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Countdown To A Financial Meltdown?; Default Fears Hit Markets; American Found Dead In Egyptian Jail; NATO Service Member Killed; Aid Workers Kidnapped In Syria; Small Explosion Shuts Part Of LAX; Lost In The Wilderness; Glitches Persist for Obamacare; Debt Deadline: Time is Running Out

Aired October 14, 2013 - 06:00   ET

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


CHRIS CUOMO, CNN ANCHOR: Good morning. Welcome to NEW DAY. It's Monday, October 14th, six o'clock in the east. Today, we commemorate today Columbus Day, the discovery of the new world and an equally perilous search. One for a deal on the debt ceiling as the clock on your screen shows the hours like grains of sand continue to filter through the glass.

Senators try to find some common ground this weekend to avoid what some economists believe would be catastrophe if the U.S. can't cover its debts. We're going inside the negotiations and inside what could happen just Thursday if there's no deal.

KATE BOLDUAN, CNN ANCHOR: Plus, an investigation into the rule out of the health care overhaul that you will want to see. Our correspondent has been trying to sign up for these health care exchanges for nearly two weeks. The site has been live for nearly two weeks. Elizabeth Cohen has been trying to sign up this entire time. She's even setting her alarm at three in the morning to avoid the high traffic times. Was she finally able to log in and get an account? That is coming up.

CUOMO: First, T minus three days and counting until the debt limit deadline hits. Thursday is the big day, and of course, the government still shut down as we speak. It seems the deal making has shifted from House to Senate. So, now, the global economy be in the hands of two old school senators.

We have Jim Acosta with us this morning reporting live from the White House. Good morning, Jim.

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Good morning, Chris. That's right. Three days to go to d-day as in default day and Senate Majority Leader Harry Reid and Senate Minority Leader Mitch McConnell, they are still talking, but they are still in search of that agreement.

(BEGIN VIDEOTAPE)

ACOSTA (voice-over): With the clock ticking down to debt ceiling day, it's come down to Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell who have started horse trading over a deal to reopen the government and avoid defaults. HARRY REID (D), SENATE MAJORITY LEADER: I've had a productive conversation with Republican leader this afternoon. Our discussions were substantive and will continue those discussions.

ACOSTA: The question is whether they can get there in time.

SENATOR CHUCK SCHUMER (D), NEW YORK: Both leaders realized how difficult default would be, the devastation it would cost to America.

ACOSTA: But talks over the weekend appear to stumble again as Republicans accused Reid of overreaching by seeking additional concessions from Republicans over those forced budget cuts and the sequester.

SENATOR JOHN MCCAIN (R), ARIZONA: Now is the time to be magnanimous and sit down and get this thing done.

ACOSTA: The White House said President Obama was standing firm in a phone call with House Minority Leader Nancy Pelosi that there must be clean bills to extend the debt ceiling and end the shutdown with no strings attached. Tensions are boiling over.

SENATOR TED CRUZ (R), TEXAS: This is the people's memorial.

ACOSTA: Texas Senator Ted Cruz led a protest over the closing of the World War II Memorial on the National Mall that drew this verbal attack on the president.

LARRY KLAYMAN, FOUNDER, FREEDOM WATCH: I call upon all of you to wage a second American non-violent revolution to use civil disobedience and to demand that this president leave town -- to put the crime down, to get up of his knees and to figuratively come up with hands out.

ACOSTA: Veterans and Tea Party activists grabbed monument security barricades and dumped them in front of the White House. Before a rowdy face off with park police in riot gear. One man waved the confederate flag. Others called for impeachment.

UNIDENTIFIED MALE: I gave them back to President Obama by piling them in front of his house, our house, I'm sorry, in front of our house.

ACOSTA: While another Tea Party backed senator was calling for compromise.

UNIDENTIFIED MALE: I think it's not a good idea to go through the debt ceiling deadline. I think we should go ahead and have an agreement in advanced.

(END VIDEOTAPE)

ACOSTA: Now as for the only deal that's been struck in the last several days, that is one between the federal government and state government to reopen some national parks around the country. And as for all that commotion outside the White House fence, Kate Bolduan, I can tell you that things are back to normal here. They are quite calm compared to yesterday -- Kate. BOLDUAN: All right, we'll see how things go this week. Thanks, Jim for starting us off this morning. So the markets, they could be feeling the fear of a default already this morning. U.S. stock futures are down for the Dow. NASDAQ and S&P 500 as a far cry from the optimism seen at the end of last week when stocks rallied. An optimism for a debt deal turned out short lived.

CNN business correspondent, Alison Kosik is here with more details. Also how quickly arises and how quickly it falls.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: That's how it goes. Today is Columbus Day so what you're going to see at the buy markets are closed, but the stock market is open, and what you're going to see is Wall Street really watching what rhetoric is going to come out of Washington. So if the market perceived there's no deal, the market will absolutely give back all the gains that it took last week.

Last week, there were big gains on optimism that lawmakers could come up with some sort of deal. You know, after all the swings we saw, the S&P 500, the Dow ended 1 percent higher. A different story today as Wall Street may fire yet another warning shot, meaning a sell-off to Washington saying, get your act together.

(BEGIN VIDEOTAPE)

KOSIK (voice-over): The U.S. is three days away from the debt ceiling deadline, the possibility of default, sparking concern of potential economic turmoil around the world.

OLIVIER BLANCHARD, IMF ECONOMIST: If there was a problem lifting the debt ceiling, it could well be that what is now a recovery would turn into a recession, or even worse.

KOSIK: Here at home, a default could mean a serious hit to your investment, like your 401k, Wall Street now waiting on Washington to dictate the trades as banks are predicting the S&P 500 could see painful losses, as high as 45 percent if an agreement isn't reached.

GEORGE HOWELL, CNN CORRESPONDENT: Here in Chicago, we have seen the housing market really pick up in the last year and like many places, that has been helped by low interest rates for people looking for loans. But all of that could change if the government defaults because interest rates could spike or even worse we could see another credit squeeze making it much harder to borrow.

KOSIK: A default also means interest rates for credit cards and student loans would spike as well and payments from the government would degree up.

SHANNON TRAVIS, CNN CORRESPONDENT: Washington meets Main Street. We are outside a local Benefits Administration Office here in Washington, D.C. Could we be seeing worried recipients of those benefits show up at offices all across the country? Roughly 58 million Americans rely on those benefits, but Treasury Secretary Jack Lew, he says if the debt ceiling isn't raised, it could be a problem paying them. KOSIK: The ripples of a default would be far reaching, the global marketplace feeling the effects of the weakening dollar. The U.S.' current debt limit sits just under $16.7 trillion.

UNIDENTIFIED MALE: Our systems were not designed to not pay our bills.

KOSIK: Despite some cries of impending chaos, some Republicans say sounding the alarms is a bit sensational.

UNIDENTIFIED MALE: I'd rather have a managed catastrophe now, which I don't think we'll be there.

SENATOR MIKE ENZI (R), WYOMING: I think this is about the 11th time I have been through the subject of the sky is falling and the earth will erupt.

KOSIK: More rates (inaudible), Peter dangerously close to the debt ceiling deadline in August 2011 where a deal was struck in the 11th hour.

(END VIDEOTAPE)

KOSIK: The exact day when the U.S. government will actually run out of cash to cover its bills is really not certain because even when the deadline hits, the revenue would still going to be coming in. Lawmakers have also been negotiating a plan that includes the temporary fix to increase the debt ceiling.

Though many critics say what we need now isn't a band-aid fix but a permanent one. But believe it or not, even Wall Street would be happy if there was a band-aid in place, like a six-week deal. But you know, you keep on pushing it down. We're like the biggest procrastinators, aren't we, lawmakers, meaning.

BOLDUAN: Is there even time to push through a band aid? I think we are even getting to the pint of no return on that. Thanks, Alison.

CUOMO: Something is better than nothing mode.

KOSIK: Isn't that sad the bar is really low at this point?

BOLDUAN: It is.

CUOMO: It is what it is. All right, we are going to take you to a mystery in Egypt, an American man jailed after a car bombing turns up dead at a police station. An investigation is under way. So let's get to CNN's Ben Wedeman live in Cairo for more details. Good morning, Ben. What do we know?

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Good morning, Chris. Well, we know that Lunn was picked up in late August he after security sweep in the aftermath of a car bombing in Northern Sinai. Now, Egyptian officials say that when they arrested Lunn, they found in his possession a computer of maps of what they called vital installations. And given the charged atmosphere in Egypt at the moment, immediately, there were accusations that he was a spy. Now, yesterday at noon, according to the Egyptian Interior Ministry, Lunn was found in his cell hanging from his black leather belt and his shoe laces. Now for their part, American officials at the embassy here in Cairo are saying it is an apparent suicide.

Now, it's not at all clear what Lunn was doing here in the first place. Egyptian media is reporting in the course of his investigations, he told Egyptian officials that he was on his way to the Gaza Strip. American officials, however, are not commenting on those claims -- Chris. Kate.

BOLDUAN: All right, thanks, Ben. Thanks so much.

CUOMO: A lot of news this morning. Don Lemon is here in for Michaela Pereira. Great to have you, Don.

DON LEMON, CNN ANCHOR: Good morning, guys, and good morning, everyone. Making news, a NATO service member killed after a man wearing an Afghan security force uniform opened fire in Eastern Afghanistan. This is the third such attack in less than a month. The so-called green on blue attacks killed dozens of allied troops in 2012. Sunday's shooting comes just a day after Secretary of State John Kerry met with Afghan President Hamid Karzai to discuss, quote, "major issues regarding U.S. troops and a security agreement."

Seven aid workers reportedly have been kidnapped in Syria. Red Cross officials say the team was trying to get medical supplies to people in northwest part of the country when a gunman opened fire on them. It's not clear who the kidnappers are. Last month, a top U.N. official warned that Syria is getting so violent that even humanitarian workers aren't safe.

Two men are now in custody after a frightening shooting at a cultural festival in Tulsa. At least five people were injured when gunfire rang out at a new year's celebration. Witnesses say hundreds were lining up to get their dinner when the shooting began. The alleged gunmen are likely to have some relationship with the victims. The Tulsa area has one of this country's largest populations of Monk people, a south Asian ethnic group.

Dry ice in a plastic bottle shut down part of LAX last night. The FBI says a chemical reaction set off an explosion in a bathroom. Terminal 2 was evacuated while authorities tracked down the problem. No injuries to report. The terminal is back opened. So far no word on who might have left the bottle. The bathroom is in an area not opened to the general public.

A 72-year-old hunter is alive and well this morning after 19 days of missing in the wilderness. Gene Penaflor became separated from his hunting partner in California's Mendocino National Forest on September 25th then suffered a head injury in a bad fall. He survived the ordeal by eating lizards, frogs, squirrels and algae from the stream. I have a report on this incredible survivor's story next hour on NEW DAY. BOLDUAN: It makes you wonder how would you handle that situation.

LEMON: It's amazing frog legs, squirrel, a delicacy down south.

CUOMO: It is impressive, covered himself with leaves at night. There's a lot of detail that we'll tell you next story, amazing recovery.

BOLDUAN: A good story ahead. Let's also get to Karen Maginnis in for Indra Petersons this morning keeping track of the latest forecast. So how is it looking today, Karen?

KAREN MAGINNIS, AMS METEOROLOGIST: We are watching it closely along the eastern seaboard, Kate and Chris, good morning to you. Our temperatures are pretty much going to remain a little bit above normal, but the rainfall is desperately needed across the northeast. You are running about half of what you totally would for the total month of October.

It will take a frontal system that moves through going in towards the middle of the work week before you start to see that. High pressure dominates right now. As we go through tomorrow, those temperatures back up into the 70s. We think two next weather systems will knock those temperatures down.

New York is 53. Washington, D.C. 58, you would think it would be a lot hotter there. All right, for Syracuse 57 and Pittsburgh reporting 62 degrees right now, but there is a strong weather system that will produce significant snowfall, higher elevations, you go all the way from Billings, Montana to the Saltess (ph) Mountain, front range of the Rockies, the snowfall in those higher peaks as much as 12 inches, but a windy day expected across Colorado.

Those temperatures only going to be in the 50s, so if you are headed to the west from Denver along that Interstate 25, watch out. It could be gusty. It's 75 for Dallas that, wet weather picks up again across North Central Texas in the next 24 hour hours. Chris, Kate, back to you.

BOLDUAN: All right, Karen, thanks so much.

CUOMO: All right, we'll take a break here on NEW DAY, when we come back, big problems for Obamacare. Why thousands of Americans that want to sign up simply cannot.

BOLDUAN: Also an NFL super star playing with a very heavy heart. Why Adrian Peterson decided to take the field Sunday just two days after the death of his 2-year-old son.

(COMMERCIAL BREAK)

CUOMO: Welcome back to NEW DAY. Happy Columbus Day.

We are now two weeks into the sputtering rollout of Obamacare, and still, few explanations for those technical glitches. Some experts say fixing it could take long time. Senior medical correspondent Elizabeth Cohen has been trying unsuccessfully to set up an account. She joins us from the CNN Center.

Good morning, Elizabeth.

So, how is it going? Have you fixed it out yet?

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: No, I haven't fixed it out, yet, Chris. As a matter of fact, this is kind of a second job for me, ever since October 1st. And I want to show you exactly how frustrating it's been.

(BEGIN VIDEOTAPE)

COHEN: I put in my user name and password, it didn't recognize it.

(voice-over): Error messages, page not found, system down. It's been a tough nearly two weeks for Obamacare.

(on camera): There were error messages, that twirl leafing. I hate it, right?

(voice-over): I have been trying since day one to get an account and log in on healthcare.gov. I failed again.

(on camera): You couldn't make this page work.

(voice-over): And again.

(on camera): It wouldn't log me in.

(voice-over): And again.

(on camera): It's not working.

(voice-over): When I called the 1-800-number, the reps tell me volume is high and to try again during off-peak hours. So, I tried at 10:30 at night, 7:00 in the morning. And still, it didn't work.

So, finally, I set my alarm clock for 3:00 a.m. Sunday morning. Guess what? The system was down for maintenance.

I'm not the only one having trouble. On Facebook, people took to the healthcare.gov page to vent by the thousands, and on CNN's iReport.

MARY IVY, CNN IREPORTER: I've tried it hundreds of times, literally hundreds of times since October the 1st.

COHEN: Independent analyst tells CNN the problems go beyond higher volume and minor glitches. They say the site fails to follow basic coding. There is the old fashioned option of enrolling over the phone and using and snail mail. You do have time to be insured by January 1st, you just have to complete the process by December 15th.

(END VIDEOTAPE) COHEN: Now, just to be clear, this is a journalistic endeavor for me. I'm lucky enough to get insurance through my employer. Imagine how frustrating it has been for people who do need insurance -- Chris.

CUOMO: Journalistic endeavor, it looks like abject failure to me, Elizabeth.

Now, when you go to the administration and point out the obvious about the glitches, what's the response?

COHEN: You know, they just keep telling me the volume has been very high, that's why we're having these glitches.

But, Chris, I have to say when we talk to experts, they say this goes way behind high volume. But that's not the cause for all of the problems that we have been seeing.

CUOMO: Right, that stands to reason, Elizabeth. I mean, when we think of all the high volume sites that were out there, millions of millions of transactions a day, it's certainly not just about software. It's about something else. They have to figure out.

Thank you for doing your part, to show us the problem. We appreciate it, Elizabeth.

COHEN: Thanks.

BOLDUAN: Coming up next on NEW DAY: your NEW DAY political gut check. Is there any hope for an 11th hour deal before the nation hits the debt ceiling?

BERMAN: And did you hear about this? Macy's is ending a 135-year tradition. Why many of their workers may not be spending Thanksgiving with their families.

(COMMERCIAL BREAK)

ANNOUNCER: You're watching NEW DAY with Chris Cuomo, Kate Bolduan and Michaela Pereira.

CUOMO: And Don Lemon.

Welcome back to NEW DAY. It's Monday, October 14th.

Coming up on the show, we heard of football players playing through the pain. But not like this. How Minnesota superstar Adrian Peterson managed to suit up and play just two days after his young son's violent death. Why he did it, coming up.

BOLDUAN: Plus, Macy's breaking tradition. It will be opened on Thanksgiving for the first time in 155 years. It finally cave, folks, humped on the black Friday bandwagon or the expanding black Friday bandwagon, I guess we should say. But it's also making a lot of people upset. We're going to have more on that ahead.

But, first let's get to our political gut check. Let's get to our political gut check this morning.

The partial government shutdown entering its 14th day, if you're keeping count, and we are just three days away from hitting the debt ceiling. The stalemate now over spending. And Democrats who believe they have political advantage here, including Senate Majority Leader Harry Reid, they are not budging.

Joining us now to talk about this, CNN political analyst and executive editor of "The Daily Beast", John Avlon.

Good morning, John.

JOHN AVLON, CNN POLITICAL ANALYST: Good morning.

BOLDUAN: So, the week -- last week ended on a pretty high note. Whispers of compromise, whispers of a potential of a deal -- so what happened over the weekend to get us back to what feels like square one today?

AVLON: And that's because it is. You should know better by now when things seem hopeful in Washington. They'll find a way to screw it up.

So, what happened Saturday morning? The House GOP got together for a big conference meeting, expecting a breakthrough. Instead, Boehner and Cantor told their conference, we're done. We've got no negotiating position. It's now entirely up to the Senate.

So, the Senate starts meeting over the weekend, trying to come up with a resolution, Harry Reid and Mitch McConnell, not much charismatic, but reputation of deals --

BOLDUAN: True.

AVLON: -- deal makers, deal making happened in part because Democrats are looking at this as an opportunity to roll back sequester cuts from last year. So, we're at square one, folks, 72 hours to go until the self inflicted debt ceiling.

BOLDUAN: It seems we're back at square one because the target or focus continues to shift. This whole stalemate started over Republican demands of defunding changing, getting rid of Obamacare. Right now, Democrats are demanding and seemed to be holding up the government shutdown and debt ceiling over wanting to deal with these forced budget cuts.

What's behind this moving target? It's very confusing for everyone.

AVLON: What's behind it is poll numbers that saw Republicans getting their butt kicked because of this whole gamesmanship. So, Democrats now running the risk of overreaching, trying to get their own plan in place.

And the problem, of course, is, is that the bottom line is people want the government to work. They don't want the U.S. to default on its debt. The president demanding a clean continuing resolution to keep things opened. But Democrats in the Senate right now are trying to get every little thing they can out of Republicans and spurns some bad blood as a result.

BOLDUAN: I mean, the Republican Senator Bob Corker, he's a candid guy. He said yesterday to FOX, it's not clear to me how this ends because there is such disarray. I think that's as honest an assessment as one can have at this point.

Are there any more plays they can be made left? I feel they've pulled out every play in the playbook, both sides. I'm not talking just Republicans or Democrats, both sides.

AVLON: No, no, no, this thing has become a complete mess from the very beginning. You have 72 hours left. They probably bring in a closer at some point. Joe Biden, the closer, probably --

BOLDUAN: Who has been remarkably quiet, right?

AVLON: He's off to the side, because remember how the whole fiscal cliff got resolved. It's Joe Biden and Mitch McConnell in the room, ultimately reason together as old friends, colleagues and competitors. So, that's probably if Harry Reid and Mitch McConnell can't get it done in the next day-and-a-half, that's when you bring Biden in before we absolutely embarrass ourselves on the world stage by failing to pay our bills.

BOLDUAN: I mean, without looking back at all the pool numbers that -- from various organizations, is anyone going to ends up on this? I feel like everyone is a loser in terms of the politics they all try to play here?

AVLON: Everyone is loser, but the polls to date have shown that the Republicans. I mean, when the Republican Party is at the lowest rate of any political party in American history, you got a problem. You got a real problem. The Tea Party loves the rating to date. So, that's partly what's emboldening Democrats. But you play a dangerous game if you try to exploit that with a serious dynamic just ahead of us as a country.

BOLDUAN: Is there any question that there is not time left to actually get a piece of legislation to the president's desk before we hit the debt ceiling? Because, of course, what do we say? Miracles can happen in Washington when they're up against a deadline? But if you have conservative members, especially in the Senate, who could slow down that process, they could be hard up against that debt ceiling.

AVLON: It's later than you think vote.

BOLDUAN: Yes.

AVLON: I mean, any individual at this point can delay a resolution. There is still time if they got their act together. But why in the world would we think that Washington would start working efficiently?

Yes, they feel the pressure of a looming debt ceiling debacle.

BOLDUAN: They say they feel the pressure. But it doesn't seem they do.

AVLON: Yes, and you can always have the senator filibuster there this. You have to have the right threshold. Then it needs to go to the House. And they need to find religion, Boehner needs to open up with for a vote that allows Democrats to vote with centrist Republicans.

So, there are still serious hurdles even if they found principles they agree on.

BOLDUAN: Yes. And I would say, don't hope for a grand bargain when you have three days left, right?

AVLON: Yes, a big week ahead, seriously high stakes for the United States of America.

BOLDUAN: All right. John Avlon, come back, find some answers, please? Bring them to us.

AVLON: Always got it for you.

BOLDUAN: Thank you. Great to see you

AVLON: You, too.

CUOMO: Let's get over to Don Lemon. He's in for Michaela Pereira.

A lot of news this morning --

DON LEMON, CNN ANCHOR: I thought you were going to do the James Earl Jones voice again.

CUOMO: I failed so miserably at the James Earl Jones. Please take it back --

(CROSSTALK)

LEMON: Thank you. Good to see you, John. Good morning, everyone.

An American held in Egypt after a car bombing victim was found dead at a police station in what officials say appears to be a suicide. James Lunn was found hanging by shoe laces and a belt from a bathroom door. Lunn had been arrested back in August after a security sweep after a car bomb exploded near northern Sinai police station. Officials say he had a computer and maps of vital installations at the time of his arrest.

A cold case closed. The cousin of Baby Hope has been arrested and charged with the girl's murder after police say he admitted to sexually assaulting, smothering and disposing of the body. Baby Hope has now been identified as 4-year-old Angelija Castillo. A tipster led police to Conrado Juarez, who along with his now deceased sister says he dumped Castillo's body along New York's Henry Hudson Parkway back in 1991.

Police respond with pepper spray when an apartment party turns into a large intoxicated disorderly mess. Take a look at this.

(VIDEO CLIP PLAYS)

LEMON: Goodness.

Hundreds of college-age party years riding near Western Washington University, throwing bottles of beer cans at police. Multiple arrests were made. No serious injuries to report, though.

Investigators in Pittsburgh are still trying to figure out what caused a frightening home explosion. The blast injured two people Saturday night. Residents say it sounded like a plane crash and the house is gone. At least one neighboring home was damaged.

And a party at Key Biscayne near Miami came to a scary end when the party boat sank. Look at this. But everyone on board is OK, thanks to quick thinking rescuers and Good Samaritans. All 30 people and one dog were pulled out of the water in just minutes.