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Judgment Day For NSA; Sweeping Changes At NSA?; Target Customers Targeted?; Basketball Diplomacy; Obama Picks Baucus; Georgia Woman Wins Mega Millions; Fury in India at Diplomat's Arrest; Fed Decides on Mini-Taper

Aired December 19, 2013 - 06:00   ET

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


(BEGIN VIDEOTAPE)

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT (voice-over): The recommendations issued by a group of national security experts appointed by the president could lead to the most sweeping changes ever proposed for the NSA.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: We felt it was important to allow people to see the full report, to draw their own conclusions.

ACOSTA: Aimed squarely at the NSA's domestic and foreign surveillance activities revealed by the agency's former contractor and fugitive, Edward Snowden, the group's report doesn't hold back, stating the government should not be permitted to collect and store mass, undigested non-public personal information about U.S. persons.

Among the proposals, end the practice of collecting data on nearly every phone call made, appoint a new public interest advocate to protect personal privacy and new higher standards before any surveillance on foreign leaders.

An obvious nod to the firestorm over U.S. spying on German Chancellor Angela Merkel among other heads of state and in a challenge to the culture of the NSA and its director, General Keith Alexander, the group urges the appointment of civilians, not military leaders, to run the agency. The White House says it understands reforms are needed.

CARNEY: We need to make sure that we're not gathering intelligence solely because we can, but because we must, because we need it in order to achieve the objective of protecting the United States, protecting the American people and allies.

ACOSTA: The question is what the president will decide. In a recent interview, he suggested the NSA could better police itself.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: I'll be proposing some self-restraint on the NSA and to initiate reforms that can give people more confidence.

ACOSTA: According to a source familiar with this week's meeting between top tech executives and the president, Mr. Obama repeated his goal of self-restrain, but indicated he may allow the collection of phone data to continue, but with more oversight and transparency. That may not be enough for members of Congress across the political spectrum.

SENATOR PATRICK LEAHY (D), SENATE JUDICIARY COMMITTEE CHAIRMAN: NSA, you've gone too far. The bulk collection of Americans' data by the U.S. government has to end.

UNIDENTIFIED MALE: We do have a right to privacy and we'll continue to fight this.

(END VIDEOTAPE)

ACOSTA: Now, the president is expected to lay out his proposals for reforming the NSA sometime next month. If it does not adopt all of the review board findings, you can expect to see a confrontation with Congress.

KATE BOLDUAN, CNN ANCHOR: Thank you so much, Jim. Now that we've heard from the president's task force, what changes can you expect to actually see in how the NSA operates? That's a lingering question for sure. Let's bring in chief national security correspondent, Jim Sciutto, for more on this.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Big picture, the NSA keeps its prize program, the so-called section 215, which sweeps up all that metadata. One of the members of panel said they're not looking to disarm the intelligence community here, that the terror threat they believe is still real. But as Jim said it will be under greater scrutiny and transparency.

And let's look at some of the proposals they're talking about and how workable they are in the short term, one them, appointing a civilian head of the NSA when Keith Alexander retires in the spring, that's workable, the president hasn't agreed to it, but it would be an easy change, putting a privacy advocate inside the court who sees, also something that's workable and doesn't seem to be major objections to.

One of other chief recommendations is having Congress pass legislation to move all this metadata from the NSA's possession -- back to the phone companies into private sector hands. One, we haven't heard from the White House whether they would agree to that, but you need Congress to act. You know how slow it to get things through Congress now. It's hard to see how that could happen quickly.

The White House rejected one of the changes that the panel recommends, which is splitting the NSA from the military's cyber command. So you have a mixed bag in there that we'll see as the president reacts to these and lays out his plan next month. But remember, this is the president's own panel and you also have this court case this week that declared a lot of this collection to be unconstitutional, a lot of pressure on the administration to do something and something measurable.

BOLDUAN: As you well lay out, there are clearly a lot of elements at play. Now that we have the recommendations, what does the president do, how quickly does he act? Also as you say, how quickly does Congress act on some of these recommendations? How quickly do you foresee these recommendations being implemented? We don't know which ones the president actually wants to see put in place.

SCIUTTO: Exactly. It will be at least a month until the president goes through this. He says he's going to study these and see which ones are workable in the short term. It will be a month before he gives his speech to the American public, likely end of January about this. That's some time right there. It's a few months before Keith Alexander retires. So we would know who might follow him. Will it be a civilian?

Congress, who knows how long that could take. Clearly this is going to play out over weeks and months to see what is implemented. But you know, as aggressive as some of these recommendations are, the president, the White House has already made clear that you know, they want to keep the main program going forward. So you know, as Americans here, is it likely a lot of the data will still be collected on us even after the president makes his decision? Possible.

BOLDUAN: Jim Sciutto, thank you so much, Jim.

CHRIS CUOMO, CNN ANCHOR: The biggest credit card breach in retail history has occurred. The Secret Service is investigating a major attack against Target. Information related to more than 1 million Black Friday shoppers at the store may have been compromised. The question, are you at risk? If so, what to do about it? Let's bring in Christine Romans. What's the scenario?

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: You are at risk. If you shopped at a Target store Black Friday and the weeks after, there seems to have been this breach where the information on the magnetic strip of your card when swiped hackers got into that information. This is what they could do. They could make a counterfeit credit card. They could make a -- take debits out of your bank account if they were able to get the pin information when you swiped your card. You're at risk if you shopped in a Target store in those days after Black Friday.

CUOMO: So now, we have dealt with a lot of these stories.

ROMANS: Yes.

CUOMO: The easy part of it is understanding you've been hacked.

ROMANS: Right.

CUOMO: The hard part is what you can do about it. What is the most effective way if you detect something that's happened other than canceling and getting new everything, what's the best proof?

ROMANS: I think the company should do a better job of making sure this doesn't happen in the first place. It's aggravating that the -- on you but it is. Check your credit card statements every single one of them. I want you to check it every day, look online at your credit card statement and make sure you are responsible for each and every one of those purchases.

If they have a counterfeit card with your name and information, there will be one or two tests, Trojan horse and then they start doing a lot of them. Check your debits. Make sure $20, $40, $60, that was yours. ATM withdrawals or debits, that was yours. Make sure. The onus is only on you. No one is going to call you up.

Here's another very, very, very important tip. If you see something wrong, report it to your credit card or debit card right away. The longer you wait, the harder and more tide up it's going to be to get it fixed.

BOLDUAN: You make such a good point. As frustrating as it is, as much as you can say this shouldn't happen, you have to be your own advocate.

CUOMO: The credit cards have fraud honoring if you contact them and let them know you were part of an event like this one at Target.

ROMANS: Don't count on the fraud monitoring.

CUOMO: It can help.

ROMANS: I'm not a big fan of that $14.99 a month for fraud monitoring. You should look -- if you shopped at Target look every single day and make sure those are your charges. That's all you can really do.

CUOMO: Thanks, Christine. That's scary when you think about how many people shop at Target.

BOLDUAN: Let's turn now to the latest round of basketball diplomacy. Dennis Rodman arriving in North Korea overnight, it's his third trip to Pyongyang at the invitation of Kim Jong-un. A family of an American hopes Rodman will press the North Korean leader for their family member's release.

CNN's Ivan Watson is live in Beijing. He makes headlines whenever he goes there, pretty much wherever he goes. What do we know this time, Ivan?

IVAN WATSON, CNN CORRESPONDENT: Morning, Kate. Dennis Rodman going to visit the man who he has described as his good friend, Kim Jong-Un, I asked Dennis Rodman is Kim Jong-Un. Rodman told me I hope so.

(BEGIN VIDEOTAPE)

WATSON (voice-over): This is more than the latest chapter in the unusual friendship between North Korea's reclusive dictator and the former bad boy of the NBA. Dennis Rodman maybe one of the first outsiders to meet Kim Jong-Un since the leader has his own uncle executed for Treason.

DENNIS RODMAN, FORMER NBA PLAYER: I have no control over that. These things have been going on for years and years and years. I'm just going over to do a basketball game and have some fun. WATSON: Rodman is going to have some fun in a country that may be in the midst of a major political purge. He's bringing along a documentary film crew on a trip sponsored by an Irish gambling company.

On Thursday he told me in the future he wants to bring other former NBA players to Pyongyang. Meanwhile, the sister of Kenneth Bae, an American missionary imprisoned in North Korea is begging Rodman for a different favor.

TERRI CHUNG, KENNETH BAE'S SISTER: Mr. Rodman, if you're watching, please do think about this American citizen, a father, a husband, a son and a brother who has been imprisoned for 13 months in the DPRK. And while you're there, could you think about him and his family waiting for him to come home for Christmas and do everything you can to bring him home.

WATSON: But Rodman insists he's powerless to help his fellow American citizen.

(END VIDEOTAPE)

WATSON: In fact, when Rodman was asked about Kenneth Bae, asked if he would bring up North Korea's dismal human rights record, he said it wouldn't be right to mix politics with his special friendship with Kim Jong-un -- Michaela.

MICHAELA PEREIRA, CNN ANCHOR: All right, Ivan Watson reporting. Thank you so much for that. Let's take a look at some of your other headlines this morning.

President Obama is poised to sign the budget compromise into law, the Senate passed the two-year deal Wednesday, easing automatic spending cuts and effectively avoiding a government shutdown. Quite an achievement for Congress. They failed to agree on a budget since 2009.

A Nevada man has been arrested, accused of providing support to terror groups overseas. He faces conspiracy and other charges. Officials say he belongs to two terror groups aiming to create a Sikh state in India. He gave advice on how to carry out acts of terrorism. Singh faces life in prison if convicted. He's due in court tomorrow.

Sources tell CNN the president will nominate the Montana democrat who has taken a tough stance against some of China's trade practices. This choice underscores the importance Washington attaches to building economic links with China. Baucus who chairs the finance committee announced earlier his intention to retire from the Senate in 2014.

A Georgia woman has come forward to claim her half of the million dollar Mega Millions jackpot. Ira Curry of Stone Mountain says she is in a state of shock over her good fortune. She hand picked the winning numbers using a mix of family birthdays and her lucky number 7. She picked the cash option. After taxes her takeaway will be about $120 million. The other winner in California has yet to claim that prize. San Jose, wake up, check your ticket. Now an amazing story to give you, an update, a New York man will indeed be able to keep the guide dog that saved his life. Cecil Williams who was blind was run over by several subway cars after he fainted and fell on to the tracks. His dog, Orlando, went down with him and kept him safe. Now thanks to anonymous donors, Orlando will not be sent away to retirement. He will stay with Cecil. Cecil spoke about it from his hospital bed.

(BEGIN VIDEO CLIP)

CECIL WILLIAMS, SURVIVED FALL ONTO SUBWAY TRACKS: Orlando, he's my best buddy, he's my pal. They said somebody made a donation and it will cover him for the rest of his life.

(END VIDEO CLIP)

PEREIRA: We'll delve deeper into this, the good stuff coming up later in the show.

CUOMO: What a great name, Orlando.

PEREIRA: Very stylish dog.

CUOMO: All right, a little bit of good stuff there. Let's try and keep on with the wave of hope. It will get perilous now because we're going to the land of weather with Indra Petersons. Can you keep the hope alive, Indra?

INDRA PETERSONS, AMS METEOROLOGIST: This much. If I'm smiling you know it is good. We're warming up to almost 70 degrees in New York. That is good, I'm sorry. But that does mean rain, 42 degrees, the high in New York City today, by the weekend, looking for 69. D.C., you're going to the 70s, same thing for Atlanta. This will play a role, we'll get to that.

First let's talk about the first system out there today. Out toward the Midwest, it's making its way through. Keep in mind, overnight tonight in the Midwest, pretty much from Wisconsin back to Missouri, a little bit of a threat for icing. We'll watch for that. The same system makes its way over to the northeast. Light rain in the northeast tomorrow.

Let's take you back into the bigger system we're watching for later in the weekend. Look at the ingredients here. A low making its way into the southeast where those temperatures were really warm, we have that moisture coming in off of the gulf. We throw in the jet stream in that same spot. You know what it means. That severe weather threat will be out there. In the southeast, heavy rain, even flooding concerns in addition to the severe weather, farther to the north.

We're talking about the icy mix of wintry weather. I want to talk specifically about the northeast, 18 degrees out towards Burlington. Look at that contrast in Roanoke. We're talking about mid-60s. When you see that, you know there will be a threat in the middle zone for icy conditions. That's what we'll be watching for, especially upstate New York, Vermont, New Hampshire and even Maine as we go through Sunday. So down to the South, hot, thunderstorms, up to the North, icing. So much going on all at once, of course, on the weekend.

BOLDUAN: A lot to keep an eye on today. My God.

PETERSONS: Just a tad.

BOLDUAN: Thanks, Indra.

CUOMO: The word I used was hope by the way.

BOLDUAN: She's offering some hope but also wants to offer reality.

PETERSONS: Reality check. Reality bites.

CUOMO: Hope changes reality.

BOLDUAN: When it comes to weather.

PETERSONS: Smooth.

BOLDUAN: Coming up next on NEW DAY, outrage in India over the arrest of one of their diplomats in New York. But could a high stakes phone call calm the fury?

CUOMO: Phone call you say? Don't start calling mom just yet from 30,000 feet, anyway. Two airlines refusing to allow cell phone calls during flights ever, no matter what the Fed says. We'll tell you why.

(COMMERCIAL BREAK)

CUOMO: Welcome back to NEW DAY.

Public outrage continues on both sides, but there is diplomatic outreach this morning over the arrest of an India diplomat in New York. Secretary of State John Kerry has expressed regret over the incident and an Indian official says he doesn't want to talk.

U.S. attorneys say the woman was well treated despite being accused of visa fraud and strip-searched.

CNN's Pamela Brown joins us with the latest.

Lot going on here.

PAMELA BROWN, CNN CORRESPONDENT: A lot of developments, Chris and Kate, on this story. In the wake of the controversy, U.S. attorney Preet Bharara isn't backing down amid these allegations from Indian officials, that consular Devyani Khobragade was mistreated.

Meantime it seems like talks between both countries is helping, seemingly helping to temper the fury.

(BEGIN VIDEOTAPE)

(CHANTING)

BROWN (voice-over): This morning, the furor between the two countries reaches a new level, with U.S. Secretary of State John Kerry directly speaking with India's national security adviser. On Wednesday, a State Department spokeswoman offered this statement about how Kerry feels about the case.

MARIA HARF, DEPUTY SPOKESPERSON, STATE DEPARTMENT: He certainly expressed regret about what happened with this case, writ large, sort of how this has all played out.

BROWN: But the chaotic scene outside the Indian mission yesterday highlighted the growing controversy surrounding this bi-continental case.

UNIDENTIFIED MALE: Do you have anything to say?

BROWN: The diplomat, deputy consul general Devyani Khobragade, refused to answer questions on Wednesday. It was her arrest for allegedly making false statements on a visa application for her nanny and how she was treated, strip searched by a female official and thrown in jail with other non-diplomat women that sparked the uproar.

After days of protests and even removing the cement security barriers from outside the U.S. embassy in India, the Indian government has now taken away government issued benefit ID cards to Americans working at some consulates there.

But U.S. authorities are not admitting they did anything wrong. From the White House --

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: All standard procedures were followed and that every opportunity for courtesy was extended. Now, thus far, all indications are that standard procedures were followed.

BROWN: To the U.S. attorney overseeing the case, who said on Wednesday that Khobragade received better treatment than most American defendants and that the outrage has drawn attention away from the serious charges against her, which carry a maximum sentences of five to ten years in prison.

In India this morning, despite the outrage from both sides, officials are saying they're open to resolving the issue.

MALLIKA KAPUR, CNN CORRESPONDENT: There now appears to be a willingness from both sides to ease off diplomatic tensions. India's external affairs minister says he's looking forward to speaking with U.S. Secretary of State John Kerry, adding, these things happen between friends. But the whole point of a friendship is that it survives a test like this.

(END VIDEOTAPE)

BROWN: Well, Khobragade remains at the U.N. mission and as of now, she has limited immunity as a consular. Now, I spoke to a State Department source this morning and that source says that no formal request has been made as of now by the Indian government for Khobragade to have diplomatic immunity. But there is a procedure for that. If they do put in that formal request, then the State Department would have to sign off on it. And, of course, this could all take time.

Now, as we mentioned before, Kerry will be talking to the Indian foreign minister today. It remains to be -- unclear at this point how this case will move forward as my source said, it could linger for two weeks, two days, two months.

We just don't know. But of course we'll be anxious to learn what comes out of that phone call today.

BOLDUAN: The longer it lingers, the worse it turns into. So, we'll see.

Thanks so much, Pamela.

CUOMO: Yes. You know, this story jumped a little bit to all the reaction but what really started it? What information was in that visa? Who's involved?

What about the nanny involved in all this? We're going to talk with the diplomat's lawyer live and dig into what was going on here in the first place.

BOLDUAN: All right. Money time, though. And chief business correspondent Christine Romans is here with more on the big market rally. Tell us more.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: (INAUDIBLE)

CUOMO: Got to cut you off, Christine. They're saying they can't hear your microphone. They have silenced you because they were talking about Wall Street too much and not Main Street enough and they literally silenced you.

Can we hear her now? Let's see if we can hear you now.

ROMANS: You can hear me now.

BOLDUAN: Now, we hear you.

ROMANS: Big rally on Wall Street.

I'll tell you, because of Fed, it's all because of the Fed. Records for the Dow and S&P, the Fed tapering, slowly, now $75 billion in stimulus. The stimulus keeps going but not as much as before. Dow Industrials up 1.8 percent, NASDAQ up 1.2 percent, the S&P up 1.7 percent.

I want to show for the year you guys -- huge gains for the year, Dow 23 percent, NASDAQ 35 percent, S&P 500 27 percent.

OK. So here's what the Fed is deciding to do: tapering just a little bit. A token taper, one of my sources called it. Also, giving a nod to the economy strength, the best of both worlds for investors, right? The economy is getting better and the fed is still really juicing the system. What it means for you, for real people. It means mortgage rates will likely go up maybe gradually. Car loan rates will probably go up, but I think gradually.

The Fed is in no hurry to see rates rise quickly. And that's why they're calling this sort of the taper light.

Savings rates eventually will start to nudge up. That should be a good thing for consumers, because as you know, the Fed keeping interest rates low has been great for Wall Street. But it means if you're a saver, you haven't been getting really any return -- Chris, Kate.

BOLDUAN: Thanks, Christine.

CUOMO: What really made it funny, Christine, was that they didn't hear the conversation we were having before. Christine and I tease about Main Street and Wall Street all the time. Somehow the greater forces of television cut off your microphone.

BOLDUAN: Chris likes to put Christine into a box. Christine then fights her way out of the box.

CUOMO: Of course, she does. She's much smarter than I am. She knows a lot more. She's constantly fighting the good fight. So, naturally, I must attack her.

BOLDUAN: Truth and truth.

CUOMO: We rolled with it, we got through it. Thank you, Christine.

ROMANS: You're welcome.

CUOMO: Coming up on NEW DAY, hold the phone. Delta and JetBlue deciding there will be no cell phone calls during their flights even if the Feds say it's OK. Why they claim they're doing it for you.

BOLDUAN: Also ahead, hundreds of people in 23 states sickened by a new strain of salmonella. It's found in chicken. It resists antibiotics and it's sending people to hospitals at an alarming rate. We'll ask a doctor about how to keep your family safe, ahead.

(COMMERCIAL BREAK)

PEREIRA Welcome back to NEW DAY.

Let's bring you up to date on the very latest news.

A presidential task force calling for sweeping changes at the NSA. Forty-six recommendations in all, including the bulk collection of domestic phone records and tighter restrictions for spying on foreign allies. The panel also recommends civilian, not military, oversight for greater transparency. Former NBA star Dennis Rodman has arrived in North Korea this morning for another round of so-called basketball diplomacy. Rodman will spend the next several days in Pyongyang, with a documentary crew.