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JP Morgan Settlement; N.J. Dream Act; Benefits Fight; SNL Adds Black Female Cast Member; Dow Jumps Over 100 Points at Open

Aired January 07, 2014 - 09:30   ET

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

CAROL COSTELLO, CNN ANCHOR: Knew or turned, you know, a blind eye? Why?

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Well, here's the thing. I don't know what - I don't know what this settlement says or whether they'll admit or deny any wrongdoing. Usually when you settle, you don't admit or deny any wrong - you don't admit any wrongdoing.

But what we know in hindsight, Carol, as we've unraveled the Madoff scam, is that people should have known all the way along. In fact, there was a whistle blower who went to the SEC and said, here is my Madoff document, here is how he's scamming people, here is how he's a total fraud and he still wasn't apprehended. So the government was warned about him. There were some banks who were leery about him. There were some hedge funds managers who didn't want to do business with him because he just didn't smell right. But he still went on for some 15 or 20 years scamming investors in New York. So -- and all over the country, quite frankly.

So this was a very, very big, big fraud with lots of big, legitimate players sort of involved around the edges and it went on for a very long time. He went to jail and now you're still seeing them untangling and now a $1.7 billion settlement from JP Morgan.

COSTELLO: I know I'm just - I'm just reading this press release and it's a long and complicated one. I'm sure you want to get back to deciphering it too. And when you have more information -

ROMANS: I will.

COSTELLO: We'd love to have you back on.

ROMANS: I will, Carol.

COSTELLO: Christine Romans, thanks so much.

Still to come in the NEWSROOM, a boost to the economy or a drain on our government, those are the arguments for and against the extension of unemployment benefits. We'll dive into the debate after the break.

(COMMERCIAL BREAK)

COSTELLO: Happening this morning, Chris Christie officially marking the passage of his state's version of the Dream Act. Christie signed the bill privately last months, but this public ceremony is taking place at a time when speculation about a possible 2016 presidential bid for that New Jersey governor heats up. CNN national political reporter Peter Hamby is in Union City, New Jersey.

Tell us more, Peter.

PETER HAMBY, CNN NATIONAL POLITICAL REPORTER: Hey, Caro, that's right, Christie is signing a version of - New Jersey's version of the Dream Act. Basically this is known as the Tuition Equality Bill here. It lowers in-state college tuition rates for the children of illegal immigrants who have been in New Jersey and have gone to a high school here for at least three years basically. And state tuition here - out- of-state is about $25,000. It brings it down to $10,000 for in-state students.

This is basically another sort of notch on Christie's resume as he tries to become a sort of different kind of Republican, a national figure, who can appeal to different kinds of constituencies. Christie won a majority of the Hispanic vote here in New Jersey in his re- election bid last year. He won Union City, where we are, which is a majority Hispanic city, improving from his 2009 performance here.

And, you know, a lot of people are talking about, as you mentioned, how will this impact his 2016 presidential chances? Well, as we know, the Republican basis has sort of a fraught relationship with immigration reform. We saw how Rick Perry, who also sign a Dream Act in Texas, was really damaged by that during his Republican primary bid in 2012.

But, look, Chris Christie, he's kind of trying to be a different kind of Republican. There are going to be plenty of conservatives in the race, Rand Paul, Ted Cruz, Rick Santorum possibly. Chris Christie is making a bet that, hey, I can be more, you know, a little bit more pragmatic, a little bit more moderate, try to appeal to a different kind of Republican. And, you know, there is space for that in the Republican primary. Mitt Romney, for example, who was the perceived moderate in 2012, Carol, almost won Iowa. So Chris Christie might be able to do that again, a conservative state. So he's going to sign this bill here in just a couple of hours and we'll be here, Carol.

COSTELLO: All right, Peter Hamby reporting live for us this morning. Thanks so much.

Also in just about an hour, the Senate will hold a key procedural vote to restore long term unemployment benefits to 1.3 million Americans. Who knows if it will pass. It's a contentious issue in a partisan culture. You either believe extending benefits help the long term unemployed, or it turns them into leeches. First, some facts.

1.3 million people, as I said, lost these benefits just after Christmas. An extension will cost taxpayers $6.4 billion. If lawmakers pass this extension, it would be the 12th extension or expansion since June of 2008, you know, when the economy went bust.

Now for what's open to debate, we turn to CNN chief business correspondent Christine Romans, David Wessel, who's the contributing correspondent to "The Wall Street Journal," and Monica Mehta is the managing principal for Seventh Capital Investment.

Welcome to all of you.

ROMANS: Hi, Carol.

COSTELLO: Hi.

DAVID WESSEL, CONTRIBUTING CORRESPONDENT, "THE WALL STREET JOURNAL": Thank you.

MONICA MEHTA, MANAGING PRINCIPAL, SEVENTH CAPITAL INVESTMENT: Thank you.

COSTELLO: OK, so, David, first question for you. Critics say if you correct unemployment benefits over a long period of time, you turn into a government leech. Is that true?

WESSEL: Well, we know that in good times, when jobs are plentiful, unemployment benefits do tend to discourage some people from looking for work. But these are not good times. Unemployment is at 7 percent. Nearly 40 percent of those people - and mind you those are the ones who are looking for work, not the ones who have given up - 40 percent of those have been out of work for six months or more. So it's very hard for me to believe that lots and lots of these unemployed, long term unemployed people are going to now find jobs if unemployment benefits are cut off.

COSTELLO: Monica, some critics say unemployment insurance that goes on forever and ever leads to more unemployment and actually hurts the economy. Is that true?

MEHTA: I find that logic a little challenging. I think what all of these numbers pretty much suggest is that we haven't rejuvenated the economy in the most meaningful way, which is putting people back to work in good, middle class jobs. And so this isn't a make believe issue. People that are out of work should be a priority for both Democrats and Republicans. It's just -- it feels like these days the ideologies of both parties seem to trump what's best for people. And so this conversation, to me, doesn't even seem to be about helping people out of work. It seems to be about the infighting between two parties that don't like each other and have conflicting ideologies.

COSTELLO: That would be very sad, but we've been down that road before, right?

Christine, who are these 1.3 million people on long term unemployment?

ROMANS: They're part of a different labor market than you and I are in, and here's why. If you are newly unemployed, you have the best chance of getting a new job than you've had in five years. Things are getting better for you. If you've been out of work for a couple of months, things are getting better for you. If you've been out of work for six months or longer, as these long term unemployed have been, it's the same old labor market. And that's why the White House is saying, look, even if the jobless rate is falling to 7 percent, we have to take care of these people over here because it's not - they're not getting absorbed yet in the recovery.

You know, an economist will tell you, that money goes right into the economy, right? Somebody who's been out of work for six months, who gets $300 a week, that's what these checks are, they spend $300 of that money and it goes into the economy. So it's good for the economy, economists say, it's good for those people. And right now not the time to pull it back.

But the message you're getting from Washington, Carol, is the president's focusing on the wrong thing. He's focusing on the long term jobless and not creating better paying jobs and more of them for people to get into and that's the issue.

COSTELLO: Ah, see that's the - that was my next question, because critics also say, from an economic standpoint, the focus should be on Obama's weak economic recovery, not in propping up the economy's victims. I mean, is that fair, David?

WESSEL: Yes, this is fair. I mean this is a band aid. Not even all the people who have been out of work for six months or a year are eligible for unemployment benefits. This is just taking care of some people who have been left out of the lousy recovery we've had. Neither -- both parties have ideas about how to get the economy growing more quickly. President Obama would like to spend more on infrastructure, for instance. Some of the Republicans say if we could have fewer regulations or some massive tax reform, that would unleash growth. But they are unable to deal with that fundamental issue, how do we get the economy growing faster, so they're skirmishing over, how do we help a few of the victims? It's really pathetic.

COSTELLO: OK. So, Monica, just to button things up, you know, the big decision then is, how long do you continue to help people? When do you think the economy might right itself enough to no longer help those long term unemployed people? When would be the right time?

MEHTA: America is the land of opportunity and I believe that helping people get good jobs should be pretty high on that priority list for politicians. And what we really need to see from Washington is a combination of confidence and positivity and some certainty because businesses will invest when they feel certain. Americans will go out and purchase when they feel more certain about their future and we don't have that. And a lot of the turmoil is actually stemming from Washington. So that's one big way that they can help and it wouldn't cost a dime.

COSTELLO: Christine Romans, David Wessel, Monica Mehta, thanks so much for this conversation this morning. So important.

Still to come in the Newsroom, after much criticism, "Saturday Night Live" adds a new black female cast member. Nischelle Turner's following that story.

NISCHELLE TURNER, CNN ENTERTAINMENT CORRESPONDENT: A member, a member, she is there. We've been talking about it for a while, Carol. Her name is Sasheer Zamata and she is now the one. We'll tell you when we come back. (COMMERCIAL BREAK)

COSTELLO: Well we just got an interesting statement from the NBA as we told you at the top of the show. Our Chris Cuomo had kind of a -- well it was a contentious interview with Dennis Rodman who intimated that Kenneth Bae the American being held hostage in North Korea was guilty of some sort of crime.

Shortly after that interview in fact right now, I would say three hours after that interview, the NBA sent CNN this statement. "The NBA is not involved with Mr. Rodman's North Korea trip and would not participate or support such a venture without the approval of the U.S. State Department."

NBA Commissioner David Sterns said in a statement released by the league Tuesday, "Referring to the former NBA star Dennis Rodman's visit to the secretive country with a team of former NBA players although sports in many instances," he said "can be helpful in bridging cultural divides. This is not one of them."

So this says to me that the NBA wants to totally remove itself from Dennis Rodman and all of those players that he brought over to North Korea for that big basketball game on the North Korean leader's birthday. We'll have much more in this in the 10:00 hour of CNN NEWSROOM.

For the first time in six years "Saturday Night Live" has a black female cast member.

(BEGIN VIDEO CLIP)

SASHEER ZAMATA, ACTRESS: -- by a girl play but you can call me Fashion Girl.

(END VIDEO CLIP)

COSTELLO: There she is. Her name is Sasheer Zamata. And she'll make her debut on SNL's next live show on January 18th. CNN's Nischelle Turner has more from New York. I can remember talking to you about this. And you said "Hey, none of it will make any difference unless they deliver. And they delivered.

NISCHELLE TURNER, CNN ENTERTAINMENT CORRESPONDENT: Right, right, absolutely Carol. Yes we've been talking about this for months, when was it going to happen, what would happen? Would it happen? Well it has.

Her name is Sasheer Zamata. She's a young woman who was actually in college the last time there was an African-American woman on the cast of SNL. You know when Maya Rudolph made her last appearance as a regular on "Saturday Night Live", Sasheer was at the University of Virginia.

Now she has been working here in New York on the comedy scene doing improv for the last few years. Primarily she's been with the Upright Citizens' Brigade that was co-founded in part by Amy Poehler, another "Saturday Night Live" alum and Lorne Michaels definitely has a history of going to the Upright Citizens' Brigade to try and find talent for "Saturday Night Live".

But let me give you a couple little tidbits about her that you may not know. She was born in Japan. Her dad was in the military. So they traveled a lot growing up. She also said that her biggest comedy influence was Lucille Ball and the show "I Love Lucy". She loves Lucille Ball and also she says she's a huge fan of Carol Burnett as we all are.

And here is something very interesting Carol this is how life works. This -- I'm messing her name up already. I better get this right. Sasheer said that she was just about to pack up and leave New York and move to Los Angeles on Sunday. She was pretty much done with New York and then she got the "Saturday Night Live" gig. So that's how life works. At the last minute you think something is happening. You get the gig Carol. You get the gig.

COSTELLO: That's awesome.

We'll all be watching January 18th. Nischelle Turner many thanks to you.

Coming up in the 10:00 hour, the 10:00 Eastern hour of NEWSROOM former NFL punter Chris Kluwe is out of a job. But he says it's his outspokenness towards same-sex marriage that has him looking for a job.

(BEGIN VIDEO CLIP)

CHRIS KLUWE, FORMER NFL PLAYER: No one ever told me that I wasn't doing what I was supposed to do. And the only thing that changed from year eight to when I got cut is I started speaking out on same-sex rights.

(END VIDEO CLIP)

COSTELLO: We hear from Chris Kluwe as he makes some serious accusations against his former team, including charges that he was fired by two cowards and a bigot. That's all new in the next hour of NEWSROOM.

(COMMERCIAL BREAK)

COSTELLO: Ok the Dow is doing something good. Let's head to Wall Street and Alison Kosik. What's happening?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: We're looking at the Dow up a little over 100 points. This is something new for 2014. You know 2014 has been kind of a slow start for stocks. You know, you look at what happened last year. We're talking just a few days ago in 2013. Stocks have had their best run since the 1990s. So now looking at the Dow really making a push to go higher. We are going to see though if this stays to the closing bell, you know, we look at S&P 500 and it hasn't ended in green over the past few days. The markets also kind of in caution mode as everybody waits for the big jobs report coming on Friday. But at this point, investors are in it to buy at the moment. Back to you.

COSTELLO: Ok. Alison Kosik, we'll check back.

Director Michael Bay is known for over the top productions, big explosions and of course lots and lots of action. But now he's created drama himself after this Samsung TV press conference. Watch.

(BEGIN VIDEO CLIP)

MICHAEL BAY, DIRECTOR: I try to take people on an emotional ride. And -- the curve, how does it -- how do you think it's going to impact how you experience movies? Excuse me. I'm sorry. I'm sorry.

UNIDENTIFIED MALE: Ok. Ladies and gentlemen, let's thank Michael Bay for joining us.

(END VIDEO CLIP)

COSTELLO: There was a prompter and I guess it stopped working. Not exactly a Michael Bay Hollywood ending there. And I'm sure Samsung wasn't so happy either. CNN's Samuel Burke is live in Las Vegas with more. Good morning.

SAMUEL BURKE, CNN CORRESPONDENT: Carol I'm sorry my teleprompter is not working. Hold on one second. No I'm just -- I'm just kidding.

COSTELLO: Mine isn't either.

BURKE: Carol they teach us this tiny, they teach us this in broadcast school. All of us who study journalism who want to be on television, use that teleprompter as much as you can. But as soon as it stops working just try and go it alone but clearly he missed that class and he's better behind the camera.

But a lot of people online thought it might be some type of publicity stunt for Samsung. But everybody who was there doesn't get sense at all. It really did seem like the teleprompter just went down.

COSTELLO: Well it's not like he was asked a hard question. It's like what do you think of this cool TV? And he needed a teleprompter to answer that? I'm just saying.

BURKE: Yes it was cut -- yes just saying, it was a bit odd but the truth is Samsung have bigger problems to deal with today. They had lower than expected earnings, their stocks is down so they're probably -- they're probably much more concentrated on those issues than this snafu with the director.

COSTELLO: All right. Samuel Burke reporting live from Las Vegas. Thanks so much.

Still to come in the NEWSROOM, Florida State quarterback leads the 'Noles to the promise land. Jameis gets more famous -- Andy Scholes. ANDY SCHOLES, BLEACHER REPORT: Yes. That's right Carol. Winston came through in the clutch for the Seminoles. We'll show you how he got it done in last night's game, next in your Bleacher Report.

(COMMERCIAL BREAK)

SCHOLES: -- championship and what a way to go out. You know Florida State had to mount an epic comeback to get this win. One of the greatest teams of the game in college football history. The Heisman Trophy winner Jameis Winston leading the Seminoles in this one. They had to do something they hadn't done all season and that's make a comeback. They fell behind Auburn early in the first pass. They eventually take the lead in the fourth quarter but the Tigers they continue to look like a team of destiny.

Under a minute and a half to go, Trey Mason breaks off this incredible 37-yard touchdown. Check it out even strikes the Heisman pose there at the end saying "I should have won it". That put Auburn up 5-4 but Florida State, they go right back down the field after a pass interference call puts them at the two-yard line. Winston right here hits Kelvin Benjamin for the touchdown with just 13 seconds left on the clock. Florida State beats Auburn in an epic game 34-31 to claim the national title.

(BEGIN VIDEO CLIP)

JAMEIS WINSTON, FLORIDA STATE QUARTERBACK: It's crazy man it's insane. It's every college player's dream to be in this situation right now and we did it, we made it happen.

I want to thank you as we're victorious. It's glad to say Florida State is the national champion and I guarantee we're bringing this right our back. You better believe.

(END VIDEO CLIP)

SCHOLES: All right. Big win for Florida State on the field was not without controversy off the field. During Jameis Winston's post game interview at ESPN, Alabama quarter AJ McCarron mom sent out a tweet that read, "Am I listening to English?"

Then McCarron's girlfriend Katherine Web, who of course Carol became famous during last year's national championship game -- she favored a derogatory tweet about Winston. Now the tweets have since been deleted and McCarron's mom later tweeted an apology saying "She's not right".

All right. Some sad breaking news this morning. Skier Lindsey Vonn has withdrawn from next month's Sochi Olympics due to injury. Vonn recently re-injured her surgically repaired right knee while competing a little over two weeks ago. She posted a statement on her Facebook page this morning. It read, "I am devastated to announce that I will not compete in Sochi. I did everything I possible could to somehow get strong enough to overcome having no ACL but the reality has sunk in that my knee is just too unstable to compete at this level. I'm having surgery soon so that I can be ready for the world championships at home in Vale next February. This is definitely sad. You know, Vonn was going to be the face of the USA team in this Olympic Games.

COSTELLO: I know --

(CROSSTALK)

SCHOLES: Sad that she's not going to be there. She tried so hard to come back from the knee injuries but it didn't work out. Wish her luck.

COSTELLO: Hopefully she'll take the season off and her knee will be repaired and she'll be healthy.

SCHOLES: She's going to take a full year off and come back better than ever.

COSTELLO: Andy thanks so much.

Next hour of NEWSROOM starts now.

Happening now in the NEWSROOM, thousands of passengers stranded right now. JetBlue Airlines gets ready to fire up its engines as a travel nightmare.