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NEW DAY

No Deal Yet, But Progress Reported; "Tremendous Progress"; What's In The Deal?; At Least 49 Dead After Quake In Philippines; New NSA Revelations; New Hampshire Teen Still Missing; LAX Rocked By Second Explosion; Accused Terrorist in U.S. Court; Senate Leaders "Optimistic"

Aired October 15, 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 Tuesday, October 15th, six o'clock in the east. And we are "T" minus two days from the debt ceiling deadline. It seems, though, that they're actually working down there, senators scurrying from office to office, meeting more than once in a day.

KATE BOLDUAN, CNN ANCHOR: Could you walk out that fast?

CUOMO: Yes. Look how fast they're moving. Look at the urgency. The president applying pressure, and hopefully, on board with what's on the table. That leaves the House, the wild card in this situation. Will its conservative members see this compromise as failure?

Clearly, this is already a failure, and new polling confirms just how much this has hurt Republicans for sure and Democrats as well. We'll get into that coming up.

BOLDUAN: Plus, he was a wanted terrorist for more than a decade up until U.S. special operations soldiers captured him two weeks ago in Libya. Well, now, this man, right there, accused of masterminding the twin U.S. embassy bombings in Africa 15 years ago is in New York City now set to make his first court appearance within hours. Many wondering, what intelligence was the U.S. able to gather from him before delivering him to U.S. soil?

MICHAELA PEREIRA, CNN ANCHOR: And unbearable grief and tragedy aboard a Carnival cruiseliner. A six-year-old boy drowned in a pool on board. The cruise line now facing numerous questions this morning. Why were there no lifeguards on duty? We'll get into that coming up.

BOLDUAN: All right. But first, that high stakes game of let's make a deal unfolding this morning on Capitol Hill. So, where do things stand? Right now, in the works of last ditch effort to fund the government and raise the debt limit into early next year, but the devil is in the details as it always is on Capitol Hill. The chief architects two Senate veterans who have spent more than a few hours in the smoke-filled back rooms.

Let's get the latest from Jim Acosta tracking the developments live from the White House this morning. Good morning, Jim.

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Good morning, Kate. Here at the White House officials sound open to the compromise that's been worked out in the Senate in part because it raises the debt ceiling for nearly four months. That would give both Democrats and Republicans enough breathing room to work their way out of this latest budget crisis.

(BEGIN VIDEOTAPE)

SENATOR HARRY REID (D), MAJORITY LEADER: We know this has been a difficult time for everyone.

ACOSTA (voice-over): Lo and behold, two experienced Capitol Hill brawlers, Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell may have actually found a path to budget peace in Washington.

REID: We are not there yet. Tremendous progress. Everyone needs to be patient.

ACOSTA: Both men shared the news on the Senate floor that they are close to a deal that would re-open the government and raise the nation's debt ceiling before potential default in less than two days.

SENATOR MITCH MCCONNEL (R), MINORITY LEADER: I think it's safe to say we've made substantial progress and we look forward to making more progress in the near future.

UNIDENTIFIED MALE: Is there a deal?

ACOSTA: But as Vice President Joe Biden indicated by staying mum on the subject, it's not over yet. Here's how the deal would work. The government funded through mid-January, the debt ceiling extended to early February. In a nod to GOP opposition Obamacare, changes to that law are also under consideration including new income verification requirements for health care subsidies. These are tweaks to Obamacare the president may not support, but he's all but pressuring Republicans to take the Senate deal.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: If Republicans aren't willing to set aside some of their partisan concerns in order to do what's right for the country, we stand a good chance of defaulting.

ACOSTA: A new ABC News/"Washington Post" poll finds the public is furious with the GOP, with 74 percent saying they disapprove of how Republicans have handled budget negotiations versus 53 percent who feel the same about the president. But some House Republicans are holding their ground, still demanding in sessions.

UNIDENTIFIED MALE: I'd like to do something that he gets something and I get something.

ACOSTA: Democratic Senator Barbara Boxer compared the GOP's tactics to acts of violence.

SENATOR BARBARA BOXER (D), CALIFORNIA: When you start acting like you're committing domestic abuse you've got a problem. I love you dear but, you know, I'm shutting down your entire government.

(END VIDEOTAPE)

ACOSTA: That kind of talk could turn off Senate Republicans who still have to sign off on this deal. They meet later this morning to go over the details of this compromise agreement. Don't forget who comes up next. That is the House where many conservative Republicans are not comfortable with this budget deal and keep in mind that many of them are skeptical of whether or not the default would be that serious for the country -- Chris.

CHRIS CUOMO, CNN ANCHOR: All right, Jim, something we certainly don't want to test. So what do we know about this deal? What affect will it have on the markets? Let's bring in business correspondent Christine Romans and chief national correspondent John King. We're going to balance the business and the political.

They're certainly coming together here. Thanks to both of you here. Christine, let me start with you. So far the markets have been even on this. They're playing along the rules of you guy on gossip, you sell on news.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Right.

CUOMO: But a deal like this is announced. It does put you right up to the sequester date in January if it's done in its present form. Kick the can down the road? What does it mean to the markets?

ROMANS: It's not good to keep kicking the can. A lot of people are telling me that they need a six-month deal for sure and something longer would be better for confidence and consumers. There are markets and people. People are getting hurt right now, right? The market, the Dow is up 525 points over the past four days. They're assuming something is going to get done. It will lead to a lasting longer deal.

There's a lot of risk in that assumption and there are markets and there are people. And people are getting hurt today. Markets could get hurt Thursday, hurt Friday. If there's not a big deal, a six- month deal you could see a huge sell-off in the stock market, which then of course could push them to do a deal like we saw with the bank bailout.

Remember, they didn't do the bank bailout and then suddenly it was a big, a thousand-point sell-off in the Dow that got them to do more negotiations than they had done before that.

CUOMO: Well, the biggest risk is if they don't get a deal done. So John, where are we in terms of dealing with these. Let's three big hurdles, dealing, you know, with the Senate, getting enough votes to make it persuasive, getting the House, Speaker Boehner to put something like this up and obviously the president giving its stamp. Where do we lie?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Well, let's take them in reverse order. The president will accept, even though he won't say so publicly right now. I'm told the president will accept the deal as now outlined in the Senate, but that's the president. We have to get to the president first. That's where skepticism comes in.

And skepticism unfortunately is the safe bet right now, Chris. You know, the Senate leaders are optimistic. They did work late into the evening, but that public optimism is now 12, 16, 18 hours old. Until you actually see a deal, you don't have a deal. So they are still trying to work on the final details in the Senate.

The biggest obstacle here is, there is no guarantee, no guarantee, from the House Speaker John Boehner that that Senate deal is something he'll be able to sell to the conservative especially the Tea Party members in his caucus. So will Speaker Boehner say it's not good enough or will he say I'll bring it to the floor anyway even if I still have that revolt within my party, still a giant question this morning.

CUOMO: Well, I keep hearing from people more and more, stop talking about Thursday. Thursday is not that big a deal. Don't worry about Thursday. We'll get this done. Even you heard with Harry Reid, be patient. What does that mean right now, John? I mean, the polls are just horrible.

If you want to put up the screens of the polls, you can show them here. The needle is tapping out in terms of how bad it could be for people on both sides. You know you're in tough shape when Democrats are celebrating at being 61 percent disapproval compared to 74 percent for Republicans. But what are you hearing in terms of their urgency. Is their urgency the same as anybody else's?

KING: Well, one of the reasons the Senate leaders were publicly optimistic is they understand the threat of the markets tanking if they don't think Washington can get a deal. If one or two senators object, let's say they cut a deal in the next 10 or 20 minutes and came out and announced it, they couldn't bring it to the floor today if one or two senators object.

We expect maybe Ted Cruz or Mike Lee or one of the Tea Party senators to do just that. It's unlikely they'd get this done completely finished, even if the House went along, by the deadline. What they are hoping is we know the treasury does have some reserves. If they have a deal on paper and it looks like the votes are going forward.

That the markets will say good enough and everything can be done within time in Washington. But again, let's get a deal on paper first. See what happens in the Senate before we start gaming it out beyond that because until you see a deal printed, have a healthy dose of skepticism.

CUOMO: Christine, you were saying that, you know, when we were dealing with the recession, had that big thousand-point drop, it was a catalyst. If they move past the market scare, they're used to that, the moment I think everyone is worried about is when the U.S. government has to make a decision whether to pay bond investors their interest or social security claims. Then what happens? ROMANS: You look at November 1st. Huge bills coming due for Medicare, social security, plus interest or our debt. You know, there's not enough money, even with tax receipts coming in. You have the position where the Treasury Department has to decide whether you pay investors first or whether you pay social security and grandma first. The irony is grandma is on both sides of that deal because the largest government holder of U.S. treasuries is the Social Security Trust Fund.

So here you have an issue where it is real people, it is people who depend on their government for something that they've actually paid into, social security, that are now at risk. And that's what is so crazy and scary and sad about the situation we're in because those are the decisions that will have to be made in a matter of days.

CUOMO: People who are waiting for a Social Security check need it right then.

ROMANS: An IOU is not going to be good enough.

CUOMO: Christine Romans, thank you very much. John King, thanks to you. Maybe the best news I heard is when I was asking when is big Joe going to show up? People saying we don't need him yet. They don't need Biden yet. So John, thank you very much. Christine, thanks --

KING: He's in the bull pen.

CUOMO: He's warming up, warming up. There's a lot of other news this morning. So let's get over to Michaela -- Mich.

PEREIRA: All right, Chris, breaking news, at least 49 people are dead following a magnitude 7.1 earthquake struck the Central Philippines. That quake was centered nearly 400 miles southeast of Manila. Officials say there was no widespread threat of a tsunami, but warned that quakes of that magnitude can sometimes cause tsunamis within 61 miles of the epicenter.

The NSA reportedly is collecting hundreds of millions of contacts lists from personal e-mail and instant messaging accounts around the globe, many of them belonging to Americans. "The Washington Post" citing intelligence officials and documents provided by ex-NSA contractor, Edward Snowden. The NSA responded to the story, but saying it functioned ethically and is not interested in personal information about ordinary Americans.

Possible leads pouring into British police in the Madeleine McCann case. Madeleine was just 3 years old when she disappeared in 2007 during a family vacation in Portugal. Newly released sketches a man who might be linked to the case have brought in nearly 500 phone or e- mail tips. Authorities say two separate people saw sketches and called in the same name to investigators.

The search continues this morning for a New Hampshire teen missing since last Wednesday. Abigail Hernandez turned 15 years old Saturday and her family is pleading for her safe return. FBI officials have received more than 300 tips, some as far away as Texas, but none have panned out. Investigators refuse to comment on a report they are looking at cell phone records saying they don't want to impede the investigation.

You remember Felix Baumgartner? How could you forget this guy? His remarkable free fall from the edge of space, the Red Bull Stratus Team behind that record-breaking dive, marking the one-year anniversary, it's already been a year. They have new video showing it from several different angles. Baumgartner became the first human to break through the sound barrier with his own body, jumping from a capsule some 24 miles up, falling at a speed of 843 miles per hour. No big deal. Yes, a big deal. I remember being captivated by this. It was really incredible.

BOLDUAN: Everyone was. I mean, heart stopping seeing that moment he stepped out.

PEREIRA: you wonder if he actually was like, maybe not. No, he went for it.

BOLDUAN: I can remember what he said right afterwards. Probably involved I'm already here, I have to do it.

CUOMO: He was lucky. He was distracted from the obvious danger by all the calculations.

BOLDUAN: Good point. Let's get over to Indra Petersons now keeping track of the forecast. You're looking at wild weather in Kansas.

INDRA PETERSONS, AMS METEOROLOGIST: You'll like this video. It's pretty impressive. Definitely this is what we call a wall cloud. This is like that strong updraft from these rotating thunderstorms. Yesterday was not rotating. They did not have a tornado that's a good part. Either way, this system was so powerful, they actually had winds as strong as 70 miles per hour.

They had tons of reports also of hail about quarter-size hail. That is the same system we're going to continue to monitor today, however, it makes its way across the country. It is weakening. So that's the piece of good news with this system. Where are we expecting rain today with this front, stretching from Minnesota down through Texas.

But in Texas, this will continue to be a big story. Remember over the weekend, all the rain that they received. Well, right now they have Tropical Depression Otape. I know it's here in Baja, California. Look at the moisture streaming in through Texas. You're taking this tropical moisture, adding in a slow-moving cold front, the same system that showed that wall cloud coming out of Kansas.

And now you are enhancing the amount of rain that they can get, so 3 inches to 5 inches of rain still possible in areas that are still dealing with flooding from over the weekend. So that is going to be a concern in through today. That's one of the big stories. Otherwise, we're still seeing warm air in the east coast and now this huge pool of air making its way across the country.

Watch the temperatures dip down across the country today. As that cold front makes its way across, you're going to start to see those temperatures really dip down, even Chicago tomorrow releasing highs just into the 50s. So cool air not too far away.

BOLDUAN: Thanks, Indra.

PETERSONS: Sure.

CUOMO: All right, let's take a quick break. Coming up on NEW DAY, he was walking the streets of Tripoli 10 days ago. Now he's in a prison cell in New York. Today we find out why al Qaeda operative, Abu Anas Al-Libi is so important to the U.S.

And for the second time in 24 hours, an explosion at Los Angeles International Airport, well, now police want to know who did it, of course, and how the device was planted in an area that's off limits to the public. That's ahead.

(COMMERCIAL BREAK)

CUOMO: Welcome back to NEW DAY

Breaking overnight: for the second time in 24 hours, a dry ice bomb has exploded at Los Angeles International Airport. Police say they found two others similar devices that did not detonate in a restricted gate area. That's the key there.

Rene Marsh tracking developments live from Washington.

Good morning, Rene.

What do we know about this?

RENE MARSH, CNN CORRESPONDENT: Good morning, Chris.

You know, it happened last night at the Bradley Terminal at Los Angeles International Airport, triggered a huge response. You see the video there. The bomb squad and detectives were on the scene. We can tell you, no injuries have been reported.

Now, police say the restricted area where last night's dry ice bomb went off was not accessible to the gate area in the terminal. Police also tell CNN it's still early in the investigation. But at this point, there's no link to terrorism.

But here's what's so peculiar about all of this. This is the second dry ice explosion set off at the very same airport. The day before, Sunday night, dry ice in a plastic bottle exploded into an employee rest room. That caused a brief shutdown of terminal two. In that second incident, no injuries either -- Chris.

CUOMO: All right. So, the key questions are who did it and how are they getting into these areas? What do we know about what how they're focusing the investigation?

MARSH: Right. Who did it, those are the two big questions, how did they get into the restricted areas. That's going to be the focus of the investigation. At this point, we don't know of any arrests, no arrests have been made.

But investigators are going to be trying to figure out, you know, the employee bathroom -- who had access to that bathroom and also that restricted area. With this incident that happened last night. Whoever this person is was able to gain access there.

So, again, the focus of this investigation in these two incidents, Chris.

CUOMO: The dry ice will be interesting, because either it's something that was designed to not set off the chemical censors or maybe there's a spoof, Halloween, dry ice. We're going to have to see what they come up with.

Rene Marsh, thank you very much. Appreciate it.

BOLDUAN: One of the FBI's most wanted terrorists is now on U.S. soil, Abu Anas al Libi was captured in a daring raid in Libya just 10 days ago. The alleged al Qaeda operative is accused in the 1998 U.S. bombings in Kenya and Tanzania. Now, he's in New York, set to appear today in federal court.

CNN's Deborah Feyerick is live outside the courthouse this morning.

So, what are we learning? What could we see today, Deb.

DEBORAH FEYERICK, CNN NATIONAL CORRESPONDENT: Well, Kate, what's expected is really a first appearance. We can tell you that since his capture, he was kept on board a U.S. Navy vessel. He was questioned by an (INAUDIBLE) elite High-Value Detainee Interrogation Team.

He ultimately came to New York over the weekend because of a medical condition which needed to be treated. Now, al Libi is accused of being one of Osama bin Laden's senior aide. He's charged of taking surveillance of the U.S. embassy in Nairobi. The blast there killed 200 people, including a handful of Americans.

And you've got to put this in context. This was the first coordinated attack by al Qaeda against a U.S. target. Four operatives were found in guilty back in 2001, just months before the 9/11 attacks.

So, for the U.S., this is sort of finishing up or wrapping up business. There are two other actual accused terrorists who are here. They're expected to be charged in March with similar charges in the attack on the U.S. embassy -- Kate, Chris.

BOLDUAN: First step in what is likely to be a long process for al Libi. It will be interesting, though, Deb, because --

FEYERICK: Absolutely.

BOLDUAN: -- just upon his capture, some officials were saying he could potentially be an intelligence gold mine. So, we'll have to see in coming day what they have learned if we can.

Deborah Feyerick, thanks so much. FEYERICK: Sure.

BOLDUAN: Coming up next on NEW DAY: a tentative deal to fund the government and raise the debt limit now on the table. Is it all good news? We don't know yet. But the clock is ticking and even if it gets through the Senate, the big question and the big focus needs to be what will happen in the House?

CUOMO: That's the big question. WWBD as we were just told, what will Boehner do?

Also, the story you have to hear. A 6-year-old boy drowning in a pool on a Carnival cruise ship. Tragic accident or a case of negligence? We'll lay it out for you.

(COMMERCIAL BREAK)

BOLDUAN: Welcome back to NEW DAY. It is Tuesday, October 15th. It's time for our political gut check of the morning.

The Senate is getting closer -- it appears to be closer to a deal to reopen the government and raise the debt limit. So, what exactly is on the table and what does it mean? Will the president and the House sign off?

Here to break it all down for us is CNN political analyst and executive editor of "The Daily Beast," John Avlon.

John, we have --

JOHN AVLON, CNN POLITICAL ANALYST: Good morning.

BOLDUAN: -- details, contours of a deal we like to say.

AVLON: Yes.

BOLDUAN: So, what's in it for Democrats and what's in it for Republicans? Even though there's a lot of details in the forecast?

AVLON: It's all evolving but the ray of light, the sign of hope is here, America.

So, here's the outlines of what folks get, first of all, time. Basically you get time until mid-December to start negotiating a more comprehensive plan. The government opens, shutdown ends until January moves to February, again, time for markets and time for the shutdown to break down.

And then, there are little token items, re-insurance adjustments, income verification for Obamacare.

But, look, no matter how hard you pi spin that, this wasn't the Tea Party's plan, right? They wanted to delay or defund Obamacare. That was Ted Cruz's big promise. They're going to stand off to the surrender caucus. But you've got to get a little adjustment in re- insurance rates. Well, take that home and call that a win if you want. The important thing, we stop the stupid in Washington, at least for a few months.

BOLDUAN: But you lay out the big problem that especially House Republicans will have at this point. There are little things, little goodies in there that you need to get a compromise deal done, and it points to Obamacare. But it falls way short of what House Republicans wanted -- which raises the question, what does Boehner do?

AVLON: Yes. This is the big question, as Cuomo was saying earlier, what will Boehner do?

What Boehner needs to do if the Senate passes this compromise bill, the word "optimism" is being used. That's a better sign than not. He's going to ultimately have to make a decision. Does he want to open this up to a real vote, ditch the Hastert Rule, which even Denny Hastert says is a nonstarter, never even really existed? Or is he going to be held captive by the folks on the far right who call any conciliation being a member to the surrender caucus?

You hear that rhetoric still today. It is fundamentally the rhetoric of people who are not interested in governing.

BOLDUAN: He calls himself a happy warrior. He's going to go into this meeting with House Republicans today and you know he's going to make a pitch of some kind.

How does Boehner -- how do you think John Boehner sells this to Republicans to attempt to get a majority of his caucus?

AVLON: Don't be held responsible for hitting the debt ceiling. Think about what the constituents will say, what he donors will say, think about what the country will say.

Look, they've been hemorrhaging popularity, the Republican Party, down to 74 percent disapprove right now. So, this isn't subtle. There is an electoral consequence that comes with this. The poll numbers are see changes in popularity.

So, he's got to say, look, let's live to fight another day, as Mitch McConnell, you start hearing him say, we have federal spending down two years in a row, first time since the Korean War, that's because of the Republicans in Congress. Call that a wiN and let's make strong negotiations positions going forward in the coming months.

But the alternative is Armageddon. It may be ideologically pure but it is an idiot's walk off the cliff.

BOLDUAN: We'll see. It goes to show, does the message set in? Does that win over enough Republicans which then I wonder how likely is it do you think when you look at the political landscape and you look at how this fight has really gone on, how likely is it that Boehner will need to go ahead without a majority of his caucus and get a coalition of some Republicans, maybe a majority of Democrats, to push through whatever the Senate sends over?

AVLON: Almost certainly. This is what happened in August of 2011 --

BOLDUAN: True.

AVLON: -- when we avoided the debt ceiling before, despite having our AAA credit down rating by S&P, because our government was getting less predictable, less efficient than before. Well, that continues to be true.

Ultimately, the center has got to hold for anything to get done in divided government. Boehner is going to have to throw off the shackles of being held hostage by his far right. He's going to have to find a way to cobble together a vote in the center. That means simply opening up to a vote.

BOLDUAN: And I guess Boehner can make an argument that he is allowing as he likes to run the House, he is allowing the House to work its will. Republican majority, they have fought it out, now the votes will have the vote. The votes are going to win. I guess that's how can I say --

AVLON: I mean, they punted this weekend. Boehner essentially said, I'm going to stay popular with my caucus, I'm going to punt the responsible difficult stuff to the Senate and then I'll come together and do what's necessary at the last minute so America doesn't default. Call it a win.

BOLDUAN: But as we were saying, a deadline changes minds.

AVLON: Yes, it does.

BOLDUAN: All right. John, come back tomorrow. We'll figure it out again.

AVLON: All right.

(LAUGHTER)

BOLDUAN: We always will. Optimism today.

CUOMO: Yes, optimism, chin up.

BOLDUAN: Exactly.

CUOMO: Let's get over to Michaela for the big headlines making news this morning.

MICHAELA PEREIRA, CNN ANCHOR: All right, guys, good morning to you. And good morning to you at home.

A car bomb in northwestern Syria killed at least 20 people, including a child. The death toll could still rise. Dozens are wounded. Some are critical condition.

In the meantime, gunmen in Syria have released three Red Cross workers and a Red Crescent volunteer who were kidnapped in rebel held territory. The fate of three other kidnapped Red Cross workers unknown at this hour. Jury selection getting under way today in the trial of a Utah doctor accused of murdering his wife. Prosecutors alleged Martin MacNeill killed his wife of 30 years in order to be with his mistress. The couple had eight children. At least one of their daughters is expected to be among the state's star witnesses. We'll have much more for you in this story in our next hour. Nancy Grace will join us live.

The Supreme Court hearing oral arguments on affirmative action today, this time, a case challenging Michigan's ban on rest conscious admission policies at public universities. In the past, the high court looked at a particular plan at a public university but this case takes looks at affirmative action from a different perspective, a state's total ban on racial preferences in higher education.

Well, she did the right thing. But Massachusetts high school senior Erin Cox is being punished for giving a drunk friend a ride home from a party. She was cited by police for drinking and later cleared. Still, school officials say Erin violated their zero tolerance policy. She's been suspended from the volleyball team for five games and stripped of her title as captain. That girl's mother sued but a court ruled it had no jurisdiction.