going to be sitting down, the man on the right of your screen, Secretary of State John Kerry and Iranian foreign minister Mohammad Zarif. That is who will be meeting. Let's bring in senior international correspondent Nick Paton Walsh for some perspective. He is live at the U.N. Good morning, Nick.

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Chris, the real issue is, can Iran be trusted? We know what will be on the table. Amongst the softer things we've heard from the new Iranian president Hassan Rouhani, a much friendlier tone, he did say Iran wants to keep hold of nuclear technologies. These talks will be about trying to slow enrichment down to make the step to a nuclear weapon a lot harder and getting more inspections in there.

Iran's president saying to "The Washington Post," he'd like to see a deal in three to six months. That's a lot of heavy, quick lifting that has to be done diplomatically. But all that aside, today is absolutely monumental, because for the first time in 34 years John Kerry will be in the same room in a direct meeting, other diplomats in the room, other countries in the room with his Iranian counterpart. Colin Powell shook the hand of his counterpart in 2001, no meeting like this. Despite the turmoil in the Middle East right now, today is really something. Back to you, Kate.

BOLDUAN: All right, Nick, thanks so much for that. Let's talk more about another element of what happened at the U.N. Iran's new president made headlines when he condemned the holocaust during an exclusive interview with CNN's Christiane Amanpour. Why? Well, President Rouhani's comments come in stark contrast to statements made by his predecessor, former Iranian president Mahmoud Ahmadinejad. Now a semiofficial Iranian news agency is questioning the accuracy of CNN's translation of that interview.

Let's go live to CNN's Reza Sayah in Tehran. Reza, it shows how delicate that relationship is when they are already questioning a translation of an interview.

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: Yes, Kate. This was a strange incident that came out of nowhere, but considering what's happening in New York today, it's important not to blow this out of proportion and point out that this controversy was sparked by a single hardline news organization with no direct official links to the state government. But it is backed by the revolutionary guard. What happened is President Rouhani acknowledged the holocaust, and then this hardline news organization denied he acknowledged it and criticized CNN.

(BEGIN VIDEOTAPE)

SAYAH: This was the question by CNN's Christiane amanpour.

CHRISTIANE AMANPOUR, CNN INTERNATIONAL CORRESPONDENT: I want to know your position on the holocaust. Do you accept what it was, and what was it?

SAYAH: This was the answer by Iranian president Hassan Rouhani.

HASSAN ROUHANI, IRANIAN PRESIDENT: when it comes to speaking of the dimensions of the holocaust, it is the historians that should reflect on it. But in general, I can tell you that any crime that happens in history against humanity, including the crime the Nazis created towards the Jews, is reprehensible and condemnable.

SAYAH: Rouhani's acknowledgement of the holocaust is big news in the U.S. Top newspapers and TV networks contrasted Rouhani's comments with former Iranian president Mahmoud Ahmadinejad, who often questioned the holocaust in speeches at the U.N. General Assembly. Back here in Iran, Rouhani's comments received little media attention, which the exception of Fars News. The semi-official hardline news agency claimed Rouhani never explicitly acknowledged the holocaust and accused of CNN of fabricating the report by mistranslating Rouhani's answer.

CNN stands by its reporting. The translation was provided by the president's own translator. The Fars news website shows the translation from Christiane Amanpour's interview and claims these parts have been added or completely altered and that this statement was a product of conceptual and non-precise translation.

AMANPOUR: Ridiculous. I don't even want to dignify that with a comment, but what I can say is we put the entire transcript out online. We have the entire 56-minute interview if anybody at Fars (ph) cares to read it. We have his translator. I speak Persian. I know what he said.

SAYAH: President Rouhani's comment once again puts a spotlight on Iran's bitter and complicated rivalry with Israel. Iranian hard- liners frequently suggested Israeli leaders embellish and exaggerate the horrors of the Holocaust to justify the occupation of Palestinian land. Israeli leaders have in turn accused Iran's leadership of anti- Semitism , labeled them enemy number one, and pointed to their skepticism of the Holocaust as proof. President Rouhani's comments seem to be an effort to diffuse Iranian/Israeli tensions over the Holocaust, at the cost of annoying some Iranian hard-liners.

(END VIDEOTAPE)

SAYAH: This bizarre controversy comes against the backdrop of the possibility of improved relations between Iran and the U.S. and it shows that President Rouhani has to be careful with what he says, because a lot of people are listening to every word he says. And the reaction that follows. Chris?

CUOMO: Reza, thank you very much for the reporting.

We want to go to another story now. We're going to show you something that the FBI says is painful, but important. Video that shows just how mentally ill Aaron Alexis was when he attacked the innocent at the Washington Navy Yard. Surveillance video shows Alexis stalking the hallways and people in the distance, running for their lives. The FBI says the video brings the shooter's motive into focus. For more we go to CNN's Joe Johns in Washington. Good morning, Joe.

JOE JOHNS, CNN CORRESPONDENT: Good morning, Chris. We have the new video and new photographs along with search warrant information. Much of the evidence pointing to the signs of mental illness in the case of Navy Yard shooter, Aaron Alexis. It tells the authorities he wasn't targeting anyone in particular and now there are some real clues on what drove him to do it.

(BEGIN VIDEOTAPE)

JOHNS: Ten days after the shooting, the FBI released the gripping silent surveillance video of Aaron Alexis carrying out his deadly attack. He drives into the Navy Yard in his rented Prius. The cameras pick him up as he enters the front door of building 197, ready for a rampage that killed 12 before he was shot down.

VALERIA PARLAVE, ASSISTANT DIR. IN CHARGE, FBI WASHINGTON FIELD OFFICE: There are indicators that Alexis was prepared to die during the attack and that he accepted death as the inevitable consequence of his actions.

JOHNS: You see him carrying his bag, hidden inside, a sawed off Remington 870 which he removed in the bathroom. Photos also released by the FBI show he left the bag behind. Twenty-two minutes after he drove in, surveillance picks him up roaming the hall. He readies his weapon, hunting people. You see him move downstairs and make his way down another hall as people flee through a connecting hallway. In addition to seeing this chilling tape, we're also getting a sharper picture of what drove Alexis.

PARLAVE: There are multiple indicators that Alexis held a delusional belief that he was being controlled or influenced by extremely low frequency or E.L.F., electromagnetic waves.

JOHNS: The FBI released photos of his gun an apparent reference to the magnetic waves carved in the handle "My E.L.F. Weapon." On the barrel, the words "End the Torment."

While the investigation into the mental illness that sowed the seeds for the attack continues, agents said they found writings by Alexis that explained in plain language why he said he did it.

PARLAVE: A document retrieved from the electronic media stated, quote, "Ultralow frequency attack is what I've been subject to for the last three months. And to be perfectly honest, that is what has driven me to this."

JOHNS: Investigators don't believe he targeted specific people in his 60-minute killing spree.

(END VIDEOTAPE)

JOHNS: There's been irritation expressed by a family member of one of the victims and by one Navy official that the public release of the video was insensitive, but a source said the FBI had more graphic pictures and did not release them. Chris and Kate.

BOLDUAN: Joe Johns, thanks so much, from Washington this morning.

There's a lot of news developing at this very hour. Let's get straight to Michaela for the latest.

PEREIRA: All right, guys. Here we go. We're looking at our headlines at this hour.

Al Shabaab, the Islamist terrorist group based in Somalia, saying it was behind the deadly mall attack in Kenya, warning also of more violence. The audio message that's said to be from the group's leader. CNN is working to make sure the message is authentic. Nearly 70 people were killed in that mall attack in Kenya; more than 60 people still unaccounted for An American citizen sentenced to 25 years in prison for conspiring to sell missiles, rifles, and other weapons to the Taliban. The U.S. attorney says - a U.S. attorney says starting in 2010 Alwar Purion (ph) and a co-conspirator communicated with an undercover DEA agent they thought was with the Taliban. They thought they had a deal for $25 million worth of arms, ammunition, and training. Both men were arrested in Romania and extradited to the U.S. to stand trial.

The Senate Intelligence Committee holding a public hearing today to discuss proposed challenges to the NSA's collection of Americans' records. Democratic and Republican senators joining forces on the new legislation, which would create a constitutional advocate to represent the public in the secret FISA court overseeing the NSA. Government surveillance programs have come under fire since NSA leaker Edward Snowden's disclosures earlier this year.

Confrontations outside court over the disappearance of a little girl from Maine. The mother of Ayla Reynolds and her supporters screamed at the girl's father. Justin DePietro, he had just pleaded guilty to an unrelated assault charge. DePietro ducked into a police station where hecklers called him a murder and shouted, where's Ayla? That little girl disappeared in December 2011.

An Arizona farmer growing pink pumpkins for a great cause. It all started when Norm Freeman, the farmer, accidentally cross pollinated white and red Cinderella pumpkins. It makes pink. He loved the color. Now he's growing them on purpose, Chris. Why? He's going to raise money for breast cancer research. Freeman wants to raise $25,000 by the end of October in honor of breast cancer awareness month. White and red make pink, even in pumpkins.

BOLDUAN: Accidents create pretty cool things.

CUOMO: I'll have them on my porch because my kids will be drawn to them like metal to a magnet.

PEREIRA: Can we have one here, too?

BOLDUAN: That's a great idea.

CUOMO: Yes. I'm going to buy a big pink pumpkin for the middle of the table.

Coming up on NEW DAY, going to the dogs. Imagine losing your home insurance because of your pet. That's what one Indiana family is facing. They say they're more like them. We're going to tell you the story.

BOLDUAN: And maybe winning the Lottery really isn't a dream come true. That's not just sour grapes. The recent Powerball winner from New Jersey has some advice that might make you think twice before buying a ticket next time.

CUOMO: Challenge.

(COMMERCIAL BREAK) CUOMO: Provocative question got people barking. Could your dog cost you your home insurance? It might just happen to one Indiana family says there are more like them. Why? They have two pit bulls. Some people deem them a dangerous breed. That's what their insurance company thinks. Then they wound up giving them an ultimatum: get rid of your dogs or lose your coverage. CNN's Zoraida Sambolin has this story.

ZORAIDA SAMBOLIN, CNN CORRESPONDENT: This will bring out the bark in people, don't you think? It's an impossible dilemma for dog lovers. What to choose between keeping your dog or keeping your home insurance. A number of companies are now dropping or canceling altogether the coverage for people who own certain kinds of dogs and now some families are outraged.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: He does everything here, huh?

SAMBOLIN: : For many home owners, a dog is more than just a best friend. It's a member of the family.

SUSIE SALAZAR, DOG OWNER DROPPED FROM INSURANCE: You treat them the same way you treat your kids.

SAMBOLIN: But now, many dog lovers like Colorado resident Susie Salazar are having to choose between Fido at home, or a home without insurance.

SALAZAR: We were informed that you have a pit bull in your home and we have to drop your coverage.

SAMBOLIN: After being with the same insurance company for nearly 17 years, American family Insurance dropped Salazar in April. The company spokesperson explaining their decision to our affiliate KUSA.

STEVE WITMER, SPOKESPERSON, AMERICAN FAMILY INSURANCE: We made a decision that there were certain breeds of dogs that we would no longer insure, and pit bulls are one of those breeds.

SAMBOLIN: Just two weeks ago, Indiana resident Brad Reinke (ph) faced a similar ultimatum.

UNIDENTIFIED MALE: Letter in the mailbox saying we had to get rid of our dogs because we had aggressive dogs.

SAMBOLIN: Reinke says of the seven years Shelter Insurance has provided him coverage, his pit bulls have been around for the last five.

UNIDENTIFIED MALE: I don't see how they can say they're aggressive when they never met the dog. They're just pretty much discriminating against the breed.

SAMBOLIN: "Forbes" magazine reports that insurance companies tend to deny to these 11 riskiest dog breeds, the top four in the doghouse: pit bulls, Doberman pinchers, rottweilers and German shepherds.

JEANNE SALVATORE, SENIOR VP PUBLIC AFFAIRS, INSURANCE INFORMATION INSTITUTE: Pets are part of a person's family, but it's important that dog owners are responsible.

SAMBOLIN: The Insurance Information Institute says dog bites account for one-third of all homeowner's insurance liability claims, costing insurance companies nearly $490 million last year. Salazar says the company never asked her if she had a pit bull, adding that even after her efforts to get a vet's recommendation, they wouldn't throw her a bone.

SALAZAR: I am mad. I'm upset.

SAMBOLIN: Now, nationwide dog lovers are fighting back. Some local governments prohibit breed specific legislation, while a couple of states have laws barring insurers from canceling or denying coverage based on breed.

SALVATORE: The family doesn't necessarily have to give up the pet. There are a lot of homeowners insurance companies out there. Make some calls.

(END VIDEOTAPE)

SAMBOLIN: That's very good advice. In response to Brad Reinke's story, Shelter Insurance sent CNN this statement "based on sound actuarial, and underwriting principles, Shelter chooses not to insure individuals with breeds known so exhibit vicious tendencies. Shelter reviews individual situations regarding breeds known to have vicious tendencies on a case by case basis."

But at the end of the day, as you said as you were watching this, is choose a different insurance company. I also wonder why they don't tell you ahead of time, or ask you ahead of time.

BOLDUAN: That's the thing I think is the problem.

SAMBOLIN: Do you have one of these breeds? You may find out if somebody comes to your house, based on another claim, somebody from the insurance company and sees the dog and then sends you a letter in the mail saying you can't have that dog so we're going to drop you.

BOLDUAN: Know what you're getting into, I guess. Right?

CUOMO: They say it's a third of all claims. You know what this is about.

SAMBOLIN: Yes, money.

BOLDUAN: Thanks, Zoraida.

SAMBOLIN: Sure.

BOLDUAN: Coming up next on NEW DAY, the government shutdown, the debt ceiling, both deadlines quickly approach. Anna Navarro and Stephanie Cutter will be joining us to talk about the stakes for you and, of course, for both sides of the aisle.

CUOMO: When you think about winning the Lottery, it sounds look a golden ticket. Win the lottery, life is better. But believe it or not some Powerball winners say winning millions is actually a curse. We'll tell you why.

(COMMERCIAL BREAK)