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President Trump's First Speech to Congress; Obamacare Replacement "Complicated"; Who's Behind the Leaks; Two Women to Face Charges in Kim's Death. Aired 4:30-5a ET

Aired February 28, 2017 - 04:30   ET

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

DAVE BRIGGS, CNN ANCHOR: President Trump putting his final touches on his first address to Congress. With critical issues facing the country, will he take the same harsh tone he did when he was sworn in?

CHRISTINE ROMANS, CNN ANCHOR: One of those critical topics, health care. With Republicans struggling to agree on a replacement for Obamacare, wait until you hear what the president says about the health care system.

BRIGGS: And an accusation by President Trump that might leave you shocked. Who does he say is behind the leaks shaking up the White House?

Welcome back to EARLY START, everybody. I'm Dave Briggs.

ROMANS: Nice to see you this Tuesday morning.

BRIGGS: You too.

ROMANS: I'm Christine Romans. It's about 30 minutes past the hour.

In just hours, President Trump will give his first address to a joint session of Congress. The president's speech writing team is working with him to finalize the address, which is expected to be heavy on national security and creating economic opportunity and promises made and promises kept.

[04:30:05] We've also learned the White House sent an e-mail in advance of the speech. That e-mail was provided to CNN by a recipient. It lays out many of the same ideas we have reported but also notes the president will address safer communities and better schools for the, quote, "forgotten men and women", apparently a reference to poorer and minority communities.

He will also lay out a plan to work with Congress on a sweeping agenda that includes better workplace for parents and better education for kids.

BRIGGS: The speech comes at a critical time for the administration. The country is still waiting on the president's health plan, his budget outline just made public, and he's going to give new options for winning the fight against ISIS. CNN's Jim Acosta joins us with a preview of Trump's address -- Jim.

(BEGIN VIDEOTAPE)

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Dave and Christine, the president appears to be ready to strike a more positive in that speech to a joint session of Congress later on tonight. Renewal of the American spirit and optimistic vision for all Americans, that will be the theme of the president's speech.

Meanwhile, the White House is signaling that President Trump is sharpening his budget axe to make major cuts to nondefense spending here in Washington. Only the Pentagon appears to be spared in the Trump administration's budget plans. White House officials say the president is expected to propose a big $54 billion increase in defense spending. Just to put that in perspective, that increase is larger than what the government spends at the state and the EPA.

What the president said yesterday here at the White House, federal agencies should brace themselves for leaner times.

Here's what he had to say.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We're going to do more with less and make the government lean and accountable to the people. We can do so much more with the money we spend. With a $20 trillion in debt, can you imagine that, the government must learn to tighten its belt -- something families all across the country have had to learn to do, unfortunately. But they've had to learn do to do it.

ACOSTA: The White House cautions the full budget proposal from the president won't be out until May -- Dave and Christine.

(END VIDEOTAPE)

ROMANS: All right. Jim Acosta, thanks, Jim.

President Trump says he wants to craft a budget to put America first. Here are the things he wants to spend more on. Jim Acosta mentioned the $54 billion boost to defense. The president pledged to beef up law enforcement, though he did not provide any details. He renewed his call for a big infrastructure bill, but said the states would have to help pay for that.

The defense spending boost will be paid for by cutting government programs elsewhere and reducing funds to government agencies. The president will target foreign aid which totals $35 billion. Sources say the Environmental Protection Agency is preparing for deep cuts. That agency runs on an $8.2 billion budget. Funding for the State Department could also be cut from the $50 billion budget right now.

There is pushback though. More than 120 retired generals signing a letter Monday, urging the White House not to cut State Department funding. They say it is critical to keep being America safe. In fact, Dave, they say that, you know, that the State Department, foreign aid spending in particular is a compliment to the military strategy. These are investments made in many of these countries so you have a seat at the tables, so that you can help craft policy there to prevent military conflict later on.

BRIGGS: Let's not forget, during the whole Benghazi investigation, one of the Republicans' central arguments is that the State Department cuts left them vulnerable to attacks in Benghazi.

ROMANS: That's a very good point.

BRIGGS: So, a bit of a hypocritical message there.

ROMANS: That's the very interesting point.

OK, Republican efforts to repeal and replace Obamacare running into new stumbling blocks this morning. Two top House conservatives, one of them, the chairman of the House Freedom Caucus, Mark Meadows, saying they would vote against a draft of the Obamacare repeal bill that leaked last week. Meadows pointing to the draft's call for refundable tax credits which he calls a new entitlement program.

Now, ahead of his speech, even the president is admitting that replacing Obamacare will be tougher than it looked from the campaign trail.

That's where we bring in CNN's Phil Mattingly from Capitol Hill.

(BEGIN VIDEOTAPE)

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: David and Christine, it's been a seven-year war for the Republicans against the cornerstone achievement of President Obama's domestic policy, Obamacare, the repeal and replace of it. It's no secret what they want to do. The process of actually doing it, that's slightly more difficult, something President Trump made very clear yesterday.

Take a listen.

TRUMP: We have come up with a solution that's really, really, I think very good. Now, I have to tell you, it is an unbelievably complex subject. Nobody knew health care could be so complicated.

MATTINGLY: And, guys, that complexity on the policy side, on the politics and on procedural side here on Capitol Hill really kind of underscoring the urgency right now for House GOP leaders. They want to move fast and with good reason. As they see the town halls, as they see approval numbers for Obamacare start to rise, they want to move quickly because if they don't, if people feeling the election pressure, as people start feeling that town hall pressure, who knows what could happen?

And that's exactly why they want President Trump not to get behind in general proposals, but specifically get behind the path laid out right now by House Speaker Paul Ryan. That is what they want to see tonight in his speech.

The big question is, will he go that far? Is he even with them so far in this process?

[04:35:02] Dave and Christine?

(END VIDEOTAPE)

BRIGGS: Thank you, Phil.

Bernie Sanders not known for his sense of humor busted out laughing when asked about President Trump's comments that nobody knew that health care could be so complicated. Sanders telling Anderson Cooper that he learned serving on a Senate Health Committee that providing care in a nation of 320 million is, quote, "very, very complicated".

(BEGIN VIDEO CLIP)

SEN. BERNIE SANDERS (I), VERMONT: Stunned, really, every day -- I mean, you just mentioned to me. He said -- I mean, this is the president of the United States. We have debating health care in this country for 30 years, and he says, gee, who knew how complicated it was. He is maybe the only person in the country who doesn't know how complicated it is.

(END VIDEO CLIP)

BRIGGS: The former presidential candidate says he does not believe Democrats should help Republicans repeal and replace, but would work with them to improve Obamacare.

ROMANS: All right. Members of the key House Committee looking into Russia's alleged interference in the U.S. election now agreeing on the boundaries of their investigation. They will examine contacts between Trump's campaign and Russia, and also look into who leaked key details about Russia's actions.

But the leadership of the committee is still at odds over what the investigators have determined if they determined anything at all. House Intel Chairman Devin Nunes tells CNN there is no evidence, no evidence that Russian officials communicated with the Trump campaign. And he is brushing off calls for an independent investigation.

(BEGIN VIDEO CLIP)

REP. DEVIN NUNES (R), CALIFORNIA: Not that I'm aware of. We still have not seen any evidence of anyone from the Trump campaign or any campaign for that matter that's communicated with the Russian government.

(END VIDEO CLIP)

BRIGGS: Meanwhile, ranking Democrat Adam Schiff says the committee hasn't even looked into the issue yet. And he says the White House is being too quick to dismiss the investigation.

(BEGIN VIDEO CLIP)

REP. ADAM SCHIFF (D), CALIFORNIA: That's as if saying before you begin the investigation, because you haven't started it yet, you should never start it because you don't have the evidence. That's nonsense. We need to follow the facts wherever they lead and not begin with the conclusion as the White House would like us to do.

(END VIDEO CLIP)

BRIGGS: There are also new questions over whether the House and Senate Intelligence investigations are compromised after reports that the Republican chairman of both committees privately discussed the matter with the White House and agreed to speak with reporters to tamp down stories about the Trump-Russia connection.

ROMANS: President Trump insists he knows who is responsible for those town hall protests and damaging links that have plagued the White House. In an interview with FOX News set to air this morning, the president points the finger at President Obama.

Listen to the interviewer suggesting Obama is somehow orchestrating all the chaos before President Trump takes it one step further.

(BEGIN VIDEO CLIP)

INTERVIEWER: Can we talk about President Obama? It turns out his organization seems to be doing a lot of the organizing some of the protests that a lot of these Republicans are seeing around the country and against you.

TRUMP: Right.

INTERVIEWER: Do you believe President Obama is behind it? And if he is, is that a violation of the called, so-called unsaid president's code?

TRUMP: No, I think he is behind it. I also think it's politics, such the way it is. His people are certainly behind it. And some of the leaks, possibly, come from that group. You know, some of the leaks, which are really very serious leaks because they're bad in terms of national security.

(END VIDEO CLIP)

ROMANS: So, the president did not offer any evidence to back up his claim. CNN has reached out to Obama's office for comment.

BRIGGS: White House Press Secretary Sean Spicer denying a CNN report that President Trump blessed his decision to search staffers' cell phones and to block certain reporters from a briefing last Friday. Spicer says that decision, decision and the move to check the phones of top aides to see if they were leaking information or if they were using encrypted apps to talk to reporters are his ideas.

Spicer tells, CNN, quote, "Mr. Trump did not sign off or even know what I did. That is not accurate. I don't believe he even knew there was a gaggle, and in no way was it discussed with him or any other staffer." And a significant break with the last administration, the Justice Department reversing its position on a controversial voter ID law in Texas. Last summer, a federal appeals court agreed with the Obama administration that the law discriminated against minority voters and violated the Voting Rights Act. But the Trump administration says the Texas legislature is considering changes to the law to address those concerns and the Justice Department wants efforts to be allowed to move forward.

ROMANS: All right. Thirty-nine minutes past the hour this Tuesday morning.

Options for growing the fight against ISIS are now on the president's desk. What are they and what is the reaction in the Arab world? We are live in the Middle East.

(COMMERCIAL BREAK)

[04:43:50] ROMANS: All right. The preliminary framework for ramping up the war in Syria is now in the hands of President Trump. The Pentagon delivering a series of options covering military, diplomatic and financial strategies. CNN reporting earlier this month that sending conventional grounds forces into northern Syria could be on the table.

CNN's Jomana Karadsheh tracking the latest developments live from Amman, Jordan, for us.

Jomana, how was all this being received in the Middle East? President Trump had campaigned on, having a decisive victory plan in his hands right away when -- upon taking office.

JOMANA KARADSHEH, CNN INTERNATIONAL CORRESPONDENT: Well, I think, Christine, the attitude here in this region is that everyone is waiting to see what this new administration strategy is going to be. They understand that there are multiple options here that are being presented by the military leadership to the White House. And they're going to wait and see what the decision is.

You're going to have some in the region who are going to be welcoming of more U.S. involvement. These countries for example like Jordan who have been -- who have wanted to see a more aggressive U.S. approach when it comes to the fight against ISIS in Iraq and Syria and even expanding it beyond that.

[04:45:01] You have others who are very suspicious of U.S. motives, especially when it comes to the notion of more combat forces in Iraq, for example, more troops there in Iraq, or deploying combat ground forces in northern Syria. There are some who are very suspicious, especially after hearing President Trump talk about what he described as mistakes of the past and not taking Iraq's oil.

And then you have some who will be very concerned about adding more combat forces in northern Syria. A very complex battlefield there where you have so many different groups that are already engaged in the fighting there and so many competing regional and international interests. So, there is going to be that concern.

And, of course, the issue of the Syrian Kurds and how the U.S. administration is going to be dealing with that issue. They have been considered one of most reliable, if not the most reliable U.S. partner in the fight against ISIS. So far, how is this new administration going to deal with this Syrian Kurds and the support they have been providing them which is not very acceptable to Turkey. So, there really is no one option acceptable for all in this very complex and very divided region, Christine.

ROMANS: It never is. If there were a magic pill or silver bullet, it would have been deployed by now.

Thank you so much for that, Jomana Karadsheh. Thank you.

BRIGGS: Breaking overnight, CNN has learned two women will be charged in the murder of Kim Jong Nam, the half brother of North Korean dictator Kim Jong Un.

CNN's Alexandra Field live in Kuala Lumpur with the breaking details.

Good morning.

ALEXANDRA FIELD, CNN CORRESPONDENT: (AUDIO GAP) the busy airport in a Kuala Lumpur terminal. They will now go to court tomorrow to face murder charges. Both of these suspects had claimed they thought they were part of the prank when they were asked to put liquid on Kim Jong Nam's face. The charges they are facing couldn't be more serious in this country, a murder conviction comes with a mandatory death penalty.

There is another suspect currently in custody, a North Korean citizen who Malaysian officials are still investigating. An envoy from North Korea has now arrived in Kuala Lumpur to lobby for his release. That envoy also seeking the return of Kim Jong Nam's body, which is being held in Kuala Lumpur. He wants it returned to North Korea and he is working toward better relations right now between North Korea and Malaysia.

Relations between the two countries becoming increasingly strained. North Korean officials have been very critical of the Malaysian investigation. Malaysian officials saying they aren't getting the cooperation that they need from North Korean officials. They are still looking to question seven North Koreans in connection with Kim Jong Nam's death. Tomorrow, two suspects go to court to hear the murder charge -- Dave.

BRIGGS: Alexandra, thank you.

ROMANS: All right. It's about 50 minutes past the hour.

A childhood dream is coming true for a couple of amateur astronauts. SpaceX is taking them to the moon. Details when we get a check on CNN Money Stream, next.

(COMMERCIAL BREAK) [04:52:39] ROMANS: Fifty-two minutes past the hour.

The parent company that owns Kay Jewelers and Jared Jewelers is dealing with a class action lawsuit involving about 250 female employees with alleged sexual harassment and discrimination. Public documents revealed the women alleged they were accosted, pressured into sex for career advancement. They were routinely paid less than men.

A spokesperson for the company Sterling Jewelers told "The Washington Post" the claims were thoroughly investigated and are not substantiated by the facts.

BRIGGS: A team of NTSB investigators heading to the scene as authorities try to determine what caused a deadly small plane crash in southern California. At least three people were killed when the plane went down Monday in a residential neighborhood of Riverside. Authorities say the aircraft broke apart on impact, destroying two homes, two people on board survived and taken to a local hospital. As many as five people on the ground are still unaccounted for.

ROMANS: A new wave of bomb threats against Jewish community centers and day schools. JCCs in at least a dozen states were targeted Monday along with the San Francisco offices of the Anti-Defamation League. No devices were found at any of those facilities. The threats prompting the ADL to issue a security advisory. Since the beginning of the year, there have been 90 reported incidents at 73 locations in 30 states and one Canadian province.

BRIGGS: Japanese auto parts company Takata pleading guilty and agreeing to pay $1 billion in criminal penalties for concealing defective air bag inflators that are blamed for at least 16 deaths. The scandal touched off the biggest auto recall in history, involving 19 automakers and 42 million vehicles. The three former Takata executives are also charged. Attorneys for Takata telling a federal charge, the company's actions over the 15-year period were, quote, "deeply inappropriate".

ROMANS: All right. To your weather now. Warmer weather bring in a few days of severe weather risk.

Meteorologist Pedram Javaheri has the latest.

(BEGIN VIDEOTAPE)

PEDRAM JAVAHERI, AMS METEOROLOGIST: Dave and Christine, it's the last day of the meteorological winter and things, of course, going out with a bang here when it comes to the severe weather coverage. Widespread region across parts of the Midwest, unto the south central states as well.

And you take a look. The storms initially developing off out towards St. Louis, work their way out toward Paducah by the afternoon hours. It displaces off towards the east, the highest level of concern right there for St. Louis, Little Rock and Memphis generally for hail and wind, but again, can't roll out an isolated tornado. [04:55:04] And we are quickly transitioning into the time of year you

begin to see the activity really pick up. Look at these temperatures, almost 80 in Little Rock today. You think that's going to help fuel these storms? Absolutely. They're 21 degrees above normal.

And same story out of Chicago where it sits at 21 above normal for today. And notice, the threat pushes towards the east. Birmingham and Atlanta could get in on the action come Wednesday afternoon with the storms forecast across the region.

Look at this, places like New York City from the 50s, up to 71 degrees. A lot of clouds, a lot of thunderstorms possible come Wednesday before a dramatic cooling trend going in towards the late portion of this week -- guys.

(END VIDEOTAPE)

BRIGGS: All right. Thank you.

The dust starting to settle after the big best picture Oscar flub. Host Jimmy Kimmel explaining what happened on his show last night. Here's his take.

(BEGIN VIDEO CLIP)

JIMMY KIMMEL, HOST, JIMMY KIMMEL LIVE: Any of you ever host the Oscars before? Except for the end, it was a lot of fun. It was -- all of a sudden, it turned into those Maury Povich Paternity Test Shows.

In retrospect now, what we know is when Warren did, he was confused, so he handed it to Faye and let her read it. In other words, Clyde threw Bonnie under the bus.

The state manager is never on camera, it's very unusual. But -- so, we are sitting there and you figure, well, you know, the host will go on stage and clear this up. Then I remember, oh, I'm the host.

So as I walked on stage, people started speculating, people around me said, oh, did you pull a prank of some kind? I said, hey, no, I didn't. I did not pull a prank. If I pulled a prank, by the way, I would not have the wrong winner's name. It would be a Bed Bath and Beyond coupon.

So, the accountants gave Warren the wrong card and they apologized for it today. So, it wasn't Warren Beatty's fault and Faye Dunaway made quite the getaway. She got the hell out of the stage.

(END VIDEO CLIP)

ROMANS: That's what I said, where did she go? The New York papers this morning, the tabloids, are just assailing the PricewaterhouseCoopers guy.

BRIGGS: The loser is, yes, this guy's name is Brian Cullinan.

ROMANS: They are giving him a hard time. PricewaterhouseCoopers has apologized.

BRIGGS: He should have known immediately upon reading "La La Land", we have the wrong one. And get out there, stop taking selfies.

ROMANS: All right. Fifty-seven minutes past the hour.

Let's get a check of CNN Money Stream right now.

I feel like a broken record because I am broken record. I have been saying the same thing for 12 straight days. The Dow hitting 12 record highs in a row. That ties a record string back in 1987. It's an incredible rally.

But there are -- some are saying it's too far too fast. Goldman Sachs put out today on its investors, warning that the market reached maximum optimism. "The Wall Street Journal" says warning signs are flashing.

But check this out, the current bull market is 2,913 days old. Over that span, the S&P 500 is up 250 percent. That's the second longest bull market ever. The first one, the first longest bull market was 4,400 days, from the crash of 1987 to the birth of the dot-com bubble in 2000.

And it grew 582 percent, more than double were the gains of the current bull market are. So, bottom line, if you were to match the longest bull market in history, you would have farther to go and so much more money to make.

There's one sector that could be the best bet in the entire stock market right now. Defense stocks, the sector raising again after President Trump's latest vow to beef up the military. Boeing up 15 percent in just the first two months of this year. General Dynamics up more than 10 percent, Lockheed Martin, Northrop Grumman, you get the picture. Defense stocks have been a great play.

SpaceX is flying to the moon and taking two lucky tourists with it. CEO Elon Musk says two people will take a trip around the moon next year. The ship will take off from NASA's launch pad near Cape Canaveral.

These amateur astronauts are likely paying millions for the trip. We don't exactly how much they've approached Elon Musk to pay. He's not released their names. They will undergo fitness tests and begin training later this year. No humans have traveled past low earth orbit since the final Apollo mission in 1972. That level is where the satellites orbit the earth.

BRIGGS: I'm not signing up for that.

ROMANS: Listen, they approached him.

BRIGGS: Even if I had the money.

ROMANS: These two people who know each other, approached him and they are on board. They're going to orbit the moon next year. BRIGGS: They will have one heck of a story to tell.

EARLY START continues right now.

ROMANS: You wouldn't do it.

(MUSIC)

BRIGGS: Happening now: President Trump getting ready to address Congress for the first time as commander-in-chief. Should we expect the same dark tone we heard in the inaugural?

ROMANS: One of the topics we will likely hear about tonight, health care. The president now realizes repealing and replacing Obamacare will not be easy. We'll show you what he said.

BRIGGS: And a stunning suggestion from President Trump.