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Early Start with John Berman and Zoraida Sambolin

Washington Battles Over Fiscal Cliff; Petraeus Set To Testify; What Petraeus Will Tell Congress; Tragedy At Parade To Honor Veterans; President Obama Tours Sandy Aftermath; Israel-Hamas Fighting Intensifies; Ron Paul Blasts Both Parties; Obamacare Deadline for States Extended; Interview with Congressman Ed Royce of California

Aired November 16, 2012 - 06:00   ET

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

JOHN BERMAN, CNN ANCHOR: No let up despite talk of a ceasefire. Bombs rain down on Gaza. Rockets crash into Israel. Now, global fears of a full-scale ground war.

ZORAIDA SAMBOLIN, CNN ANCHOR: David Petraeus in the hot seat. The ex-CIA chief heads to Capitol Hill this morning with members of Congress demanding answers.

BERMAN: And steering clear of the fiscal cliff. President Obama's drawn his line. Will Republicans now draw theirs? Both sides face- to-face this morning at the White House.

It's a big day coming up. Good morning, everyone. Welcome to EARLY START. I'm John Berman.

SAMBOLIN: And I'm Zoraida Sambolin. It is 6:00 a.m. in the East. Let's get started this morning.

A summit on the nation's looming fiscal cliff begins in just a few hours from now. President Obama and four top Congressional leaders will meet at the White House for talks. That raises the curtain on a six-week push to beat a January 1st deadline. If no deal is reached by then, $500 billion in tax increases and spending cuts simply just start taking effect.

CNN's Jill Dougherty is live in our Washington bureau. And Jill, Boehner has said that he is open to discussing revenue increases that don't involve racing tax rates.

Tax rates that is, but that is something many other GOP House members have vigorously opposed. Is there a sense that the tide may be turning at this point?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Well, at this point, I would -- I think you'd have to say that this is their opening gambit. It is pretty locked in at this point.

But there is some type of flexibility, especially on whether or not let's say the cutting loopholes, they would say, the Republicans would say, you should do that or you should have deductions. I should say cut deductions. The Democrats say that doesn't add up at all, but let's look at what Mitch McConnell says, who's taking a harder line on all of this.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL, (R-KY) SENATE MINORITY LEADER: We don't happen to think the government needs more revenue. The government spends too much as it is. But if Democrats are willing to reduce spending and shrink on entitlement programs, which we all know are on an unsustainable path that threatens our own long-term viability and the economic well-being of our children and grandchildren then we'll be there. What we won't do is raise tax rates.

(END VIDEO CLIP)

DOUGHERTY: Yes, tax rates and again, that's really the issue. Can you do it in another way? Don't raise tax rates, but raise effectively how much people actually pay in taxes, especially President Obama would argue the rich.

SAMBOLIN: And Jill, President Obama has said that he is actually open to cutting spending on entitlement programs, but both Senator Harry Reid and Representative Nancy Pelosi have opposed that in the past, any chance that they're going to change?

DOUGHERTY: It's very difficult for the Democrats to really want to change at this point because that's one of the key things. They don't want cutbacks on any type of programs that help the middle class. And you hear that very strongly coming from Nancy Pelosi.

SAMBOLIN: All right, Jill Dougherty live --

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI, (D-CA) HOUSE MINORITY LEADER: Whenever adjustments will be made in Social Security to strengthen Social Security not to subsidize a tax cut for the wealthiest people in America and say that's how we balance the budget. The same thing with Medicaid and Medicare, but again we have said we support a grand bargain.

(END VIDEO CLIP)

DOUGHERTY: And the grand bargain, that's what the President continues to talk about. Something balanced and he's really the man that they're paying attention to today. He is the person who will set the tone, and it's a very important meeting, as you can imagine.

SAMBOLIN: All right, Jill Dougherty live for us, thank you very much.

BERMAN: All right, 3 minutes after the hour. One week after resigning former CIA Director David Petraeus is preparing to testify before a House Intelligence Committee. The closed-door hearing begins at 7:30 Eastern this morning.

Petraeus will be asked what he knows about the deadly September 11th attack on the U.S. Consulate in Benghazi. All while the CIA is launching an investigation into his conduct while he headed up the agency. Senior congressional correspondent Dana Bash who never sleeps live from Washington this morning. What do we expect David Petraeus to say, Dana?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, our Barbara Starr got some great information from a source close to Petraeus who says that he's going to tell lawmakers that he knew almost immediately that Ansar Al-Sharia, which is a loosely connected radical Islamist group was involved.

But at the same time, he saw a string of intelligence, including about 20 reports that indicated that there was some brewing furor over that anti-Islamic video that preceded the attack.

But the only briefing that Petraeus did for lawmakers on the Intelligence Committee back in September, after that attack in Libya, he apparently left the impression that they still believe it's the more likely scenario, was that violence sparked this demonstration.

And, John, I talked to some lawmakers yesterday who are still quite annoyed. One described Petraeus' presentation at the time as weak. So you can be sure he's going to hear about that today.

BERMAN: So Dana, we also know the CIA is going to be continuing its investigation into Petraeus and his affair with Paula Broadwell. What are they hoping to find out at this point?

BASH: Well, at this point, a U.S. official confirms to CNN that the CIA investigation includes whether he used CIA resources to carry out his affair with Paula Broadwell.

Now, one of the reasons that lawmakers have been so outraged about the Petraeus affair in not being informed about it is because they're concerned that there was national security risk. Well, the Attorney General insists there wasn't. Listen.

(BEGIN VIDEO CLIP)

ERIC HOLDER, U.S. ATTORNEY GENERAL: We felt very secure in the knowledge that a national security threat did not exist, that warranted the sharing of that information with the White House or with the Hill.

But when we got to a point in the investigation, it was very late in the investigation, after a very critical interview occurred on the Friday before we made that disclosure, when we got to that point, where we thought it was appropriate to, to share the information, we did so.

(END VIDEO CLIP)

BASH: And John, we should underscore that today's briefing, both for the House and Senate Intelligence Committees, which are going to start in a little more than an hour are supposed to really just be on Benghazi, what the former director knows, based on the trip that he took to Libya and other -- and other information that he had. It's going to be hard to imagine that there won't be some questions that will at least try to get to, if not -- if nothing else the question of whether or not there was anything leaked inadvertently or otherwise to Paula Broadwell.

BERMAN: Dana, you've been covering these hearings now for over -- well, since they began. And you know the rules on both sides of the aisle. Is there anything David Petraeus can say about Benghazi that will bring these two sides together? Because it just seems so contentious right now.

BASH: You know, I think if there's anybody that can do it, it would be David Petraeus. Yes, obviously his reputation is sullied and no longer the CIA director. But he still, in terms of the substance of his work, commands more respect than just about anybody.

So, particularly because he gave a presentation that led the lawmakers, and outlawed the unclassified version did the same, to believe that it was much more likely that this attack was sparked by these demonstrations based on the video.

If he explains why that was, and that there were these two streams of information coming to them, that probably will be -- he has the best shot at doing it than anybody else because right now, it's a political war shock test.

I talked to Democrats coming out saying you see the administration was right to be cautious. And Republicans saying, based on what I'm hearing in here the administration simply went off on a tangent that they shouldn't have.

BERMAN: All right, Dana Bash in Washington. Thanks for being with us this morning. You'll be covering it all day again, I'm sure.

SAMBOLIN: We were talking about this earlier. I asked you if you watched on Anderson Cooper. And it was Representative King was on there and Adam Schiff and they were in the exact same hearing and two very different stories and that's what they were fighting about, very contentious.

So at the end of the day, it's like it doesn't matter, same information and the way that you digest it very differently. So we expect more fighting to happen.

It's 7 minutes past the hour. A parade honoring veterans goes horribly wrong. This is Midland, Texas. At least four people were killed. A train slammed into a float packed with veterans and their spouses yesterday. More than a dozen other people were rushed to the hospital, as well. The circumstances that led to that horrific crash are unclear. Union Pacific says the track's lights and crossing gates were working at the time, and that the train sounded its horn right before the crash, as well.

The Commander in Chief, Consoler in Chief, President Obama toured Hurricane Sandy devastation in New York yesterday, flying over the ravaged neighborhoods in Queens, comforting devastated homeowners in the streets on Staten Island and reassuring them that they will come back, and that he will also be back.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I came up here right after the storm, was on the Jersey side, and I had promised to everybody that I was speaking on behalf of the country when I said we are going to be here until the rebuilding is complete.

And I meant it so I'm going to come back today, but I'm also going to be coming back in the future to make sure that we have followed through on that commitment.

(END VIDEO CLIP)

SAMBOLIN: The recovery from Sandy now has a point person, as well. President Obama named Sean Donovan, a New Yorker who is a Secretary of the Department of Housing and Urban Development. He is now the go-to guy.

BERMAN: There is a lot going on in the Middle East this morning, flaring violence in Gaza. We will return to Gaza coming up because there are real fears this morning that Israel could be mobilizing for a ground invasion. We will go live to the region, next.

(COMMERCIAL BREAK)

SAMBOLIN: It's 12 minutes past the hour. America's closest ally in the Middle East is edging closer to a full-scale war this morning. Thousands of Israeli troops are mobilizing at this hour, and for the first time since the Gulf War, that was in 1991, air raid sirens are sounding in Tel Aviv.

BERMAN: Palestinian militants in Gaza launching hundreds of rockets into Israeli territory for a second straight night. Israel, striking back from the air with attacks on over 300 what they're calling terror targets.

Ben Wedeman is live in Jerusalem this morning. Ben, we're hearing there are protests happening right now in Jerusalem. You are in Jerusalem. What are the details on these protests?

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT (via telephone): Well, the Israeli police were bracing for protest in solidarity by Palestinians with the people of Gaza. Our understanding is there have already been some small clashes between the police and Palestinian protesters.

In some cases they've been throwing rocks at the police. The police responding, at least by the sound of it, from here, either with stun grenades or tear gas. In some cases, some fisticuffs were exchanged, but this was really to be expected.

Now, today is Friday, a day of prayer for Muslims in Jerusalem and elsewhere, but it was expected. It would be a day of protest. So the Israeli police basically put a limit, anybody over the age of 40 will not be allowed into this compound behind me. The temple mount, what they were trying to do is really just to keep the numbers down in Jerusalem from going in to the mosque. But it appears that protests are already going ahead.

We're expecting other protests elsewhere in the west bank. One Palestinian legislator, Mustafa Barghouti, is saying that this is a time for Palestinians to raise their voices.

(BEGIN VIDEO CLIP)

DR. MUSTAFA BARGHOUTI: This was to stop Israel attacking not Hamas, Israel attacking Gaza. Israel attacked us yesterday in West Bank because we were protesting peacefully and non-violently. This Israeli government is not a government of peace. It's a government of war and their behavior is killing the very opportunity of peace based on two- state solution.

(END VIDEO CLIP)

WEDEMAN: And certainly any talk of the two-state solution or diplomacy at the moment is really on the back burner. It's really the generals and the politicians calling the shots and they are shots.

BERMAN: Ben, I've been in the region for a couple of these cycles of escalating violence. Once they start, it really seems just really nothing that can stop them. I mean, Israel now calling up ground troops, we're understanding, reservists in preparation possibly for some kind of invasion.

Do you think that's a possibility of having ground troops in Gaza soon?

WEDEMAN: It's definitely a possibility. It's somewhat reminiscent of the Israeli offensive against Gaza in late 2008, early 2009. It began with several days of intense airstrikes on Hamas targets around -- the Gaza Strip, as those forces concentrated around Gaza, and eventually went in.

Now, what's interesting is that what we're hearing from Israeli officials that they're not talking simply about a limited operation that somehow cripple Hamas' military ability. They're also talking about the possibility of what amounts to regime change.

Here's what one Israeli official had to say.

(BEGIN VIDEO CLIP)

RON PROSOR, ISRAELI AMBASSADOR TO THE U.N.: Hamas are the enemies of peace, not just the enemies of Israel. They are the enemies of peace, regional stability in the region and to peace both internally on the Palestinian side and between Palestinians and Israel. So, we are targeting that military infrastructure so we will be able to sit down with good people on the other side, for real, constructive talks.

(END VIDEO CLIP) WEDEMAN: And it's hard to say, however, where those good people are going to come from. Oftentimes, after these offensives, it's the militants who are actually strengthened by -- politically by these Israeli incursions into Gaza. Not really the moderates.

BERMAN: All right. Ben Wedeman live in Jerusalem this morning. We have a lot of questions about this.

And coming up later in the next hour, Soledad O'Brien will be talking to Israel's deputy foreign minister, Danny Ayalon. Be sure to catch that interview in our 7:00 hour.

It is now 16 minutes after the hour.

We want to get you caught up on all the headlines. Here's Christine Romans with that.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: A lot happening this Friday.

As the fiscal cliff inches closer, you guys, President Obama invites top Republicans and Democrats in Congress to the table to be gin talks on a deal. Talks begin this morning at the White House. The President will be joined by John Boehner, Nancy Pelosi, Harry Reid and Mitch McConnell.

Informative but not necessarily conclusive -- that's how Senate and House lawmakers describe real time video and testimony about the attack on the consulate in Benghazi. Senators say the video combines surveillance and drone footage, and a source familiar with the House committee hearing said the video includes shots of Ambassador Christopher Stevens being dragged out of the building. He, and three other Americans, died in that September attack.

A major political shake-up in Japan. The country's Prime Minister dissolved the lower house of Parliament, setting the stage for general elections next month. The move is part of a deal between Japan's two main political parties, a move that helps the government avoid a financial crunch, and continue financing itself.

BP agrees to pay $4.5 billion and pleads guilty to criminal misconduct in the Deepwater Horizon disaster. But Attorney General Eric Holder says the deal doesn't end the criminal investigation into the worst- ever offshore oil spill. The settlement includes a criminal fine of more than $1.25 billion. That is the largest in U.S. history.

The company faces the possibility of more fines in its civil trial, which is set to start next February.

SAMBOLIN: All right, thank you, Christine.

Eighteen minutes past the hour. They say that Twinkies can actually last forever. But the company that makes them might not last that long. Up next, a baker's strike that could turn the ovens off at hostess.

BERMAN: No!

SAMBOLIN: Depressing.

(COMMERCIAL BREAK)

SAMBOLIN: We are minding your business this morning. We're expecting another down day on Wall Street. Analysts say the trend for the markets is going to be down until Washington puts together a deal on that fiscal cliff.

BERMAN: You know, and we're following another showdown, a really serious one. This one has to do with Twinkies -- Hostess threatening to close its doors if its workers don't return to work. And Christine Romans has all the details.

ROMANS: You know, it is serious if you like Twinkies. But it's really serious if you're one of the 18,000 workers who have already been through this company that's gone through bankruptcy. It's still in bankruptcy, and who have already taken like big cuts to your pension contributions and stuff.

Look, Hostess gave its bakers an ultimatum, said, get back to work by 5:00 p.m. yesterday or we're just going to close our doors. We're requesting to liquidate the company. We're not going to play the games anymore. Deadline passed. No deal.

And now, we're waiting to hear from Hostess whether it will make good on its threat and liquidate the entire company. Hostess is controlled by hedge funds, by the way, out of its most recent bankruptcy iteration.

The company in the middle of bankruptcy proceedings is trying to force pay and pension cuts on its workers. The workers said no more of this. They went on strike last week. Not all of them, though, just the bakers' union. That's 5,000 people, 30 percent of Hostess workforce.

Hostess says it doesn't have the money to survive an ongoing strike. Bakers' union says the cuts are outrageous. And you see the deadlock.

SAMBOLIN: Wow.

ROMANS: A liquidation would mean it would close all 33 plants, laying off all 18,000 workers. But would Twinkie go away or Ho-Hos or all those other things? Probably not. In liquidation, other big companies would probably swoop in and buy those brands.

So, I think those brands would survive. I think those workers would not. And you've got this real standoff between, you know, the financiers who run the company and the bakers' union that say we've already taken enough too much. We've already taken enough hits. There you go.

SAMBOLIN: There's another deadline looming on Obamacare.

ROMANS: Yes. SAMBOLIN: That's been extended?

ROMANS: And it's been extended.

This is so interesting. You had some Republican governors who were saying they didn't want to file -- they didn't want to set up the state health care exchanges or they were waiting to decide if they were going to -- until the outcome of the election. They were hoping, of course, that Mitt Romney would win and he had said that he would repeal Obamacare.

Guess what? Mitt Romney did not win. The President won, the state exchanges must be up and running by 2014.

The deadline was today for states to declare that they were going to get those going. And now the HHS, the Health and Human Services Administration, has said you have another month to decide. You have another month to decide to put that off.

But, you see, you've got to have an online marketplace to make health care affordable that's set to open in 2014. It's all laid out in the Affordable Care Act.

The CBO, Congressional Budget Office, says the state health exchanges will cover 25 million people with insurance. Some people will be fined if they don't buy them. Others will get -- you will get subsidies.

BERMAN: If the state doesn't do it, the federal government will come in and do it for them --

ROMANS: Right.

BERMAN: -- which the states have to decide which way they'd rather have it.

ROMANS: Right. They'll lose some revenue. I think there are some financial incentives for them to --

(CROSSTALK)

SAMBOLIN: Why would they just act together and have it done by the deadline?

BERMAN: It's political.

ROMANS: It's political. Yes, that's insane. That is the story of the world, isn't it?

BERMAN: So what's the one thing we need to know about our money?

ROMANS: Well, remember yesterday I was telling you about the bright signs in the housing market? More bright signs. We've got the numbers on mortgage rates, 30-year fixed rates 3.34 percent.

I can't even say -- I can't even believe these numbers come out of my mouth every week. Last year, it was 4 percent, 3.43 percent. We thought that was great last year.

BERMAN: Whoa!

ROMANS: Two-point-six-five percent on the 15-year fixed.

Now rates are falling because, you know, investors are worried about the economy, right? So, just throwing money in the bond market and out of the stock market. That's one reason why you've got rates falling so much. Also, the Fed keeping rates very, very low.

But those rates are so low you might have to look and see if it's time -- you might have to go and refinance again. I'm not kidding.

SAMBOLIN: Can you send out a calculation of when it is advantageous to you?

BERMAN: You know -- yes, usually when it's three quarters of a point or a point, you know? Somebody asked me yesterday, I'm going to sell my house in a year should I refinance now. And I said, no, absolutely not.

And then they said, my rate is 6.2 percent. I said, why do you have a 6.2 percent rate? That's too high.

SAMBOLIN: All right. Christine, thank you.

BERMAN: All right. There's been no letup despite the talk of a cease-fire this morning in the Middle East. Bombs raining down on Gaza, rockets crashing into Israel. Could we be seeing signs of a ground invasion? We're going to take you live to Jerusalem, coming up next.

(COMMERCIAL BREAK)

SAMBOLIN: No backing down, just more bombs. Is Israel gearing up for a ground war in Gaza?

BERMAN: Plus, he's been out of sight but not today. Ex-CIA Director David Petraeus set to testify on Capitol Hill in just a few hours.

(BEGIN VIDEO CLIP)

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: So we were standing here while the place was filling up, the water would come up to our neck?

UNIDENTIFIED MALE: It would almost cover your head and come up to my neck.

(END VIDEO CLIP)

SAMBOLIN: Wow. The Manhattan Medical Center washed out by hurricane Sandy, where sick babies were rushed down the stairs. Remember that? Now making a comeback. CNN takes you inside the extraordinary cleanup.

BERMAN: Welcome back to EARLY START, everyone, I'm John Berman.

SAMBOLIN: And I'm Zoraida Sambolin. It is 30 minutes past the hour.

BERMAN: So, in the next hour, former CIA director, General David Petraeus, will be on Capitol Hill to testify about the attacks on the consulate in Benghazi. Sources tell our Barbara Starr that Petraeus wants to clear up a lot of misrepresentations of what he told Congress initially and that you saw then two streams of intelligence about the attacks.

The House and Senate intelligence hearings will take place behind closed doors. This will be the first time the former CIA director will speak to government officials since his shocking resignation last week over an extramarital affair with his biographer. Some Republicans have actually suggested his departure was linked to what he knew about the attacks that killed four Americans, including the U.S. ambassador to Libya.

I'm joined now by Congressman Ed Royce, a Republican from California. He's a ranking member on the Foreign Affairs Committee, the chairman of the Terrorism Subcommittee which held its own hearing on Benghazi on Tuesday.

You know, Congressman Royce, do you think there's any truth to the idea that General Petraeus quit the CIA because of the Benghazi situation?

REP. ED ROYCE, (R) CALIFORNIA: I think the reason General Petraeus wants to testify is because, as he said, he knew almost instantaneously, that this was an attack linked to al Qaeda. And I think he's trying to clear the record of the Central Intelligence Agency on this.

I don't think it should be any surprise to those of us monitoring the situation given the attack in June on the mission and giving the training by CIA affiliates, or given the fact that our CIA was watching al Qaeda in that area, that that was an al Qaeda attack on 9/11.

BERMAN: So, Congressman, our Barbara Starr tells us that what the general wants to do, what David Petraeus wants to do at these hearings is clear up his testimony from September 14th, when he may have been unclear about the cause of the attack.

Barbara Starr tells us that Petraeus is staying that he knew almost immediately that Ansar al-Sharia, a terrorist group, was responsible. But he was also seeing separate streams of intelligence that did suggest that protests over that video we've all talked about were involved.

How do you hope the general clears this up? What do you need to hear from him here?

ROYCE: Well, I think we know the answer to this, because we have the films. And the films do not show any protests whatsoever. What, in fact, did occur was the same -- the same attack that our ambassador there feared. What happened was that those al Qaeda affiliates that he had requested support and security personnel to help defend against, did, indeed, attack the compound.

And so I believe what will come out of this is a very -- is a much more clear understanding of how in preparation for this attack, our personnel on the ground made repeated requests. And I think the other aspect that we're going to learn more about is why a firefight that lasted six hours occurred without reinforcements coming in from Tripoli, why the rapid reaction force was removed from the theater of operations several months prior, and why we lost those personnel on the ground.

I think for us that's what's important, because al Qaeda has a modus operandi of attacking the targets, attacking again and again. They did that on 9/11. They have a pattern of behavior of hitting the same targets. And now, we've opened up our consulates and embassies overseas as a target, as a result of not being prepared here, not having contingency plans here, and especially not coming to the aid of our personnel while they were under attack.

BERMAN: Congressman, it seems like some of your colleagues may have different motives for these hearings or at least want to address slightly different issues. I want to play you a sound bite from Republican Congressman Dana Rohrabacher yesterday at the Foreign Affairs Subcommittee hearing. Let's listen to this.

(BEGIN VIDEO CLIP)

REP. DANA ROHRABACHER, (R) CALIFORNIA: What is clear is that this administration, including the President himself, has intentionally misinformed -- read that lied -- to the American people in the aftermath of this tragedy.

(END VIDEO CLIP)

BERMAN: See, what you were discussing a second ago was a mess surrounding a foreign incident where actions weren't taken that perhaps should have been taken. What Congressman Rohrabacher is accusing there is flat-out dishonesty. Do you agree with him?

ROYCE: Well, here's the problem. When you become wedded to a certain mind-set, and let's say that mind-set is that the problems in the world are because there's protests against America, or there's protests against a video, and you begin to advance that, and you begin to pressure agencies and the federal government to advance that theory, what if you're wrong? What if, in fact, things are exactly as they seem, and it is an al Qaeda attack just as suspected by our personnel on the ground, and as witnessed by our own Central Intelligence Agency there?

BERMAN: Sir -- wrong is one thing. Lying is another. You have clearly stated that things went wrong. It's pretty obvious at this point a lot went wrong --

ROYCE: Let me explain --

BERMAN: Rohrabacher is saying lying.

ROYCE: Right. I'm explaining when you have a mindset and you're wedded to that video, you're wedded to a certain scenario that you cling to for weeks, so much so that you take your U.N. ambassador, whose task is not to explain national security, and you put her out in front of the media, and you give her talking points, which, according to our chairman of the Intelligence Committee, were not the same talking points that were received by the Central Intelligence Agency.

Now, we need to get to the bottom of all of this. As Senator Feinstein has said, you know, this is the opening of a process of fact-finding. We need to find out how this happened. What if, indeed, a certain scenario was laid out and the administration and the President himself stuck to that line of arguments, day after day after day in the face of evidence, and in the face of a video that the White House presumably would have watched, then there's very real question as to why would you maintain that line of argument in the face of the facts.

BERMAN: All right. Congressman Ed Royce, thanks for joining us this morning. Great to see you.

ROYCE: Thank you very much.

SAMBOLIN: The violence in Gaza escalating overnight, leaving Israel on the brink of a full-scale ground war with Hamas. The Israelis shelling more than 300 terror targets, as they're calling them, with air strikes and heavy artillery overnight. Bombs are still pounding Gaza, as officials talk of a brief ceasefire with Egypt's prime ministers on the ground in Gaza this morning.

But Palestinian militants launched hundreds of rockets into Israeli territory for a second straight day, at least two of them striking Tel Aviv. Israel is now calling up thousands of reservists, they're saying in preparation for war.

Ben Wedeman joins us now from Jerusalem. He is on the phone.

And, Ben, we understand there are protests that are happening right now. Maybe you're in the middle of them. What can you tell us about that?

WEDEMAN (via telephone): There are limited protests around Jerusalem. I'm at the Damascus gate, one of the entrances to the predominantly Palestinian old city, where several hundred Palestinian protesters, including older women, are sort of haranguing and shouting and chanting against the Israeli police here.

I'm seeing some bottles are being thrown, but it's still relatively calm compared to what could happen here, and I think just one protest of many going on, not just around Jerusalem, but also in the West Bank, as well.

SAMBOLIN: Ben, Israel is now calling up thousands of reservists, presumably in preparation for war. Could we see ground troops move into Gaza any time soon, do you think? WEDEMAN: Certainly very good possibility. They called up 16,000 reservists. There are apparently tanks on the move, other equipment and heavy armor heading for Gaza. Very similar to what we saw in 2008-2009, the last time there was a major outbreak of fighting between Gaza and Israel.

And therefore, yes, definitely from what we're hearing from Israeli officials, and from others, it does appear that they are preparing, not necessarily that they've taken a final decision for a major ground assault inside Gaza itself.

SAMBOLIN: And, Ben, what could you tell us about that brief ceasefire with Egypt's prime minister on the ground in Gaza?

WEDEMAN: That was about just three hours long. What the Israelis said was if Hamas doesn't fire any rockets or other militants don't fire any rockets from Gaza, Israel will not accept any aberrations. Our understanding is rockets were fired from Gaza into Israel, and Israel aircraft were active over Gaza during that brief visit by Hesham Kandil, the Egyptian prime minister.

SAMBOLIN: All right. Ben Wedeman live from Jerusalem -- thank you.

BERMAN: Thirty-nine minutes after the hour right now. And next on EARLY START, it was one of the most heart-wrenching images from Superstorm Sandy -- the evacuation of newborn babies from NYU Langone Medical Center. CNN gives you an exclusive look inside the facility to survey the damage. That's coming up next.

(COMMERCIAL BREAK)

BERMAN: It is Friday.

Soledad is here for a look at what's ahead on "STARTING POINT."

SOLEDAD O'BRIEN, CNN ANCHOR: Wheels are falling off this morning.

Welcome, everybody. Ahead this morning on "STARTING POINT": we've been talking a lot about the violence that's been escalating between Israel and Hamas. Defense Secretary Leon Panetta spoke to the Israeli Defense Minister, Ehud Barak. We're going to talk about what they talked about.

And we'll talk with the Israeli Deputy Foreign Minister, Danny Ayalon, about exactly what was discussed and where this conflict goes from here.

Big talks in Washington, D.C., focus on the fiscal cliff. We'll talk with Florida Congressman Connie Mack, Alabama Senator Jeff Sessions and take a look at what could happen in any kind of a Friday compromise.

Plus, actress Jada Pinkett Smith will join us to talk about her continuing fight against human trafficking. She's trying to help 27 million victims worldwide. And Denzel Washington has a new movie. This looks so awesome. We're going to talk to his co-star, the actress Kelly Reilly, that and much more.

We'll start right at the top of the hour. We'll see you later.

SAMBOLIN: You know, I actually saw that film the other day.

O'BRIEN: Yes?

SAMBOLIN: It was fantastic. But if you are scared of flying, don't go see the movie.

O'BRIEN: OK.

SAMBOLIN: That would be my suggestion.

O'BRIEN: You should just fill me in on the commercial break, because I'm a little -- yes, I don't need to see that.

SAMBOLIN: A little skittish, yes.

Forty-four minutes past -- thank you, Soledad -- 44 minutes past the hour.

It is one of the most compelling images that emerged from Superstorm Sandy -- the evacuation of newborns from NYU Langone Medical Center, hospital staff carrying the infants down flight after flight of stairs because of all the massive flooding. Now, an extensive cleanup operation is under way and CNN is the first network allowed inside to survey the devastation.

Here's senior medical correspondent, Elizabeth Cohen.

(BEGIN VIDEOTAPE)

E. COHEN (voice-over): After the rain fell, and the river overflowed into NYU Langone Medical Center, this is what was left. A hospital ruined by more than 10 million gallons of floodwater. Now, two weeks later, Richard Cohen is my guide to see the damage.

So, we're in the cellar right now?

RICHARD COHEN, VP FACILITIES OPERATIONS, NYU LANGONE MEDICAL CENTER: We're in the cellar at the lowest portion of the building.

E. COHEN: Down here, the filthy river water went up to the ceiling. It's been pumped out, but it still smells bad so we have to wear masks.

R. COHEN: This was an MRI suite. We have four MRIs down here. Unfortunately, they were all flooded.

E. COHEN: Oh, my God! How expensive is that machine?

R. COHEN: It's probably several million dollars. E. COHEN: And kaput?

R. COHEN: This is kaput.

E. COHEN: The water continued rising up to the first floor. This lecture hall became a swimming pool.

(on-camera) So, we were standing here while the place was filling up. The water would come up to our necks?

R. COHEN: It would almost cover your head and would come up to my neck.

E. COHEN: I'd be under water?

R. COHEN: Almost.

E. COHEN (voice-over): Ken Langone, the medical center's chairman of the board was there that night, as a patient.

KEN LANGONE, CHAIRMAN, NYU LANGONE MEDICAL CENTER: I was on the 11th floor.

E. COHEN (on-camera): How did you get down?

LANGONE: I walked.

E. COHEN: And you were recovering from pneumonia.

LANGONE: They won't -- we're evacuating. And I said fine and I got up to brush my teeth, put my clothes on, I said let's go.

E. COHEN (voice-over): 322 patients were evacuated. Now, this once busy emergency room is empty.

LANGONE: This place took a hell of a hit.

E. COHEN: NYU Langone has brought in hundreds of cleanup workers, some with specialized skills from around the country. Hot air in these tubes is drying out the ceilings, floors and walls. Cleanup is 24/7, expected to cost around $700 million.

(on-camera) People's lives were saved in this room. And now it sits idle. How does that feel to you?

LANGONE: Well, it feels like I can't wait for it to start saving lives again.

E. COHEN: Elizabeth Cohen, CNN, New York.

(END VIDEOTAPE)

BERMAN: You have to take a look at this dramatic new video just released by New York and New Jersey Port Authority showing the devastating flooding caused by Superstorm Sandy. You're looking at video of two New Jersey path train stations under water, one in Jersey City, the other in Hoboken.

Service at both stations remains suspended nearly three weeks after the storm with nearly all the equipment for signaling and train equipment damaged or destroyed. Look at that.

SAMBOLIN: You wonder how long it's going to last before they can reopen that.

BERMAN: That's a problem.

SAMBOLIN: Yes.

BERMAN: All right. Congressman Ron Paul bids a not so fond farewell to Washington after 36 long years. You ought to hear his parting shots at both sides of the aisle coming up.

(COMMERCIAL BREAK)

BERMAN: All right. Welcome back, everyone. Fifty-one minutes after the hour. We want to get you up to date on all the headlines right now.

(BEGIN VIDEOTAPE)

BERMAN (voice-over): America's closest ally in the Middle East may be edging closer to war. Violence intensifying overnight between Israel and Palestinian extremists in Gaza. Hamas fighters launching hundreds of rockets into Israel overnight with the Israelis shelling hundreds of terror targets with artillery strikes. Three Israelis and 19 Palestinians have been killed.

SAMBOLIN (voice-over): A parade honoring veterans goes horribly wrong. This is in Midland, Texas. At least four people were killed when a train slammed into a float packed with veterans and their spouses. This all happened yesterday. More than a dozen other people were rushed to the hospital.

BERMAN: And in less than an hour, former CIA director David Petraeus is expected to testify behind closed doors about the deadly raid on the U.S. consulate in Benghazi. He's expected to tell members of the House and Senate Intelligence Committees that he knew almost immediately the attack was the work of loosely formed militia with members sympathetic to al Qaeda. He's also expected to say he had no direct involvement in the talking points used by U.N. ambassador, Susan Rice, in the days after the attack.

SAMBOLIN: Talks on the looming fiscal cliff begin this morning at the White House. President Obama has invited the four top leaders in Congress, John Boehner, Nancy Pelosi, Harry Reid, and Mitch McConnell to try and strike a deal to protect the economy.

Texas Congressman Ron Pau, gives what is likely his final speech in front of Congress. In a 48-minute speech, the Republican who leans Libertarian slammed both parties saying they're leading the country in the wrong direction.

(BEGIN VIDEO CLIP)

REP. RON PAUL, (R) TEXAS: The financial crisis is actually a moral crisis. Many are acknowledging that a financial crisis looms, but few understand it's in reality a moral crisis. It's the moral crisis that has allowed our liberties to be undermined and permits the exponential growth of illegal government power.

(END VIDEO CLIP)

SAMBOLIN: Congressman Paul is stepping down from his seat in Congress at the end of the year.

(END VIDEOTAPE)

BERMAN (on-camera): Thanksgiving travel around the corner. Who will see the worst of the weather? Meteorologist, Alexandra Steele, joins us now from Atlanta.

ALEXANDRA STEELE, AMS METEOROLOGIST: Hi. Or the best of it. Actually, pretty benign weather around the country. So, some great travel conditions. There's one caveat, and that's the west coast. Good morning, everyone. Hope you're waking up to a good Friday. You know, around the Beltway in Washington, pretty dry, but outside that, around Richmond, Virginia, a few rain showers, kind of negligible in scope, through the Delmarva, as well.

But On the whole, this will all dissipate and really end up with a pretty sunny day. On the west coast, this is just kind of the beginning. A barrage of storms all the way from Washington to California coming in for the next few days, including that very important Wednesday, Thursday, Friday of next week even. Here's the future cast taking you through the three next days.

All the way from the Siskiyou (ph) to the sierra. Heavy mountain snow, a lot of rain at the valleys and really, really rough travel conditions. So, that's going to be the only kind of caveat in the country in terms of planning ahead for the next couple of days. Big picture today. we're dry in the northeast. Good morning to you in Philadelphia and New York, Boston, dry, sunny skies, a few degrees below average.

Southeast similar scenario. Of course, there's the west. So, that's where those storms beginning to come in, but pretty quiet. Temperature wise, maybe just a few degrees below average. Chicago 53, in the 40s in the twin cities today, but, tonight, late tonight, big celestial sky sightings if you're into that. Leonid Meteor Shower is pretty cool.

Around 2:00 tomorrow morning, that's when we'll see it. So, look up into the sky, guys, toward the cancellation Leo, that's where it looks like this is emanating from, and we also have a new moon so the skies are pretty dark. So, pretty good conditions for a lot of the country. See some meteors coming at you tonight.

BERMAN: ALL right. We're in.

SAMBOLIN: Thank you.

STEELE: OK. Meet you out there.

SAMBOLIN: GET your kids up at 2:00 in the morning for that.

(CROSSTALK)

(LAUGHTER)

SAMBOLIN: Christine Romans has today's "Best Advice." That's coming up. We'll be right back.

(COMMERCIAL BREAK)

BERMAN: Fifty-eight minutes after the hour. As always, we wrap it up with "Best Advice."

ROMANS: All right Twi-hards, listen up to the morning's "Best Advice" from actress, Elizabeth Reaser.

(BEGIN VIDEO CLIP)

ELIZABETH REASER, "TWILIGHT" ACTRESS: I think some of the most important advice that maybe actually sounds strange coming from an actress is to be yourself, and that that's the only -- your authentic self is really the only thing that's interesting, and it's the only real worthwhile way to spend your time, I think. It's the only way to move forward in your life is to sort of know yourself and to live up.

(END VIDEO CLIP)

ROMANS: Be yourself except when you're being paid to be someone else.

(LAUGHTER)

BERMAN: So, my advice to you, have a great vacation.

SAMBOLIN: Oh, thank you, I will. I will be my authentic self on vacation.

(LAUGHTER)

BERMAN: Sure.

SAMBOLIN: He's teasing me all morning.

(LAUGHTER)

BERMAN: That's all for EARLY START. I'm John Berman

SAMBOLIN: And that's John's authentic self. I'm Zoraida Sambolin. "STARTING POINT" with Soledad O'Brien starts right now.