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Democrats Defect, Back GOP Obamacare Fix; Obamacare Fix Could Cost Billions; Interview With Rep. Fred Upton; Interview Rep Adam Schiff; Vote Strips Toronto Mayor of Key Powers; Terror Threat Worse than Before 9/11?; Search for Man who Fell from Plane; Batkid to the Rescue

Aired November 15, 2013 - 17:00   ET



House Democrats defect and back a Republican fix for Obamacare. One their leaders say should dismantle the troubled program.

Also, a mystery off Florida. A man falls from a plane and disappears.

And Batkid to the rescue at city hall. Thousands of volunteers come together to make the wish of a young cancer patient come true.

Wolf Blitzer is on assignment today. I'm Jim Sciutto. And you're in THE SITUATION ROOM.


SCIUTTO: If you could be a fly on the wall for one meeting today here in Washington, the one to pick just wrapped up at the White House. President Obama sitting down with the heads of some of the nation's largest health insurance companies. He's asking them to take part in a controversial and high priced fix to an Obamacare flaw that's caused millions of people to have their policies canceled. The president now wants those plans extended for a year.

But on Capitol Hill, House Republicans want them reinstated permanently, potentially fatal blow to Obamacare, and one that some Democrats crossed the aisle today to vote for.

CNN's chief congressional correspondent Dana Bash is there today.

Dana, how big a blow for the president today?

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Well, look, the prospect of losing this vote in a big way is exactly what drove the Democratic leaders here earlier in the week to plead with Obama officials for the president to come up with some kind of fix to this canceled policy problem. So, the fact that the president did offer a mea culpa yesterday, he offered his own plan, certainly helps soften the blow but it still stung.


BASH (voice-over): Thirty-nine House Democrats, one-fifth of the caucus, defected and voted for a Republican bill allowing people to keep canceled health policies.

Democrat Ron Barber in a tough re-election campaign next year was one of them.

REP. RON BARBER (D), ARIZONA: I had been home meeting with constituents. This has been a topic of concern and conversation. So, I wanted to vote yes to let my constituents know I heard what they had to say.

BASH: That despite warnings from Democratic leaders that the GOP bill would dismantle Obamacare by not only allowing consumers to keep canceled policies but also letting people sign up for new policies that do not meet new benefit requirements.

REP. NANCY PELOSI (D-CA), MINORITY LEADER: That idea that it was helping consumers was sort of the Trojan horse whose underbelly is poisonous with -- in terms of the health and well-being of the American people.

BASH (on camera): Your leadership says that your vote would undercut the entire Obamacare law.

BARBER: Well, I don't see it that way. I mean, I think any fix that we can make, particularly when a problem arises, is good for the people back home. And truth of the matter is, look, I'm accountable to the people who sent me here.

BASH (voice-over): The prospect of this GOP vote is the main reason the president came out a day earlier with his own plan to reinstate canceled insurance policies. Democratic sources admit without that, many more Democrats would have defected. But the GOP bill still got significant bipartisan support, and Republicans were eager to pour salt on the president's political wounds.

REP. FRED UPTON (R), MICHIGAN: "Ask not what your country can do for you, "the only thing we have to fear," "tear down this wall." And our current president will be no different. "If you like your health care plan, you can keep it, period."


BASH: The president has issued a veto threat but it probably won't get that far because in the Senate, there are certainly a number of Senate Democrats who also want to have a legislative fix, want the show their constituents back home that they are part of the problem just like some of their colleagues in the House did.

But so far, Democratic leaders who run the Senate, Jim, are saying that they will hold off on having a vote and give the president's plan a little bit more time to work.

SCIUTTO: All right. Dana Bash, right in the middle of it as always.

Let's get more now with CNN chief political analyst Gloria Borger, and CNN senior political analyst, Ron Brownstein, the editorial director of "The National Journal." So, the president came out with an attempt at a fix yesterday with the stakes nothing short of saving his signature legislative program. Did he succeed? Is he closer to that?

RON BROWNSTEIN, THE NATIONAL JOURNAL: No, I think the president is walking an incredible tightrope because on the one hand, he has to be seen, he wants to be seen as being responsive to the concern about people who are losing their existing policies, but he can't be too responsive to it --


BROWNSTEIN: -- because ultimately, the way the individual market works now largely segregates out the sick, those who are in it tend to be healthy. They are exactly the people he needs to come in to the new plans to provide a balanced risk pool that will allow it to succeed going forward. If large numbers of them are allowed to stay in their current plans outside of the system, he is putting off problems today but compounding them a year from now when rates could go up and further that downward spiral.

BORGER: You know, I was talking to a senior administration official yesterday who said to me we do understand that we are undermining our own program, but we have no choice and we have to do it administratively and for as short a time as possible. You know, this Upton bill would have undermined it completely. It's another way of undoing Obamacare.

SCIUTTO: Ron, you have written about how the stakes for the party as a whole, the very message can government fix things?


SCIUTTO: Can government help?

So, you are talking about not just in 2014 but longer term for --

BROWNSTEIN: Absolutely. Look, the Democrats have long viewed health care reform, the guarantee of universal health care, as their best way of demonstrating to skeptical voters, particularly in the white middle class, that government can in fact provide them tangible benefits. And after decades of running, they are the dog that caught the bus. They now have the program. They need to show that it can work.

Instead, in the initial rollout at least, they still ultimately have time to reverse this, but in the initial rollout they've had kind of a disastrous first few weeks that have compounded the doubts, compounded the problem that the program is meant to solve.

BORGER: You know, this is a president who's always talked about what government can do for you. He wants to embark on immigration reform, which means securing the borders, and who has to secure the borders? Government.

BROWNSTEIN: Universal pre-K. BORGER: Will people trust government to secure the borders and by the way, will they trust the president? Because his own trustworthiness is now upside down. It's dropped 10 points since October. So it's a problem --

SCIUTTO: And below that crucial 40 percent approval rating, which was dropped -- President Bush dropped below that, George W. Bush, post- Katrina.

BROWNSTEIN: Approval rating among white voters it is down consistently around 30 percent, you know, with enormous skepticism. Look, from the beginning, they have had enormous difficulty convincing particularly the white middle class that this program will benefit them and their family. In the Virginia election, the exit poll, three quarters --

BORGER: That's why he said --


BORGER: -- if you have a health care plan you like, you can keep it.


BORGER: For those voters.


So, they started with skepticism and rather than dissolving or resolving it, they are compounding it. Still have time to make it work but you never get a second chance to make a first impression.

SCIUTTO: Ron, I know you have written in effect that for those white middle class voters this is kind of like food stamps. They view it as something that doesn't affect them.

BROWNSTEIN: That has been the core problem they've had. Many voters --

BORGER: But it might affect them because their premiums might end up going up. In the end if all of this is a complete failure --

SCIUTTO: And just in meantime he's made the point before the 2014 elections, it's going to happen 2015.


SCIUTTO: Is this Obama's Katrina moment? You talk about trustworthiness --

BORGER: Competency.

SCIUTTO: Competency.

BORGER: Competency, credibility, all of that. You want to compare it to what President Bush faced except, you know, this president had -- they have had years to plan for this. This isn't, you know, this isn't a disaster that just --

BROWNSTEIN: Potentially, I agree. Look, here's something that's really revealing. There were 36 House Democrats today who voted in districts from which Obama won 55 percent or less, 28 of those 36 voted for the Upton plan. There were 156 districts where he won 55 percent or above. Only 11 of them voted.

These are the vulnerable Democrats beginning to distance themselves, voting for something they probably knew would never happen. I'm not sure all of them would have voted for it if they thought it could.

BORGER: That doesn't take into account the senators who are worried about this who are up for re-election.

You know, generally, second term presidents don't do well, they generally lose seats in the midterm election of their second presidency. They were thinking after the shutdown, you know what, we might actually gain seats because they were riding so high. Now they have totally flipped on that.

SCIUTTO: We were talking about the GOP, we were ready to --

BROWNSTEIN: Not that they're doing so great either. It's a race to the bottom.


BORGER: They canceled each other out.

SCIUTTO: Fantastic. Ron Brownstein, Gloria Borger, as always, sassing it out.

Next, I will talk to the Republican lawmaker whose fix for Obamacare drew support from some Democrats in the House today.

Also, Toronto's town council takes action against the city's crack- smoking mayor. Now, even his brother is asking him to take a leave.

And a special 5-year-old super hero is called in to save the day at San Francisco becomes Gotham City to help make his wish come true.


SCIUTTO: The president's proposed fix to Obamacare is not only controversial, it is costly, too. Mr. Obama's asking insurance companies to temporarily reinstate policies that were canceled because they did not meet the stricter requirements of the Affordable Care Act. But that could come with a huge price tag.

CNN's Joe Johns is looking into it for us.

Joe, how much is it going to cost us?

JOE JOHNS, CNN CORRESPONDENT: Well, Jim, $11 billion is the number to watch. That's the amount of money the government says it expects to pay out in 2014 to essentially underwrite insurance companies that are losing money because of the high cost customers, including the old and the sick. In order to pay for that, the government is going to balance that out and said it would take in $12 billion next year from fees to insurance companies that were making good money by writing policies to low risk consumers, including the young and the healthy.

The question is whether the president's new fix is going to upset the apple cart, Jim.

SCIUTTO: So to understand the math here, why would that happen, why would those numbers change by delaying those cancellation notices?

JOHNS: You know, it's actually pretty simple. If lower cost consumers, for example, younger people with fewer insurance bills, decide they're going to stay with their old plans next year, but consumers with higher medical bills decide to go with Obamacare, the government could end up paying out more than it expected according to the American Academy of Actuaries, which sent out a warning letter about this just yesterday.

The White House and press secretary says it's really no big deal. Listen.


JAY CARNEY, WHITE HOUSE PRESS SECRETARY: The reports in the press vary widely. I think that -- I think it's important to note that when you look at the number of people who would, for example, get benefits in the marketplaces, tax credits and the like, is 17 million and I think the largest number I have seen in terms of cancellation letters is 3.5 million and I don't even know if that's accurate.


SCIUTTO: So, Joe, let's say Carney is wrong there. Just how much money are we talking about?

JOHNS: That is the billion dollar question. So far, no one we've talked to can tell us that number.

But the American Academy of Actuaries has warned that the president's plan to give states the ability to reverse health insurance cancellations could increase cost to the government. How much? They won't say.

The problem is, it's just hard to project who's going to get into Obamacare and who's going to stay out if they're allowed to keep their plans for another year, Jim.

SCIUTTO: Absolutely. That's a big problem because Obamacare sold in part by saying it's going to save money in the deficit. Thanks very much to our Joe Johns.

House Democrats are taking cover from expected fallout from the problems plaguing Obamacare. More than three dozen voted with Republicans to approve a bill that would allow insurance companies to continue offering policies that fall short of Obamacare standards. Republican congressman, Fred Upton, of Michigan wrote it and joins us now live from Capitol Hill. Congressman Upton, thanks very much for joining us. Your bill passed in the House, but it would be dead on arrival in the Senate, and the White House will veto it. Explain to us how this will be different from your failed attempts in the past to actually repeal the entire Affordable Care Act.

REP. FRED UPTON, (R) MICHIGAN: Well, Jim, let's see what happens. You've got to remember that we passed this by more than 100 votes this afternoon. The other thing is that earlier in the week, we had at least by everyone's estimate, at least 100 Democrats that I think were willing to vote with our bill. So, we would have over 300 votes for this and that's finally prompted the White House than yesterday afternoon to announce this administrative change that they're trying to do.

But until then, they were willing, ready and willing to let literally millions of folks who were going to lose their individual policies, more than a quarter of a million in my state, almost a quarter of a million in my state of Michigan, to go over the edge, to go over the side, disregard the promise that the president said you can keep your health care if you like it, period. Don't have to do anything if you like it.

They knew, in fact, it was different for years, and yet, until they saw that we were going to have some 300 votes a couple of days ago, they were just going to sit on their hands. So, we've raised the specter of debate, that's for sure. I don't know what the Senate's going to do, whether they pass any legislation or not.

We don't know what the White House, that's just down this way which is why I went that way -- I don't know what they're going to do with this administrative fix that they're trying to impose, but what do you tell the millions of folks who, all of a sudden, they've lost their policy, the premium's going up by maybe 300, 400 percent. The deductibles are going up in the thousands of dollars.

Yesterday, we had almost 100 House members just read letters on the House floor from the mail that they got from their insurance companies canceling their policy. It's not right.

SCIUTTO: But let's get to the core issue here, because in the past, your position has been you want the entire act to disappear. You voted against it. You've, in fact, sponsored legislation to do exactly that. Now, you brought new legislation which modifies it but keeps it alive. Are you saying now that you're in favor of Obamacare as long as it has changed in this way?

UPTON: No. We'd like to repeal it. There's not a Republican out there that wouldn't like to repeal it. We'd like to see that happen. But we also know that, you know, as we came back from our districts last week, grocery store, veterans events, service clubs, someone was at every one with a letter, a cancellation letter wondering what the heck they were going to do.

And so, that's what our legislation, it allows it to -- if you had an insurance policy, individual policy at the beginning of the year that qualifies you, you can keep it, like the president said. You're not going to have to pay a penalty like the president, I guess, is still going to impose that on folks at some point here early in the year, and at the end of the day, we are bipartisan, but we have lots of issues to look at.

Look at this rollout, the website still having enormous problems. We're going to have a hearing next week in our committee relating to the security of the information that the individuals themselves actually put into that website. Their Social Security, their income levels, all of that. There's no reason for us yet to be convinced that, in fact, it's secure. What are the providers going to do?

I met with some of mine back in Michigan last week. They don't know how they're going to -- when people show up in January for services, doctors, physicians, hospitals, are those people really covered? How are they going to get paid? This is a mess. The administration told us from day one, they looked us in the eye, they said, hey, we're going to be ready. Not the case.

SCIUTTO: Congressman, to get at your actual goal here, you say that the majority of Republicans, yourself included, want to have this repealed. You know that Nancy Pelosi, the minority leader, has said that this is a Trojan horse in effect. Are your intentions here to torpedo this bill, to make it unworkable, in effect?

UPTON: Look, we're waiting to see how the administration is going to do this. They told us it was going to work. It hasn't. They told the American public they'd be able to keep their plans. We know that for millions of folks, that's not the case. We're trying to remedy some of these situations and not leave our constituents high and dry with nothing to show for it.

SCIUTTO: One question we've been asking. You're from the great state of Michigan. Are you going to take the subsidy? The workplace contribution from the federal government or not to demonstrate your opposition to this going forward?

UPTON: Well, as you know, members of Congress are included in the Obamacare president's health care bill, so we will lose our federal employee health care benefits. It puts us into the D.C. exchange. I've not yet explored what those options are. My personal staff will be in that as well.

I also know that there's a court decision that will be probably out perhaps in the next couple weeks relative to whether or not there can, in fact, be a subsidy for any of the workers that are in the state exchanges. We'll see. I don't know.

SCIUTTO: Thanks very much, Congressman Upton, sponsored a bill today, got 39 Democratic votes.

UPTON: And won by more than 100. That's the key.

SCIUTTO: Well, we appreciate having you on today. Coming up, a deal on Iran's nuclear program said to be getting close. We will talk about what it entails with Congressman Adam Schiff, a member of the House Intelligence Committee.

Also, new developments in the bizarre case of Toronto's mayor. There's fresh fallout from his admission that he smoked crack.

Plus, the feel-good story of the week. You'll be amazed at what thousands of people did to help make this cancer patient's batman wish come true. Amazing story.


SCIUTTO: CNN has learned that the U.S. and the west are getting close to a deal with Iran on its nuclear program. Senior administration official tells me the agreement would keep Iran's nuclear technology from advancing and even roll it back in some key areas. We now have Democratic congressman, Adam Schiff of California, to talk about it. He sits on the House Intelligence Committee.

We've been here before, even in the last couple of weeks, thought we were close. How close do you think we are now? I get the sense from administration officials that they feel they're very near to making a deal.

REP. ADAM SCHIFF, (D) INTELLIGENCE COMMITTEE: Jim, I think we're probably very close, but as you said, we were very close a week ago and anything can cause this to fall apart. We can have differences with our allies about it. It could be that Rouhani brings the proposed deal back to the mullahs and gets turned down. So, very precarious, but we've never been this close in more than a decade, so there is some cause for optimism.

SCIUTTO: Well, you make a good point. The Iranians have to go back to Tehran and they have their own opposition there, hardliners, who are very skeptical, as does the president here. He has his opposition, some of whom are in the Democratic Party. Senator Menendez, for instance, expressing concern about giving too much too soon. What do you say to those skeptics about a deal, about the outlines of the deal as we know it now?

SCHIFF: Well, look, I think we have to go into these negotiations very skeptical. Iran has proved to be hiding its nuclear program for years. They've got a lot of reasons for us to be distrustful. At the same time, I don't think we want to do something that jeopardizes the chance to get to a good deal. We may not get there, but I don't think we should embark on another round of sanctions during the negotiations that might cause Iranians to walk away.

We need the support of the international community to enforce sanctions. If they see us imposing unacceptable obstacles to a diplomatic course, it's going to be a huge problem for us. So, will they come through, I don't know. I don't think we can look in Rouhani's eyes and see whether he's telling the truth, let alone see his soul. But I do think we ought to give administration a chance to see if they can get to a good deal. SCIUTTO: I think it's fair to say that there are some people who don't want to see any deal at all. The argument the administration will make to them is that if you don't negotiate, the only option you're left with is going to war. Is it safe to say that the true skeptics, that's the only option that they're leaving open here, a military attack on Iran's nuclear facility?

SCHIFF: Well, you know, I think those that are opposed to the present state of negotiations are probably in two camps. The one camp that says doesn't look like they're getting close to a good deal so we got to walk away and if we can push sanctions and help them walk away, all the better. The other that won't trust any kind of negotiated resolution, they just don't believe the Iranians will follow through.

They think it's yet another delay tactic and that it's delaying the inevitable use of military force. I think it's imperative that we try to see if we can get to a deal. It has to be tough and verifiable and a short-term deal if we reverse any sanctions or provide any relief has got to be something we can turn on again very quickly.

But if ultimately it comes to the use of military force, we don't want there to be any doubt in the world that we made every effort to get a diplomatic resolution.

SCIUTTO: It seems to me one of the real problems here, this is a difficult deal to make at any time. Now the administration attempting to do it when it has real hard opposition from allies it needs, its closest allies in the region, you heard from Benjamin Netanyahu in Israel, you heard from the Saudis. You need these people on board, don't you, to make this successful going forward?

SCHIFF: Well, you know, we do need their support. We may or may not get it. It's going to be awfully difficult to get with their active opposition. At the same time, I think we have to make the case with our friends and foes alike that the military path, if that's the only option we leave, has its own huge set of problems. It's not as if the military path inevitably leads to a conclusion where Iran has no nuclear program.

It may, in fact, mean they throw all caution to the wind and accelerate their nuclear efforts. So, there is no good option here short of a negotiated one, and that may be possible, it may not be, but I think we ought to test the Iranians.

SCIUTTO: We're going to find out very quickly this week. They start meeting on Wednesday this week in Geneva. Again, thanks very much, Congressman Adam Schiff talking about these very important negotiations.

When we come back, growing concern about the next Osama Bin Laden. One lawmaker warns al Qaeda is a worse threat today than before 9/11.

Also, the leader of the fourth largest city in North America is stripped of his power. Details of new fallout for Toronto's crack- smoking mayor. Plus, Batkid puts the riddler behind bars. It's a dream come true for a young cancer patient. We will show you how thousands of volunteers made it happen.


SCIUTTO: To Toronto now. An unprecedented move in the city council to strip embattled Mayor Rob Ford of key responsibilities in the aftermath of his admission to having smoked crack cocaine and what has been a bizarre week of tawdry allegations and vulgar language.

CNN's senior international correspondent Nic Robertson is in Toronto and joins us now with the latest information -- Nic.

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, Jim, on Wednesday, we saw the city council here try to vote the mayor out of office. The vote went successfully against him but he refused to step down. Now they're trying to do by other means what they couldn't achieve Wednesday. What they're trying to do now is cut his power.


UNIDENTIFIED FEMALE: The motion introduced the bills carries 41-2.

ROBERTSON (voice-over): This is the sound of Toronto City Council pulling power from embattled Mayor Rob Ford. His reaction? I'll take you to court.

MAYOR ROB FORD, TORONTO: This will cost taxpayers thousands of dollars.

ROBERTSON: Only he and his brother, Councilor Doug Ford, voting against the motion to cut his authority.

(On camera): 41-2, how does that feel?

JOE MIHVIC, TORONTO CITY COUNCILOR: Well, it -- at one level of course it feels good that the motions went through. However, this is a sad day for the city of Toronto when council united left, right, center, uptown, downtown, had to do what it had to do.

ROBERTSON (voice-over): Yet in his own unique and contradictory way, a seemingly ever so slightly humbled Mayor Ford appeared to sympathize.

FORD: I would have done the same thing if I would had a mayor acting the way I have conducted myself. I would have done the exact same thing. I'm not mad at anybody. I take full responsibility.

ROBERTSON: Even so, he will keep fighting. Next week, more powers to be cut until --

(On camera): What's he going to do? What's it going to look like?

MIHVIC: Well, he's -- the mayor will still have the right to vote on issues but he will be one vote, one voice. ROBERTSON (voice-over): And that voice, part of the city's problem. Nice on Friday following profanities Thursday, reacting to allegations of sexual misconduct with staff.

FORD: Olivia Gondek says that I wanted to eat her (EXPLETIVE DELETED). I have never said that in my life to her. I would never do that. I'm happily married.

ROBERTSON: And if anyone thought curbing his power would cut his tongue, not so. Monday, he starts his own TV show, "Ford Nation." Questioned then, if politicians can't reel him in, can his family, as we've heard his brother say, perhaps he should step back.

ANDREW COYLE, COLUMNIST, NATIONAL MEDIA: It's clear he has a very complicated relationship with his brother. But probably not unusual. But he I think both looks up to his brother, has been in his shadow. The brother is much more bullying, much more aggressive, much more inclined to fight it out.

ROBERTSON: And Fight is what the Ford family is doing. For how long is what everyone's asking.


ROBERTSON: And the perception here is that the mayor's family does have deep pockets so the fight could go quite awhile -- Jim.

SCIUTTO: Nic, I have to ask you, how did he respond to being stripped of all his powers? Does it sound like he's going to stick it out?

ROBERTSON: He's going to stick it out. He doesn't think that he's really being stripped of any powers. He thinks that there's -- sort of essentially what they're doing is shuffling money from one place to another, but he can continue. Perhaps he'll now have to work if there's a state of emergency, work more closely with the deputy mayor, but his role the way he sees it, nothing so much in his view so far has changed. And that's what the council is up against here. He just doesn't seem to get what so many other people seem to get here -- Jim.

SCIUTTO: Well, it makes Washington seem practically civil. Thanks very much to Nic Robertson.

When we come back, we are learning more about the man who fell from a small engine plane as police expand the effort to try to find him.

Plus, a 5-year-old Batman rescues a damsel in distress and just got a special shout-out from President Obama.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Way to go, Miles. Way to save to Gotham.


(COMMERCIAL BREAK) SCIUTTO: A reinvented al Qaeda and a man some call the new bin Laden. One lawmaker says they are posing the biggest terror threat to the U.S. homeland in more than a decade.

CNN's Brian Todd is working the story for us today.

Brian, what are you finding out? How concerned should we be?

BRIAN TODD, CNN NATIONAL CORRESPONDENT: I think pretty concerned, Jim. I spoke with U.S. officials and to the chairman of the House Intelligence Committee today. He has got a really chilling warning.

Mike Rogers says al Qaeda poses a bigger threat to attack inside the U.S. right now than it did before 9/11 and it's the smaller scale attacks he says that are the real danger.


TODD (voice-over): They have become the new faces of terrorism against America. Umar Farouk Abdulmutallab, the failed airline underwear bomber. Nidal Hasan, the Fort Hood shooter. Guided in ideology by al Qaeda, now a jarring assessment of the threat from al Qaeda to launch an attack inside the U.S. from House Intelligence Committee chair Mike Rogers.