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Shutdown Showdown Day 9; Salmonella Outbreak; Obama to Nominate Yellen

Aired October 9, 2013 - 05:00   ET


ZORAIDA SAMBOLIN, CNN ANCHOR: The debt ceiling deadline just days away now. The clock, as you can see on the right-hand side, ticking. But you have to look for good news where you can find it. And both sides at least have shared a phone call.

Senior White House correspondent Brianna Keilar has the very latest.


BRIANNA KEILAR, CNN SENIOR WHITE HOUSE CORRESPONDENT (voice-over): Day nine, the government shutdown is getting real. For families of troops killed in combat, they will not get automatic death benefits during the shutdown, $100,000 to help cover funeral costs and to travel to Dover Air Force Base to witness the dignified remains.

In North Carolina, food assistance for women and children cut off.

And 27,000 government furloughed workers have signed up for unemployment as they go without pay. Just eight days until the United States could default, President Obama phoned house speaker John Boehner, both sides indicating the divide is as deep as ever.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: You got to stop repeating this pattern.

KEILAR: But later, President Obama appeared in the White House briefing room, opening the door to negotiations if Republicans agree to a short-term conclusion to reopen the government and increase the debt ceiling.

OBAMA: If there's a way to solve this, it has to include reopening the government. And saying America's not going to default. It's going to pay our bills.

KEILAR: How long might a short-term measure last? Four to six weeks, one GOP source tells CNN. Republicans may agree if the president promises to negotiate.

But it's far from a breakthrough without some sort of concession like a cut in spending, a stopgap measure may not clear the House.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: The long and short of it is, there's going to be a negotiation here. We can't raise the debt ceiling without doing something about what's driving us to borrow more money and to live beyond our means. KEILAR: The House voted Tuesday to create a congressional committee on government spending and the dead limit, as well as pay federal employees currently working without pay. But the Obama administration threatened vetoes. A stalemate still, and the clock is ticking louder and louder.

Brianna Keilar, CNN, Washington.


JOHN BERMAN, CNN ANCHOR: Another casualty of the federal government shutdown concerns your health and your safety. The shutdown has now affected the response to a salmonella outbreak that's linked to raw chicken and proving to be resistant to antibiotics.

That story now from CNN's Brian Todd.


BRIAN TODD, CNN CORRESPONDENT (voice-over): Nearly 300 people made ill from salmonella poisoning, primarily on the West Coast, the source traced to raw chicken products from three California plants run by a company called Foster Farms.

The inspectors from those products are from the U.S. Department of Agriculture. Are they sitting at home? Could this outbreak have started because of the government shutdown?

TOM JOHNSTON, "MEATINGPLACE": The shutdown has not affected USDA's food inspection to any major degree. The vast majority of inspection personnel are still working because Congress has generally viewed their function as a necessity.

TODD: And according to a USDA official, the investigation into this outbreak started before the government shutdown. Experts say the salmonella made it into the marketplace simply because some of the naturally occurring pathogens in chicken slip through sometimes.

But the shutdown is drawing another major concern regarding this outbreak and it has to do with the Centers for Disease Control.

(on camera): While poultry inspectors are still on the job, the CDC has furloughed a lot of people, which means that the absence of people who could track this salmonella linked to the outbreak could put us all at risk.

(voice-over): A CDC official tells us many of its scientists who track foodborne pathogens who were furloughed were brought back. But there was a delay in the exchange of information about the outbreak. That worries food watchdog groups.

PATTY LOVERA, FOOD AND WATER WATCH: Is this food getting further into the marketplace if you're not warning people that you're losing opportunities to warn people not to eat it or to remind people to care because of salmonella or to figure out, did the outbreak occur because we haven't put those pieces together? TODD (on camera): Another key piece of information we may not be getting is this resistant to antibiotics, right?

LOVERA: Right. So, it's a new thing that we're able to track now is the salmonella that is making people sick, is that bug going to respond to the antibiotics you would use to treat it? It happens more often recently. And again just I haven't seen that in reports from the government because we're not getting complete reports.

TODD (voice-over): A CDC spokeswoman told us there are signs of resistance to antibiotics in salmonella strains in this outbreak. But because of the government shutdown, they've not been able to track how widespread those concerns are so that is a major concern.

Brian Todd, CNN, Washington.


SAMBOLIN: Our thanks to Brian.

Did the Obama administration know its insurance exchange Web site wasn't ready to handle the job? There are reports now that the administration was told by insurers, state health care officials and Democratic allies about major problems with the site.

"The Washington Post" said warnings have come in for months about the site which has been plagued with problems since the exchanges launched a week ago now. The Obama administration says the latest maintenance site was designed to increase capacity and to make it easier for you to set up an account.

BERMAN: A name familiar to the financial world may soon be heading the Federal Reserve. President Obama today is set to nominate Janet Yellen, the current vice chair, to take over for Ben Bernanke when he steps down in January. If the Senate approves, Yellen will be the first woman to head the Federal Reserve.

And Christine Romans will be here in just a few minutes to talk about this nomination. This is a big deal. That's coming up in "Money Time."

SAMBOLIN: Chilling accusations about a missed opportunity to stop al Qaeda before 9/11. A new report by a conservative government watchdog involves a hijacking plot in 2000. Advance warnings was reportedly disregarded by the government but the clock fell through. The plans were considerably different from the suicide attacks of 9/11 and involved taking the jet and holding hostages for ransom.

BERMAN: The United States plans to cut some of its more than $1 billion in military aid to Egypt. CNN has learned money for security in Sinai and counterterrorism operations will continue. And the U.S. has not yet notified Egypt of its plan. The move comes in the wake of deadly violence across that nation and the crackdown of a political party of ousted President Mohamed Morsy.

SAMBOLIN: An arrest for several Congress members as they rallied with thousands of others outside the Capitol Building in support of immigration overhaul. The issue has stalled on Capitol Hill in the showdown over fiscal policy. Among the Democratic lawmakers arrested was famed civil rights leader and now congressman, John Lewis.

BERMAN: Take a look at this from South Florida.

SAMBOLIN: This is cool.

BERMAN: That is a water spout over Biscayne Bay. There were boaters nearby. What started out as a beautiful day, winds formed and that funnel came out from the sky. So they turned on their cameras. Hopefully, they turned on their cameras as they were going away. The water spout did disappear just a few minutes later.

SAMBOLIN: Indra Petersons is watching your weather this morning.

Good morning to you, Indra.

INDRA PETERSONS, AMS METEOROLOGIST: Good morning. It's a chilly out there.

I notice you guys match, very how cute.

BERMAN: Anchor prom.

PETERSONS: Prom pictures.

Yes, definitely a little bit chilly this morning. We're talking 20s and even 30s out there. Kind of moving in through Maine -- so, yes, that cold arctic air has moved in. Albany, 43, Philly, though, not bad, seeing 50s in the morning hours, but we always know when we start off cool we're going to be a little cool in the afternoon as well.

So, that's what we're dealing with today. More cool air filling in from Canada. These are actually your expected highs as we go through the afternoon. Philly looking for 66. New York around average for fall, at about 65.

You will notice, though, as we go into tomorrow, we're going to cool off even more and see below normal temperatures in the Northeast.


PETERSONS: A little chill, I know, for a couple of days.

SAMBOLIN: We're not feeling that, Indra.

PETERSON: You don't like that? I can see your face, you're just depressed right now.


PETERSONS: Down in the Southeast, here's the goodness. We're not in the rain right now. Strong winds are going to be on the other side of this. Not only cool, but a little bit of that hat chill factor is built into this as well, as long as that low stays down there, we're going to talk about moisture fueling that and bringing it up the coastline.

So, yes, chilly and cool and rain. In the Carolinas, two to four inches there. There's the low, towards the weekend week going to be talking about rain as we start off Columbus Day weekend.

SAMBOLIN: You know, the only thing about it getting colder, you get to wear sweats and --



PETERSONS: I know what those are.

SAMBOLIN: That's the good news. In the morning, that's what we're get going to look like.

Thank you, Indra.

So, once you conquer the swim from Cuba to Florida, what do you do for an encore? In Diana Nyad's case she's taken to an outdoor New York City pool for a two day marathon swim, raising money for victims of superstorm Sandy. It's under way right there. So, we're taking a look live.

That's her right there on the right. She's in the pink cap on the left side there are various celebrities ands other volunteers that have been hopping in the pool for a chance to swim alongside her. She will stay in the water, except for bathroom breaks, she's allowed those under tomorrow morning. The money being raised will go to the Americares Foundation.

Congratulations. That's fantastic.

BERMAN: Good cause.

SAMBOLIN: That other people like taking the time to go, and keep her company right?

All right. Coming up, a police officer is behind bars, accused in connection with the brutal attack carried out on a New York road. New information on this case, coming up next.

BERMAN: An historic Los Angeles church up in flames. That dramatic scene coming up.

SAMBOLIN: Plus, it's time for your morning rhyme, tweet us with your own original verse that can be about anything. Make sure it's #earlystart and #morningryhme. We're going to read them on the air. We have some doozies this morning.

BERMAN: Very good ones.


SAMBOLIN: Welcome back to EARLY START. Surprising new developments in the beating of an SUV driver by a group of motorcyclists. There are new arrests, including an off-duty police officer.

Susan Candiotti has the latest.


SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT (voice-over): As we learn of even more arrests, online video like this, painful to watch -- a biker seen kicking SUV driver Alexian Lien lying motionless before getting up.

An off-duty officer now under arrest, 32-year-old Wojciech Braszczok riding with other bikers shown in this video gone viral. The camera shows an SUV driver running over bikers after his tires were slashed. The off-duty cop is charged with two felonies, criminal mischief and being involved in a riot, in part accused of pounding on that SUV.

RAY KELLY, NYPD COMMISSIONER: Internal Affairs is looking at this and they'll continue to do this.

CANDIOTTI: Another biker also charged with gang assault and criminal mischief. A law enforcement source says police have video of the detective not yet made public, proving Braszczok took part. That same source says the veteran detective waited three days before reporting the incident, afraid of blowing his cover.

CNN legal analyst and former prosecutor Paul Callan says the detective could also lose his job even if he's not convicted.

PAUL CALLAN, CNN LEGAL ANALYST: As police officers, they have an obligation under NYPD regulations to break their cover, if they're under cover. And to come to the assistance of any civilian who's in danger. And having looked at this video, clearly, the civilians in that car look like they're in danger.

CANDIOTTI: Police also released photos of four other bikers in connection with the attack. The still frames were isolated from that video showing Lien getting stomped on.

As for the biker wearing that helmet cam, he's now revealing why he pressed the record button. He says he saw Lien throw a water bottle out of the sun roof hitting a biker. The SUV started swerving and the biker smelled trouble. He's not expected to be charged.

(on camera): The police union representing the undercover detective who's arrested has nothing to say for now. But the worst may be far from over. A law enforcement official telling CNN prosecutors are considering charges against at least one more officer and more bikers.

Susan Candiotti, CNN, New York.


SAMBOLIN: Thank you very much, Susan. Repeated calls to the attorney for the detective have not been returned.

BERMAN: Three firefighters jurisdiction as an historic Los Angeles church went up in flames. The Roman structure built in 1895, it was completely destroyed. Firefighters were trapped inside as the roof collapsed. Two were treated and released. The other is being kept for observation.

They did manage to prevent the fire from spreading to other buildings. Look at that. No word yet on a cause.

SAMBOLIN: Water causing plenty of problems in Seattle. A major water main break, that is, not far from the university of Washington. Streets were flooded. The parking lot of a popular shopping center was submerged in ankle deep water, but that's a bit much - -

BERMAN: Kind of a mess there.

All right. So, he's the world's most famous street artist. He goes by the name Banksy. And he has a lot of fans, but in an exhibit in Brooklyn, some person or persons have been spraying graffiti on his work. Now some people are outraged but others wonder if it's part of the show.

SAMBOLIN: You think?

BERMAN: Who knows? The truth is out there.

SAMBOLIN: In today's "Road Warriors", it's not just airfares that are going up. It is hotel pricings, too. According to hotels that --

BERMAN: Beat that table!


SAMBOLIN: Outrage.

The average hotel rate went up 3 percent in 2012. So, if you have to book an overnight stay, here are some ways to save a little cash. Try bundling your airfare and hotel and purchase them together. That can be cheaper if you book them separately. Hotels tend to lower prices when the room rate is hidden from the buyer.

Use social media before your trip to get updates. Tweet the hotel to see if there are any deals available. That's a good idea. And get on Facebook as well, like the property and let the hotel know how excited you are to be staying there. That, my friend, may get you a free upgrade. And many hotels also have loyalty programs that can join for no costs. They offer perks, so why not?

It could end up saving you some cash, which is always a good thing. And spare the table the beating --

SAMBOLIN: I'm outraged by that. Everything is going up. BERMAN: All right. Coming up for us next, the president's big new pick to lead the Federal Reserve. This is a big long lasting decision. Just who is Janet Yellen, and what might she do?

One person knows the answer better than anyone. It is Christine Romans. She will be here to explain on "Money Time."


SAMBOLIN: Welcome back to EARLY START. It is "Money Time." Christine Romans is here.

BERMAN: Big money time today.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Good morning, you guys. It really is. There's so much going on.

And stock futures are up this morning because the markets like a woman named Janet Yellen. Futures rose immediately when the president announces he would nominate Dr. Yellen as the next head of the Federal Reserve. For the market, it takes a big unknown out of the equation. And she is seen as continuing Ben Bernanke's low interest rate policy.

Dr. Yellen's domination will be announced officially at 3:00 p.m. She's well-versed in Fed politics and procedures. She's been a second in command since 2010. Hundreds of economists have been lobbying for her appointment to this position. She would be the first woman to run the fed in the 100-year history. She needs to be confirmed by the Senate.

The job of the Federal Reserve chair, of course, I've said it probably a hundred times. It is probably the most important job in the world right now. Dr. Yellen's chance will now be to figure out when to start pulling back on the Fed's $85 billion a month bond buying program, the stimulus that has kept the U.S. economy afloat.

We should get some hints also about Ben Bernanke's thinking about that pullback, that taper, later today. We're going to get some minutes from the Fed's September policy meeting. Investors want to see how close the vote not to taper was and what that could mean for Fed policy over the next few months, because, of course, the Fed is the only game in town in terms of the economy because your Congress really is doing nothing.

So far, the markets have had a good year, despite the dysfunction, I'm talking about in Washington. The turmoil, you guys, has been taking its toll over the past few weeks. The Dow, the NASDAQ and S&P are still showing double-digit gains but ominous sign for the markets despite the one-year Treasury bill, that's the chart everyone was looking at yesterday, trading desks, politicians, journalists passing around this chart, the big concern whether there will be any disruption in Treasury operations if the debt ceiling isn't raised in time.

That chart right there, there are trillions of dollars of transactions between business, government, small business, all kinds of loans tied to the 30, 60, 90-day treasury bills. That shows you there's some strains.

BERMAN: No, it's complicated but that's a terrifying image to a lot of economists.

ROMANS: Absolutely right. That is complicated. That is terrifying.

Also, remember if the debt ceiling isn't raised, the government has tough choices.

I'm going to show you, just on November 1st, what comes in. We've got a bill to pay for $18 billion in Medicare, just on November 1st, $25 billion on Social Security payments. There's a $12 billion due to military pay $3 billion in SSI payments.

You've got, as you know by October 17th only $30 billion in the bank. You're going to have daily revenues. Balancing the checkbook is what we're talking about here.

It's not about politics. It's about accounting. How are you going to balance on the checkbook?

SAMBOLIN: Is October 17th a hard deadline?

ROMANS: You know, the hard deadline I think was really in May. We hit that debt ceiling in May. The Treasury Department has been using extraordinary measures to keep the money going.

On October 17th, you have $30 billion in the bank. Sometime by the end that month, you're really not able to pay everything. We've never been here before, right? We've never been here before.

So, it's really -- an economist yesterday told me yesterday a vote not to raise the debt ceiling is a vote for a recession. I'm going to say again, a vote not to raise the debt ceiling is a vote for a recession, because you would slam 33 percent of the spending out of the economy immediately.

You'd balance the budget like that, that's especially what it is, right? And that means it's austerity. I mean, you're doing austerity in one month, just like that.

BERMAN: It's a very stark decision. And if someone doesn't get paid, no one knows what happens.

ROMANS: Right.

BERMAN: You're entering an abyss here. And it will be extremely, extremely problematic to say the least.

ROMANS: That's what every economist, CEO and a person on the system works. There are more debt ceiling deniers than ever before. The people who -- the political types who are saying, oh, it wouldn't be that bad.

BERMAN: We'll see. Hopefully, we don't get to see --

SAMBOLIN: Hopefully, we won't see it.

ROMANS: We won't, right.

BERMAN: Christine Romans, thank you so much.

SAMBOLIN: Thank you, Christine.

All right. Coming up, the government is just days away from this dangerous deadline we were just talking about. What would it mean for you if Washington doesn't pay its bills, how a debt default could seriously impact your life.


SAMBOLIN: Debt deadline fast approaching, say that fast five times, in Washington. That's next. What could it mean for you if the government defaulted on its bills?


UNIDENTIFIED MALE: Certainly, the family is horrified and confused.


BERMAN: Horror, just awful, at a San Francisco hospital. A patient missing for days turns up dead inside a stairwell.


UNIDENTIFIED MALE: How can you let a 9-year-old sneak past security, get on the plane without anyone stopping him, questioning him or anything?


BERMAN: A father demanding answers after his 9-year-old son sneaks past security and on to a Vegas-bound plane without a ticket.