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UPS Cargo Plane Crashes and Burns; Egypt's Bloodiest Day Since Revolution; What's At Stake For U.S.?; NTSB Briefing On Cargo Plane Crash; Gunman Dead in Bank Standoff; Baby Monitor Allegedly Hacked

Aired August 14, 2013 - 17:00   ET

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

WOLF BLITZER, CNN HOST: Happening now, Egypt reels in the bloodiest day since the revolution. Hundreds of people killed, both demonstrators and security forces.

A deadly plane crash -- a jumbo cargo plan goes down a half a mile from the runway, just yards from homes.

Plus, new details of what may have motivated a deadly hostage crisis.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

Federal investigators, they are now on the scene of a fiery and deadly plane crash. It happened before dawn near the airport in Birmingham, Alabama.

A UPS jumbo jet slammed to the ground about a half a mile short of the runway, breaking apart, bursting into flames, killing the pilot and the copilot.

CNN's David Mattingly is on the scene for us.

He's joining on the phone.

What's the latest you're hearing over there -- David?

DAVID MATTINGLY, CNN CORRESPONDENT: Wolf, it wasn't until I saw the actual crash site that I understood how close so many lives came to being taken in this crash. The pilot and the copilot, we're told, died in the impact of this crash. But this plane landed, or crashed, in an open field about a half mile from a neighborhood. That sounds like enough breathing room, but this plane actually came in very low, taking out the tops of trees in neighborhoods, taking out power lines, actually coming within feet of hitting certain houses on its descent down into that open field.

What we're waiting for right now is the National Transportation Safety Board. They've been on the scene for hours this afternoon, looking at the wreckage. They were supposed to have a press conference very soon.

It appears, looking at the wreckage, that it should not be a problem to recover the cockpit voice recorder and the flight data recorder, those two important sources of information, as they go about trying to find out what happened.

We've talked to people who live on the ground, who actually had this jet fly over them and wake them up before dawn this morning. They talk about how they heard what sounded like a sputtering sound from an engine.

I actually spoke to a man who is a former aircraft mechanic. He says he believes that he heard one of the engines backfire, suggesting that there might have been some mechanical problems as this plane was coming down.

But this is all just people on the ground. No one actually saw what they're. And they're just guessing about what they were hearing.

But it definitely didn't sound like a plane that was under full power and under control as it was coming down -- Wolf.

BLITZER: What time was the plane, David, supposed to land?

Was weather, perhaps, a factor at all?

MATTINGLY: This was before dawn. But visibility, I'm told, was actually pretty good, because there was some precipitation in the area, but not much. Officials here say there was really nothing going on, nothing severe, no problems that would have brought an aircraft down. So that is part of the mystery here.

Also, the mayor of Birmingham tells me that they checked with the people at the tower and the pilot never radioed into the tower that he was having problems. This, according to the mayor of Birmingham.

So we're waiting for NTSB to give us their initial impressions, after having looked at this. The aircraft is in some very large pieces. Some of the pieces of the aircraft were actually littering yards of the neighborhood I was talking about as it was hitting those pine trees and losing pieces as it was coming down. So they have a very large area to actually look at and to collect debris from.

We're waiting to see what sort of conclusions they're going to draw.

BLITZER: All right, David, stand by, because we're anxious to hear from the NTSB, as well.

We're going to wait for that news conference to begin and get the latest information.

In the meantime, though, I want to bring in Michael Goldfarb.

He's the former chief of staff for the Federal Aviation Administration. He understands this situation quite well.

Michael, based on the information we're getting -- and this is obviously very, very early in this investigation -- what does it seem like?

MICHAEL GOLDFARB, FORMER FAA CHIEF OF STAFF: Well, David's report is interesting for one aspect, Wolf. The fact that there was no radioing for any kind of help indicates, like with the Asiana crash, it may have been pilot error. But the Board is going to say very little this afternoon. It's protocol. They're going to talk about the go teams looking at every aspect of the aircraft. They will get the black boxes, the so-called black boxes, flight data and voice recorder. They'll bring them back to Washington and they'll find out if it was mechanical or if anything was going on in that aircraft.

BLITZER: This was an Airbus A-300.

GOLDFARB: Right.

BLITZER: Tell us about this plane.

GOLDFARB: Well, you know, first of all, it's an old plane. But this plane is only 10 years old. So it's been in service since 1972 and they stopped producing them...

BLITZER: That's when they started making them...

GOLDFARB: Exactly.

BLITZER: But this one was acquired in...

GOLDFARB: Ten years old...

BLITZER: -- 2000 or something like that?

GOLDFARB: Right. 2003. Ten...

BLITZER: Yes.

GOLDFARB: -- 10 years old, so it's relatively new. And it also has modern avionics and the equipment, the black boxes, will tell a lot about the aircraft. So the fact that it was old means very little. (INAUDIBLE)...

BLITZER: Is this plane only used for cargo?

GOLDFARB: Yes. Yes.

BLITZER: Is there a passenger version?

GOLDFARB: Well, no. It's now only cargo. It is no longer produced for passengers.

But the interesting thing is, you know, what are the leading indicators here?

What causes concern about a cargo crash?

Number one, pilot fatigue -- you know, too many hours. They don't have the same standards that commercial pilots do.

BLITZER: Why don't they? GOLDFARB: Because it's -- it's been a push-back from the cargo industry, saying it's not cost beneficial for us. We fly different regimens.

But in this case, 6:00 a.m. from Louisville to Birmingham?

Probably the first flight of the day, a short hop. Fatigue doesn't look like the case.

Point two, HAZMAT cargo holds -- three years ago, they had a crash. Ninety thousand lithium batteries in the cargo hold exploded. Whether that was the case today and they were carrying that, we'll find out.

So, you know, it's curious and there's very little information right now that would indicate why such a tragedy would occur. We don't know how many hours the pilots had. We just have to assume that they were seasoned.

BLITZER: Are there different regulations for cargo pilots, as far as training is concerned...

GOLDFARB: Yes.

BLITZER: -- as opposed to passenger planes?

GOLDFARB: Yes. I mean they've been trying -- the FAA has been trying to move to one standard of safety. And it's been a struggle. It's been a struggle over 10, 15 years. So that people that fly on a passenger plane and people that fly on a commuter plane have the same safety standards.

Cargo has been a bit bit more difficult to regulate.

BLITZER: And you say...

GOLDFARB: That's (INAUDIBLE).

BLITZER: -- that it's because of the lobbying, the pressure from the cargo industry?

GOLDFARB: No. I mean they have a different flight regimen and they fly at night and they have different pilot rules. So there's arguments on both sides of this.

But remember, all this came out of that horrible crash in Buffalo, the commuter crash. A lot of lessons learned applying to pilot rules, applying to the safe (INAUDIBLE)...

BLITZER: So, for example, what lessons were learned from that crash, that Colgan...

GOLDFARB: Well...

BLITZER: -- jet flight there?

GOLDFARB: -- I mean, the hours in-flight were ridiculous. I mean you had a young 20-year-old with, you know, 15 hours in flight at that...

BLITZER: She was the co-pilot.

GOLDFARB: She's a co-pilot. The pilot -- the pilot's salary is $25,000, $30,000, the same as you make at McDonald's. No offense to McDonald's, but -- so they weren't paying those pilots. The hardest flight is commuter flying.

BLITZER: Has that changed since then?

GOLDFARB: Not that much.

BLITZER: Why?

GOLDFARB: They now change the hours, so they have better requirements, better training. But it's very evolutionary (INAUDIBLE)...

BLITZER: But I assume a pilot and a copilot for a UPS jumbo jet like this, an A-300...

GOLDFARB: Sure.

BLITZER: -- they get paid decent salaries.

GOLDFARB: They do. They get paid much more than the commuter planes. And they're probably much more proficient. They've had hundreds of hours in flight simulators and they've flown many, many miles so...

BLITZER: We're standing by for this news conference.

GOLDFARB: Yes.

BLITZER: We expect this NTSB board member, Robert Sumwalt...

GOLDFARB: Yes.

BLITZER: -- to be briefing us on what they know.

What's the most important thing you want to hear in the course of the next few minutes, once this briefing begins?

GOLDFARB: Well, essentially, that they can recover the black boxes, that's number one. They have the air traffic control tapes. They know about what was discussed in the communication. And they're going to come back to Washington -- the good news is they will rapidly resolve what happened on this crash (INAUDIBLE)...

BLITZER: When you say rapidly...

GOLDFARB: Rapidly.

BLITZER: -- sometimes it takes a year.

GOLDFARB: No, no. They will have initial preliminary results quickly, listening to the black box recordings and the flight data recorder. So we'll have a good sense.

The investigation will take a year, just like Asiana in San Francisco.

BLITZER: Yes.

GOLDFARB: The danger, at this stage, as you know from all the times we've done this, is the early speculation almost invariably is never right.

BLITZER: Yes.

GOLDFARB: It's a combination of things (INAUDIBLE)...

BLITZER: And if it was a mechanical problem...

GOLDFARB: Right.

BLITZER: -- as opposed to pilot error...

GOLDFARB: Anything.

BLITZER: Who knows what that could have been?

GOLDFARB: Indeed. Yes.

BLITZER: All right, Michael, stand by, because we're standing by for the news conference from the NTSB. I'm anxious to hear what they have to say, as well.

Michael Goldfarb will be with us.

We're awaiting that news conference. As soon as it begins, we'll go there.

Meanwhile, a state of emergency as political violence claims hundreds of lives in Egypt.

CNN's Arwa Damon is right in the middle of all of this. We're going live to Cairo. That's coming up.

Also, Newt Gingrich, cohost of the new CNN "CROSSFIRE," he gives a stunning lecture to his fellow Republicans about ObamaCare.

(COMMERCIAL BREAK)

BLITZER: Let's go to Egypt now and what's the single bloodiest day since the country's historic revolution.

On the ground, one protester describes the scene of quote, "open war," just hours after Egyptian security forces bulldozed two massive camps filled with supporters of the ousted president, Mohamed Morsy.

According to Egyptian TV, 278 people have been killed, at least two of them journalists. One a long time Sky News cameraman who used to work right here at CNN. Hundreds have been injured. A month long state of emergency is now in effect and curfews are in place in cities across the country, including Cairo.

That's where our senior international correspondent, Arwa Damon, is.

She's joining us now -- Arwa, you had to duck for cover at several points today, right in the middle of all of the violence.

What is the latest?

What's going on right now?

ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, right now, it's something of an uneasy calm, if one can even describe it as that. The streets absolutely deserted because of that curfew that is in place.

The big challenge that was facing the security forces throughout the day was not just having to go in and clear those two main sit-in sites, but dealing with clashes that increased in intensity and spread throughout the entire city.

Supporters of the ousted president were refusing to give up. They were trying to repeatedly re-gather in different areas. They were trying to re-access one of the main sit-in sites, clashing with riot police, throwing stones at them.

And then in this other new area, they've managed to even set up yet another sit-in. And those people are still there and they are fully aware that they do so at great risk to their own safety. They've set up a field clinic. They are waiting for the crackdown to continue. They are expecting the worst case scenario.

And adding to all of this, too, Wolf, is the added dynamic that it's not just clashes between security forces and Morsy supporters, it's also clashes between Morsy supporters and residents in some of these areas. Driving around just before curfew, we also saw neighborhood watches being set up in some places, basically youth from neighborhoods carrying batons, bats and setting up their own checkpoints searching vehicles.

BLITZER: Do the pro-Mohamed Morsy elements, the Muslim Brotherhood there, who are protesting his removal, do they have weapons, though?

Do they have arms to fight the security forces of the Egyptian military and police?

DAMON: They claim that they do not. And that being said, we did not see any weapons in their hands at any point in time.

That being said, though, Wolf, there are 43 members of the police force who have been killed in these clashes. So one can only assume that some of these demonstrators were, in fact, carrying weapons, although, by and large, this was a peaceful movement.

And the fallout from all of this, in terms of the casualties, in terms of the clashes that many are expecting to continue as the security forces try to bring the situation under control, and in terms of the political fallout, this country is paying an incredible cost right now. And trying to navigate the way forward is proving to be as challenging as ever -- Wolf.

BLITZER: I raised the question about weapons because I know a lot of people are concerned, what we've seen in Syria for the past two years, a horrendous civil war.

The question to you, Arwa, you've been to Syria, you've been in Egypt, you've been in Libya, you've been throughout the region, are we on the verge of potentially a civil war, a deadly civil war in Egypt?

DAMON: To the scale and magnitude that we've seen in Syria and Iraq and in some of the other countries in the region? No, absolutely not. Is the country right now, Egypt, at great risk of even more clashes, even more violence? Yes, that most certainly is there and it is there in a greater capacity than it was before the security forces one and then forcibly cleared these individuals out of these two sit-in areas.

And for the Muslim Brotherhood for its supporters, for those who are supporting the ousted president, this is also very much an existential battle, so that as an added dynamic to all of this, but that being said, is Egypt going to fall into an all-out civil war?

Not likely, but it's still in an incredibly precarious position, and the government, the responsibility that's really on the government right now to try to figure out a way to bring about an end to this situation, and really decrease the amount of blood that is being spilled. It's a very vicious cycle. But the more killing and death that there is, the angrier people become, the more potential for more killing and death there is in the future.

BLITZER: Certainly is. Arwa Damon, we'll get back to you.

Once again, we're standing by for that news conference from the NTSB in Birmingham, Alabama. The crash of that USPS A-300 cargo plane. Once it begins, we'll go there.

But let's, in the meantime, continue the fallout for what's going on in Egypt, the violence there, could have huge implications for the United States. The White House calling the latest bloodshed a step in the wrong direction. And just a little while ago, the secretary of state, John Kerry, directly addressed the crisis.

(BEGIN VIDEO CLIP)

JOHN KERRY, SECRETARY OF STATE: The United States strongly condemns today's violence and bloodshed across Egypt. It's a serious blow to reconciliation, and the Egyptians people's hopes for transition towards democracy and inclusion.

(END VIDEO CLIP)

BLITZER: Let's bring in our foreign affairs correspondent, Jill Dougherty. Jill, both sides in this, I guess we can call it a conflict in Egypt right now, they're blaming the United States. JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: They are, and that's the ironic thing. It's very disturbing for the United States, because after all, remember when they were trying to say is it a coup or isn't it a coup? And the United States stood back and said best not to define it, let's stay out of this. Let's keep both sides happy.

But by staying out of it, they have angered both sides and they're being criticized. You know, if they say it's a coup, it angers the military and it pleases the people on the Morsi side. And if they say it's not a coup, it angers Morsi people and pleases the military, so they can't win. And then don't forget Senator McCain and Senator Graham went there. And Senator McCain said it's a coup, looks like a coup. It is a coup. So, it's getting a lot of anger and generating a lot of anger among the Egyptians.

BLITZER: Tell our viewers what's at stake for the United States?

DOUGHERTY: Number one, this is a huge country, 81 million people linchpin of the Middle East. And I think it boils down to terrorism and Israel. Israel because Egypt made peace Israel, even when Morsi came in. You know, Muslim Brotherhood, they were fearful here in Washington that he might walk away from the peace, but he didn't.

And now, the military has been cooperating with the United States on anti-terrorism. So, if that falls apart, and if Egypt completely falls apart, that fight against terrorism could be diminished and that's very dangerous.

BLITZER: Certainly is. Lots at stake here. Jill, thanks very much.

By the way, in our next hour, I'll speak live with the Egyptian ambassador to the United States, Mohamed Tawfik. He's here in the the SITUATION ROOM. We'll talk about this crisis.

Once again, we're awaiting a news conference with the NTSB at Birmingham. Once it begins, we'll go there live on the crash of that U.P.S. cargo plane overnight.

Meanwhile, a stunning reprimand to fellow Republicans from the co-host of CNN's new "Crossfire." What Newt Gingrich is now telling them about Obamacare?

Plus, coke takes on critics of the artificial sweeteners in some of its drinks with a new ad campaign. Sanjay Gupta will join us, but I'm told the news conference, the NTSB news conference is about to begin. Here it is. Let's go there.

(BEGIN VIDEOTAPE)

ROBERT SUMWALT, NTSB BOARD MEMBER: Well, good afternoon. My name is Robert Sumwalt, and I'm a board member with the National Transportation Safety Board. The NTSB has arrived in Birmingham to begin the investigation of the accident involving U.P.S. flight 1354. Before I go on, I would like to pause a moment and offer our sincere condolences and let you know that our thoughts and prayers are with the families and the victims and the friends of those. We are thinking of you, and you are in our prayers.

The NTSB, we'll start with that. We are an independent federal agency charged by Congress to investigate transportation accidents to determine the problem cause action and then to issue safety recommendations to keep those accidents from happening again, and that's what we're in the business of doing. As far as factual information is concerned, this was U.P.S. flight 1354. It was on a scheduled flight from Louisville, Kentucky to Birmingham.

The aircraft is an A-300-600. A-300-600F, and the "F" stands for freighter. The registration number is in 155UP. And as has been reported, the aircraft crashed while on approach to runway 1-8 here at Birmingham Shuttlesworth International Airport. The NTSB's Go team arrived here in Birmingham. We landed at about eleven o'clock this morning.

We had an investigator on scene actually about 9:15 this morning who drove over from Atlanta. And today, what we've done is just a very an overall initial assessment to begin planning the next steps of our investigation.

But I can tell you from the preliminary information that we've gone out and gathered, from the initial ground impact -- and bear in mind that there were three strikes prior to the initial ground impact, but from the initial ground impact to the final resting point of the forward fuselage, which contains the cockpit area, that distance is about 200 yards.

And then another 75 or 80 yards past that, closer to the runway, that is, there would be the part of the fuselage that contained the wings and the tail section. And that part of the aircraft, especially the over-wing portion, was extensively damaged by fire.

The tail section of the aircraft is still smoldering, still smoking, and for that reason, we have not been able to get in and get the black boxes, if you will, the cockpit voice record, the flight data recorder, but the first responders are out there continuing to put water, fire retardant on that section of the fuselage.

So, we are optimistic that we will be able to get in there quickly and recover those crash recorders. The NTSB has responded to this crash with a 26-member Go team. The investigator in charge is Dr. Dan Bauer (ph). Dr. Bauer has over 20 years of investigative experience with the NTSB. Our Go team consists of -- we will break it down into several groups.

And just to give you an idea of what some of those groups are, we will have a special group of experts looking at the aircraft's structure, power plans, survival factors, human performance, systems, operations, air traffic control, weather. We will be looking at everything that may be relevant to the causation of this accident.

In addition to our investigative staff, we have members of the NTSB's office of transportation disaster assistance. They will be helping to provide support for the family members of the victims. I do want to emphasize that we are just at the very, very beginning stages of our investigation. There's a lot of work to be done, and that work will begin in earnest tomorrow morning. Throughout the next few days, we will be gathering factual information. Our goal is to find out not just what happened, but more importantly, why it happened, so that we can keep it from happening again.

I want to emphasize that while we are here on scene, we are just here to collect the perishable evidence, the perishable information, which is, in my opinion, the information that goes away with the passage of time. So, we will be, tomorrow morning, with the assistance of the FBI's E.R.T., evidence response team, they will help us to document the wreckage. They have special measuring devices that can very precisely help us diagram the wreckage.

We'll be collecting records that we can analyze later, records for the aircraft, records for the flight crew. We'll be looking at collecting weather information, the ATC tapes. Those are the types of things that have already started, but will continue in much more detail tomorrow, but we're not here in Birmingham.

We are not here to conduct any analysis, and we will not be determining cause of the accident and nor will we, in any case, speculate on the accident.

(END VIDEOTAPE)

BLITZER: All right. That's Robert Sumwalt, the NTSB board member, giving us some very, very preliminary information about this investigation that the NTSB will do on this U.P.S. flight 1354, the crash in Birmingham, Alabama overnight. We'll stay on top of this story. We'll take a quick break. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Happening now, an unusually harsh reprimand from fellow Republicans from the new co-host of CROSSFIRE. What Newt Gingrich is now telling them about Obamacare.

Plus, the gunman and one hostage dead after a tense stand-off in a Louisiana bank. What we are now learning from police about the suspect's family and a possible motive.

And Egypt's bloodiest days since the historic revolution. Is the worst still to come? I'll ask the Egyptian ambassador to the United States. That's coming up at the top of the hour.

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

It's the law of the land, and it increasingly seems to be as troubled as it is controversial. We're talking about Obamacare. Implementation of one part of the law has now been delayed by the president, and it's not such a first initial glitch. Our White House correspond Dan Lothian is joining us now in our American Solutions segment. Dan, what's going on right now with Obamacare? DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, first of all, it's a very complicated law, as you know. And there are now these delays. What it does is it gives critics more ammunition, more reasons to discredit the law, and to remind Americans that the president overpromised.

(BEGIN VIDEOTAPE)

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: When President Obama was selling health care reform, part of the pitch included this promise.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We'll place a limit on how much you can be charged for out-of-pocket expenses.

LOTHIAN: But when this requirement takes effect next year, the cap for some will be nearly twice as high as originally planned. Yet another delay in the roll-out. That hitch discovered this week buried in bureaucratic language on the Labor Department's Web site. all the individual out of pockets costs were supposed to be capped at $6,350 by next year. A big benefit for consumers. But now, certain individuals will face two caps that combined total more than $12,000.

SARAH LUECK, CENTER ON BUDGET AND POLICY PRIORITIES: There's major medical policy with prescription drug benefits from a separate provider, for example. In that sort of situation, if that prescription drug policy doesn't have a cap today, then under this delay, the plan would have an additional year to add that cap.

LOTHIAN: But the White House says this cap on out-of-pocket costs still benefits consumers.

JOSHUA EARNEST, WHITE HOUSE DEPUTY PRESS SECRETARY: For the first time, every single American will have access to a health care plan that will limit their out-of-pocket medical expenses. That means that never again will a family go bankrupt because somebody in their family gets sick.

LOTHIAN: Yesterday there seems to be plenty of confusion and criticism as other delays and change have been quietly announced.

SEN. RAND PAUL (R), KENTUCKY: They can't do that. That's against the law for him to just write the law (INAUDIBLE0

LOTHIAN: Last month, the White House gave large employers an extra year to offer health insurance to full-time employees. A few days later, the bar for the government to verify consumers' salary and insurance status was lowered. And in April another one-year delay to offer employees of small businesses more insurance options.

In his pre-vacation news conference, President Obama insisted the Affordable Care Act is already benefiting millions of Americans, but admitted there will be setbacks.

OBAMA: There will be some glitches, no doubt about it. There are going to be things when we say, you know what, we should have thought about this earlier or this would work a little bit better. That's true, by the way, of a car company rolling out a new car. It's true of Apple rolling out the new iPad.

(END VIDEOTAPE)

LOTHIAN: As for Republican criticism, Josh Earnest points out these are the same Republicans that voted against the law, the same ones that tried to have it repealed some 40 times. He's making the argument they don't have any credibility. Another administration official pointing out that most of this law is either on track to be implemented or already in place, and that only a small portion of it facing delays. Wolf?

BLITZER: Dan Lothian traveling with the president while he's vacationing in Martha's Vineyard. Thanks very much.

Newt Gingrich, the co-host of CNN's new CROSSFIRE debuting next month, gave a verbal smackdown to fellow Republicans over Obamacare. The former presidential candidate blasted GOP members of Congress for not offering any alternative to the controversial health care reform law.

Speaking at the Republican National Committee summer meeting in Boston, no cameras present at that meeting, Gingrich said Republicans have no positive replacement for Obamacare, said his party is caught in a culture that rewards obstruction and negativity. He was a bit more restrained when I later caught up with him on the phone.

(BEGIN VIDEOTAPE)

BLITZER: Joining us right now, the former house speaker Newt Gingrich. Newt, as you know, House Republicans voted 40 times to repeal to get rid of Obamacare. It's not going anywhere; the Senate, certainly the president would veto that action. And now some Republicans are saying they are ready to shut down the government to do away with Obamacare. You believe this is a mistake. Tell us why

NEWT GINGRICH, CNN CO-HOST, CROSSFIRE (on the phone): Well, I don't think we should shut the government down. I think we should finance all the of the government except Obamacare, and I think we should be prepared to send a bill to - House Republican ought to send a bill to the Senate that says here's the entire government Obamacare. And then I think Senator Reid and the president have to decide how big a crisis they want to create, but make clear it's their crisis. There's no desire by Republicans to shut the government down,

But I also think, and I've been in here Boston talking with the Republican National Committee, we need to over a better future in health care. We have people like Dr. Mike Burgess, a congressman, Dr. Tom Price, a congressman, Dr. (INAUDIBLE), a congressman. We have a number of people with good ideas, and we should solidify into a Republican better future in health alternative, and say, look, would you have this personalize medicine (AUDIO GAP) against Obama, and I think that would puts in a stronger position to then force the fight over Obamacare in October.

BLITZER: Because you know the president would veto any legislation that wouldn't fund Obamacare, and in effect, there could be a government shutdown. You lived through two government shutdowns in the '90s. As you well remember, Republicans paid a huge political price for both of those shutdowns.

GINGRICH: Yes, you know, I thought so at the time, and then as I got away from Washington and was no longer speaker and thought about it for about two years, it occurred to me that's all nonsense. The first reelected House Republican majority since 1928 occurred after the shutdown. So, I've always wondered, what is this big price to be paid? We got reelected. Nobody had been reelected since 1928

BLITZER: Well, the big price, Mr. Speaker, was that Mr. Bill Clinton was reelected in 1996.

GINGRICH: Well, I don't think Bill Clinton was reelected because of the shutdown.

BLITZER: I think -- that was certainly a major part of it.

GINGRICH: But he also signed the welfare reform bill --

BLITZER: That was important as well. That was important as well. But he certainly benefited dramatically in recapturing the White House for four years because of those two Republican-led government shutdowns.

GINGRICH: Well, all I would suggest to you is that there are a lot of different factors in the presidential campaign, but the people who were directly responsible for the shutdown got reelected, and that nobody had been reelected -- incumbent presidents getting reelected is a lot more common than Republican Congresses getting reelected was in 1996. And yet almost nobody in the media wants to look at -- why was it that while Clinton got reelected, so did the House Republicans and so did the Senate Republicans?

BLITZER: Those are fair points. But what's your biggest gripe right now with your fellow GOPers?

BLITZER: Well, I don't think I have a gripe per se. I think we have to shift to a breakout approach where we show the American people they can have better health and better health care through a Republican approach than they'll get from Obama's.

(END VIDEOTAPE)

BLITZER: Newt Gingrich speaking with me earlier.

Coming up, new information about a deadly hostage at a bank. Now officials are saying it's not what it first appeared to be.

(COMMERCIAL BREAK)

BLITZER: Tense standoff at a Louisiana bank has ended with a gunman and one hostage dead. Police say the suspect shot both hostages just before a SWAT team entered the building, killing him. Now they're learn more about the suspect and what might have been motivated him to act. Even people who knew him didn't see it coming.

CNN's George Howell reports.

(BEGIN VIDEOTAPE)

GEORGE HOWELL, CNN CORRESPONDENT: So you spoke with him before this all happened?

MAYOR EDWARD BROWN, ST. JOSEPH, LOUISIANA: Yes, I did. I went to the (INAUDIBLE) store where he worked to purchase some ice. When I walked in, of course, as he usually does, "Mayor, how are you doing?" I said, "I'm fine, how are you?"

HOWELLL: St. Joseph mayor Edward Brown says the standoff that rocked this town Tuesday came out of the blue. Brown says he knew Fuaed Abdo Ahmed once attended LSU, but more recently worked at the gas station his family runs in town. Police say his father is from Yemen, but Ahmed was a U.S. citizen. In this small, close-knit Louisiana town, Mayor Brown says he now worries the incident has stirred unwarranted concerns about the gunman's family.

BROWN: Because of their nationality or they are from Yemen, that perhaps they should leave St. Joseph. And I don't agree with that.

UNIDENTIFIED MALE: Fuaed Abdo Ahmed.

HOWELL: Police say Ahmed took three people hostage Tuesday.

COL. MIKE EDMONSON, LOUISIANA STATE POLICE: My belief was from the beginning that this was not a bank robbery. That he was attempting to make a statement, and all evidence that we uncovered from his apartment (ph) as we were transgressing through the night indicated he wrote things down that he was going to do. And from what we saw at the scene and what we learned in negotiation process, he did each one of those.

HOWELL: Investigators say the gunman released one bank employee earlier that evening while still holding two of her colleagues captive at gunpoint. All along, police say they knew they were working against the clock.

EDMONSON: We went in just prior to midnight. That was the plan as we were working toward that. We had a deadline in place of midnight or thereafter that he was going to start (INAUDIBLE) the suspects when he made the statement to negotiators.

HOWELL: Just as the police SWAT team entered the Tensaw State Bank, they say two captives, a man and a woman, were both shot by Ahmed. One died; the other in the hospital.

Louisiana state police shot and killed the gunman. Investigators say he was known to police and described as schizophrenic. They say he complained of voices in his head and that he was mad at people for being mean to him.

BROWN: This office, myself, we have not been mean to anyone. And of course, we've always - I've dealt with the young man in a positive light since he has arrived here. So, that's a bit strange to me.

(END VIDEOTAPE) HOWELL: Investigators believe the events that played out in this community that happened just at that bank down the street may have been sparked by mental illness. They say that Ahmed complained about having a device implanted into his head, Wolf.

And they also say that he traveled a great deal outside the United States recently, Wolf. That's something also that they'll be looking into.

BLITZER: Well, when the authorities say he wanted to make a statement, was it a political statement they're referring to?

HOWELL: You know, that -- there's a lot that investigators are still looking into and it's too early to read into it at this point. But they do say that as they look into these situations especially the travel outside the United States we'll get a better idea --

BLITZER: All right. George Howell reporting for us with the latest from there.

Just ahead a family terrorized after a hacker gains access to their daughter baby monitor. We're taking a closer look at what items in your home might be vulnerable.

And a single tweet increases the value of one company by billions. With a B. Billions of dollars. We'll explain.

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BLITZER: For any parent who's ever worried about a stranger invading their home, you'd expect the baby monitor to provide some sense of comfort. But what happens -- what happens if it's the baby monitor that gets broken into?

CNN money correspondent Laurie Segall has the chilling details.

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LAURIE SEGALL, CNN MONEY TECH CORRESPONDENT (voice-over): Imagine. Your 2-year-old daughter sleeping and an outsider watching her through the baby monitor. That's what happened to a family in Texas this weekend. They discovered the problem when they heard a man yelling at their toddler, reading her name off of her bedroom wall.

MARC GILBERT, FATHER: He said, wake up, Allyson. You little (EXPLETIVE DELETED).

SEGALL: The Gilberts believe their device was hacked.

GILBERT: It felt like somebody broke into our house.

SEGALL: Someone kind of did. And as home automation becomes increasingly popular there are more and more ways to hack your house, and many devices that are vulnerable.

DANIEL CROWLEY, SECURITY RESEARCHER, TRUSTWAVE: I can tell the Varilight, please, unlock the door.

SEGALL: That's a hacker literally unlocking your door. The smart lock is connected to a device that enables you to control your home appliances from your phone. Daniel Crowley, a security researcher, found a flaw in that device.

CROWLEY: I actually run code on the Varilight and compromise it, just set up a backdoor, or I can control any device hooked up to it.

SEGALL: In a world full of these types of devices that let you do everything from flush your toilet to turn on your lights through your smartphone, a hacker can make your house feel haunted.

DAVID BRYAN, TRUSTWAVE: Basically what I can do is open up any of these rooms that have been configured or associated with this device and control them, either turning them on or turning them off.

SEGALL: Sound like something Casper would do? These security researchers found an issue with this INSTEON hub that enabled them to take control of the devices connected to it.

A similar vulnerability was found in a children's toy. This toy rabbit has a camera that syncs with an app on a parents' mobile device. Designed for keeping an eye on your kids, but someone else could, too.

JEM SAVAGE, SECURITY RESEARCHER: That traffic, I was able to capture and then pull from it a URL which was the direct video feed, and as long as the access token was still valid, it hadn't been expired yet, I could watch that video feed indefinitely.

BRYAN: INSTEON --

SEGALL: INSTEON has fixed the issue identified by these researchers. Varilight stresses that a hacker requires an insecure Wi-Fi connection and they say the majority of their users have secure Internet connections.

The makers of the baby monitor and the toy rabbit did not immediately respond to CNN's request for comment.

As for ways to stay safe, always put a strong password on your Internet connection. Keep your software up to date and never click on links from strangers.

(END VIDEOTAPE)

SEGALL: And Wolf, I should say when it comes to that baby monitor had this couple, had they updated their software, this could have been prevented. But that being said, when you have a baby monitor, you don't think, if I don't update the software, someone can hack in and spy on my child. It's just a scary, eye-opening new reality -- Wolf.

BLITZER: Very scary indeed. Laurie, thanks very much for that report. Laurie Segall reporting. Just ahead, Egypt sees its bloodiest days since the historic revolution. And the Egyptian ambassador to the United States, he is here in THE SITUATION ROOM. I'll speak with him live for reaction.

And a single tweet increases the value of one company by billions of dollars.

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BLITZER: Apple stock on the rise, thanks in part to the billionaire investor, Carl Icahn. The company has been trading far below its high of 750,000 -- $705 a share last September. But yesterday Icahn tweeted, "We currently have a large position in Apple. We believe the company to be extremely undervalued. Spoke to Apple president, Tim Cook, today. More to come."

That was followed by, "Had a nice conversation with Tim Cook today, discussed my opinion that a larger buy-back should be done now. We plan to speak again shortly."

Within minutes, Apple shares jumped 5 percent before closing, a little above $498.

Coming up, hundreds of people killed as political violence rocks Egypt, drawing sharp condemnation from the United States. I'm going to talk about it live with the Egyptian ambassador to the United States. He's here in THE SITUATION ROOM.

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