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Unemployment Rate in its Lowest in Eight Years; Fireworks Erupt During Democratic Debate; GOP's Tone, Momentum May Be Shifting in N.H.; Critics Question Cruz Camp's Tactics, Honesty. Aired 9-9:30a ET

Aired February 05, 2016 - 09:00   ET

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

[09:00:02] ALISYN CAMEROTA, CNN HOST: What an incredible story. We bring you those every Friday.

MICHAELA PEREIRA, CNN HOST: Fantastic.

CAMEROTA: "NEWSROOM" with Carol Costello begins right now. Hey, Carol.

PEREIRA: Happy Friday.

CAROL COSTELLO, CNN ANCHOR: Thanks so much. Have a great weekend. NEWSROOM starts now.

And good morning. I'm Carol Costello. Thank you so much for joining me. This just in to CNN the U.S. unemployment rate dropping to the lowest level in eight years. Now at 4.9 percent. I know that sounds great, but it's not all rosy.

Christine Romans is here to tell us why. Good morning.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Carol, it is a milestone for the unemployment rate, no question. Now the lowest since February 2008. The dark, dark days of the financial crisis were in the months to come after that.

Let me show you the numbers. 151,000 net new jobs added. That's slowing job growth from the great pace of late last year, but 151,000 net new jobs, the jobless rate now below 4.9 percent approaching full employment when you starts to see numbers going into the 4 percent range.

Another good sign in this report, wage growth. 2.5 percent. People had more hours -- more hours their bosses are giving them, more hours, and giving them more pay in January.

Look at the trajectory of the unemployment rate. Down, down, down, to 4.9 percent. You could see how far it has come since the worst days of the financial crisis.

And take a look at job growth over the past year. You can see from this chart how things have slowed from a very brisk end of last year. Slowing job creation. But many economists saying that's OK. You're reaching this point where you're getting full capacity in the labor market. If you get wages continuing to rise, you'll start to get people coming out of the sidelines and actually more people coming into the labor market.

Here's where the job gains were, Carol. Retail, 58,000 jobs. Fast food, those were up, too. Might be one of the reasons why wages grew because so many states raised their minimum wage in January. So those retail workers and those fast food workers got a raise.

And health care, Carol. We see that every month for years now, health care growing strongly.

COSTELLO: All right. Christine Romans, thanks so much.

On to politics now. Enough is enough. Fireworks erupting on the debate stage in New Hampshire last night. Hillary Clinton taking on presidential rival Bernie Sanders, accusing him of waging an artful smear campaign.

The night was filled with fiery one liners from Clinton as she tried to defend her ties to Wall Street and speaking fees. For Sanders, it was all about owning what it means to be a progressive.

(BEGIN VIDEO CLIP)

HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: And enough is enough. If you've got something to say, say it directly.

SEN. BERNIE SANDERS (D), PRESIDENTIAL CANDIDATE: All right. Let's talk about why in the 1990s Wall Street got deregulated. Did it have anything to do with the fact that Wall Street, providing -- spend billions of dollars on lobbying and campaign contributions?

CLINTON: But if we're going to get into labels, I don't think it was particularly progressive to vote against the Brady Bill five times.

SANDERS: She has the entire establishment or almost the entire establishment behind her. That's a fact.

CLINTON: I am the strongest candidate to take it to the Republicans and win in November.

SANDERS: We can create an enormous amount of enthusiasm from working people, from young people on our worst days.

I think it is fair to say we are 100 times better than any Republican candidate for president.

CLINTON: That's true.

(END VIDEO CLIP)

COSTELLO: All right. All of this happening just five days before the New Hampshire primary.

Let's bring in CNN's John Berman with more. Good morning.

JOHN BERMAN, CNN ANCHOR: This was completely different. This was a different universe of debates and confrontations than we'd seen before. First of all, they were the only two on stage and two-person debate very different than a three-person debate. Martin O'Malley now obviously dropped out of the race. And Hillary Clinton has clearly decided she can't be patient anymore. She can't wait until the campaign gets to more favorable terrain to take on Bernie Sanders directly.

(BEGIN VIDEOTAPE)

BERMAN (voice-over): Three days after barely winning Iowa, five days before facing daunting odds in New Hampshire, Hillary Clinton clearly decided she could not wait another day to fight back.

CLINTON: I really don't think these kinds of attacks by insinuation are worthy of you.

BERMAN: The battle, who was the real progressive and who was beholden to the establishment?

CLINTON: I am a progressive who gets thing done. And the root of that word progressive is progress.

SANDERS: Secretary Clinton does represent the establishment. I represent, I hope, ordinary Americans. And by the way who are not all that in avid with the establishment.

BERMAN: Clinton, who has been careful not to offend the young, passionate support behind Bernie Sanders, now seems to think it is worth the risk.

CLINTON: Senator Sanders is the only person who I think would characterize me a woman running to be the first woman president as exemplifying the establishment, and I've got to tell you, it's really quite amusing to me.

SANDERS: What being part of the establishment is, is in the last quarter having a super PAC that raised $15 million from Wall Street.

CLINTON: Enough is enough. If you've got something to say, say it directly.

[09:05:02] You will not find that I ever changed a view or a vote because of any donations that I ever received. I think it's time to end the very artful smear that you and your campaign have been carrying out in recent weeks and let's talk about the issues that divide us.

SANDERS: Let's talk about --

BERMAN: Sanders was only too happy to talk about those divisions not just on Wall Street donations but also then Senator Clinton's vote to authorize the Iraq war.

SANDERS: Experience is not the only point. Judgment is, and once again, back in 2002 when we both looked at the same evidence about the wisdom of the war in Iraq, one of us voted the right way and one of us didn't. CLINTON: A vote in 2002 is not a plan to defeat ISIS. We have to

look at the threats that we face right now. And we have to be prepared to take them on and defeat them.

BERMAN: Clinton also tried to use new information to diffuse the controversy over her use of a private e-mail server as secretary of state. The fact that now e-mail sent to both Colin Powell and top aides to Condoleezza Rice when they held the job have been deemed classified.

CLINTON: You have these people in the government who are doing the same thing to Secretary Powell and Secretary Rice' aides, they've been doing to me, which is that, I never sent or received any classified material. They are retroactively classifying it.

I agree completely with Secretary Powell, who said today, this is an absurdity.

BERMAN: Once again Sanders refused to pounce on the e-mail questions, though he noted the opportunity is out there.

SANDERS: I will not politicize it. There's not a day that goes by when I am not asked to attack her on that issue, and I have refrained from doing that, and I will continue to refrain from doing that.

(END VIDEOTAPE)

BERMAN: So it seems that Clinton's new tone, not necessarily directed just at New Hampshire voters, the new CNN poll has her trailing by 30 points there, but perhaps beyond that. To South Carolina, Nevada and the states that vote on March 1st, and another sign that Clinton is looking a little behind New Hampshire, on Sunday she travels to Flint, Michigan.

Unusual to take a diversion from New Hampshire just days before, but obviously, Carol, wanting to send the message the issues in Flint are important and also that it's not all about New Hampshire for her.

COSTELLO: All right. John Berman, many thanks to you.

So Clinton takes the fight directly to Bernie Sanders and tells him to do the same. But while her tougher tone may offer a short-term boost, will it alienate the young people and the liberals she will need as the Democratic nominee?

So let's talk about that and more, Mark Preston is the executive editor for CNN Politics and Errol Louis is a political anchor for New York 1 News.

Good morning.

ERROL LOUIS, CNN POLITICAL COMMENTATOR: Good morning.

MARK PRESTON, CNN POLITICS EXECUTIVE DIRECTOR: Good morning, Carol.

COSTELLO: Good morning. So let's start with this, Mark. Clinton, we hear, has postponed a campaign fundraising event in Boston that was put on by the big banks. Tell us about that.

PRESTON: Well, it is something that we've known about for a few days as well, listen, the optics of her going and raising money at a time when she's trying to shake the criticism that Bernie Sanders has been throwing at her about taking $675,000 in speaking fees from the big banks and donations, what have you, are not good for Hillary Clinton at this moment in time.

That fundraiser will happen. There's no doubt about it because the Clinton campaign is looking at the long game. And as she said last night during that debate, Carol, she said she doesn't think that it is such a bad thing to take money for interest groups and noted that Barack Obama himself had taken money from Wall Street.

So Hillary Clinton trying to push, or at least trying to defend herself from this fight from the left, this Bernie Sanders populist idea that he's saying that she's too tied and too close to Wall Street.

COSTELLO: So, Errol, she postponed this fundraiser but during the debate we heard her artful smear comment. It was booed by the audience. Do you think that had anything to do with her decision to postpone this fundraiser?

LOUIS: It almost certainly did, and it's really part of a much larger fight. I mean, that booing, that back and forth, that's not just Clinton versus Sanders in a personal sense. That's Hillary Clinton arguing what the progressive wing of the Democratic Party, the progressive base if you want to call it that. And you know, it's a valid debate to say, look, just because I have raised money, you want me to win, right? So I have to go out and raise money. And this money comes from lots of different sources.

Now if we want to be pure and not raise any money, then fine, we'll just get trounced by the Republicans I think is where Clinton is coming from. But if we're going to fight the good fight on things like, you know, equal pay, on things like trying to make sure that you have Obamacare sustained for another generation, you've got to -- you've got to have the tools and the tools include money.

And so she's really -- I think she's trying to sort of make an argument to people who don't want any money from any tainted source finding its way into politics. She's saying, hey, that's just not reality.

[09:10:03] COSTELLO: All right. So on the subject of the Iraq war, Mark, Sanders again attacked Clinton for her vote for the Iraq war. She answered this way, she said, a vote in 2002 is not a plan to defeat ISIS. Is that skirting the issue, Mark, or is it effective?

PRESTON: I think that's probably her most effective argument to date. Look, this was litigated back when she ran against Barack Obama in 2007-2008 and it was largely, you know, due to the fact that she'd lost because of the Iraq vote. Of course, the hope and change and the history-making of Barack Obama, but she was dogged by Iraq back in 2008. Who would have thought that we would be talking about it today and, of course, we are right now, but I think when she said that, it was more forward-looking.

She's trying to move beyond it. Let's not talk about the past. I've apologized for that, but how are we going to defeat ISIS right now? It's when I think when she came up with that line last night, that was probably her most effective defense.

COSTELLO: So, Errol, also, you know, along the lines of who's the pragmatist who can get things done, you know, Hillary Clinton says progressiveness means progress. Clinton intimated during that debate that Sanders, even after all of his years as a lawmaker did not accomplish much.

Errol, is she right?

LOUIS: Well, yes, I mean, apparently. I mean, the charge that's coming from the Clinton camp, I can't say that I have verified this myself, is that he's passed three bills and two of those were naming post offices. You know? I mean, if that's true, or anything resembling that is true, that's not much to show for a quarter of a century in Congress.

Now if that's the argument that she's going to make, I think it has a certain amount of reality to it. If Bernie Sanders is saying that because I was right, I should be the president of the United States, I think we all have -- you know, certainly his rival has the right to raise the issue. Is that really all there is to it? To just be right on this issue or that issue? That's not the same as running the government of the most powerful country in the world.

COSTELLO: All right. I have to leave it there.

Errol Louis, Mark Preston, many thanks to both of you.

LOUIS: Thanks, Carol.

COSTELLO: You're welcome.

Will this presidential race come down to two words? Young voters? What we do know, the candidates are vying for their support. So who is resonating and who isn't and what issues are most important to them?

I talked to college students, student body presidents from across the country. Their answers may surprise you. That's coming up later in the hour. You can also check out my op-ed on CNN.com/opinions.

All right. We're following breaking news now. Startling images, right, of a crane collapse in Lower Manhattan. The New York Fire Department currently on the scene at 40 Worth Street. At least two injuries have been reported. Of course, I'll keep you posted on how this situation develops. CNN is on its way to the scene right now.

Still to come in the NEWSROOM, Donald Trump walking away from a battle with Ted Cruz? A new tone and a new poll on the campaign trail.

(COMMERCIAL BREAK) [09:17:09] COSTELLO: For the presidential candidates, the week in Iowa -- well, it began in Iowa and most center ending in New Hampshire.

This is a live picture from Dover, where New Jersey Governor Chris Christie is about to host a town hall. He'll have plenty of company on the campaign trail.

This is the Republican blitz of the state. Candidates are racing to cover as much ground as possible, ahead of the nation's first primary on Tuesday.

But the tone and the momentum may be shifting a bit.

CNN's Sunlen Serfaty is in Manchester with more.

Good morning.

SUNLEN SERFATY, CNN NATIONAL CORRESPONDENT: Good morning to you, Carol. Yes, we're really starting to see Donald Trump recalibrate a bit on the ground here in New Hampshire. He's really trying to campaign in a much more traditional way holding smaller, more intimate campaign events, try his hand basically at retail politicking, which New Hampshire voters expect to see here from the candidates.

But also another shift. Donald Trump really shifting his tone. Really toning down his rhetoric and backing off attacks on Ted Cruz.

(BEGIN VIDEOTAPE)

SERFATY (voice-over): Going into the nation's first primary next Tuesday, the GOP candidates are taking New Hampshire by storm.

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: February 9th. You've got to get out and vote. No matter where you are, no matter how you feel, I don't give a damn --

SERFATY: Donald Trump ramping up his ground game, a lesson learned from his second place finish in Iowa, switching gears at last night's rally in Portsmouth, he didn't attack opponents Marco Rubio and Ted Cruz, instead firing up the crowd with one message: He's in it to win it.

TRUMP: We're going to win on health care, we're going to win with the military, we're going to knock the (EXPLETIVE DELETED) out of ISIS. We're going to knock the (EXPLETIVE DELETED) out of it.

SERFATY: The latest CNN polls show Trump maintaining his lead among Granite State voters. Rubio surging to second place. Ted Cruz downplaying his third-place status.

SEN. TED CRUZ (R-TX), PRESIDENTIAL CANDIDATE: If momentum were measured by the media, Marco Rubio would already be the Republican nominee. Iowa demonstrated the media doesn't get to pick the Republican candidate.

SERFATY: While sharpening attacks on Donald Trump.

CRUZ: Donald Trump is very rattled right now. He told the entire world he was going to win Iowa, and then he didn't win.

God bless the great state of Iowa.

SERFATY: And just a day after accusing the Texas senator of stealing those Iowa caucus votes, Trump now telling CNN's Anderson Cooper he's over it.

TRUMP: But I'm so much -- because I've been now here for two days -- I'm so much into this, into New Hampshire, that I just, I don't care about that anymore.

ANDERSON COOPER, CNN ANCHOR: But you think Ted Cruz intentionally was spreading false --

TRUMP: I don't care. I mean, I don't want to even say, let's see what happens. I guess people are looking at it. Who cares?

SERFATY: Meanwhile, former GOP candidate Lindsey Graham, who's endorsed Jeb Bush, blasting both candidates, calling Trump's views on foreign policy gibberish and calling Cruz an opportunist.

[09:20:01] SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: If you're Republican and your choices is Donald Trump and Ted Cruz in a general election, it's the difference between poisoned or shot, you're still bit.

(END VIDEOTAPE)

SERFATY: And as Cruz and Trump continue to duke it out, the establishment lane of the party continues to battle it out really, escalating attacks on each other and Marco Rubio remains target number one -- Carol.

COSTELLO: All right. Sunlen Serfaty reporting live for us this morning.

The Ted Cruz campaign blitzing New Hampshire under the banner "Trusted" as in trust-ted. Well, his campaign is facing new questions about its tactics and honesty.

CNN has gotten ahold of a Cruz campaign voice to Iowa voters claiming that Ben Carson has suspended his presidential campaign and they should vote for Cruz in last week's caucuses. Listen.

(BEGIN AUDIO CLIP)

TED CRUZ CAMPAIGN VOICE MAIL: It has just been announced that Ben Carson is taking a leave of absence from the campaign trail, so it is very important that you tell any Ben Carson voters that for tonight, that they not waste a vote on Ben Carson and vote for Ted Cruz.

(END AUDIO CLIP)

COSTELLO: The campaign's claims simply not true. Carson is indeed still in the race.

This is the second time the Cruz camp was blasted for dirty tactics. The campaign also blasted for the mailer you're looking at, an official-looking voter violation flyer that seemed to threaten people if they didn't vote. Both tactics sparking headline at today's editorial page of "The Des Moines Register", "Cruz's campaign of deceit should worry voters."

So, let's talk about this. John Brabender is a Republican political consultant. He was also a senior strategist for Rick Santorum's 2012 campaign. I'm also joined by Sabrina Schaeffer. She's the executive director of the Independent Women's Forum.

Welcome to both of you.

JOHN BRABENDER, REPUBLICAN STRATEGIST: Good morning.

SABRINA SCHAEFFER, EXECUTIVE DIRECTOR, INDEPENDENT WOMEN'S FORUM: Good morning, Carol.

COSTELLO: Good morning.

So, Sabrina, is this hurting Ted Cruz?

SCHAEFFER: You know, we're going to have to wait and see. Here's the thing, Carol, there has never an era of political civility, and we should not pretend that, you know, campaigns have ever been sort of polite and nice to one another. The difference is we have cable news, which is where 90 percent of voters are getting their news information from, according to Pew Research, and we have technology. And so, all of this makes a bigger splash than perhaps in days past.

I think what's interesting, though, is that this is a campaign that is no doubt sort of salacious, right? We are watching a reality TV show. More than 50 percent of people who watched the debates say they are fun to watch.

So, I think people are getting caught up in all of this scandal and what's right and what's wrong and what's dirty tricks perhaps more than we want them to.

COSTELLO: Yes, but, John, Cruz supporters love him because he's against the establishment. For people fed up with the system, doesn't -- don't those tactics look like politics as usual?

BRABENDER: That's the problem. I would tell you, I've done politics, media campaigns, for over 20-some years. Six presidentials.

This isn't just hardball politics. This is unethical politics. It's a character issue.

The problem is, Ted Cruz is starting to see more and more like the Johnny Manziel of presidential campaigns where every morning, we're waking up to find something new that's a character issue, and I think that's why you're seeing that he did not get a very big bump coming out of Iowa. I think this is causing a lot of concerns about Republicans, because they know what Democrats would do with this in the fall election.

COSTELLO: And --

SCHAEFFER: Yes, and --

COSTELLO: Go ahead, Sabrina.

SCHAEFFER: Yes, I would add that, it's interesting, because, if you asked Democrats, they're more concerned that there actually hasn't been enough substance in the campaign. That the candidates aren't talking about the issues that matter most.

And I think a lot of the Republicans say who cares? But the reality is, there are more Democrats registered than Republicans. Republicans, if they want to win in November have to be able to appeal to some of those leaning Democrats, some of those softer Democrats. So, that's where some of this is definitely going to make an impact.

They're going to have to get back to talking about issues voters want to hear about and make sure they don't just got caught up in dirty tricks and salacious headlines.

COSTELLO: But, John, until the field is narrowed much more than it is, Republicans really can't talk about substantive issues, can they?

BRABENDER: Well, first of all, let's not limit to do a Republican thing. It was last night -- just last night that Hillary Clinton accused her opponent Bernie Sanders of running a smear campaign, not an issues campaign. So, as far as being the victim in chief, she's very good at that.

But there has been a lot of substance in this campaign. The problem is, when you have this many candidates, what everybody gravitates to is the problems. And I would argue, character, is an issue. And people are going to look at all these candidates and say, they check the box in a lot of the conservative value things but do they live them is a very important issue question.

(CROSSTALK)

COSTELLO: I have to leave it there. I'm so sorry.

SCHAEFFER: OK.

COSTELLO: Sabrina Schaeffer and John Brabender, thanks so much.

Still to come in THE NEWSROOM: Hillary Clinton still dogging her campaign. But now, we're finding out she wasn't the first secretary of state to use a private account.

(COMMERCIAL BREAK)

[09:29:17] COSTELLO: I want to take you now back to Lower Manhattan where a crane collapse -- well, we found out it's now killed at least one person. Two others are injured, and they have serious injuries. This took place at 40 Worth Street. I think that's in Tribeca. One

hundred thirty-eight firefighters now on the scene. A number of cars have also been smashed and damaged. We'll keep you posted.

(MUSIC)

COSTELLO: And good morning. I'm Carol Costello. Thank you so much for joining me.

Hillary Clinton's private e-mail at the State Department was not the first to handle classified material, and an internal investigation by the State Department found two e-mails on the private account of former Secretary of State Colin Powell. It found they were retroactively reclassified secret or confidential.

Powell took exception to the disclosure saying, quote, "I have reviewed the messages and I do not see what makes them classified."