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Senate Passes Bipartisan Budget; Panel: Don't Stop NSA Surveillance, Change It; White House Hits Russia with Olympic Snub; Interview with Rand Paul

Aired December 18, 2013 - 17:00   ET


WOLF BLITZER, CNN ANCHOR: Happening now, breaking news, budget vote. The bipartisan spending bill, the first to pass a divided Congress in almost three decades, I'll talk about that with Republican Senator Rand Paul. Why is he against it? NSA review, independent report on the controversial surveillance programs leaked by Edward Snowden has just been released. Does it vindicate him?

An Olympic surprise, the White House sends a message to Russia with who it will send and won't send to the Winter Games. Is President Obama snubbing Vladimir Putin? I'm Wolf Blitzer. You're in THE SITUATION ROOM.

We're following the breaking news up on Capitol Hill, where the Senate has just approved the bipartisan compromise budget that had earlier been approved by the House of Representatives. It funds the government through next year's Congressional elections, averting the chance of another government shutdown.

Our chief Congressional correspondent, Dana Bash, is here -- Dana, a pretty impressive vote if you support this compromise.

DANA BASH, CNN CORRESPONDENT: That's right, 64-36. So it passed with some cushion, to say the least. There's certainly a lot of kumbaya over getting this budget done for the first time in years. But there's also bipartisan agreement that one of the most controversial cuts that made this possible is going to have to be changed.


BASH (voice-over): Responding to outrage about cuts in military pensions, even senators voting "yes" on the budget demanded benefits be restored.

UNIDENTIFIED MALE: I believe this mistake must be corrected.

SEN. JOHNNY ISAKSON (D), GEORGIA: These heroes laid their lives on the line for us and they deserve us to work to fix this provision so that they can receive the full benefits that they've earned.

BASH: To salvage her bipartisan deal, Democratic Budget Chair Patty Murray promised to push new legislation to make sure disabled veterans who lost limbs and worse fighting America's wars won't lose their retirement benefits, even vowing to revisit the whole $6.2 billion cut for military retirees.

SEN. PATTY MURRAY (D), WASHINGTON: This action -- military action actually doesn't take effect for two years. So we welcome anybody coming with a better way to do it that want to offer it and get it through a divided Congress.

BASH: At issue, a 1 percent drop in the cost of living adjustment for service members who retire after 20 years, generally people in their 40s. The cut would be restored at age 62.

In real terms, a retiring Army sergeant first class would lose $3,700 each year. Over 20 years, that could add up to $80,000 in lost benefits -- a cut infuriating vets across the country, like in this online petition from Iraq and Afghanistan veterans. "Who amongst the politicians have given as much in the same conditions as I have?," writes one vet. "Our service should be respected more than this," said another.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: Of all the people we could have picked on to screw, how could we arrive here?

How could we have done this?


BASH: Now, his very good friend, best friend in the Senate, and very influential veteran, John McCain, disagrees with him. He spent a lot of time on the Senate floor making the point that you need to have reforms, Wolf. He said, for example, that this costs the federal government, these benefits, $56 billion last year. It skyrocketed like 49 percent over 10 years. The point he was trying to make is that he believes it's intellectually dishonest to say there shouldn't be cuts here, at least what he calls minor cuts, because you need to do this in order to reform the system, to reform the budget in general.

He also made the point that if this didn't happen, if people stopped this because of the military retiree issue, then the whole budget deal would have unraveled and we would have had another threat of a government shutdown.

BLITZER: But there will be a major effort in the coming...

BASH: Yes.

BLITZER: -- weeks and months to reinstate that cut.

BASH: Not only a major effort, it's pretty clear, given the fact that you had bipartisan statements on the floor of the Senate today effectively vowing to do so that is going to happen in some way. They just have to find that $6 billion somewhere else in order to make this deal happen.

BLITZER: It's a big budget. It's a $4 trillion budget.

BASH: It is. BLITZER: They can find it some place.

All right, thanks very much, Dana, for that.

We're also following another breaking news story. A federal judge says it's probably unconstitutional, but an independent panel says the NSA should continue its controversial collection of those bulk phone call data reports. That's the conclusion of a 300 page report that has just been released by the White House.

It also makes dozens of recommendations for changing the way the government spies on communications in search of terrorists.

Our chief national security correspondent, Jim Sciutto, is here. He's got the details.

What are the headlines coming out of these recommendations?

JIM SCIUTTO, CNN CORRESPONDENT: Well, I'd say the headline word from this report is accountability, accountability to the public, to the White House, to Congress and to the courts. And one demonstration of that -- and here are the recommendations here, 46 of them -- is that there is no classified version of this report. It's only declassified, available to the public. Everybody can see what they're recommending.

But what's also key is that they're not recommending to get rid of this so-called Section 215 phone meta data collection. This is the thing that has been controversial, gathering all those phone numbers and phone calls of Americans. That, they recommend, stay in place.

As one of the officials on this committee said to me, he said, quote, "We are not in any way recommending disarming the intelligence community." And he went on to say that the terror threat remains.

So they're really talking about making this program more accountable.

So let's get to some of those specific recommendations among the 46 here.

One of the most significant ones is that they move the data to private phone companies. So the NSA is not holding onto all these phone numbers and accessing it when they want to, but it stays with private phone companies.

Second, that there's greater court oversight any time the NSA decides to search it, so that when they want to pick out a phone number of someone they suspect, they've got to have some court backing for it.

They're are also recommending that the next director of the NSA be a civilian. You know, traditionally, it's been a general, a member of the military. They would say that this would be an example of greater civilian oversight. And they also say that the NSA should restate its mission, as it should be, which is purely to be going after foreign collection, not to be doing collection domestically, but to say our mission is solely on foreign collection on foreign targets.

BLITZER: So what else did they say about spying overseas, outside of the United States?

SCIUTTO: This is another thing that's interesting about the report, because they make it clear that they have two priorities here. One is for Americans, but also for foreigners. They -- I spoke to a senior administration official earlier today who said we know that we have a trust gap, not just with Americans, but with foreigners.

So here's what they're saying on foreigners. One, the White House, it has to be approved at the highest levels, the president, if you're going to be spying on foreign leaders. Remember, we talked about how angry Angela Merkel was, for instance, when her phone calls were tapped.

Two, they recommend that the U.S. come to an agreement with its allies, such as France and Germany, as to what's acceptable and what's not, saying, we're friends, you know, it's OK to spy on this, it's not OK to spy on that, because as we've said before, everybody does a little bit of spying on each other.

But they also say that they have to make it clear to the foreign public, not just to governments, that when the NSA is spying, it's doing this for national security. It's not doing this to gain secrets on businesses. It's not doing it because it can. It's doing it because the U.S. has a national security interest. So it's very sweeping. And it shows that the White House is aware of the trouble that they have not just domestically, but overseas, in terms of credibility.

BLITZER: Let's bring in Ryan Lizza, because you've been doing a lot of reporting lately on the NSA, these recommendations.


BLITZER: Ryan is the Washington correspondent for "The New Yorker," a CNN contributor.

The president now has to either accept or reject these kinds of recommendations. He's going to do that fairly soon.

LIZZA: Yes. Apparently, he's going to do it next month. They've rushed out the report. They were going to delay it until next month, but it's obviously out now, perhaps because of this federal court decision.

I think the big headline here is that the NSA's collection of meta data may be over, right?

We don't know who's going to collect it. We don't know where this database is going to be stored in the future.

But between a federal judge saying this week that the program is probably unconstitutional and Obama's own advisers, who, let's be honest, are most mostly from the intelligence establishment here, this group saying the NSA should not collect this data anymore, it's -- this is a big deal. This -- this may mean that the NSA won't be doing this anymore.

Now, the question is, how will the program and -- if it operates at all, how will it operate in the future?

This panel says it should be in some kind of private entity. I think members of Congress will have a lot to say about that. I think the reformers up there, like Wyden and Sensenbrenner will have some very specific questions about if you're going to put this database in the private sector, what are the controls on it?

But it's a big blow to the NSA that they are no longer -- both a federal judge and a White House panel are saying we don't trust the NSA to collect this data anymore, because the privacy implications are too important.

BLITZER: I know you've gone through this report.

What does it say about Edward Snowden?

Because we wouldn't be having this discussion, frankly, right now, if it had not been for the leaks that he -- that he committed earlier in the year.

SCIUTTO: That's a good point, but this is forward-looking recommendation. These are about what the NSA should do going forward, not looking back in terms of what Edward Snowden did.

But to your point about the administration, because what's interesting is the administration has already pushed back, in fact, rejected some of the recommendations in this report. One thing they've -- they've recommended is to split the NSA, the command of the NSA, from the military cyber command. Today, Keith Alexander, the director of the NSA, oversees both. They recommend splitting that. The White House has already said they're not going to do that.


SCIUTTO: But it is interesting when you talk about the push back. You had the court decision this week.

If you look at the members of this panel, they're not wilting flowers. Richard Clarke, you know, he -- he was in the White House pre- 9/11. He knows the seriousness of the threat.


SCIUTTO: But he's looked at this and said some of this is not necessary.

LIZZA: (INAUDIBLE) you know the first recommendation there on 215, that's the section of The Patriot Act that justifies this full collection, they're really tightening the language there, going back to a language that Obama actually proposed as a Senate candidate. And one thing on Snowden, whatever you think of Snowden, let's be honest, we would not have this report and we would not be having this debate right now absent Edward Snowden's disclosures.

BLITZER: All right, Ryan, you're going to be joining us later, as well.

Jim, thanks very much.

Important news also, the White House makes a statement about Russia's anti-gay laws with a passive-aggressive Olympic delegation. Who's going says as much as who's not.

And can she help save his floundering health care law?

The White House calls on one of its biggest guns to promote ObamaCare.


BLITZER: Another snub in the growing rift between the United States and Russia. The White House is taking a clear shot at the host country of the upcoming Winter Olympic Games with a delegation that's meant to send a message.

Our foreign affairs reporter, Elise Labott, is here in THE SITUATION ROOM to explain what is going on.

What is going on?

ELISE LABOTT, CNN CORRESPONDENT: Well, Wolf, the U.S. isn't exactly boycotting the Sochi Olympics because of Russia's violation of human rights and its treatment of gays and lesbians. But President Obama is making his protests loud and clear.


LABOTT (voice-over): The White House left no question its delegation to the Olympic Games in Sochi was a jab at Russia's anti- gay laws.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: We, as I said earlier, have made no bones about the fact that we strongly oppose and are offended by the anti-LGBT legislation in Russia.

LABOTT: To drive home that message, the president will not attend the Games, instead, sending openly gay athletes to represent the U.S. -- tennis legend "Billie Jean" King and two time hockey Olympian Caitlin Cahow.

CARNEY: This legislation represents the diversity that is the United States.

LABOTT: And there will be no cabinet secretaries. Janet Napolitano, former Homeland Security secretary, will attend the opening ceremony, and William Burns, a deputy secretary of State, the closing.

It's the first time in more than a decade an American president, vice president or first lady has not attended an Olympic ceremony. Last year, Michelle Obama led the U.S. delegation to the London Games and Vice President Joe Biden traveled to the Winter Games in Vancouver. President George W. Bush attended the Beijing Olympics in 2008.

President Obama has not shied away from slamming Russia's treatment of gays and lesbians. In Russia earlier this year, he didn't meet privately with President Putin, but he did meet with gay activists.

But he was more direct on "The Tonight Show" in August.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If Russia wants to uphold the Olympic spirit then every judge should be made on the track or in the swimming pool or balance beam and people's sexual orientation should not have anything to do with it.

ELSIE LABOTT, CNN FOREIGN AFFAIRS REPORTER: This now comes amid growing rift between the U.S. and Russia over a host of issues, among them NSA leaker Edward Snowden, who now has asylum in Moscow, and Putin support for Syrian president Bashar Al Assad.

FIONA HILL, FOREIGN POLICY EXPERT, BROOKINGS INSTITUTION: The message that it is sending is that Russia has to pay attention to what it does it harm, the effect that that it will have its international standing on Russia's prestige.


LABOTT: Wolf, President Obama is not alone in sitting out the Sochi games. French president Hollande will not be attending, German president and the European commissioner of the European Union, all part of a growing list of world leaders that are sitting out.

BLITZER: Yes. They are sending in effect a powerful message to the Russian leadership.

All right, Elise. Thanks very much.

She's one of the biggest guns the White House has, and now the first lady Michelle Obama is using her star power to help persuade people to sign up for the affordable care act. The deadline is next Monday in order to have coverage starting January 1st.

CNN's Athena Jones is over at the White House with more on the first lady's Obamacare push.

Athena, what's going on with Michelle Obama?

ATHENA JONES, CNN CORRESPONDENT: Hi, Wolf. Well, Michelle Obama was called the closer during the 2008 campaign because of her ability to win over voters. The question now is whether she will be as effective in selling the health care law.


B. OBAMA: Well, Michelle --

JONES (voice-over): President today calling in his not so secret weapon, the first lady, to try to sell his signature law to a skeptical public.

MICHELLE OBAMA, FIRST LADY OF THE UNITED STATES: The words that come to mind for me are peace of mind.

JONES: Michelle Obama rarely seen publicly in the oval office today sitting beside the president in the seat often reserved for world leaders, telling a group of mothers selected by the White House how they can help get more young healthy people to sign up for health insurance. Without them, experts say, the health care exchanges could implode.

M. OBAMA: Educate yourselves. Get that education. Make the choice that's best for your family.

JONES: Asked about her involvement, the first lady answered simply.

M. OBAMA: Because I'm a mom.

JONES: And she's taking her message directly to African- Americans nationwide, recording a series of interviews with popular black talk radio hosts, telling the Yolanda Adams morning show.

M. OBAMA: Health is a powerful connector that we all have and we all share regardless of where we come, from our political backgrounds, our neighborhoods, our communities, our religious beliefs. We are tied together by our health.

JONES: As the December 23rd deadline to enroll in insurance coverage that starts next month closes in, the White House is pulling out all the stops.

UNIDENTIFIED MALE: We have something really important to talk to you about.

JONES: Even blasting out this humorous commercial via social media to reach young people.

UNIDENTIFIED MALE: So what's so important?

UNIDENTIFIED FEMALE: Your dad and I are moving in with you.

UNIDENTIFIED MALE: Roomies. Your mother and I have joined a circus.

UNIDENTIFIED MALE: What did you want to talk to me about? UNIDENTIFIED FEMALE: We know you don't have health insurance.

UNIDENTIFIED MALE: We love you no matter what, but it's time to get covered.

JONES: Today, even the White House admitted it was willing to capitalize on the first lady's popularity which is significantly higher than her husband's because --

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: She's just a great messenger.

JONES: All part of an attempt to help save his legacy.


JONES: Now the first lady encouraged the mothers in the room to share their health care stories and also to make talking about health care around the table a, quote, "Christmas treat."

And one more thing, Wolf, the White House found itself playing cleanup today. John Podesta, the newly named adviser to the president had to apologize for comments he made in an interview earlier this year comparing the Republican Party to the Jonestown cult that murdered a congressman and then committed suicide in the 1970s -- Wolf.

BLITZER: And he later apologized. He came out with a tweet suggesting he made a mistake with that original comment.

JONES: That's right.

BLITZER: All right, Athena, thanks very much.

Let's get to some other stories we're following in the SITUATION ROOM right now.

The stock market closed at record highs today with the Dow adding almost 300 points. The jump was in reaction to the Federal Reserve's announcement to cut its economic stimulus program gradually starting in January. The federal will buy $75 billion in bonds each month. That's a drop of $10 billion as the agency cuts back its bond-buying program. The fed says interest rates will stay exceptionally low for the time being.

A Harvard University student accused of making bomb threats is being released on bond. 20-year-old Eldo Pinma has waived his right to a probable cause hearing and he is in the custody of his sister and uncle. He was charged in the hoax that shut down the Ivy League campus in the middle of final exams, I should say. He confessed Monday evening telling the FBI and Harvard campus police he wanted to avoid a final exam. If convicted, he could face five years in prison sentence and a $250,000 fine.

A wildfire is tearing across California engulfing more than 750 acres and destroying 22 buildings. Only 22 percent of the blaze is under control. In Big Sur, several neighborhoods have been evacuated, the roads closed. Almost all of California in the (INAUDIBLE) extreme drought right now at a time of the year when it usually has some of its heaviest rainfall.

And we do have a winner. Georgia lottery has announced Ira Curry of Stone Mountain, Georgia, is the holder of one of the two mega millions jackpot winning tickets. Curry quietly came forward to collect her cash prize, a whopping $129 million after taxes, calling it unreal. Curry's number a mix of family birthdays and lucky number seven. Lottery officials are waiting for the second winner in San Jose, California.

Coming up, we're following the breaking news on Capitol Hill, the Senate vote of the bipartisan budget deal and the outrage over cuts to Veterans benefits.

And we're going to talk about it with Republican Senator Rand Paul. Why does he call the spending plan shameful?


SEN. RAND PAUL (R), KENTUCKY: Describe sort of pastorally where we are.



BLITZER: We're following the breaking news up on Capitol Hill. The Senate has just passed the compromised budget plan approved earlier by the House of Representatives. The vote in the Senate, 64- 36.

Republican Senator Rand Paul of Kentucky was among those voting against it.

Senator, thanks very much for joining us.

PAUL: Good to be with you, Wolf.

BLITZER: Let's talk a little bit about your vote. Would you have rather seen another government shutdown, the last one 16 days and cost the U.S. economy, what, about $24 billion?

PAUL: Yes, no, I wasn't in favor of a shutdown, and I think that's sort of a false choice. You're setting it up as if that was only choice. Really, what we've been doing in the past is passing a continuing spending resolution which doesn't mean shutdowns, but current law is actually better than what the deal is. The current law included some budget caps from 2011, and now we've abandoned those caps, so I think this is really a step backwards for the country, and really we've allowed us to say, you know what, we don't care so much about the debt. And I think that's a big mistake.

BLITZER: But isn't it good that for at least two years now no one will have to wore about another government shutdowns, all the uncertainty, the pain and the cost that those shutdowns incur?

PAUL: A shutdown is not good but I'm worried about the future of the country. I'm worried about a $17 trillion debt and I'm worried about the fact that we're borrowing a million dollars every minute. So, really, there's concern about shutdown, but there's also concern about the long-term fiscal stability of the country, and I think we've got so much debt that it was a mistake for us to give up on the budget caps.

BLITZER: Will you vote to reinstate those benefits for military veterans that would reduce in this plan approved by the Senate today, earlier by the house and that's about to be signed into law by the president?

PAUL: Given a chance, yes. But, see, that's the problem with the Senate right now. The Democrats don't allow any amendments, so we end up passing bad legislation which they make mistakes that they say are mistakes. But this could easily be fix if we have a more open process.

So, right now, there's not much collegiality going on. It is a poisonous atmosphere where the majority is just shoving things down the throat of the minority, and because of it we can't fix legislation like this. So, disabled veterans will lose part of their pension. People who have sacrificed their limbs will lose part of their pension because Democrats are in a hurry to get their way, and they want their way or the highway. They don't want any amendments.

BLITZER: But there was collegiality and cooperation and compromise in the House of Representatives earlier and now in the Senate. Those were pretty lopsided votes.

PAUL: Yes, but compromise in the wrong direction, Wolf. What happened is Republicans said we want more money to spend on the military. Democrats said we want more money to spend on social welfare, so they compromised in the wrong direction. They compromised to add $60 billion in new spending, all of it borrowed, and even borrowing from disabled veterans.

The money that they are not going to pay to disabled veterans, they are not saving it or going towards the debt. They are immediately spending it on more weapons systems. So, no, it's a huge step backwards, and can you say that's compromise, but its compromise in the wrong direction. It's compromise towards accumulating more debt. It's a big mistake and a big step backwards for the country.

BLITZER: So John Boehner, the speaker and Paul Ryan, the chairman of the house budget committee, you believe they were totally wrong in supporting this deal.

PAUL: Absolutely. When we had the budget caps that we passed in 2011 which people called the sequester, S&P said that they were inadequate and they downgraded our debt. So, we've taken something that even in 2011 people thought wasn't enough, and we abandoned it.

So really, I think the number one threat to our national security and to our country is our debt, and by going through with this budget motion, everybody wants to be all giddy and joyful. It's a compromise. It's pragmatic. Yes, but it's a compromise going in the wrong direction. It's a compromise towards not really being serious about our debt.

BLITZER: The next big fight could be raising the nation's debt ceiling once again. The treasury department says that has to take place in February, maybe March at the latest.

Here's the question. What will it take for you, senator, to support an increase in the nation's debt ceiling once again?

PAUL: You know, I supported a proposition called cut, cap and balance two years ago which is, yes, I'll add more debt if you'll agree to balance your budget from here on out. If you're not going to reform the price, if there's not going to be any conditions and see the president has already said, hey, I'm not going to negotiate with a gun to my head, he won't negotiate with or without any leverage, or with or without any deadlines, my problem is I can't in good conscience vote to raise the debt ceiling without budgetary restraint.

BLITZER: But you realize, of course, Senator, and you're obviously a smart guy, the Republicans in the Senate is the minority, the president is in the White House. In order to reach these kinds of grand deals, if you will, you need to cooperate. You need to compromise. You can't just have 100 percent your way.

PAUL: Well, we are getting 100 percent the president's way. He got Obamacare with no Republican votes. He's getting the budget, you know, the spending. He's getting the debt ceiling. He's getting all of those basically his way or the highway so really there's not any compromise coming from the administration when the president says I will not compromise. I will not negotiate. It sounds to me not like our side is the problem. It sounds like their side is unwilling to negotiate.

BLITZER: Let's talk about the NSA surveillance programs. I don't know if you've had a chance to go through this report that was released today by -- these recommendations for curbing and reforming some of the NSA surveillance programs. If you have -- you want to give us your immediate reactions to these recommendations.

PAUL: You know, my reaction is that the judge the other day said that it was unconstitutional is exactly right. I think even the president's own team now is coming up with recommendations that acknowledge that the president has allowed this to get away from himself. He's allowed the NSA program to be intrusive, go against the bill of rights, go against the fourth amendment. And even his own team is now recommending that he needs to rein this in.

I don't think they go far enough in the sense that I think the fourth amendment should protect your personal information and that you do have a right to privacy, whether the papers are in your house or whether they are kept at your bank. I think you do have a right to privacy and we'll continue to fight this. BLITZER: Well, when you say fight this, are you ready to file, as there have been reports, and you're familiar with them, a class action lawsuit against the NSA to stop it?

PAUL: We have tens of thousands of people who have signed up for it. We're still exploring the legal aspect of whether we can file a class action suit. When you hear of class action suits, you hear of them mostly on liability. This would be a class action suit on a constitutional question, and it might be the first of its kind if we can file it.

The problem is the court sometimes say you have no standing, and the NSA will say, hey, prove we were spying on you, but we won't give you any information whether we were or weren't. So we're exploring it from all different ways.

I'm also exploring legislation that would give people an easier time standing in court and then if the phone company gets an order from a secret court, the FISA court, that they could appeal this into a public court or the Supreme Court.

There's a lot of venues that we're trying to reform. Bottom line I don't think the NSA should be spying on Americans. I think they should be spying on terrorists.

BLITZER: Do you believe Edward Snowden, and arguably we're having this discussion right now because of his leaks, do you believe he broke the law or was a whistleblower?

PAUL: You know, that's a real question. If he were here I think he would probably say he technically broke the law, but in favor of a higher law which is the constitution. Now we have a federal judge that's saying the information that he gave us was about an unconstitutional program.

I think there have to be rules about leaks. I don't think you can give away national security secrets. But at the same time, I'm very offend that the intelligence director lied to Congress which is perjury and punishable by time in jail, and the president has glibly gone on his way, has not asked for his resignation, has not said that he will try him in court for lying to Congress. I find that really -- that clapper is lying to Congress is probably more injurious to our intelligent capabilities than anything Snowden did because Clapper has damaged the credibility of the entire intelligence apparatus and I'm not sure what to believe anymore when they come to Congress.

BLITZER: Well, let me just press you on that, Senator. You believe Clapper is more of a potential criminal when it comes to national security secrets than Snowden who by all accounts took about 1.7 million classified documents?

PAUL: I think the law is the law and they both broke the law and that one shouldn't get off scot-free. And even Snowden, I think really broke the law and we can't have people revealing secrets. But at the same time, there is some question whether or not you can be a whistleblower in our society and whether you can release information that you think that the government is breaking the law, and that is the argument here, and now it's been upheld by a federal court saying that the government is breaking the law. And I do think what you're government is doing is unconstitutional. And I really think that in order to restore confidence in our intelligence community, I think James Clapper should resign.

BLITZER: So just to be precise. If it were up to you, you'd have the justice department file charges, criminal charges, against James Clapper?

PAUL: Otherwise you're just encouraging people to lie to us, and then we have no confidence now -- if the intelligence community says we're not spying on Americans, well, and they are, and then they say we're not collecting any data, it's hard to have confidence in them. Now, they are saying, we capture terrorists with this data. Are we to believe them or not to believe them?

If they are going to come to us and lie it really damages the credibility, and it's damaged our credibility worldwide, but really with the American people because we don't know what to believe. So, I don't know how you can have someone in charge over intelligence who has known to lie in a public forum to congress, to lie without repercussions. I really blame the president for not taking a better handle on things.

BLITZER: One final question before I let you go, Senator.

On these U.S. drone strikes, there's now a report that a drone strike in Yemen instead of killing al-Qaeda terrorists that was the suspected targets wound up killing, this is according to a government official in Yemen, killing a wedding convoy, including 14 civilians who had nothing to do with al-Qaeda. What's your position on these U.S. drone strikes?

PAUL: You know, I think you do have to worry about the unintended consequences. You remember the very articulate little girl, Malala or young woman now from Pakistan who was shot by the Taliban, when she had a chance to talk to the president, her first words you're not helping, you're hurting America's cause because when innocent people die in Pakistan, there is more hatred for America.

So, I think drones are useful for killing out enemy in battle. But a lot of the drone strikes are going towards people who are not currently involved in battle, and they are intermixed with their families and occasionally we're making mistakes. So, there's an upside and a downside. And I think right now the downside is creating such enmity in parts of Pakistan and other places around the world that they may be more deleterious than they are helpful.

BLITZER: Senator Paul, thanks very much for joining us.

PAUL: Thanks, Wolf.

BLITZER: Up next, we're going to talk about all of this with our political experts, Gloria Borger, Ryan Lizza and John King. They are all standing by. Plus, a diplomatic uproar after an Indian official in New York is arrested, threatening Thais with the key ally and now it could be threatening American Lives as well.


BLITZER: Let's get some more on the breaking news.

The Senate passing the bipartisan budget bill, 64-36, that earlier passed the House of Representatives. The first bipartisan bill to pass a divided Congress in almost three decades.

Let's discuss with our chief political analyst Gloria Borger and CNN political commentator Ryan Lizza and the Washington correspondent for the "New Yorker" and our chief national correspondent John King.

Let me start with you, John. What did you think of this vote. Similar lopsided vote in the Senate, percentage-wise, as occurred in the house.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: All the nos are coming from the Republicans. You just had an interesting conversation with Rand Paul. His senior senator Mitch McConnell, the leader of the Republicans, voting no here. In the old days, Wolf, the leader would have voted yes. Maybe given a speech listening all the reasons to complain about this, but saying it's the best deal we can get. We need to move on.

It tells you a lot about the current political environment. A lot of the no votes are either about 2014, Mitch McConnell has a tea party challenge, Lindsey Graham has a tea party challenge for 2016. Rand Paul, Marco Rubio and Ted Cruz are thinking about 1600 Pennsylvania avenue?

BLITZER: A little political part of this as well.


BLITZER: I know you agree, but you weren't surprised by all the yes among Republicans. There were a lot of Republicans who decided to vote from that, joined Boehner in the House, joined Paul Ryan in the House and vote in favor of what is clearly a compromise.

BORGER: Like John McCain, for example, and we really don't see him split from Lindsey Graham very much.


BORGER: They are usually joined at hip. In this case Lindsey Graham, as you're pointing out, faces a tough fight in his re- election. And McCain was from the let's just get something done caucus this time which is, look, I know that there are things in it that I didn't like. He said, you know, he didn't like the cost of living adjustment issue for military pensioners, but he said there's a larger purpose here which is we have to tell the -- let the American public know that we're not so dysfunctional, that we can get something done and it would be worse for the Republican party if we shut the government down.

BLITZER: Ryan, you just heard Rand Paul said he'll go ahead and raise the debt ceiling if there's an, in fact, a grand bargain including tax reform and entitlement reform. That has to happen between now and February.

LIZZA: Look like that's going to happen, especially when the chairman of the finance committee just got sent to be apparently the ambassador to China, Max Baucus.

Actually, it is kind of amazing. The power of the tea party, just when the back of the tea party was broken in the House of Representatives by John Boehner. It sort of -- its influence has sort of grown in the Senate.

BORGER: Well, because these people are many primaried.

KING: But the debt fight will bring this back up. Huge divide in the Republican party right now is do we have to be part of a governing coalition? You know, we run the House of Representatives. We're close to half in the Senate. Are we supposed to help govern, or are we supposed to be the opposition movement? That's part of the philosophical debate in the Republican party. And what we just saw in this vote and you'll see it more and more in the debt ceiling fight because many of those conservatives are going to want something big from the president. The President says he is not going to give it to them.

BORGER: And the question is how relevant is the tea apartment going to be next time around? I mean, I talked to some House Republicans who voted for the budget compromise, and they were keeping their fingers crossed, that maybe, maybe by doing a joint deal they could push the hell no caucus over to one side and make them less relevant than they are politically. But what we've seen is that all these incumbents are running scared. And don't forget who votes in mid-term elections, the intensity comes from the base of the party.

LIZZA: My view of this is to blame the good people of Iowa. All of these Republican candidates jockeying for presidents, appealing to very conservative Republican constituency in Iowa and it real messes up the ability of getting anything done.

BLITZER: You've done a lot of reporting lately on the NSA surveillance program. So, I was pretty surprised to hear Rand Paul say, just a few minutes ago, that James Clapper, the head of national intelligence, is just as criminally guilty as Edward Snowden who stole, what, 1.7 million classified documents from the NSA.

LIZZA: Yes. I was really surprised by that. I've heard him rail against Clapper before and say that he believes that Clapper perjured himself. But I've not seen him make the case that actually Clapper has harmed national security in that way.

Look, it gets at something that a lot of the senators up there are upset about with the intelligence community. They think they leave them in the dark. They don't tell them what's going on. And this report today, this report that came out.

BLITZER: The recommendations.

LIZZA: You read that report, and it's 300 pages. I was going through it before I came on. It's filled with the same kind of rhetoric. Not -- obviously not saying like Clapper is a perjurer or harmed national security, but it is filled with the idea that the national security establishment hasn't been up front with the American people and with Congress.

BORGER: I don't think they have been up front with the president. I mean, half the time -- you know, the president can say I didn't know this was going on or that was going on. You know, there are secrets they keep perhaps even from the commander in chief, and that's a big issue, too.

LIZZA: And the more I like at this report, the more I think you're now going to see a big split between what Obama has said about these programs and what this report is recommending. There's a number of places where it's just absolutely contradicts what the president has said.

BLITZER: We got to leave it there. Good discussion. Lots of news today. Thanks very much.

Just ahead, could your insurance company be canceling your favorite doctor? It's happening across the country. Our CNN investigations unit is standing by with new information.

And at the top of the hour, the Indian government now fighting back over a diplomatic dispute with a move that could potentially put American lives in danger.


BLITZER: There are now allegations some insurance companies are getting rid of costly patients, not by dropping the patients themselves, but rather their doctors.

Chris Frates of CNN's Investigations Unit has been looking into this for us.

Chris, so what are you finding out?

CHRIS FRATES, CNN INVESTIGATIONS UNIT CORRESPONDENT: Well, Wolf, what CNN has learned is that because Obamacare makes it more difficult for insurance companies to drop patients, that insurers seem to be dropping doctors instead, and that's leaving thousands of patients across at least a dozen states facing a tough choice.


JODY SABATINO, INSURED SENIOR: I'm decorating and I'm making the curtains up there.

FRATES (voice-over): Jody Sabatino is like many seniors. She sees multiple doctors and takes lots and lots of medication.

(On camera): How many prescriptions do we have here?

SABATINO: OK, one, two, three, four, five.

FRATES (voice-over): Last month the 79-year-old got some jaw- dropping news. Her insurance company, UnitedHealthcare, is cutting four of her six physicians from its Medicare Advantage Plan, including her most trusted doctor. Dr. Lawrence Mieczkowski or Dr. Mitch to patients like Jody. The cardiometabolic specialist will be unceremoniously dumped from United's Medicare Advantage network January 1st with little explanation. Or, as United put it in a letter --

DR. LAWRENCE MIECZKOWSKI, CARDIOMETABOLIC SPECIALIST: UnitedHealthcare is amending your agreement referenced above to discontinue your participation in the Medicare Advantage Network. This amendment does not require your signature.

FRATES: But the doctor thinks United is trimming physicians from its network because under Obamacare it's harder to drop patients.

MIECZKOWSKI: Let those high-cost patients move out of the UnitedHealthcare Medicare Advantage Plan over to Anthem or Humana and let those poor suckers, so to speak, you know, pay -- pick up the cost.

FRATES: United's decision left Jody and her 94-year-old husband Nick facing a tough choice. Do they stay with United and find new doctors or try to keep their doctors by finding a new insurance plan.

SABATINO: Dr. Mieczkowski has been my doctor for 20 years. No one knows me any better than he does and it's silly not to continue to go with him.

FRATES: So Jody went shopping.

SABATINO: This was inexpensive, this was expensive.

FRATES: And the plan she bought is going to cost her much more.

(On camera): Do you have any sense of how much more than wound up costing you?

SABATINO: These will be double.

FRATES (voice-over): Jody and Mieczkowski are not alone. The American Medical Association says United and other insurers have taken similar action in at least a dozen states.

In Connecticut, for example, United cut about 20 percent of its doctors, according to the State Medical Society, and here in Ohio, the insurance giant dropped hundreds of doctors affecting thousands of patients.

TODD BAKER, OHIO STATE MEDICAL ASSOCIATION: The patient costs a lot and United is going to those patients' doctors and dropping them. And therefore getting rid of the patient.

FRATES: United concedes it is reducing the size of its network, but declined an on-camera interview request. In a statement to CNN, United said, "Many health plans are making changes to their networks to improve quality and keep health insurance affordable. These changes are necessary to meet rising quality standards in an era of Medicare funding cuts."

The Insurance Industry Trade Group argues that the changes are direct results of Obamacare. To help pay for health care reform lawmakers included $200 billion in cuts to the Medicare Advantage program and a new tax on health insurers.

ROBERT ZIRKELBACH, AMERICA'S HEALTH INSURANCE PLANS: Washington can't cut in tax the Medicare Advantage program this much and not expect seniors in the programs to be harmed.

FRATES: Even though Jody Sabatino was able to find a plan that included Dr. Mitch, she is still going to lose two other doctors.

SABATINO: We're walking away from people that we've known and trusted and counted on for over 10 years, and that's hard.


FRATES: Now, Wolf, Dr. Mieczkowski tells me that the vast majority of his patients who are affected by United's decision have followed Jody's footsteps and they got another insurer so they can continue seeing him. And it's no wonder why. Another of the doc's patients told me that this year the directory for United Doctors was 25 pages long. Next year it's only five.

BLITZER: Wow. Is it going to get any better? Is it going to get worse? What do you see down the road?

FRATES: You know, when I talk to insurance officials, they say that seniors can expect higher premiums, that they can continue to see this network shrinking and that they don't think things are going to get any better going forward.

BLITZER: Especially seniors, they get so attached to the doctors they've had for a long time.

FRATES: That's right.

BLITZER: It's a big issue. Thanks for the report.

Chris Frates, reporting for us. Thank you.

Coming up, we're going live to India, where there is now outrage and it's spilling over into the streets over the arrest of an Indian diplomat in New York City.

And a new bill to ban employers from checking your credit score. Our Brian Todd talks to the author, Democratic senator, Elizabeth Warren. (COMMERCIAL BREAK)

BLITZER: If you think you've been lazy about walking your dog, wait until you see this owner and his pooch.

Here's CNN's Jeanne Moos.


JEANNE MOOS, CNN SPECIAL CORRESPONDENT (voice-over): It's raining out. The dog has to go, but the owner's son doesn't feel like moving. At least that's why this dog was dangling from a second-floor balcony. Jennifer Snow took the photo.

JENNIFER SNOW, WITNESSED DOG DANGLING: Actually holding his dog down, lowering it, and then pulling it back up to actually let it out to use the bathroom.

MOOS: The photo spread and so did the outrage. Heather Vincelette helped share the picture.

HEATHER VINCELETTE, SHARED DOG DANGLING PHOTO: He needs to know that no, you can't do that.

MOOS: Folks online let him know, "How freaking hard is it to get your butt off the couch and take the poor dog for a walk?" But the most frequent comment was, "Hang his sorry butt out by a rope the same way."

(On camera): Police say the dog was tethered not to a collar but to a harness. He wasn't choking, he wasn't harmed.

SNOW: There was a lady and her husband actually were getting in their car, and they were kind of yelling at the guy.

MOOS (voice-over): Eventually the photo made its way to the Greenville Police. They went to the upscale condo and cited 23-year- old Tyler Smith with violating the city's Animal Care Ordinance, which carries a fine of $1,093, and the possibility of 30 days in jail.

Smith is the son of the dog owner.

(On camera): The son was house-sitting while his parents were out of town. The father told a news photographers that he was livid about what his son did to the dog.

(Voice-over): We weren't able to reach him, but someone who identified himself as the pet owner and the dog as Mac responded to online critics by saying, "Our son is a great kid who made a bad choice. Mac is a much loved part of our family and no one would ever try to intentionally harm him."

Others defended the dog dangling by saying it was no different than pets going skydiving, like this rescue dog does.

Not since Michael Jackson held his baby boy over the edge of a balcony has dangling generated such a fuss.

VINCELETTE: The stupidity of people upsets me.

MOOS: Letting a dog dangle has left people untethered.

Jeanne Moos, CNN, New York.



BLITZER: Happening now, protests and payback over the arrest and strip-search of a key Indian diplomat in New York. New retaliation now by her country may be putting Americans in danger.

Plus million-dollar freeloader. A former government official is going to prison for a shocking scheme. He invented a secret identify to get out of work and steal a big fat paycheck.

And blackout bombshell. The FCC considers ending a controversial rule that could change the way you watch sports on TV.

I'm Wolf Blitzer, you're in THE SITUATION ROOM.

But we begin with a just-released report recommending new limits in the way the National Security Agency snoops on Americans and foreigners. The president asked an outside panel to review the agency's tactics after the bombshell revelations by the NSA leaker Edward Snowden.

Our chief national security correspondent Jim Sciutto has been going through the report and its recommendations.

Give us the headlines.