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U.S. May End Spying On Allies; Presidential Insurance Pitch; Murder Spree Arrest; U.S. Drone Strike In Somalia; Texas Judge Partly Rejects Abortion Law; Jackson Imprisonment Delayed; 12-Year-Old Guilty In Hacking Scheme; Two Of Four Escaped Inmates Back In Custody; Superstorm Sandy: One Year Later; NSA Under Review; Presidential Nominees Blocked Over Benghazi

Aired October 29, 2013 - 06:00   ET


CHRIS CUOMO, CNN ANCHOR: Good morning. Welcome to NEW DAY. It is Tuesday, October 29th, six o'clock in the east.

Coming up, a new strike against Obamacare. The president has said all along if you like your health insurance coverage, you like your doctor, you get to keep them under the Affordable Care Act. Well now, that may not be true for some people. So who could lose their current coverage? We'll explain, coming up.

KATE BOLDUAN, CNN ANCHOR: Plus, four inmates made a daring escape from an Oklahoma jail. Well, now, two of them are recaptured and have been put back behind bars. But the hunt is still on for the other two fugitives on the loose. They're considered armed and dangerous. We're going to have a live report coming up.

MICHAELA PEREIRA, CNN ANCHOR: And I want you to take a look at this photo. Most of us get really mad when their smartphone is smashed. Not this store clerk. His phone took a bullet for him literally. It saved his life. We'll have his dramatic story coming up.

CUOMO: First, the Obama administration rethinking its approach to electronic surveillance at the NSA spying scandal. Does that grow (ph)? They're starting to rethinking (ph). The president ordering a full review of intelligence operations, specifically, where foreign leaders are concerned. Let's bring in chief national security correspondent, Jim Sciutto, who's following developments live in Washington. Good morning, Jim.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Good morning, Chris. That's right. The White House is taking a hard look at the benefits and costs of this kind of surveillance. This is part of a review that began this summer. The same review which the White House says was how the president first learned of spying on foreign leaders such as the German Chancellor Angela Merkel.

Now administration officials saying the president did not know she was a target and would not know specific targets, but another U.S. official telling CNN that he would have had to know about the framework of such surveillance programs including the country's target. It's still some very hard questions for the administration to answer here. (BEGIN VIDEOTAPE)

SCIUTTO (voice-over): President Obama would not confirm the NSA was spying on the phone calls of U.S. allies like Germany's Chancellor Angela Merkel. But in an interview with the new cable network, Fusion, he both defended U.S. intelligence activities --

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: The national security operations generally have one purpose and that is to make sure that the American people are safe.

SCIUTTO: And conceded that maybe they've gone too far.

PRESIDENT OBAMA: I'm initiating now a review to make sure that what they're able to do doesn't necessarily mean what they should be doing.

SCIUTTO: Senior administration officials tell CNN President Obama did not know about the NSA surveillance of Merkel and other allies until earlier this year. When he found out he ordered a stop to some of the programs. The Democratic chairman of the Senate Intelligence Committee, Dianne Feinstein usually an ally of the White House says that's not good enough and wants a, quote, "total review of all intelligence programs." European lawmakers are in Washington this week pressing the case for limits. The head of the E.U. delegation told me E.U. citizens find U.S. spying disturbing.

CLAUDE MORAES, CHAIR OF EUROPEAN PARLIAMENT CIVIL LIBERTIES COMMITTEE DELEGATION: They feel uneasy. They don't know why it's happening. Why our strongest ally is doing it.

SCIUTTO: Amid reports the U.S. surveillance of leaders of allies began back in 2002 well before the Obama administration, here's one explanation former Vice President Cheney gave CNN's Jake Tapper.

DICK CHENEY, FORMER U.S. VICE PRESIDENT: We are vulnerable as was shown on 9/11 and you never know what you're going to need when you need it. The fact is we do collect a lot of intelligence without speaking about any particular target or group of targets. That intelligence capability is enormously important to the United States, to our conduct of foreign policy, to the defense matters, to economic matters and I'm a strong supporter of it.


SCIUTTO: The director of National Intelligence, James Clapper, announced overnight he's declassifying a trove of documents about collection under the Foreign Intelligence Surveillance Act or FISA. This is the act that authorized collection of data on virtually every telephone caller in the U.S. Later today, clapper and the head of the NSA, Keith Alexander, will be testifying on the Hill. Kate, we can expect them to face some hard questions as well. We'll try to ask some of our own.

BOLDUAN: Absolutely. Reviews on multiple fronts at this point, but what will come of it? Jim Sciutto, great to see you. Thank you so much. Meanwhile, the Obama administration is facing ongoing criticism on another front, Obamacare. The president's advisors are fighting back on Twitter, challenging claims millions of people could lose coverage because of the law. The administration is extending the sign-up window by six weeks. Senior White House correspondent Brianna Keilar is here with the very latest. Good morning, Brianna.

BRIANNA KEILAR, CNN SENIOR WHITE HOUSE CORRESPONDENT: Kate, good morning to you. That sign-up deadline now March 31st, it had been February 15th. So that is a change and the White House also now admitting that some Americans may lose their previous insurance plans under the Obamacare law, but arguing that that's not actually a bad thing.


KEILAR (voice-over): One of the president's long-time promises about his name sake health care reform plan --

PRESIDENT OBAMA: If you like your healthcare plan, you can keep your healthcare plan.

KEILAR: -- is coming under intense scrutiny as White House officials admit some plans will cease to exist under the law.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: It's true that there are existing health care plans on the individual market that don't meet those minimum standards and therefore do not qualify for the affordable care act. There are some that can be grandfathered if people want to keep insurances substandard. But what is also true is about Americans who have insurance on the existing individual market will now have numerous options available to them.

KEILAR: President Obama making an Obamacare pitch to young people who must sign up for health insurance by the end of March to avoid a fine.

PRESIDENT OBAMA: When you look at the number of young people who actually want health insurance, but are having trouble affording it, the fact that we're making it affordable for them for the first time, that's a big deal.

KEILAR: A new study shows 70 percent of eligible Americans between 18 and 34 can now purchase coverage for less than $100 per month, but that's if they can sign up. was knocked offline Sunday along with the data hub that verifies eligibility for government subsidies. Service was restored Monday.

As the Health and Human Services Department aims for a November 30th deadline to get the site fully operational, it's giving detailed updates on problems. The latest says, in part, we're also getting information on which parts of the application are causing the most errors, enabling us to prioritize what we fix next.


KEILAR: Now the web site is key to getting young tech-savvy people to sign up, young, healthy people are key to making the whole system work, Chris and Kate, because they offset the older less healthy who are more expensive to provide health care for.

BOLDUAN: All right, Brianna, thank you so much.

CUOMO: All right, a lot of news this morning so let's get right to Michaela for the headlines -- Mich.

PEREIRA: All right, good morning to the two of you and good morning to you at home. A Texas man under arrest now after a shocking murder spree near Dallas, police say Charles Brownlow killed five people in four locations apparently burning one person to death. None of the dead have yet been identified. It's unclear if police have any motive.

Two suspected members of the terror group al Shabaab have been killed in Southern Somalia in a U.S. military drone strike. U.S. officials tell CNN one of those killed is considered to be a top technical and explosives expert for the Al Qaida affiliated group. The other person killed was not yet identified.

Federal judge in Texas rejecting part of the state's restrictive new abortion law, which would have required doctors performing the procedure to have admitting privileges at a nearby hospital. This decision comes a day before it was to take effect, preventing a major disruption of abortion clinics across Texas. State officials plan to appeal.

Disgraced former Illinois Congressman Jesse Jackson Jr. was supposed to begin his 30-month prison term Monday. But it appears a paperwork issue has delayed his incarceration at the federal prison in North Carolina. Officials say Jackson at the moment is not officially an inmate. He pleaded guilty back in August to misusing some $750,000 in campaign funds.

A 12-year-old boy in Canada pleading guilty to a massive hacking attack that took down government web sites back in 2012. Young boy had been working under the umbrella of the hacker group "Anonymous." Sharing the information he found in exchange for video games. The boy's lawyer says the 12-year-old saw it as a challenge and had no political purpose.

CUOMO: Well, that makes it OK as long as it wasn't politics.

PEREIRA: A 12-year-old. It's interesting. Completely not motivated, motivated by video game. The right price, is that your motivator? Is that how we get to work?

CUOMO: I see it in my kids.

All right, since today is a very big day because of the anniversary of Hurricane Sandy. So we have Indra Petersons. She's down in a place that really became the face of the devastation, Seaside Heights, New Jersey, giving us the update on the situation as well as the weather. Indra, it's good to have you there today. INDRA PETERSONS, AMS METEOROLOGIST: Thank you, Chris. It really is hard to believe it has already been a year since Superstorm Sandy really impacted the region. I'm actually standing in front of where the Jetstar Roller Coaster used to be. If you look over my shoulder, there was nothing there. It was torn down in May. We do have signs of progress.

You can actually see -- we're right in front of the Casino Pier where they are still trying to rebuild. The good news this morning, the boardwalk, 90 percent of the businesses here on the boardwalk are open. Of course, they're hoping to have more of this pier open by next summer. We'll give you a little deeper look into Sandy coming up in a bit.

But first, I want to talk about a storm system that is impacting the state today. That same storm system brought that heavy snow, about a foot of snow in through Montana yesterday. Well, now, today, that storm system could bring as much as 10 inches into portions of Wyoming and even into Colorado, heavy winds, winter storm warnings in effect in that region.

The reason this is so significant other than the snow and the storm itself is you have all that cold air now clashing with that warm air into the south. So with that, the jet stream going right over that panhandle of Texas, we have a severe weather threat. So we are looking for large hail, strong thunderstorms and even an isolated tornado cannot be ruled out today.

That same system will eventually make its way farther into the east as it makes its way through the mid-week. We're talking about a severe weather threat for tomorrow. That will go from Nebraska to Texas.

Eventually again as we look towards Halloween, Thursday night in through Friday, we are talking about really the Ohio Valley extending all the way into the overnight hours into the northeast, a strong, powerful system making its way into the region so really a lot to be talking about this morning -- Chris and Kate.

BOLDUAN: A lot to be tracking. Indra, thanks so much. We are going to be getting right back to Indra in just a few minutes for more on the recovery from Superstorm Sandy so we'll be getting right back to you, Indra. That will be coming up.

CUOMO: Also we are monitoring a manhunt that's going on in Oklahoma. Two men are still missing after this daring jail break. They actually broke out through a shower. The real questions now about how it happened and how it might happen again, we'll tell you.


BOLDUAN: Welcome back to NEW DAY. Now captured are two of the inmates made a daring escape from an Oklahoma jail are back behind bars, but two others considered armed and dangerous are still out there. This morning, we're learning more about how they made their great escape. CNN's George Howell is live in Oklahoma with more. So what's the latest, George? GEORGE HOWELL, CNN CORRESPONDENT: Kate, good morning. So we learned it was an investigator who spotted two of those men here at this convenience store and these weren't the regular customers. He described their clothes as wet, dirty and according to the store clerk they came here to buy Ramen noodles. They are behind bars this morning and the search continues for the other two.


HOWELL (voice-over): Police searched throughout the night looking for two remaining Caddo County jail inmates who have been on the run since Sunday, Anthony Mendonca and Triston Cheadle remain at large, both considered armed and dangerous.

(on camera): Should people be worried that these men are on the streets?

SHERIFF GENE CAIN, CADDO COUNTY JAIL: Yes, anytime, you know, people breaks out of prison, you should be more cautious and be more secure around your surroundings.

HOWELL (voice-over): Mendonca and Cheadle escaped with two other inmates who ended up right back where they started from, inside the walls that failed to confine them. Dylan Three Irons and Prime Brown were both arrested Monday afternoon in nearby Chickasha, Oklahoma, less than 20 miles away from the jail. Many around town are most troubled by the simple fact that this jailbreak even happened.

MARCY LEE, ANADARKO, OKLAHOMA RESIDENT: Kind of frightening to think that it happened so easily. It just makes me nervous to think that it's not built better.

MARK JOHNSON, ANADARKO, OKLAHOMA RESIDENT: Evidently, there's a design flaw in it, where you get in the shower, climb up, climb over, and get out.

HOWELL: And that is exactly how it went down. According to officials, the men busted through a maintenance hatch above the shower in the jail. They crawled through a pipe space right beneath the roof where the air-conditioning and plumbing sit. Then, they knocked out a cement block to get to another room. That took them directly to an unlocked side door which they simply pushed open to freedom.

SHERIFF GENE CAIN, CADDO COUNTY JAIL: I don't think it was a design flaw, no. I mean, it's something we will have to investigate, but the jail was well-built.

HOWELL: Our camera caught contractors back on the job repairing the damage created by the jail break.

But could this sort of thing happen? Not even the sheriff could say for certain.

CAIN: There's lots of ways, you know, that people escape jails. I can't say it won't happen again. We hope it don't happen again.


HOWELL: So, you know, we're looking over here and see a police officer passing by with a Chickasha police department, something you'd expect as they continue the search.

When you think about Three Irons, and when you think about Brown, they did not get very far, Chris, about 20 miles from the jail. Authorities do believe the other two could be here in this Chickasha area.

CUOMO: Good. Hopefully they catch them really soon and we hear it from you, George. Appreciate the reporting this morning.

So, we're marking a painful anniversary. Exactly one year ago today, Superstorm Sandy changed the face of much of the East Coast. Many of us witnessed one of the deadliest and destructive storms in U.S. history.

Now, what you don't hear is that for far too many it isn't over. Some places are beyond repair, other places still struggling to recover, still vulnerable. Indra Petersons is live in one of the areas hardest hit, Seaside Heights, New Jersey -- Indra.

PETERSONS: Yes, really, again, it's so hard to believe it was just a year ago. I mean, 100 million of us were affected by the storm. So large in fact hundreds of thousands of homes and 5 million people were left without power. We're talking about a storm surge that was record breaking that came in at 13.88 feet.


PETERSONS (voice-over): It's been one year since Superstorm Sandy wreaked havoc in the U.S.

UNIDENTIFIED MALE: It's really just all water.


UNIDENTIFIED FEMALE: That is a record.

PETERSONS: The monster storm carved a path of destruction, killing 117 people in the U.S. and damaging hundreds of thousands of homes and businesses, becoming the second costliest storm in American history.

DR. KATHRYN D. SULLIVAN, ACTING NOAA ADMINISTRATOR: We know the storm was unusually wide. It stretched literally from the off the coastline, all the way to the Great Lakes. It was loaded with water.

PETERSONS: In Manhattan, Sandy slammed the coastline, water pouring into city streets. Lower Manhattan left in complete darkness for days.

(on camera): Twenty-three million gallons of water flooded the 31,000 square foot subterranean retail plaza where the water literally came up to these steps. Notice, it is still gated off. Millions of dollars of dollars in damage are currently still being renovated. (voice-over): Still under renovation a year later, Sandy's scars still visible, subway stations filled with water one year ago now still under construction. In New Jersey, Seaside Heights historic boardwalk demolished from the storm re-opened more than six months later to a slow return of tourists and locals.

VINCENT STORINO, MANAGING MEMBER OF CASINO BECH PIER, LLC: We have a thousand man hours a day working on this project. What we accomplished in several months should have taken a few years.

PETERSONS: Only to grapple with another tragedy in September.

UNIDENTIFIED MALE: The stores are on fire.

UNIDENTIFIED MALE: First, Sandy, then the fire. I don't know what's next.

PETERSONS: Electrical wiring possibly damaged in the storm sparked a blaze that burned 30 businesses to the ground.

BILL AKERS, MAYOR OF SEASIDE HEIGHTS: It's been one thing after the other. But you know, we are tough here.

PETERSONS: In Queens, Breezy Point was one of the hardest hit areas. More than 100 homes burned to ashes. Fire trucks unable to enter the neighborhood for hours, due to flooded streets. The neighborhood still lined with piles of sand and unoccupied houses.

But a year later there are signs of resilience and recovery. A group of Rockaway residents marking the anniversary, holding hands on the beach. An immigration museum at Ellis Island damaged in the storm re- opened its doors yesterday. Still, experts offering a harsh warning.

SULLIVAN: Sandy is unfortunately is definitely not one-of-a-kind storm. The reality is that a storm of this force and magnitude could hit the coastline of our country any time and any place.


PETERSONS: Now, one of the things I wanted to touch on here that I still here a year later is a lot of confusion. What was so different about Sandy than Irene a year previous? One of the most important things, of course, its size, 1,000 miles we saw the tropical storm force winds.

But take a lack at the path of Sandy versus Irene. Sandy came in perpendicular to the shore instead of parallel. Why does this matter?

Well, take a look at this animation. If it comes in perpendicular to the shore, you have that storm surge completely concentrated in one region. It allows it to be higher instead of spread out along the coastline. That is a key factor.

And then, of course, take a look at this plan. This is actually the 100-year flood plan that FEMA put out that they felt. The worse scenario, every hundred years, this is how much flooding would occur. Now, take a look at what actually happened with Sandy. It was even worse than that. It really was the perfect combination of this coming in at high tide, 9-foot storm surge combining with high tide that brought it in 13.88 feet. A thousand miles wide. So, expansive and coming perpendicular to the shore.

Of course, these are the small things that had this huge impact that, of course, we all felt exactly a year ago today -- Chris and Kate.

BOLDUAN: All right. Indra, thanks so much.

The illustration is so helpful in understanding why Superstorm Sandy was so different and exactly what we call it, "superstorm."

CUOMO: Yes. And we're going to keep following it because there are still a lot of families in need. Anybody who lives in this area knows that many are still in the process of getting back on their feet.

BOLDUAN: A year later.

Indra, thank you so much for that.

Coming up next on NEW DAY: a key lawmaker is saying no. Senator Lindsey Graham planning to block all of the president's nominees. Why you ask? Well, John King will be here for our political gut check, coming up.

CUOMO: And imagine paying your taxes by the mile. The government charging you based on how far you drive. The new proposal, we'll tell you about it. Who? Not so much.


BOLDUAN: Time now for a political gut check of the morning.

The White House is reviewing all U.S. surveillance programs after reports the National Security Agency was spying on some 35 world leaders, and the top senator on the Senate intelligence committee says he is totally opposed to that surveillance and that data collection will not continue.

CNN's chief national correspondent John King is here to talk more about all of this.

It's pretty interesting where things have gotten with this spying controversy, John. You've got the White House now saying they're going to review the spying policy of foreign leaders but Dianne Feinstein, she is not happy. She says she's been kept in the dark and she wants an even further review that she's going to spearhead. What's going on?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: It's very important, Kate, because remember, at the beginning of all this, when these revelations first came out, Senator Feinstein was a defender of the NSA, saying most of the intelligence gathering is necessary. And, yes, Congress would ask some questions. But she defended most of the practices.

Now, she's not happy because she doesn't think she's getting straight answers all the time from the agency and sometimes from the White House. So, she's promising tougher scrutiny. And that's a signal. It's a shot across the bow, if you will, to the administration.

Significantly, in this latest case, is that she put out a statement saying essentially that the administration had promised to end all surveillance of allied leaders, leaders of allied countries like Germany, for example. We've seen the embarrassing disclosures about that in the recent days.

Then, the White House said, well, not exactly. We're going to have a review. We're going to change some of the policies but don't use the word all. Don't have a blanket prohibition on this.

So, in trying to put this behind us, we may have raised some more questions here.

BOLDUAN: So, the president did an interview with the Fusion Network yesterday. Do you think he did enough to try to calm concerns? Is he explaining his position on the NSA and kind of his spying policy directive to the NSA? Did he do enough yesterday?

KING: Probably not, in the sense that he would not even publicly concede that the German chancellor's phone -- some of those conversations were monitored.

Look, the president has got a tough one here. This is top-secret classified intelligence programs.


KING: The specifics of it and the practice of it. So, what can he say publicly?

So, the president is going to have to do a couple things. Number one, the administration is going to have to answer these tough questions from Congress and in doing so, hopefully answer questions from the American people.

But I suspect between Secretary Kerry and the president himself, a lot of personal diplomacy with these allied leaders.

Remember, very close friends of the United States who are peeved and who say this will impact relations down the road.

BOLDUAN: We'll talk about lingering questions coming from Congress. Senator Lindsey Graham now threatening to stall all presidential nominations until he gets more information on what happened a year -- more than a year ago in the attack in Benghazi. I mean, it's been more than a year.

What's Lindsey Graham trying to do here?

KING: He is trying to help his colleagues in the House, because the Democrats control the Senate. So, there's not really a serious Benghazi investigation over on the Senate side, but there is on the House side, and they have been very frustrated.

The White House says this is all partisanship. We spent some time on this. There are some people the committees want to talk to, other U.S. employees who are there at the time, who survived the attacks, that the committee wants to talk to, that the State Department, through the White House that has not been willing to send them there as witnesses, to testify.

And so, Lindsey Graham is now saying, fine, you won't send them up to testify, I'm going to block almost every nomination if not any nomination coming through the Senate. We'll see how long this one plays out. It's his effort to try to force some cooperation -- significant in the sense that Lindsey Graham is someone who has tried to work with the president on immigration, for example. He is not reflectively a partisan like this.

You should note and remember, he has a Tea Party primary challenge back home. So, planting a flag against the president, he has long been demanding questions to Benghazi. So, I'm not questioning his commitment to the policy investigation. This also helps him politically back home.

BOLDUAN: And this has worked for him in the past. He stalled, he had held up the nomination, the confirmation of John Brennan for CIA director, asking other questions about the Benghazi attack and the White House gave that information.

KING: That's right. And so, if you're Lindsey Graham, you're thinking this worked once, let's try it again. And again, he's not so much hoping for, you know, some huge new breakthrough on the Senate side. But this has been one of the frustrations on the House side.

Have the House Republicans sometimes overstepped themselves in this investigation? Without a doubt. Has the administration been completely forthcoming during this investigation? No.

And so, this has been a key tension point. Lindsey Graham hoping by using the tactic again, clogging up the Senate he'll force, if not get everything he wants, some sort of a compromise.

BOLDUAN: In getting nominations through the Senate, while it's not sexy politics, it's been a big issue in the Senate in this last session.

KING: Sure has.

BOLDUAN: So, we'll be watching closely. Thanks, John. Great to see you.

KING: Thank you.

BOLDUAN: All right. We're going to be watching the politics because it never goes far away. But there are other stories making headlines right now. So, let's get over to Michaela. PEREIRA: All right, Kate.

Here are the headlines at this hour:

The White House getting back a report it calls misleading, refuting claims the White House knew for years that millions of people could lose coverage under Obamacare. Advisers say normal turnover in the insurance market is to blame, not the health overhaul.

Today, the head of Medicare will be on Capitol Hill to answer questions about the failures of the website.

In Syria, security concerns are preventing inspectors from reaching the last two of 23 declared chemical weapons sites.