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EARLY START

Buttigieg Maintains Lead With New Results From Iowa; Trump Turns State Of The Union Address Into Partisan Rally; The Senate Is Set To Acquit President Trump Today In The Impeachment Trial. Aired 3:30-4a ET

Aired February 5, 2020 - 03:30   ET

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


[03:30:24]

LAURA JARRETT, CNN ANCHOR: A big task for a divided nation. Votes from Iowa still coming in. Hostilities boiling over at a divisive State of the Union and the Senate posed to acquit the President of high crimes and misdemeanors. Welcome back to EARLY START. I'm Laura Jarrett.

CHRISTINE ROMANS, CNN ANCHOR: And I'm Christine Romans. It is 30 minutes past the hour, 3:30 a.m. in the East.

Breaking overnight, new results are trickling in from the Iowa caucuses and former South Bend Mayor Pete Buttigieg still in front with 71 percent of precincts now reporting.

Buttigieg has 26.8 percent of state delegates followed Bernie Sanders, Elizabeth Warren and Joe Biden. Amy Klobuchar not far behind the former VP. Remember, nearly 30 percent of results still not reported.

The Sanders campaign no doubt looking at popular vote totals where Sanders remains in front.

JARRETT: Now, Buttigieg started his campaign in obscurity, but he has to be regarded as a serious contender. That reality appeared to be sinking in after the first set of Iowa results was released.

(BEGIN VIDEO CLIP)

FORMER MAYOR PETE BUTTIGIEG (D), PRESIDENTIAL CANDIDATE: And it validates for a kid somewhere in a community wondering, if he belongs or she belongs or they belong.

(END VIDEO CLIP)

JARRETT: Meanwhile, former Vice President Joe Biden is looking to leave Iowa behind and pick up some momentum. Nevada, South Carolina are ahead with large blocks of Hispanic and black voters who support them, but first New Hampshire an overwhelmingly white state.

(BEGIN VIDEO CLIP)

JOE BIDEN (D), PRESIDENTIAL CANDIDATE: It's good to be back in New Hampshire. More than you know.

[LAUGHTER]

BIDEN: As I said from the beginning, I want to do well, and I want to do well in Iowa. The four states I can't afford and the first four are the key, two caucuses in two primaries. And so we'll see what happens -- have they finished counting?

(END VIDEO CLIP)

ROMANS: Mike Bloomberg's campaign looking to capitalize on the chaos in Iowa. The former New York City Mayor doubling his spending on television ads, and has already topped $300 million.

Now as for the app at the center of Iowa's reporting issues, the Department of Homeland Security says Democrats did not take up their offer to test it for security flaws.

But Iowa officials say the data that was entered was accurate and the paper trail backs that up.

JARRETT: Trouble with the app had been reported last week during testing. The same software was supposed to be used for the Nevada caucus on February 22. That won't be happening now.

Nevada, Democrats say the party is reevaluating its options and has a series of back up plans in place.

ROMANS: All right, a can't miss two-night event on CNN starts tonight, the last Democratic Presidential Town Halls before the New Hampshire primary. Join us tonight at eight Eastern only on CNN.

While Democrats struggle to count the votes in Iowa, President Trump was turning his State of the Union address into a rowdy partisan campaign rally.

(BEGIN VIDEO CLIP)

AUDIENCE: Four more years. Four more years. Four more years.

(END VIDEO CLIP)

ROMANS: Republican chants of four more years while Senate Republicans are on the verge of acquitting the President and keeping him in office.

Last night, the President leaned on voters to do the same in November.

JARRETT: Two defining moments bookending the State of the Union address, the President snubbing Nancy Pelosi's handshake at the start, and the House Speaker tearing up her copy of the President's speech at the very end.

It was a speech filled with reelection themes for the President's base: The economy, immigration, the border wall, guns, abortion, judges and of course healthcare. That's a topic of great interest for voters on both sides of the

aisle, the President highlighting a key fracture within the Democratic Party.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: To those watching at home tonight, I want you to know, we will never let socialism destroy American healthcare.

[APPLAUSE]

(END VIDEO CLIP)

ROMANS: The President also claimed he will protect coverage for patients with preexisting conditions, even though his administration is in court to abolish those protections without a plan to replace them.

(BEGIN VIDEO CLIP)

TRUMP: With unyielding commitment --

(END VIDEO CLIP)

ROMANS: Democrats many of them wearing white as a tribute to the suffragettes, countered the President's healthcare talk with chants of H.R. 3, that's the Democratic bill to lower prescription drug costs.

JARRETT: The President's guests reflecting the demographics he is clearly trying to appeal to. He honored a 100-year-old Tuskegee airman, and awarded a scholarship to a young African-American girl.

He also engineered a reunion of sorts between service member Townsend Williams and his family and had First Lady Melania Trump award the Medal of Freedom there on the spot to conservative icon, Rush Limbaugh, who announced earlier this week he is battling lung cancer.

But not one mention of the "I" word during the President's State of the Union address. Impeachment was clearly not off limits in the Democratic response.

[03:35:28]

(BEGIN VIDEO CLIP)

GOV. GRETCHEN WHITMER (D-MI): As we witness the impeachment process in Washington, there are some things each of us, no matter our party should demand -- the truth matters.

(END VIDEO CLIP)

JARRETT: That's Gretchen Whitmer, the Democratic Governor of Michigan, focusing on healthcare and American workers.

She offered up a challenge to the President's take on the economy. (BEGIN VIDEO CLIP)

WHITMER: The President says the economy is strong. My question is, strong for whom? Strong for the wealthy who are reaping rewards from tax cuts they don't need?

(END VIDEO CLIP)

JARRETT: It's important to note here how the Democrats chose to elevate Michigan in the rebuttal, a critical state obviously won by the President back in 2016.

ROMANS: All right, a strong economy is central to President Trump's reelection argument. The dealmaker President taking credit for his trade deals at times with trademark exaggeration.

(BEGIN VIDEO CLIP)

TRUMP: The USMCA will create nearly 100,000 new high paying American auto jobs and massively boost exports for our farmers, ranchers and factory workers.

(END VIDEO CLIP)

ROMANS: That's the new NAFTA. The President there inflating his own administration's forecast of new jobs under USMCA.

The Office of the U.S. Trade Representative estimates 76,000 jobs created over the course of five years, the U.S. International Trade Commission estimated an increase of 29,700 jobs in auto parts production. But a decline of 1,600 jobs in vehicle production.

For farmers, USMCA and that Phase 1 trade deal with China do provide some relief, relief from President Trump's own trade wars that disrupted Ag markets. But even with the President's billion dollar bailouts, farm bankruptcies jumped to their highest level since 2011.

JARRETT: The Senate is set to acquit President Trump today in the impeachment trial. He was charged with abuse of power for demanding a political investigation of the Bidens from Ukraine in exchange for military aid and a White House visit.

There's some senators who could cross party lines, but they won't. Senator Susan Collins won't be one of them. The moderate from Maine voted to hear from witnesses in the trial, but says she will not vote to convict.

(BEGIN VIDEO CLIP)

SEN. SUSAN COLLINS (R-ME): I believe that the President has learned from this case.

QUESTION: What do you believe the President has learned?

COLLINS: The President has been impeached. That's a pretty big lesson. (END VIDEO CLIP)

JARRETT: You can watch CNN's live coverage of the Senate vote today at 4:00 p.m. Eastern.

And it's interesting Christine. She says the President has learned from this, but told George Stephanopoulos, he would take foreign assistance and do it again.

ROMANS: Yes, we'll see if he has chastened at all heading into the election.

Thirty seven, thirty eight minutes past the hour. If the State of the Union was a blueprint for the campaign, a divided nation will see no signs of healing. What it all means nine months to election day?

(COMMERCIAL BREAK)

[03:42:30]

ROMANS: New results trickling in overnight from the Iowa caucuses. They show former South Bend Mayor Pete Buttigieg holding his lead with time running out for the other candidates to catch up.

JARRETT: Let's go live to Washington and bring in Zach Wolf, senior writer for CNN politics. Zach, thanks so much for joining us again. Right now, Buttigieg leading the pack. Obviously not all of the votes are in yet. It haven't been all counted yet. We've got 71 percent.

If this sticks, how bad is this for Joe Biden going into New Hampshire next week? You know, you see there in some of the totals that we've seen between the first pick, and the second pick from the Iowa caucus night. I mean, he lost -- he was just bleeding, something like 2,300 votes that night.

ZACHARY WOLF, CNN MANAGING EDITOR: I don't think when Joe Biden joined this race, he anticipated he would come in fourth place in Iowa. So this is certainly not meeting expectations for him.

And then if you add to that, he is not expected to win necessarily in New Hampshire, which is the next contest. He has trailed Bernie Sanders, who you know, lives right next door in Vermont.

So it takes a little while for him to get down to South Carolina, where he does a little bit better with African-American voters and is favored to win.

So he is going to have to wait a little while to get some really good news, barring some kind of surprise, I think in New Hampshire, so it's not good. I don't think it's a mortal blow or anything quite yet, but it certainly starts to raise questions about him and his candidacy and his viability amongst the Democratic electorate.

JARRETT: But I mean, let's be frank about this, this is a two-term Vice President, who has now at least, it looks like been beat by the former mayor of South Bend, Indiana. I mean, if he is making the argument that only he can beat President

Trump, well, it looks like he's just been beat by three other Democrats.

WOLF: Right. And let's not understate what a phenomenon that South Bend, Indiana mayor is turning out to be that former mayor. You know, he went all in in Iowa, he spent a lot of time there. He spent a lot of money there.

But it's truly remarkable that he was able, you know, at his young age to essentially galvanize that state behind him and become the alternative to Bernie Sanders. That's a remarkable thing.

ROMANS: Yes. Joe Biden, by the way, says that it's not one, he's not looking at just Iowa. He's looking at the first four here and that's what's important to him. So they've already sorted massaged that messaging and are moving on.

Meanwhile, all of this chaos in Iowa all plays into the President's hand. And then last night he had the stage and you know, it was a stage, Zach, last night, at the State of the Union.

I mean, I'm not the first one to say, I won't be the last one to say it felt like a game show. But it certainly was a blueprint for what the President is going to do over the next nine months as he runs for reelection.

WOLF: You know, I've watched a lot of the State of the Union addresses and honestly, they get kind of boring after you've seen a couple of them. This one was not boring.

He had props, you know, a Presidential Medal of Freedom. He had the guests and he actually used the guests. I think that he uses the bully pulpit in a way at this speech that no other President really does because he's so over the top with his language, with his bravado, with his hyperbole.

You know, it's kind of a remarkable thing. It's hard to sort of see past it, to think about what he doesn't mention with these speeches.

But yes, it had that feel of a game show, of a show, of a production really more than a State of the Union.

JARRETT: But Zach, isn't the challenge for Democrats figuring out how do you stop that message from resonating? You know, as we pointed out, his message on the economy may have some hyperbole, but the economy is doing well.

And obviously, you know, the pocketbook in healthcare, those are the issues people care about.

WOLF: Yes. And, and certainly for Democrats they are. I think that they have to continue to point out when he overstates things. He painted a very rosy picture of things last night and it sounded good coming out of his mouth.

But when you drill down into details, you know, a lot of the economic story is not necessarily his to tell.

ROMANS: Yes.

WOLF: It has done well, that's for sure. He, you know, added a lot -- he injected a lot into the economy with his tax cut bill. There are some real problems long term with the deficits and the debt that will be added to the economy.

ROMANS: Exactly. Yes, where are deficit hawks? They are completely gone into hiding and there are people around him, you know, Mick Mulvaney and others who are longtime deficit hawks, and they've just changed -- changed.

WOLF: Right. Yes, he turned them essentially. But you know that's their political interest right now. It is being with him.

So you know, it'll be it'll be interesting to see if the voters can see through this mirage past some of the good news to see the whole story.

ROMANS: Yes, what's so interesting to me about the deficits, you guys is that, you know, I mean, the corporate investment is down the last three quarters. The consumer is holding up everything.

So even after all that gift of those tax cuts, corporate spending isn't exploding. The economy is growing at two percent. You know, those promises that those tax cuts would pay for themselves are just completely empty at this point.

JARRETT: Yes --

ROMANS: All right, Zach Wolf, senior writer, CNN politics. Thanks, Zach.

JARRETT: Thanks, Zach.

WOLF: Thanks for having me.

ROMANS: All right Tesla stock on a roll this year pushing the NASDAQ to a record high. All of those Tesla shorts are just hating life.

CNN Business has the details next.

(COMMERCIAL BREAK)

[03:52:39]

JARRETT: Two evacuation flights carrying Americans from the epicenter of the coronavirus outbreak are on the way to the United States right now. They left China with about 350 passengers on board. CNN's David Culver live in Beijing with more. David, what can tell us?

DAVID CULVER, CNN CORRESPONDENT: Well, Laura, they've got a long flight that they're coming to the end. We know that they're going to be in California where they'll be split between two locations including Travis Air Force Base, and then further south in Miramar, and they're going to spend 14 days in quarantine. That's federally mandated because of where they were coming from in China, Hubei province, the epicenter of all of this outbreak.

And imagine spending quarantine on a cruise ship. That may be the reality for some 3,700 people off the coast of Japan. We're monitoring this story as well.

We know that one passenger tested positive for the coronavirus in Hong Kong. He was on that ship 12 days ago. So they've now quarantined the ship. They've started testing the passengers and the crew.

We know 10 passengers have tested positive, among them, one American. They've taken those 10 off of the ship back into Japan. And now, they're testing the others to see how many may have the coronavirus and that ship could be in quarantine for up to 14 days.

It's not clear, but the passengers and crew will have to stay on for that duration.

Meantime the containment effort is stepping up here in China. We're learning about more and more cities and provinces adding lockdowns to their residents. And we know that the hospital staff is really being pressured here and they're now building on more hospitals.

We know one finished construction today according to state media, it's expected to open tomorrow, that in addition to a brand new hospital that was built in six days. That opened to patients on Monday, but then they're going to do this Laura, they're going to add three field hospitals.

They're going to be at stadiums and exhibition halls, and they're going to hold 4,300 patients. I've been seeing the images from these and they're very close quarters. It shows just how desperate they are to find space for these patients.

JARRETT: You can only imagine what it's like to be stuck on that cruise ship, it's just like a big petri dish.

CULVER: Yes.

JARRETT: David, thanks so much.

ROMANS: All right. A second member of a high school track team has died in Oklahoma after a pickup truck ran over six members during a practice run. The driver, 57-year-old, Max Townsend was arrested on charges of manslaughter and leaving the scene.

[03:55:07]

ROMANS: Police say Townsend lost his own son in a car crash in the same city the day before, and appear to be impaired.

JARRETT: Really sad. Shannen Doherty is battling stage four breast cancer. The 48-year-old actress was originally diagnosed back in 2015 and went into remission.

In 2017, she decided to tell ABC News her cancer returned to send a message to others fighting the disease.

(BEGIN VIDEO CLIP)

SHANNEN DOHERTY, ACTRESS: People can look at that and say, oh my god, yes, she can work and other people with stage four can work, too.

(END VIDEO CLIP)

JARRETT: Doherty has been quietly battling cancer while filming the Beverly Hills reboot, "BH 90210." She was coping with the disease while also mourning the death of her friend and former 90210 costar, Luke Perry last March.

ROMANS: So screening "The Lion King" live action movie at a fundraiser turns out to be a costly move for a school in Berkeley, California.

The company that licenses -- school, they would have to pay 250 bucks for showing the movie illegally at this fundraiser.

The e-mail came two months after the event and that fine, well, the fine is nearly a third of what the PTA raised at the event.

JARRETT: So an Ohio man was expecting a letter from a student loan company about his daughter's tuition. What Dan Cain did not expect was this, 79 bins of mail for him at the Twinsburg Ohio Post Office. It seems the loan company accidentally sent Dan 55,000 copies of the same letter.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The Dean and I were shocked. We were like, are you kidding me? Who makes that kind of mistake?

(END VIDEO CLIP)

JARRETT: Look at all of those bins. They apologized citing a glitch in their outgoing mail system. A spokesman for the Postal Service says having that many letters addressed to one person is in one word uncommon.

ROMANS: And what did the student loan company pay postage for all of those? I mean that sounds a little --

JARRETT: A total waste.

ROMANS: Let's go check out CNN Business this morning taking a look at markets around the world.

Asian markets recovering after being shaken by the corona fears -- coronavirus fears. On Wall Street, stocks rally Tuesday as more stimulus from China calmed fears that coronavirus will hurt the global economy.

The Dow rose 408 points. The S&P 500 closed up one and a half percent. The NASDAQ finished up 25. That makes it a record high. Thanks to Tesla.

Tesla's stock on fire this year, closing up almost 14 percent, Tuesday. It's up 112 percent this year bringing its market value to almost $170 billion. Driving the gains optimism from analysts, they're looking at Tesla's new plant in Shanghai to drive growth.

Tesla also said it had its first annual profit in its 10 years as a public company. Reuters says solid earnings from Panasonic, that's Tesla's back maker also giving the stock a boost.

Toyota is now the only car maker in the world more valuable than Tesla.

A strong debut for Disney and the streaming wars. Disney Plus now has nearly 30 million subscribers up from 10 million in November, or when it launched. Disney his forecast 60 to 90 million global subscribers by the year 2025. It also reported revenue rose to 20.8 billion that's a 36 percent.

But the company told investors it could take a big $175 million hit due to its theme parks in China being closed because of the coronavirus assuming -- the company is assuming the parks are closed for two months.

JARRETT: While you were sleeping, late night hosts had a field day with the Democratic debacle in the Iowa caucuses.

(BEGIN VIDEO CLIP)

STEPHEN COLBERT, LATE NIGHT SHOW HOST: Last night, I was supposed to kick off the 2020 election. Instead they kicked democracy right in the old hanging Chad.

JIMMY KIMMEL, LATE NIGHT SHOW HOST: It was a very long day for Democrats today. The Democrats somehow found a way to lose the Democratic caucus in Iowa.

The President of course was delighted by this. He weighed in today tweeting, "It is not the fault of Iowa. It is the do-nothing Democrats' fault. As long as I am President, Iowa will stay where it is."

Was there talk of moving Iowa? Did Iowa decide to retire and move to Florida because I didn't know about it?

NOAH TREVOR, LATE NIGHT SHOW HOST: The app that the Democrats commissioned to make vote counting easier, ended up malfunctioning and screwing up the entire night.

And I guess what do you expect? I mean, the average age of the party leadership is like 85 years old. Right? What do they know about apps? The only thing they know about apps is that you get one for free with the early bird special. That's it.

(END VIDEO CLIP)

JARRETT: Just like layups there.

ROMANS: Yes, it really is.

JARRETT: EARLY START continues right now.

A big task for a divided nation. Votes from Iowa still coming in.

Hostilities boiling over at a divisive State of the Union.

And the Senate poised to acquit the President of high crimes and misdemeanors.

[04:00:07]