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Snowden's Dad In Russia, Hopes To See Son; Former Detroit Mayor Sentenced To 28 Years; Dow Posts Biggest Gain Of The Year; Market Stability Put To The Test; A Short Term Deal?; Kimmel And Kanye Clear The Air

Aired October 10, 2013 - 16:30   ET


JAKE TAPPER, CNN ANCHOR: Welcome back to THE LEAD. I'm Jake Tapper.

Now, it's time for our world lead. And the father of the NSA leak source is on top of the world lead. Lon Snowden talked with us over the summer about his son Edward and his search for asylum. Right now, Lon is in Russia hoping to have some father/son or father/fugitive time. There's no guarantee they'll meet up. Blood is not thicker than water in the spy game.

Russian authorities are keeping the younger Snowden's whereabouts top secret, although four American whistleblowing activists claim they met with Snowden yesterday to give him an award. Lon says his son deserves a Nobel Peace Prize. The U.S. of course is a giant pile of criminal espionage charges with Ed Snowden's name on them.

In politics, prosecutors say he stuffed his pockets while Detroit slid toward bankruptcy. Now the city's former mayor, Kwame Kilpatrick, will do hard time for it. The Democrat was sentenced to 28 years in prison in court today for his March conviction on two dozen federal charges including racketeering, extortion and filing false tax returns.

Kilpatrick, who was once affectionately known as Detroit's hip- hop mayor, but went on to prove himself to be the Suge Knight of municipal politics, resigned in 2008 after lying under oath and he already has a lot of time served under his belt.

Let's check in with our political panel in the green room. Olivier Knox when pressed by Dana Bash if he would support a four-week spending plan, the speaker of the House replied and I quote, "Ifs, ands and buts were candy and nuts, every day would be Christmas." Do you have any idea if that's a political position or just the first half of a limerick that I can't complete on live television?

UNIDENTIFIED MALE: Jake, I think it's the meager offerings at the shutdown movie theater. Boy, have we seen this movie before.

TAPPER: At least two times before. Stay tuned. We'll be back with more of THE LEAD.

(COMMERCIAL BREAK) TAPPER: Welcome back to THE LEAD. I'm Jake Tapper. It's time for the "Money Lead." President Obama and House Republicans are meeting right now, right this minute, to talk about a possible deal to end the debt ceiling standoff. Now, it's not clear if the White House is on board and Senate Democrats came out a short time ago and demanded the government reopen, so it's not clear where this debt limit plan will go, but still, here's how Wall Street took the news.


UNIDENTIFIED MALE: So you're telling me there's a chance.


TAPPER: The Dow posted its biggest gain of the year, rising 323 points. Joining us live from the New York Stock Exchange is CNN's Alison Kosik -- Alison.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: What a day. You know what, Jake, the bulls charged ahead and didn't look back. Just in today's trade, this one trading day, the gains almost wiped out everything that was lost since the shutdown started on October 1st, missing by a meager three points. This was a day investors bought in on word that progress is being made on Capitol Hill to come up with some sort of solution to the debt ceiling, even if that means it's a short-term band-aid for Wall Street, it's good enough.

So the rally came actually despite the first hard numbers that are showing how the shutdown is affecting Americans. First time claims for unemployment benefits jumped by a whopping 66,000 last week, all the way up to 374,000, and about a quarter of those filing those claims, 15,000 people, they were people filing for benefits because they were directly impacted by the shutdown.

Most of them are private sector employees who are contracted out by the government from places like Lockheed Martin and United Technologies, for example. These are employees who were furloughed, about a half million of them. But as Wall Street sees it, the thinking is the jump in claims is temporary so their focus today, they were laser focused on the debt ceiling and movement on Capitol Hill gave the market momentum today.

TAPPER: All right, Alison Kosik with some rare good news this week from Wall Street.

If the White House does agree to a short-term deal on the debt ceiling, will that be enough to sustain the markets through the next chapter of what's sure to be some tough negotiations?

I'm joined by Mark Zandi, he is the chief economist of Moody's Analytics. Mark, thanks for being here. This proposed deal would raise the debt ceiling through November 22nd, but what happens on Wall Street if a new deal can't be reached by then?

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: Well, it's a good question. Certainly the angst created by all the uncertainty between now and then means I think it will be tough sledding for the market. Had a great day today, but I think there will be a lot of ups and downs in the market over the next few days, few weeks until they actually nail this down more concretely.

TAPPER: Now Alison mentioned that the market reacted well today even though there was some bad news, as we are starting to see the results of the government shutdown, not just the added people who are not getting paid, but the residual effects. And I'm wondering if the government continues to stay shut down, as seems to be the current Republican plan in the House, will that sway how investors react to even a short term debt ceiling deal?

ZANDI: Yes, eventually. It depends how long the government is shut down. By my calculations, the damage to the economy to date is about a half a percentage point off of growth. Now, that's, you know, that's meaningful but it's not overwhelming. If this were to last another two weeks, the shutdown continued through the end of October, then it could be somewhere between one and one and a half percentage points of GDP. That's real money.

If it extended into November, extracting even from the debt limit, then we get pretty close to stall speed. The economy stalls out. So the shutdown by itself, even if we take the debt limit off the table as an immediate threat, will start to do some real damage already is.

TAPPER: Our viewers care about the stock market because largely, they view it as a way to judge whether hiring will improve in this country and also because many people have retirement accounts. When can we start to exhale? When do you think there's a time when we can start to think things will be back on track and we don't have to be as nervous about what's going on in Washington?

ZANDI: Well, as soon as we're not talking about it on CNN, to be frank. I mean, as soon as Washington can push the debt limit off enough into the future and fund the government for at least, you know, the fiscal year, and then Washington gets off the front pages, I think that's when we exhale.

And when the better private economy, there's a lot of good things happening in the private economy, at least there were before all this started, that will start to shine through and that's good for everybody, including stock investors. But the key here is really, the litmus test is when CNN isn't really covering this wall-to-wall like it is right now.

TAPPER: All right, thank you so much.

Coming up, offers are on the table, House Republicans and the president are talking, happy day. But wait, if everyone is embracing their inner kumbaya, why can't the government open for business?

Later, it's the other big feud that seems like it will never go away. Kanye West goes face to face with his nemesis, Jimmy Kimmel and explains away his rants with, of course, a rant.


TAPPER: Welcome back to THE LEAD. I'm Jake Tapper. It's time for the "Politics Lead." On the 10th day, the White House said let there be lights.


JAY CARNEY, WHITE HOUSE PRESS SECRETARY: Our position is clear. Turn on the lights, stop threatening default, and pay our bills.


TAPPER: But right now, as Republicans and the president are meeting face-to-face to hash out their differences, turning on the lights and ending this partial government shutdown does not seem to be on the table in the Republican Party's new pitch to extend the debt ceiling, or at the very least, it's not the main course in the pitch.

Let's bring in our political panel to talk about it, CNN political commentator and columnist for the "New York Times," Ross Douthat, the president of the Center for American Progress and former senior adviser to Health And Human Services Secretary Kathleen Sebelius, Neera Tanden. That's a mouthful, and chief Washington correspondent for Yahoo! News, Olivier Knox.

Thank you so much for being here. So Ross, I'm wondering, as the Republican at the table here, your thoughts on this deal. OK, extend the debt ceiling, I understand that --

ROSS DOUTHAT, CNN POLITICAL COMMENTATOR: I'm going to ask him to translate my answer to French, speak it in French.

TAPPER: But not open the government. Why not open the government?

DOUTHAT: Well, I would say the hope, the hope today for those of us on the political right of center who think that perhaps, just perhaps, the Republican Party doesn't really know what it's doing in this particular moment, the hope is that --

TAPPER: But you want it to and you want it to thrive.

DOUTHAT: Who want it to thrive, this gambit by Boehner leads to a situation where perhaps, through Senate Republicans attaching a continuing resolution, perhaps through some card that is so far up Boehner's sleeve we haven't seen it pulled out yet, that first we get the six-week extension, then you get a continuing resolution, then you get negotiations and so on.

The problem is basically for Republicans that if you lift the debt ceiling for six weeks but continue the government shutdown, you are basically saying well, I'm going to give up on that whole murder- suicide thing and just concentrate on slitting my own wrists, right, because that's the basic politics of it.

There are lots of conservatives, not that many, but it's a big country so there are lots of conservatives who think this is a good strategy for Republicans to follow. They are all mistaken. There is no evidence that shutting down the government helps the Republicans in any way and it's not going to achieve any objective that is worth the political damage.

It's possible, you know, there will be some concession at some point from the White House, but nothing that's worth this kind of fight. Anyway, I have said enough. I think I'll just --

TAPPER: You can exhale. Olivier, the 5 percent poll number, the American people according to a new AP poll, only 5 percent of us approve of the job Congress is doing. You don't find that as contradictory with the 98 percent re-election or recidivism rate that I do.

OLIVIER KNOX, CHIEF WASHINGTON CORRESPONDENT, YAHOO! NEWS: Right. That's right. Congress now is obviously less popular than venereal disease. We established that a long time ago. But now the 5 percent number is really important because unless people turn on their own congressmen, in other words, if that number means man, I hate your representative, I wish he acted more like mine, she's great. That poll number is essentially meaningless.

Where it could pose a problem is for gubernatorial candidates in big diverse states who have to run a more centrist campaign who might be inclined to run against Congress. It matters there and it matters in some senate races. But as a pure House number, it doesn't really mean that much to me.

TAPPER: So a year after a presidential election, as we all know, political geeks at least know, these are the important races that everybody is watching. New York city's mayor, but then on a broader level, there is New Jersey governor, this year, there is also a New Jersey Senate race, not normally the case, and then there is Virginia governor.


TAPPER: Is this affecting those races in any way that you can see?

TANDEN: Yes. I think Terry McAuliffe moved -- Democratic candidate in Virginia, actually moved into an almost double digit lead. It's over last week or so. So a lot of people are pointing at the government shutdown. He was a few points ahead, now he's 9, 10, 11 points ahead. That's an issue.

I think what you're seeing, I hope what we'll see in the next few days is more and more Republicans who do run state-wide, Republican senators recognize that a government shutdown is a horrible disaster for them. It's hurting the brand of the Republican Party, which is at 28 percent, lowest level in decades, and that that really were down negatively to them.

So my hope is Republican senators will join with Democrats to have an end to both of this hostage taking and you will see, because you hear from Republican governors, Chris Christie, who is running right now -- TAPPER: Two to one lead.

DOUTHAT: This is great for Chris Christie.


DOUTHAT: Chris Christie has brand separation from the congressional party in a way that Ken doesn't. For Christie, if you're a New Jersey voter, he's even less like those other guys than I thought he was to begin with.

TANDEN: But why is he less like them? Because he is saying the House Republicans are wrong on the government shutdown. That is helping his brand because he's with the American people with saying this is insanity.

TAPPER: So where does the party go from here? What's the way out of here that would allow John Boehner to save a little face, keep his job, and also get us out of this?

DOUTHAT: Are you asking me?

TAPPER: Yes, I'm asking you, because obviously, by the way, I don't care about any politician saving face or keeping his job, but that's obviously an important part of this.

DOUTHAT: The way out of this is yes, there is some sort of fig leaf of concessions at some point that's mixed in with continuing resolutions that get passed with a mix of Democratic and Republican votes. The issue here is that Boehner clearly feels like he can't go all the way down that path yet without basically having his party in the House fall apart around him.

And what I don't know is, it's not that the path is unclear. I don't know what the tipping point is where it becomes politically viable for Boehner to take that path and maybe this gambit with the six-week extension is the path, and I'm pretty sure there are people around Boehner who think it is. But I'm not sure how that works.

KNOX: I think actually Ross sort of charted the path forward pretty well in his first answer which is we're already hearing Senate Republicans talking about attaching spending measures that would reopen the government to this debt ceiling lifting bill which we haven't seen yet.

But you're talking about a situation in which the House could vote on its own pure version of this legislation. Goes to the Senate, Senate Republicans, Republicans, attach measures reopening the government. It goes back to the House.

Now Speaker Boehner's hands are essentially clean and he can go back and say look, we're up against the White House and both parties in the Senate. We've got to kind of take this hit --

TANDEN: He needs, the truth is, the reason why we are having the time that we are is because he doesn't have 218 votes for anything over the last week or so. He's going to need Democratic votes so hopefully, Democratic votes with Senate Republicans will help resolve this.

TAPPER: May you live in interesting times, a famous curse. Neera Tanden, Ross Douthat and Olivier Knox, thank so much.

If Kanye and Kim were in Congress, we might not be talking about shutdowns, defaults, gridlocks. They actually know how to talk, clearing the air, on the air, coming up.


TAPPER: Welcome back to THE LEAD. Now a little lighter fare, the Pop Culture Lead, on the next episode of "Law and Order SVU," Detective Benson will suffer an emotional breakdown after another failed attempt to log on to I'm just joking. But don't be surprised if you start seeing Obamacare angles and plot lines in some of your favorite TV shows, thanks to a $500,000 grant Hollywood producers are getting a little extra incentive to weave the affordable care act into story lines.

The grant was awarded to Hollywood's health and society program by a private foundation. The thought is that since a lot of people get their news from entertainment shows, it's the best way to inform the public about how Obamacare works. Good luck with that.

It's a sad day in our nation when members of Congress and the White House could learn a thing or two from Kanye West and the late night comedian. West and Jimmy Kimmel decided to squash their short- lived, but quite entertaining feud last night on Kimmel's show.

It all started when Kimmel did this spoof of a Kanye West interview on BBC Radio a few weeks back, one in which the musician was boastful and oddly resentful. Kimmel used child actors to re-enact the interview and apparently Kanye West is not a fan of having his own mini me. He immediately took to twitter and lashed out at the talk show host. Last night, West attempted to explain why he got so worked up.


KANYE WEST: A combination of me knowing you, but also me not knowing the person who put, you know, a bad headline on the cover of "in touch" and me not knowing this person. I was like this is the one person I know so I can go and let out everything that I feel about every single bogus weekly cover, every single bogus skit, every single rumor and barbershop, everything that people feel is okay to treat celebrities like zoo animals or act like what they're saying is not serious or their life is not serious or their dreams are not serious.


TAPPER: So there are people out there who don't take Kanye West seriously? How is that possible?


WEST: Me, I'm a creative genius. There's no other way to word it. I know you're not supposed to say that about yourself. I say things wrong a lot of times but my intention is positive. There's no way Kim Kardashian shouldn't have a star on the walk of fame. It's ridiculous like concepts and for me, it's like I'm just going to give y'all the truth and y'all are going to learn to love it. It's like my grandfather loved Ali until he died and my grandmother hated Ali until she passed. You know? So you're going to love me or going to hate me, but I'm going to be me.


TAPPER: Seems totally reasonable. Although I would suggest that if you want privacy from the media, maybe don't date someone who stars in multiple reality TV shows, just a thought.

By the way, ABC reports that last night's episode of "Jimmy Kimmel Live" was the highest rated yet in that 11:35 slot. So Kanye must be doing something right or Kimmel. That's it for THE LEAD. I'm Jake Tapper. Make sure to follow me on Twitter @jaketapper. I will be back tonight at 11:00 p.m. eastern, 8:00 p.m. Pacific with a live CNN Special, "Shutdown Showdown." For now, I turn you over to WOLF BLITZER in "THE SITUATION ROOM" -- Wolf.