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THE SITUATION ROOM

Sandy's Fallout; Interview With Congressman Peter King

Aired October 28, 2013 - 18:00   ET

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


WOLF BLITZER, CNN ANCHOR: Happening now, the president's "I didn't know" defense. Was he really in the dark about Obamacare's troubles and U.S. snooping on world leaders? There may be cause for concern, no matter what the answer is.

Plus some desperate Americans may be successful at signing up for Obamacare, but they're not necessarily the people the administration need the most in order to make the system work.

And one year later, many superstorm Sandy survivors haven't been able to put the death and the destruction behind them.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Right now, one of the most famous questions in political history is being asked of President Obama, what did he know and when did he know it? The Senate Intelligence Committee chair, Dianne Feinstein, now seems to be confirming reports that the president was not aware about NSA snooping on allied leaders until recently, this only days after the health secretary Kathleen Sebelius told CNN the president didn't know about failures with the Obamacare Web site until it was launched.

Let's bring in our senior White House correspondent, Jim Acosta, who is watching all of this unfold.

What's the latest, Jim?

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: That's right, Wolf, Dianne Feinstein, the chair of the Senate Intelligence Committee, now says it's her understanding the president did not know about the spying program on foreign leaders.

I have been told by an aide to that committee that the senator is basing these conclusions on conversations she's had with the White House about these programs. And as you said, Wolf, consider the old Watergate president, when did the president know and when did he know it, the question these days seems to be, is the president even in the know?

(BEGIN VIDEOTAPE)

ACOSTA (voice-over): It's a White House line that keeps coming up. The president was not in the know. On the allegations that the National Security Agency conducted surveillance on foreign leaders, including German Chancellor Angela Merkel, CNN has confirmed this "Wall Street Journal" headline, Obama unaware as U.S. spied on world leaders.

On the problems about the Obamacare Web site, the answer was again, the president was not informed.

KATHLEEN SEBELIUS, U.S. HEALTH AND HUMAN SERVICES SECRETARY: Well, I think it became clear fairly early on, the first couple of days that...

DR. SANJAY GUPTA, CNN SENIOR MEDICAL CORRESPONDENT: So, not before that, though? Not before October 1?

SEBELIUS: No.

ACOSTA: Even back in May, when it was discovered the IRS was targeting conservative groups, the president claimed he didn't know about it.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I first learned about it from the same news reports that I think most people learned about this.

ACOSTA: So it was no surprise that the RNC blasted out this e-mail, dubbing Mr. Obama the bystander president.

White House veteran David Gergen said the issue is confidence.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: This is an administration that has been very, very good at its politics, but has never been very good at execution of policies from day one.

They -- it's an administration which has some really smart people in it, and a lot of younger people. It doesn't have very many heavyweights.

ACOSTA: Administration officials point out the president only learned of the spying effort this summer, halting some of the program, but dodged on whether Mr. Obama is being kept out of the loop.

(on camera): Is there a concern in the administration that the president is being kept in the dark on some of these issues?

(CROSSTALK)

JAY CARNEY, White House Press Secretary: Well, it's certainly true that you have contemplated a bunch of very disparate issues.

ACOSTA (voice-over): But aides to the president say this statement back in September is accurate.

OBAMA: I can give assurances to the publics in Europe and around the world that we're not going around snooping at people's e-mails or listening to their phone calls.

ACOSTA (on camera): Is that statement still operative?

CARNEY: Jim, what the president said was true. ACOSTA (voice-over): But CNN has also learned that the president was made aware of the broad parameters of the surveillance of U.S. allies when he came into office, a spy program the White House cautions stops terrorist threats.

(END VIDEOTAPE)

ACOSTA: And late today, Senate Intelligence Chair Dianne Feinstein did say this surveillance program on allies of the U.S. "will not continue," and we should also point out, Wolf, that that goes further than what White House Press Secretary Jay Carney has said during White House briefings. He was specifically talking about Angela Merkel, the German chancellor in previous briefings here at the White House.

This Feinstein statement appears to go further than that and talk about other U.S. allies. We should point out at this hour, we do not have a comment from White House officials about what Senator Feinstein is saying.

BLITZER: Yes, no reaction yet from the White House. Let's see what they say. Thank you, Jim.

Let's get some more now on the latest NSA spying allegations and the backlash.

Our chief national security correspondent, Jim Sciutto, is here.

What are you learning about all of this?

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Two main headlines, one, the president did not know, but when he found out about the extent of this program, he did end parts of it. Administration officials telling CNN the president found out about NSA's spying only this summer when the administration conducted a review.

He then ended parts of the program, including surveillance of phone calls of Angela Merkel and other leaders. White House spokesman Jay Carney said that even as the world becomes more interconnected and there are more capabilities there should still be limits on surveillance.

(BEGIN VIDEO CLIP)

CARNEY: Just because we have made these extraordinary technological advances, they give us greater capacities, we need to make sure we're collecting intelligence in a way that advances our security needs and that we don't just do it because we can.

(END VIDEO CLIP)

SCIUTTO: A senior administration official defending the president's lack of knowledge of this program has said it would be understandable that the president wouldn't know the specifics of the targets of this kind of surveillance, he would only know the intelligence priorities. That said, Wolf, we have talked to other U.S. officials, our own Evan Perez, who said at least the framework, the president would have to approve that framework. These are presidential programs requiring executive orders. Under the auspices of that program, he would know that it targeted leaders of other countries, maybe those countries, maybe not the leaders themselves, so you have some conflict about how far the administration's knowledge went, how far the president's knowledge went.

BLITZER: I'm surprised Dianne Feinstein says in the statement "The White House has informed me that the collection on our allies will not continue, which I support," because earlier U.S. intelligence officials were saying to me some of this collection is important not only to protect American citizens, but also to protect allies that don't necessarily have the capabilities, the intelligence-gathering capabilities the U.S. has.

SCIUTTO: No question. And these are long-held cooperative agreements. The allies want American help, because they know America has capabilities they don't have.

The question is when those capabilities are used beyond where the allies are informed. I think this is the issue here, when the president found that out, he put a stop to it immediately, partly to preserve those relationships.

BLITZER: Jim Sciutto, thanks very much for that.

Still ahead, I will ask Republican Congressman Peter King if he thinks the president is lying about his knowledge of NSA spying.

If you have questions for Peter King, tweet them to us, use #SITROOM.

Plus, the Northeast before and after the superstorm Sandy. Why the recovery still has a long way to go one year later.

(COMMERCIAL BREAK)

BLITZER: The White House says the Obamacare Web site is working again a day after a new malfunction prevented users from applying for coverage, but the system still has plenty of problems that may be driving away some of the most coveted groups of customers.

Our senior medical correspondent, Elizabeth Cohen, is keeping tabs.

(BEGIN VIDEOTAPE)

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT (voice-over): Since October 1, from the minute healthcare.gov went live, Susan Lane has been bulldogging her way through the Web site.

SUSAN LANE, SEEKING HEALTH INSURANCE: I tried after midnight. I tried when I thought everybody was going to work, when they were coming home from work.

COHEN: She toiled on the broken site every day, five hours a day. LANE: At night, I have dreamed about this little -- this green circle.

COHEN (on camera): You have worked really hard at this.

LANE: Really hard.

COHEN: You have been diligent.

LANE: Yes, I have.

COHEN (voice-over): Finally, two weeks later it worked. She got a policy to cover herself and her daughter, who have a host of medical problems, from Asperger's to sleep apnea. They have spent their life savings on medical bills, and are now in bankruptcy.

(on camera): You finally got a policy. How did you feel?

LANE: Relief. Immediate relief.

COHEN (voice-over): But here's the question. Will people who don't have health problems be as determined on a site that's such a mess?

CAROLINE PEARSON, AVALERE HEALTH: It's incredibly important to have young, healthy people in the exchanges.

COHEN: Without them, premiums could spike, or worse, too many sick costly patients would be enrolled and the system could failed. So the Obama administration is trying to win over the young and the healthy.

UNIDENTIFIED MALE: Getting coverage this good at this price? I'm thrilled, and hey, I'm covered.

COHEN: but online there's 13 things bros would rather buy than Obamacare. One group of young people even gave out an award for making the site so difficult. It gave them an excuse, they said, to opt out. The Web site woes could spell trouble if young people spend more time making fun of Obamacare than signing up for it.

(END VIDEOTAPE)

COHEN: Now the administration has not released enrollment numbers, and certainly not released any demographics, so we don't know how many young people have signed up, but the administration has always said, look, we expect enrollment to be like it was for Romneycare in Massachusetts, more people signing up towards the end of the sign-up period and fewer people signing up at the beginning -- Wolf.

BLITZER: Elizabeth Cohen, thanks for the report.

Meanwhile, superstorm Sandy survivors are making a long hard year since they made it out alive from one of the deadliest, most damaging storms ever to hit the United States. Sandy hammered parts of the Northeast, including Long Island and the Jersey Shore exactly one year ago tomorrow.

CNN's Poppy Harlow has been following recovery efforts since day one.

(BEGIN VIDEOTAPE)

POPPY HARLOW, CNN CORRESPONDENT (voice-over): When superstorm Sandy slammed ashore one year ago, swallowing this boardwalk and its iconic roller coaster, it took Bubba's Hot Dog Shop with it.

UNIDENTIFIED MALE: The building was just destroyed, devastation.

HARLOW: But he reopened this summer, unwilling to give up.

(on camera): How was the summer for business?

UNIDENTIFIED MALE: It was slow. No one made a lot of money. It was a year of survival.

HARLOW (voice-over): Then in a one-two punch, Bubba's new restaurant was wiped out in a September fire that demolished 60 businesses.

UNIDENTIFIED MALE: It was probably the biggest feeling of helplessness I have ever had in my life.

HARLOW (on camera): You named one superstorm?

VINCE STORINO, BUSINESS OWNER: Superstorm. That's the only type of superstorm I ever want to see again.

HARLOW (voice-over): Vince Storino is building back the casino pier.

STORINO: I think we had 1,000 manhours a day working on this project, and what we accomplished in several months should have taken a few years.

HARLOW: But a large chunk of the pier still isn't rebuilt. And Storino questions whether it's even worth the investment, now knowing how many people will return. Many have no homes to come back to.

BILL AKERS, MAYOR OF SEASIDE HEIGHTS, NEW JERSEY: I think we have come a long way.

HARLOW: Seaside Mayor Bill Akers estimates business was down 30 percent this summer.

AKERS: There was a time when after Sandy we don't know if we would be open. You can look at it as 30 percent down or 70 percent up.

HARLOW: He says rebuilding the town's infrastructure and mitigation work could cost up to $20 million.

(on camera): This town gets whacked by Sandy, and then this fire.

AKERS: It's a punch in the gut, Poppy. I'm not going to kid you. You sit there and you -- there's no reason why. There is no good answer. The only thing you can do is deal with it.

HARLOW (voice-over): At the Beachcomber Bar and Grill, something astounding happened. The businesses on both sides of Michael Carbone's restaurant burned down, but his did not.

MICHAEL CARBONE, BUSINESS OWNER: Fire, we're here, this is or lives, this is how we make our living, and the lesson is, we're Jersey strong.

HARLOW: Strong, a good word to describe folks here. And what Bubba built twice, he's building again, come hell or high water.

UNIDENTIFIED MALE: If I can get my doors open, pay my rent, pay my employees, I will be happy. I will be happy. I will be open. That's the goal.

(END VIDEOTAPE)

HARLOW: And he certainly embodies Jersey strong. You know, Bubba told me he needs a second job in the off-season just to get by, but when you're trying to rebuild your business for a third time, that's tough to do. He thinks it will take about three to four years to really get back on his feet, business as normal.

A big part of that is because, as the mayor told us, so many of those homes, they haven't even started rebuilding them. So until those residents and tourists come back, you have a long, long road ahead. I can tell you, Wolf, we are going to see Governor Christie all across the state of New Jersey tomorrow all day making stops in areas impacted by Sandy on this one-year anniversary.

BLITZER: Good luck to all the folks who are still, still recovering. Good report, Poppy. Thank you.

Just ahead, Republican Congressman Peter King, he is standing by to speak with us live about U.S. spying on world leaders, whether President Obama has been out of the loop. You know what? Tweet us your suggested questions. Use #SITROOM.

(COMMERCIAL BREAK)

BLITZER: Serious new questions are being raised right now about whether President Obama is out of loop on key issues, including NSA spying on friendly foreign leaders.

We're joined now by Congressman Peter King, Republican of New York. He's a key member of the House Homeland Security Committee. He's the chair of the Subcommittee on Counterterrorism and Intelligence.

Congressman, thanks very much for coming in.

REP. PETER KING (R), NEW YORK: Wolf, thank you.

BLITZER: Is it credible to you that the president of the United States would not know that the U.S. has been listening in on the private phone conversations of the German chancellor, Angela Merkel, since 2002?

KING: Well, again, I can't say whether or not we have been doing it or not, but assume that we have. No, I can't believe that the president wouldn't have known that. He certainly should have known. And if he didn't, I think that's almost more of a serious issue, that something like that, at that level would be conducted without him knowing it.

Now, let me just say, I support the NSA. I think that we should stop being defensive and apologetic. But, having said that, I don't think the president -- I can't believe that he didn't know or he should have known or people very close to him had to have known. This is a key issue, which goes beyond the actual intelligence, it goes beyond our relationship with foreign leaders.

And the president certainly should be aware of that.

BLITZER: Dianne Feinstein, a woman you know, the chair of the Senate Intelligence Committee, she is fully briefed on all of these issues. She just issued a statement saying: "It is my understanding that the President Obama was not aware Chancellor Merkel's conversations were being collected since 20012. That is a big problem."

I assume, for her to say that, that's confirming these press reports in Germany and elsewhere that this U.S. spying on Merkel's private phone conversations has been going on now for more than a decade. She wouldn't just put out a statement like that unless she had been told it was true.

KING: Yes, again, it may have been. I'm on the committee. I'm on the Intelligence Committee, and I really can't close what we have been told or not told.

I would just say that if the president did not know, then that raises very serious questions about what he's doing as commander in chief, as chief executive. The fact he would be going into negotiations and discussions and meetings with Angela Merkel or with French leaders or any other European Union leaders or any leaders, for that matter, and not be aware that there was surveillance going on of their private phone calls, to me, either something is definitely wrong in his administration, or he just has a totally hands-off attitude, because to me this is just unacceptable that he not know that, and also that it continue, because, again, this goes beyond the intelligence- gathering value.

There's obviously a diplomatic component to it. To me, the president should be advised, and if not, I would like to know how high up in the administration it went. Who was the closest person to him that did know about it? And why didn't that person not tell him?

BLITZER: Is it credible to you that the director of national intelligence or head of the NSA had made a conscientious decision, this is information the president does not need to know, he's better off not knowing, so we're not going to tell him?

KING: I don't believe that should be done, no, not at all.

I think if it appears that the president is trying to put this back on General Alexander or put it back on the NSA, I think that is also going to create serious morale problems. To me, he should be out there with the NSA, thanking them for the great job they do, not trying to put the blame off onto them.

So, Wolf, it's just hard for me to imagine. Either he knew about it, and he's now saying he didn't, which is wrong, or he never knew about it. That to me is -- Senator Feinstein said it's a serious problem. I don't know if she meant it's a serious problem that he didn't know about it or that no one told him, or that the whole program was going on. To me, the serious problem would be if he didn't know, why he didn't know about it, and how high up in the administration it went.

BLITZER: She's also upset that, as chair of the Senate Intelligence Committee, she says she was never informed about this. She said: "The White House has informed me that collection on our allies will not continue, which I support. But, as far as I'm concerned, Congress needs to know exactly what our intelligence community is doing. That to end, the committee will initiate a major review of all intelligence collection programs."

First of all, do you support this decision? She says the White House has now made a decision not to collect intelligence on friendly countries.

KING: No, I would not support that.

For instance, let's go back to when Willy Brandt was the chancellor of Germany -- of West Germany, and he actually had Stasi agents, communists in his government. The fact that Germany and France and other countries deal with Iraq and Iran, North Korea, the Russians as far as nuclear energy and other issues, I think we don't know who the chancellor is going to be, who the president is going to be, who the prime minister is going to be, and there's a reason why we signed an agreement.

There's only four other countries in the world where we have actually said that we are not going to do surveillance on, as far as their leaders, as far as their government. Listen, when Madeleine Albright was the ambassador to U.N., she said her phone was tapped, that the French were actually listening in and knew what she was saying.

Now, she's in the president's Cabinet. If we're not going to tap a chancellor, are we going to go to the vice chancellor? Are we going to go to people in the Cabinet? Where does this end? And suppose one of the these governments becomes very uncooperative.

Just go back several years ago with Chancellor Schroeder when he and the Russians basically formed an alliance against us as far as Iraq was concerned, which is one thing, but then right after that, Chancellor Schroeder ends up working for an energy company that is controlled by the Russian.

To me, I would like to know what is going on in his mind as we were going into those negotiations as far as our policy in Iraq was concerned. No, I think this is not something the president should just unilaterally and forever write off. It can be done -- to me, this is something that comes within his jurisdiction and isn't something that he should just write off, because I think this can be very useful information to us. Believe me, if they could -- I really wonder when Senator Obama was there in 2008 speaking in Berlin, was German intelligence, you know, going into his BlackBerry to know what he was saying?

This is -- all countries do it. For us to -- listen, I understand why Angela Merkel has to say something publicly. But the fact is, the NSA has done more to save German lives than the German army has done since World War II. That's the reality. The NSA has provided so much intelligence to Germans and the French and other European countries to save them from terrorist attack, they should be thankful to us, not going through this charade.

BLITZER: Peter King is a member of the House Homeland Security Committee, the House Intelligence Committee as well. He's chairman of the Subcommittee on Counterterrorism and Intelligence.

Congressman, thanks very much for coming in.

KING: Wolf, thank you. I appreciate it. Thank you.

BLITZER: Peter King, thank you .

Remember, you can always follow what's going on here in THE SITUATION ROOM on Twitter. You can go ahead and tweet me @WolfBlitzer. You can certainly tweet the show @CNNSITROOM.

Thanks very much for watching.