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ERIN BURNETT OUTFRONT

White House Meeting Ends With No Deal; Shutdown Threatens Veteran Benefits; Interview with Rep. Jeb Hensarling; Interview with Valerie Plame

Aired October 10, 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 tonight, we begin with the breaking news, sudden confusion over a debt deal. House Republicans have just left a crucial meeting at the White House and they presented their plan to the president, but from there, it gets muddy.

(BEGIN VIDEO CLIP)

REPRESENTATIVE ERIC CANTOR (R), MAJORITY LEADER: We had a very useful meeting. It was clarifying, I think, for both sides as to where we are, and the takeaway from the meeting was, our teams are going to be talking further tonight. We'll have more discussion. We'll come back to have more discussion. The president said he would go consult with the administration folks and hopefully we can see a way forward after that.

(END VIDEO CLIP)

BURNETT: The White House though coming out saying, no specific determination, no deals on anything yet. So the question is, deal or no deal. I want to go to Dana Bash on Capitol Hill. And Dana, an hour and a half meeting, and you just saw Eric Cantor. Relative to how things have been with words like ransom and hostage, that seemed positive. Then there was a report that the president had rejected the Republican plan and there wouldn't be a deal. So what really happened?

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: There's definitely seemed to be a lot of positive signs out of this meeting. I have spoken in this hallway where we are, which by the way, is right down the hall from House Speaker John Boehner's office with many of the Republicans in that meeting all of them said that report is not true. That the president didn't reject anything, he didn't approve anything either.

But they did agree to keep talking. One of the most significant things we just found out a short while ago, Erin, is that the Republicans went in mostly focused on the debt ceiling and their plan to temporarily raise the debt ceiling for about six weeks while they continue to talk about broader issues.

But the president we're told by house appropriations chair said I want to talk about reopening the government and ultimately Republicans agreed that they would do that. They would talk about what conditions would be acceptable to all sides to reopen the government. So that is what is happening.

Republicans are spread out all over the capitol right now. They say they intend to work late into the night with their staff to try to figure out what kind of deal could happen. This is significant for lots of reasons. One, as you said, no longer terms like ransom and terrorists. We're talking about big things being productive and helpful.

More importantly, you're talking about all the crises were coming together at the same time, being addressed, it seem, at the same time, the debt ceiling being addressed as well. The fact they're talking about the shutdown is something we might not expect. It looks like Republicans are agreeing to at least talk about it.

BURNETT: There was so much talk about a deal today on the debt ceiling specifically and there was reaction around the world. Stocks went up the most they have this year. Then there was this confusion in the past few minutes and that actually caused stocks to drop. They trade in futures markets and they've already dimmed. I guess, my question to you, is it possible to get a deal that would raise the debt ceiling, but not deal with the government shutdown or is that where the president says absolutely not?

BASH: That was the thought going into this meeting. That perhaps at least the Republicans said we'll talk about the debt ceiling. We'll agree to put a bill on the House floor, to raise the debt ceiling temporarily and then we'll talk about reopening the government. But it seems as though according to Hal Rogers, who is the Republican chair of the House Appropriations Committee.

This is his job to get bills through to fund the government. He said that the president forced the issue and said I really want to talk about reopening the government. That's where it stands right now. It is much more productive than we've seen at all. This is the first real discussion that both sides have had since this whole crisis began.

BURNETT: All right, thank you very much. We appreciate it, Dana. I want to go to Jim Acosta now who is at the White House. It seems that the Republicans were so optimistic, but the White House now saying, no specific determination. We're not saying there is a deal. Obviously, more positive than before but not exactly what we're hearing from the Republican side at all.

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, I think because as the White House has been saying all day long, Erin, they haven't seen a specific piece of legislation. But they are starting to talk and that is a good sign. While they are saying no specific determination was made, I have heard from administration officials a few things. Yes, no deals have been reached yet, but the talks are going to continue, and they're going to continue through the night.

And one other thing that we've just picked up in the last few minutes, Erin, that is Vice President Joe Biden is still here at the White House as you know, Erin, Vice President Biden has been the crisis whisper in some of these stand-offs in years past. The fact that Joe Biden is still here at the White House is a good sign. It's an indication that perhaps they are still working with Republicans on all of this.

But yes, the day started with a lot of optimism and the markets reflected that. The president would sign according to White House officials a short term debt ceiling increase. But what was also in play today is whether or not they'll reopen the government. As we heard during the press briefing earlier this afternoon, White House Press Secretary Jay Carney was asked almost 20 different ways as far as could I count whether or not you would have both.

Whether or not you would have a deal to increase the nation's debt ceiling and reopen the government. He just didn't want to go there and he indicated that the president would sign the debt ceiling increase even if he didn't get a deal to reopen the government. So all of this is still in play, but Erin, I don't want to pain a gloomy scenario here.

The fact that they came over here to the White House, spoke, the House Republicans left without going to the microphones and the fact that verbal grenades weren't tossed at one another. That's probably a hopeful sign and again, Vice President Biden here at the White House also a good sign -- Erin.

BURNETT: All right, thank you very much, Jim Acosta. And of course, Jim and Dana is going to continue to work their sources because as they said, obviously, the key here is that discussions are going to continue through night. That means that this, who knows, right? You could end up with some sort of a major break on this story.

One Republican congressman who was at the White House with the president tonight was the chairman of the House Financial Services Committee, Jeb Hensarling. Chairman, good to have you back. We appreciate it.

Can you make sense of exactly what happened? We have this meeting as Jim Acosta just said. Grenades were not tossed in terms of words from one side or the other and they said they are going to be meeting into the night with their teams to try to see if there is a deal. Do you think that we're on the verge of a deal?

REPRESENTATIVE JEB HENSARLING, CHAIRMAN, FINANCIAL SERVICES COMMITTEE: Well, here's what I believe. I've probably been in seven, eight, nine meetings with the president. I would characterize this as probably the most constructive, but I don't want to could not because the progress with success. The president, we Republicans said we're happy to appoint people to talk about all of these issues.

We want some breathing space. We'll increase the debt ceiling for six weeks, but we have got to address the debt crisis that we have. And the president didn't say yes, but he didn't say no. To some extent, I guess it is the first time as Republicans, we did not hear no, I refuse to negotiate. So this is a discussion that hasn't led to negotiation yet.

We were there an hour and a half and I would say there was at least understanding of each other's position. It is sad that it took so long. It hasn't been that many years since we've had interaction. You have to have a little bit of understanding, a little trust to lead to negotiation, and it is all taking place tonight and probably over the weekend.

BURNETT: Probably over the weekend. That gives may sense of timing. Let me understand exactly what you're talking about when you talk about a negotiation. First of all, can you clarify? Will there be a deal that is going to raise the debt ceiling that does not include reopening the government or are you all on the same page that you're going to try to reopen the government and raise the debt ceiling in one deal?

HENSARLING: I don't know the answer to the question. What House Republicans said, we want breathing space. The president has asked for this. We feel like we have met him halfway by offering a six-week increase in the debt ceiling. We want for the first time to hear something besides, I will not negotiate. You must do this continuing resolution. You must do this debt ceiling.

For the first time we didn't hear that. What comes out of all this, I don't know. I mean, every successful negotiation I've been in, people remain to their principles. They don't get everything they want, but they walk away with something. We Republicans think we've met the president halfway. And he didn't say yes, he did not say no, but I guess both parties are trying to figure out where are the parameters. Where might it lead?

BURNETT: Yes.

HENSARLING: We know the president has some strong feelings. We have some strong feelings about addressing the debt crisis. There are too many in Washington and Wall Street who want to deal with it tomorrow. We want to deal with it today. That's what debt ceilings are for. At the same time, we passed a number of bills to make sure that we address our veterans. I have an interview to talk to some World War II veterans.

I want to honor them and make sure they get their benefits. So far the White House has not been willing to sign that legislation. Again, we hope this leads to an honest negotiation. We didn't hear no for the first time.

BURNETT: So two other things I want to make sure I'm very clear on. One of them is you said you met him halfway. Let me ask about what that means. Is Obamacare on or off the table right now? Because he has said categorically it will never go on the table. I know he said we'll talk about it when we reopen this and raise the debt ceiling. Is that the term you're working under right now after this meeting?

HENSARLING: After this meeting, I did not have the impression that anything was quote, unquote, "off the table." BURNETT: Even Obamacare.

HENSARLING: Even Obamacare. The president has made his views loudly known. We have made our views loudly known. We also know that the president has authorized almost 1,100 waivers. He himself has signed seven different changes into law of Obamacare. Unilaterally, he decided that you know, employers don't have to comply with the mandate for a year. So I'm hopeful that even though we don't believe in the law and every single day, I'm hearing from a constituent.

I've been cut back to 29 hours. All of a sudden my premiums have gone up 1,500 for Obamacare. So Republicans are never going to quit fighting it. At the same time, we know it is divided government. We won't go away with it. Democrats work on it for a couple generations. We won't quit fighting for patient centered health care after three years.

But at the same time, we understand the president has strong feelings, but this is a broader conversation that includes what can we do to get America back to work, but what can we do to make sure we don't bankrupt this country. It is a discussion and negotiation and frankly legislation that we need today.

BURNETT: So let me see if I can -- I know you're one person. You cannot speak for everybody. Can you say that there is a promise to this country that by October 17th, which is the formal deadline for the debt ceiling, that the debt ceiling will be raised?

HENSARLING: I'm going to stop you there and saying, there are no promises, what we have is a good, honest discussion that I hope will lead to a negotiation in divided government. And all I can promise is that I believe both parties are going to work hard and work in good faith, but again, we did not get, we, House Republicans, the good news is we did not hear no.

The bad news is we did not hear yes, that the White House is ready to begin formal negotiations on both spending and debt in Obamacare is part of spending and debt. So that's where we are. We have put on the table legislation to make sure the full faith and credit that we never have the default. We don't want it.

But at the same time, we can't keep kicking the can down the road on the national debt. For whatever passes for fiscal responsibility in this town, it is attached to the debt ceiling. That's why we have the vote. We want it addressed.

BURNETT: Thank you very much, Chairman Hensarling. I appreciate your taking the time you heard his view. The most constructive meeting they've had with the White House in quite some time. Reading between lines, all right, he's saying the president did not take Obamacare off the table but it certainly seems from that conversation with the chairman that the Republican sticking pointed of Obamacare, defunding seems to be pulled back quite a bit. So obviously a big move in a direction of a deal, but again in a direction of a deal as Jim Acosta and Dana Bash have been reporting. BURNETT: Still to come, we'll go deep entire the effect the shutdown is having with voters. There is a new poll describe as jaw dropping. We've looked at the numbers. It's a fair description.

Plus, authorities believe that Ariel Castro committed suicide in his cell. An investigation now shows there was something very bizarre to his death.

And a stash of 213 grenades uncovered by police, tonight, who they think they belong to?

And a race car driver involved in a violent crash at the Indy race. We have an update on his condition tonight.

(COMMERCIAL BREAK)

BURNETT: Welcome back. Nick Gillespie is the editor-in-chief of reason.com and Reason TV, Michael Medved is a conservative commentator for Salem Radio. Great to have you both with us. Obviously huge developments in Washington, we could be reaching a deal.

I want to talk we just had Chairman Hensarling on. He was careful about how he phrased things, but pretty clear that he was optimistic. In terms of this latest poll that has come out, the NBC/"Wall Street Journal" poll, Republicans have taken a serious hit, the outcome for the next election now, Republican-controlled Congress 39 percent, Democrat-controlled Congress is 47 percent.

NICK GILLESPIE, EDITOR-IN-CHIEF, REASON.COM AND REASON TV: Yes, but I mean, this is right now. The minute after a deal was signed, that is going to change. We saw this in 1996 where it wasn't clear that the Republicans who were widely blamed for the shutdown then did pretty well in 1996. I don't think that matters. I think what people are going to remember is that it was ultimately the Republicans and even somebody like Ted Cruz who is incredibly unpopular, probably the single least popular politician in America.

BURNETT: Which is saying something, 1 percent?

GILLESPIE: I mean, it could be negative numbers here, but you know, they are the ones who force these issues about spending and debt limit in a way, rather, Ted Cruz did. And he forced the Republicans to go along with that in a way that I think will be genuinely beneficial down the road. We weren't talking about this in these terms that we needed to be.

BURNETT: All right, so you see this in the positive like, Michael Medved, let me just follow up though, the poll did sort of go in the direction of asking the question the ratings by talking about the Republican leadership, 27 percent of people surveyed said congressional Republicans have had strong leadership and 70 percent say they've put their political agenda ahead of what is good for this country. Is that something you can really turn around?

MICHAEL MEDVED, SALEM RADIO: Sure. Because have short memories and that's a great blessing here. Look, I think the general reaction of the American people and I think this polls show that is it's a plague on all your houses. I am embarrassed by my government. I'm embarrassed by the Republican leadership. I'm very much embarrassed by President Obama's leadership.

That he says he will not even negotiate? He won't even talk about some of these issues on the table? This government shutdown was unnecessary. The debt ceiling crisis was unnecessary. I'm glad it will be averted and I give a lot of credit to Budget Committee Chair Paul Ryan who put a piece in the "Wall Street Journal" yesterday, which seems to have helped to move us forward.

That's what we need to be concentrating on. If the Republicans are going to turn this around, and I think we are and we can, it will be based on positive incremental change. Not the fantasy that basically by taking an inflexible stand we will win a complete total sweeping victory.

BURNETT: Nick, what about this issue though? Paul Ryan didn't mention Obamacare on that op-ed. Jeb Hensarling didn't really want to talk about Obamacare right now. It seems to me that Republicans know they really messed up on making that the be all and end all.

GILLESPIE: Yes, I mean, I think there is a real strategic question there and saying, you know, they should have let Obamacare launch the way it did and it is like a guy trying to fly flapping wings or something to go down the chute and right down into the water, I mean, it's a total disaster. It would have been great to have let that go on its own.

By the same token, if we come out of this where the president of the United States, who in his latest budget is talking about spending $3.8 trillion compared to $3.5 trillion from the House Republicans, and he has to admit, we really do have to rein in entitlement spending over the long haul and things like that.

BURNETT: He's admitted. That he's been open to an increase in retirement age.

GILLESPIE: He has not done anything other than talk about chain CPI and his own budget window. That's where the Republicans will be able to say at the end of the day, if they do this and I'm not convinced they are. This is why I like the wacko bird coalitions. They're the only ones, the Rand Pauls --

BURNETT: The wacko bird coalitions?

GILLESPIE: Yes.

BURNETT: You're the one who said it.

GILLESPIE: We have to stop spending the way we have been and we have to do it now on entitlements. I think the Republicans do.

BURNETT: The market's single biggest day since the beginning of the year because they thought there would be a deal. Now there's optimism that there would be a deal. The chairman of the House Financial Services Committee just came on the show and said he thought talks would go through week and they may not. All of a sudden this is longer. Closer to October 17th. Are we counting our chickens by saying that there is going to be a deal?

MEDVED: I don't think we are. As I heard Congressman Hensarling on your show, it is pretty clear that the president would sign an extension on the debt ceiling part. What is new is that the president wanted to resolve at the same time reopening the government and that's really what should happen because no one gains from continuing this crisis.

Certainly Republicans don't gain, the country doesn't gain. The American people really want to us turn the page and now maybe try working together. On the "New York Times," it showed a teenager holding up a sign that said stop arguing. I think that's the message from the American people and that's the message we need.

And also for Republicans to stop arguing with one another, I mean, basically there is a lot of blame that can go around. We all have to pledge together and as a unified Republican Party to do better and make progress on the some of the big issues.

GILLESPIE: If I can say, the American taxpayers will win if the shutdown continues. There's a lot of stuff that is totally nonessential and people realize that. Every time government shuts down, there are some things government should be doing at about 70 percent of what it's doing. We can live with that.

BURNETT: Of course, they're paying people for vacation. That's a separate issue. Thank you to both of you. We appreciate that.

The shame of the shutdown, capital dysfunction is hurting some people terribly. The men and women who have risked their lives for this country, millions of wounded veterans are waiting a combined $6 billion benefits in November. As long as the shutdown continues, those checks don't go out. And Barbara Starr is OUTFRONT.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): Ryan Lamke has been on edge for days. He's one of more than 3 million wounded veterans who are worried they won't get their next disability check because of the government shutdown. He has a message for all politicians about what veterans are facing if the checks don't arrive.

RYAN LAMKE, WOUNDED VET: It means that they may go broke. They may have that extra financial stress on an already emotionally stressed life. In worst-case scenarios, that suicide spike, emotional stability drops. We're talking about a population of veterans that are not seeking out the mental health care they so desperately need.

STARR: Ryan Lamke knows what he's talking about. When he came home from Iraq in 2008, after seven IED attacks, he was diagnosed with traumatic brain injury and post-traumatic stress.

LAMKE: I had hard time keeping my basic aspects of my life in order. I was frustrated. That translated to anger quite a bit and it pushed me to say I don't want to live like this.

STARR: He went on to graduate from college determined to make it. Believing the government's promise that his war time servicemen his VA disability check would always be there, but he's been unemployed for five months. Now that check is his only source of income.

LAMKE: If the shutdown goes past October 15th, the VA has said that they will be unable to process payments for 1 November when most of my bills come due.

STARR (on camera): What does that mean to you? What happens?

LAMKE: I go broke. I go broke. It is that simple. I enter into a level of poverty at that point.

STARR (voice-over): Lamke and other veterans now expressing frustration that they have somehow become pawns in a political debate. For OUTFRONT, Barbara Starr, Washington.

(END VIDEOTAPE)

BURNETT: Very important when you talk about these dates, to realize how much is at stake for so many people by every delay.

Still to come, a woman went missing from her hospital room. Two weeks later she was found dead in the building stairwell. How did she get there and how did they not know?

Plus a man who held three women captive for more than a decade found dead in his cell. They thought he committed suicide. It turns out he may not have done that at all.

And the driver involved in an Indy car crash, an update on his condition tonight.

(COMMERCIAL BREAK)

BURNETT: Welcome back to the second half of OUTFRONT.

An investigation into the death of Ariel Castro inside his prison cell reveals he may have died by accident from auto erotic asphyxiation. This is a clinical syndrome which entails suffocating yourself to experience a high.

The report says that Castro who was serving life plus 1,000 years for kidnapping three girls was found half naked in his cell, hanging from the window bars just weeks into his sentence. Clinical psychologist questions whether he had the strength to attempt hanging since according to the report, Castro was refusing meal, experiencing chest pains, dizziness and nausea.

Well, IndyCar driver Dario Franchitti has been released from a Houston hospital following the violent crash during the last lap of the Grand Prix. A collision with another car catapulted his vehicle into a wall sending debris into the stands and injuring 13 spectators. We are told by a local hospital that three people were treated and released.

Franchitti suffered a concussion -- here is the video -- spinal fractures and a fracture to his right ankle. On Twitter today, he thanked the hospital, family and friends.

Well, motorcyclists appeared in a Manhattan courtroom stemming from the incident with the SUV driver whom prosecutors say was chased, dragged from his vehicle and savagely beaten.

The 31-year-old pleaded not guilty to gang assault, assault and criminal mischief. He actually posted the $200,000 bond he is now released. That brings the total number of bikers arrested and charged to seven, including an undercover police officer accused of actually shattering the rear window of the SUV which was totally destroyed and terrorizing the family.

BURNETT: Now, awarding the NSA leaker. Edward Snowden, the man responsible for leaking top secret U.S. intelligence is actually being honored by four Americans who used to work for the U.S. government. They met Snowden in Moscow where he has been hiding since August to give him the Sam Adams Award for integrity in intelligence.

Now, this came as his father arrived in Moscow to see his son for the first time since this happened, saying his son is trying to look for a job.

OUTFRONT tonight, former covert CIA operative Valerie Plame. You will recall her cover was blown in 2003 at that time by a member of the Bush administration and she is now the author of a new book called "Blowback."

All right. Good to have you with us, Valerie. I really appreciate it.

Do you think Edward Snowden -- I mean, I'll cut straight to it. A lot of people hear this, they're probably cheering for him. And some are just appalled. Does he have -- deserve an award for integrity in intelligence?

VALERIE PLAME, FORMER CIA OPERATIVE: One thing as we know for certain, we would not even be having this conversation about the appropriate balance of security versus privacy if it were not for Snowden's revelations. And President Obama had spoken about the need to have a really robust conversation about this, because it goes right to the heart of the Fourth Amendment.

I think ultimately history will tell exactly where Ed Snowden falls on that line.

BURNETT: All right. And so you've said that U.S. citizens owed him -- at one point, you said a thank you for bringing the NSA policies into the public eye, which, you know, it's something that has changed the conversation in this country about who is watching what that do you in your e-mail and your phone conversations. But a lot of intelligence official, and people who serve in the government, think that Snowden is a criminal and I wanted to play for you some of the names you're going to know the best.

(BEGIN VIDEO CLIPS)

DICK CHENEY, FORMER VICE PRESIDENT: I think he is a traitor. I think he has committed crimes in fact by violating the agreements, given the position he had.

JAMES CLAPPER, DIRECTOR OF NATIONAL INTELLIGENCE: For me, it is literally -- not figuratively -- literally gut wrenching to see this happen, because of the huge grave damage it does to our intelligence capabilities.

MICHAEL HAYDEN, FORMER DIRECTOR OF NSA AND CIA: I can't imagine a government anywhere on the planet who now believes we can keep a secret.

(END VIDEO CLIPS)

BURNETT: Should he go to jail? Val, do you think he should go to jail, Edward Snowden?

PLAME: I think the irony of having Dick Cheney talk about a traitor is really too rich. What is very clear is that as a stand, the whistle blower protections are not adequate. Thomas Drake was one of those who gave the award. He is a former NSA employee who pointed out tremendous waste and mismanagement of funds. For that, the FBI came in and tossed his house and he has lost his job and so forth.

This is a really important conversation that we need to have about just how deep the NSA invasion goes into U.S. citizens' lives.

BURNETT: And before we go, you were in the CIA for 20 years. Obviously, the government blew your cover. I understand where you're coming from, right? Your point and some of the frustration you feel.

But a lot of people say that Snowden has blown the cover of a lot of people like you. They say he's put lives at risk. Someone said he was the biggest threat to Western intelligence in the history of Western intelligence.

Is that all hyperbole? Or is it possible that Edward Snowden actually is risking people's lives?

PLAME: I don't actually know. But what I do know is I don't know how much he put into jeopardy, and what happened with me and how my cover was betrayed is not analogous. I think people expect me to say, oh, absolutely what he did was to be condemned.

I am much more interested, much less in Snowden than what is at play here and what is the right balance that we need to have as a democracy? How much as citizens are we willing to give up in our terms of our privacy to be told by our political leaders that don't worry, we're keeping you safe.

BURNETT: All right. Valerie Plame, thank you very much. We appreciate it. As we said, you can get Valerie's new book now. Well, still to come, police uncover a stash of 213 grenades and we're going to tell you who they belong to, where they found them next. Plus, two weeks after a woman vanished from her hospital room, she was found dead in the building's stairwell. It seemed impossible that this would happen, but it and it happened at San Francisco General.

The family now pointing fingers at someone other than the hospital staff and they're OUTFRONT.

(COMMERCIAL BREAK)

BURNETT: Missing patient turns up dead in a hospital stairwell. And tonight, that patient's family is demanding answers. It was confirmed that the body found in the stairwell is that of a San Francisco woman who vanished from her room two weeks ago.

Fifty-seven-year-old Lynne Spalding checked herself into San Francisco General on September 19th for a bladder infection. Two days later, she disappeared. Now investigators are trying to figure out how this mother of two could vanish in the midst of treatment and end up in the stairwell at the busiest hospital in the city of San Francisco.

Dan Simon begins our coverage OUTFRONT.

(BEGIN VIDEOTAPE)

DAN SIMON, CNN CORRESPONDENT (voice-over): Missing person flyers were hung throughout the city as the community searched for Lynne Spalding. The search turned out to be useless. The 57-year-old has been dead or dying in a hospital stairwell for more than two weeks after she checked into San Francisco General with a bladder infection.

An autopsy will hopefully shed some light on just how long she lived before a member of the hospital's engineering staff making a routine quarterly check discovered her body.

LAWRENCE KOBILINSKY, FORENSIC SCIENTIST: Certainly there is a possible that the simplest explanation is that she entered this stairwell area and fell. And perhaps smack her head.

SIMON: Dr. Lawrence Kobilinsky is a renowned forensic scientist and not attached to the case. He says the body will provide clues as to what happened. A fall? A heart attack? Too much medication? All things to be studied.

But what about the hospital?

KOBILINSKY: This institution should have been looked at, examined from top to bottom, every room, every possible place that a person could be found. And that didn't happen. And I would say the San Francisco hospital does not look good at this point.

MAYOR ED LEE (D), SAN FRANCISCO: The city is responsible for what happened here. SIMON: San Francisco Mayor Ed Lee offered those blunt words, also saying today that he's asked for an independent review of the hospital owned and operated by the city.

LEE: This should not have happened. We all agree. We want to prevent it from ever happening again.

SIMON: San Francisco General until now had a good reputation. For example, it successfully treated many of the patients from the recent Asiana Airlines crash at the San Francisco International Airport.

DR. TODD WAY, CHIEF MECDICAL OFFICER, SAN FRANCISCO GENERAL: We are here to provide patient care and security to 100,000 patients and their families each year. Nothing like this has ever happened before. There is no precedent for this.

SIMON: For now, we're still left to wonder, why did Spalding leave her room? Why did she go to that fire escape stairwell? And why did it take so long for someone at the hospital to find her?

(END VIDEOTAPE)

SIMON: As for that independent review, we're told, it will encompass many things, especially, how do they deal with thing when someone goes missing?

Now, Erin, in terms of that autopsy, I talk to the medical examiner today and we're told that we should get any results for at least several more weeks.

Back to you.

BURNETT: Dan Simon, thank you very much.

Several more weeks. Obviously, a long time to wait. But this incident is raising so many questions. I mean, when you hear it, you just are shocked that this could happen and it could happen in the United States of America.

An independent investigation is now underway to determine what systems failed and what can be done to prevent a horrific tragedy like this.

But the reality is, people want to know what happened. I want to bring in a friend of Lynne Spalding, David Perry. He's also the family spokesman.

And, David, I wanted to say I'm sorry for your loss. I know you work with her, you knew her very well. According to the hospital here's what we know. We know Spalding was seen in her room at 10:15 in the morning on September 21st. Fifteen minutes later, a nurse came in. Saw her bed was empty. Her cell phone was there.

Has the hospital been able to tell you what happened in that 15- minute time frame? It sounds like he is not hearing me.

DAVID PERRY, LYNNE SPAL.DING'S FRIEND: I lost her signal.

BURNETT: OK. So, obviously, we're going to see if we can get that back. He is, of course, a friend of Lynne Spalding. They had worked together. And right now, as I said, serving as the family spokesman there.

Let's see if we have him back. We'll get him back in a second.

Obviously, the crucial question is what happened in those 15 minutes? I don't want to waste any time. I want the use every second we have on the show to interview him. So, while we get that audio back, we're going to take a brief break.

We'll be back.

(COMMERCIAL BREAK)

BURNETT: I want to bring in a friend now of Lynne Spalding. David Perry is with us now, also the family spokesman.

And, David, thank you for your patience. You can hear me now, right?

PERRY: I can. That's the least of our problems today. Thank you so much for your patience and for coverage.

BURNETT: No problem. Let me start off as we told our viewers, why you friend was in her hospital room and then for two weeks, no one knew where she was. She was found in that hospital in a stairwell and she had died -- a horrific thing to have happened. I'm very sorry for your loss and for the family's loss.

Let me ask you this question, David. She was last seen in her room at 10:15 in the morning. 15 minutes later, a nurse went by. Her bed was empty. Her cell phone was left behind. Have you ever found from the hospital, gotten an answer of what happened in that 15 minutes?

PERRY: We have not. And it a very good question, it's a question that her family and friends have been asking -- well, for 19 plus days now.

We were very, very encouraged, moved today by Mayor Lee's visit. He responded in a way that's compassionate, authentic and real and he made it clear he would get to the bottom of this.

The hospital staff, the sheriff's department, both said that something like this has never happened at San Francisco General and, of course, now that Lynn passed away, the important thing is to make sure nothing like this happens again.

BURNETT: I mean, it is shocking that this could have happened. I mean, this is the business hospital in the city of San Francisco. I think most people be shocked to think that this could happen.

PERRY: It's a nightmare.

BURNETT: Do you have --

PERRY: Absolutely, it's a nightmare. I mean, San Francisco has a stellar reputation. It is shocking.

BURNETT: Do you, David, have any indication of her state of mind? I mean, was -- what sorts of drugs she was on, was she disoriented, did she actually want to leave the hospital? Do you know?

PERRY: Right, we don't know yet. All we know is she came in here and was here for two days and two nights, September 19th and 20th. We know the hospital personnel was looking in on her every 15 minutes and saw her at 10:15 and 10:30, they didn't.

And when her boyfriend and a close friend came to visit at 11:00, they were told she was missing. And we were told that a search was done of the hospital premises, which meant, of course, we turned our attention outward. The San Francisco Police Department had been incredible in supporting us in the outward search.

For two weeks, we looked all over the city, hundreds if not thousands of flyers were put up in cafe --

BURNETT: But nobody looked in the hospital?

PERRY: Public transit areas, homeless shelters.

Well, we were told they looked in the hospital. With all due respect to the San Francisco Sheriff's Department, the search wasn't thorough because Lynn Spalding's body was here for 19 days.

BURNETT: I understand your frustration with the police, but -- I mean, you know, with the hospital. I mean, if she went through a door, an exit, an alarm would sound, right? It says there, emergency exit only, alarm will sound. It gets triggered --

PERRY: It was. We're told today that they -- yes, we were told today that that alarm door was checked and worked. If it was working on September 21st, did no one hear it? Did Lynne get locked out and was there? Did she die a slow, painful death? Did she die quickly? We don't know.

We're waiting for the medical examiner's report. We hope they will die a quick death.

The whole thing is just so shocking. But I do want to correct you, the frustration is certainly not with the San Francisco Police Department. They were really amazing in helping us outside the search outside the hospital.

And with all due respect to the San Francisco Sheriff's Department who are responsible for security here on site at San Francisco General, the hard questions are being asked of the sheriff's department tonight. What sort of search did they undertake, and what are the protocols for it? We need to find these answers out for all San Franciscans.

BURNETT: I think everyone wants to get answers to those questions.

David, thank you.

And still to come, man's best friend, an idea that could show they are also soldier's best friends.

(COMMERCIAL BREAK)

BURNETT: Earlier, we shared Iraq veteran Ryan Lampke's story. And he told us he struggles with post-traumatic stress disorder. He's far from alone. PTSD affects millions of Americans. It's incredibly difficult to treat.

Tonight, one woman's idea for an unusual cure that's becoming popular. It doesn't require drugs, has no side effects, success rate is 97 percent. And it is all about that guy you're looking at there.

(BEGIN VIDEOTAPE)

SERGEANT ALONZO LUNSFORD, FT. HOOD SHOTING VICTIM: That's when he shot me again in the back. When I got ready to go out the backdoor, he followed behind me and shot me again.

SERGEANT SCOTT YOUNG, U.S. ARMY (RETIRED): Every day I would wake up and think about suicide, that was the first thought in my head.

BURNETT (voice-over): Two men in uniform serving in the United States. Sergeant Scott Young survived two tours of duty. Staff Sergeant Alonzo Lunsford survived the deadliest shooting on a military base in U.S. history. He was shot seven times.

LUNSFORD: This was the (INAUDIBLE), last one went through my body.

BURNETT: Both haunted by their experiences and diagnosed with posttraumatic stress disorder, now turning to the same place for treatment, K9s for Warriors. K9s for Warriors is an exclusive program that rescues dogs from shelters and trains them to be service dogs for people suffering from PTSD. It's here in this four bedroom house in Florida that veterans learn to readjust to every day life with the help of a service dog.

YOUNG: The dog makes me feel safe. When you're on the battle field, you have buddies, the guy to the left, your guy to the right. She's my partner.

SHARI DUVAL, FOUNDER, K9S FOR WARRIORS: It's a win/win for both the dog and the warrior. BURNETT: Sixty-eight-year-old Shari Duval had the idea to start K9s for Warriors when her son Brett (ph) returned home with PTSD after serving in Iraq. Duval noticed that when her son was around dogs, he was back to his old self-cracking jokes, relaxed, happy.

DUVAL: He felt comfortable around the dogs. It would take his mind off of what he had seen and been through.

BURNETT: Young wasn't sure what worked for Brett would work for him, but today he credits this dog, Whisky with saving his life.

YOUNG: I was skeptical at first because I never had a dog. Once I got the dog, about the second day, like a light came on and everything changed.

BURNETT: Before meeting Whisky, Young could barely leave his house. Now, he doesn't think about suicide. He thinks about the future.

YOUNG: Now, I go out, no problem, if I start to get stressed out or having an anxiety attack, I just pet her and relax and that takes all the anxiety away.

BURNETT: Alonzo Lunsford is hoping for the same relief. He'll meet his service dog for the first time next month, an Irish wolf hound named Bomber.

LUNSFORD: I'm excited because this is something I know in long term has a huge benefit.

(END VIDEOTAPE)

BURNETT: Pretty incredible story.

Thanks so much for watching.

Tomorrow, we are working on something we're very excited to share with you. A man had an infection, goes into the hospital, and doctors for a month know respirator and don't allow him to breathe. But he's alive right now, and he's doing OK. That story is tomorrow night out front.

Right now, "AC360".