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Early Start with John Berman and Zoraida Sambolin

Fiscal Cliff Deal May Be Near; Massacre Ignites Gun Control Debate; Newtown Schools Reopen; A Moment Of Silence For Newtown; Gun Industry and Retailers React; Sen. Daniel Inouye Passes Away

Aired December 18, 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: Good morning, everyone. We're going to go live to Washington in just a moment for more on the fiscal cliff, coming up.

ZORAIDA SAMBOLIN, CNN ANCHOR: But in the meantime, welcome to a special edition of EARLY START. We're also live here in Newtown, Connecticut.

SOLEDAD O'BRIEN, CNN ANCHOR: 6:00 in the morning in the East Coast.

SAMBOLIN: And another beautiful young child will be buried here today. Four days after a school massacre that has numbed the entire nation. Here's the very latest for you. This unspeakable tragedy is reigniting the gun control debate in this country. The president already taking steps to ban assault rifles with his vice president leading the charge.

O'BRIEN: Plus, this happened overnight: Dick's Sporting Goods banning the sale of AR-15 rifles and other guns similar to it. The Modern Sporting Rifle section of its Web site, totally blank this morning.

The company is releasing a statement that says this, "Out of respect for the victims and their families, we have removed all guns in our store nearest to Newtown and suspended the sale of modern sporting rifles in all of our stores chain wide."

SAMBOLIN: And grief counselors and police will be on hand this morning when all of the children all over in Newtown head back to class for the first time since Friday. Sandy Hook Elementary School will remain closed.

Jessica Rekos, one of 20 children who was killed on Friday, she will be laid to rest today. Take a look at her big, beautiful eyes. The 6-year-old girl adored horses and couldn't wait until her 10th birthday to get one. Her family called her the CEO of the family. She was in charge of making all of the plans. She also leaves behind two younger brothers -- John.

BERMAN: We'll go back to Newtown in just a moment to Zoraida and Soledad there. But first, we are following a developing story in Washington this morning because there has been significant movement in the fiscal cliff negotiations with just 14 days to go until those huge across the board tax hikes kick in along with mandatory spending cuts.

Now this obviously has not received a great deal of attention in recent days, understandably so. But overnight, we've learned that President Obama made an eye opening new offer in talks with House Speaker John Boehner.

Under the new proposal, tax rates go up only on incomes above $400,000. For years, you will remember the president has campaigned on that number starting at $250,000. He is also part of this deal offer spending cuts worth about $200 billion.

Now, House Speaker Boehner has all along refused to consider raising tax rates, he has now possessed tax hikes for households making over $1 million so clearly both sides are budging from their initial positions here.

CNN's Dan Lothian is in Washington with the latest on this. Good morning, Dan.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Good morning. You know, it was Speaker Boehner who first opened the door to tax increases of those upper income Americans, those over $1 million so once he made that movement, we saw this dramatic development overnight from President Obama, who as you pointed out on the campaign trail and in recent days, had said that it was a nonstarter.

Taxes had to go up on those over $250,000 or those households making more than $250,000. Now he has raised that to $400,000. Many are encouraged by the movement. In addition to that, the president proposing $1.2 trillion in revenue that's down from $1.4 trillion and $1.2 trillion in spending cuts.

Now House Republicans say this is a step in the right direction, but they don't think the president's math adds up. They think that this leans to heavily toward tax increases. In addition to this, we expect some pushback from seniors and others who depend on social security.

Because as part of the president's plan he is also proposing to lower the cost of living increases for Social Security beneficiaries so certainly there will be some resistance to this, but a big development happening on this front.

BERMAN: All right, Dan Lothian in Washington, thanks very much. Let's go back to Soledad and Zoraida now in Newtown.

O'BRIEN: All right, thanks, John. The gun control debate in this country has been reignited by the massacre at the Sandy Hook Elementary School here in Newtown, Connecticut.

It seems that more Americans are now supporting the idea of tighter gun laws in the aftermath of the tragedy. Let's get right to Emily Schmidt. She is live from Washington, D.C. this morning. Let's start with the polls, Emily? What do they show us?

EMILY SCHMIDT, CNN CORRESPONDENT: Soledad, it's very interesting when you take a look at three new polls that are out. They show that there has been a significant, maybe temporary, we don't know, reaction to what people think about gun control after the Newtown shootings.

I want to show you first of all, a CBS News poll saying, "Do you think should there be more strict gun control laws?" The number up 18 percent last weekend over when the same question was asked in April.

ABC News/"Washington Post" poll said, "Do you support or oppose stricter gun control laws?" This was -- the last poll was taken in August, showed the number going up 5 percent.

Pew Research Center also did a survey. When they said, "Do you think the shootings reflect a broader societal issue?" When that question was asked after the Aurora, Colorado, shootings, 24 percent said yes. After the Newtown shootings, 47 percent say that is the case. That is why we are hearing this broader conversation now.

SAMBOLIN: Dan Malloy.

O'BRIEN: In the next half hour, we'll be joined by Congresswoman Sheila Jackson Lee, a Texas Democrat, and she is calling for an immediate ban on all assault weapons. Thank you for that update. We appreciate that -- Zoraida.

SAMBOLIN: As we said, Newtown schools will reopen today. They will do so two hours later than usual. Sandy Hook Elementary remains an active crime scene and is the only school in the area that will remain closed.

For returning students and their families, it's back to a productive routine. A lot of mental health experts say that it's a good idea. It's good for them, but you know, the pain is still going to linger. Sandra Endo is live not far from here in the center of Newtown.

SANDRA ENDO, CNN CORRESPONDENT: Zoraida, students, parents, teachers, may feel a bit anxious as classes resume today, but it could be the first step toward healing.

(BEGIN VIDEOTAPE)

ENDO (voice-over): In the wake of tragedy, a step toward normalcy, for Newtown kids, that means going back to school.

UNIDENTIFIED MALE: We also are going to be a little bit worried because we know what we thought was a secure school had this happen to them.

ENDO: But facing fear may be the first step to overcome this tragedy.

UNIDENTIFIED FEMALE: Children have to get back to school. If we let this sort of terror in our lives anywhere in this country win, we've lost. We have to get our kids back to school again.

ENDO: Classes resuming for 5,400 students in the district, except for those at Sandy Hook Elementary. Monday, all schools closed as teachers and administrators train with experts on how to handle the aftermath. Many parents we spoke with agree kids belong back in school. UNIDENTIFIED MALE: I think that one of the big things we have to do is have some sort of normalcy, and school is part of that.

UNIDENTIFIED MALE: Unfortunately, you know, we're living in this world where sometimes evil prevails sometimes, but we're just believing that good will overcome this.

ENDO: Sandy Hook Elementary remains a crime scene. Furniture and supplies moved to Chalk Hill Middle School in neighboring Monroe, where Sandy Hook students will eventually resume classes.

UNIDENTIFIED MALE: When the children come in, whenever the school is started, they walk into a classroom, it will look as close as possible to their classroom that they left.

(END VIDEOTAPE)

ENDO: Grief counselors and police will be present at Newtown schools today and through the weekend. Principals have asked parents to make sure they talk to kids about the tragedy before they head back into the classrooms, because you never know what fellow students may say, and, of course, teachers will also talk about what happened in an age- appropriate manner -- Zoraida, Soledad.

SAMBOLIN: All right, Sandra Endo, reporting live for us. Thank you very much.

Connecticut Governor Dan Malloy is calling for a nationwide moment of silence Friday morning. That is exactly one week after the shooting at the Sandy Hook Elementary School. He is also calling on churches to ring their bells 26 times. That is once for each of the victims who were killed in Friday's school massacre. The governor choking up when explaining why he took it upon himself Friday morning to tell waiting families that their loved ones were not coming out.

(BEGIN VIDEO CLIP)

GOV. DANNEL MALLOY (D), CONNECTICUT: It was evident to me that there was a reluctance to tell parents and loved ones that the person they were waiting for was not going to return. I made the decision that to have that go on any longer was wrong.

(END VIDEO CLIP)

SAMBOLIN: Malloy also says that he fully supports action at the federal level to tighten the nation's gun control laws. You know, the little girl, Jessica Rekos who died, they were at the firehouse with the governor. And they said that they were so frustrated because they were following all this protocol and they were waiting and waiting, and finally they left. They went home. They got into their little girl's bed and waited until police came to the house and said that indeed she was one of the ones who died.

O'BRIEN: At 1:00 in the morning.

SAMBOLIN: At 1:00 in the morning, terrible. O'BRIEN: Coming up in our next half hour on EARLY START, the "Hartford Courant" crime reporter, David Owens, is going to join us. He'll have the very latest on the police investigation of the 20-year- old shooter who shattered so many lives in Newtown. That's ahead.

And then coming up in our 7:00 hour, we're going to speak with Senator Joe Manchin. He will join us. He is a West Virginia Democrat, NRA member, but says now is the time to act on tightening up the nation's gun laws.

Plus another sign that tide could be turning in the debate over gun control in this country. We're also going to talk a Wall Street firm that's now taking a stand. We'll tell what they are doing that's straight ahead.

(COMMERCIAL BREAK)

BERMAN: All right, welcome back to EARLY START, everyone. I'm John Berman and Christine Romans is here this morning minding your business with some really interesting developments happening in the business community in the wake of the shootings in Connecticut.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: So the company that makes that military style rifle, the company that makes the rifle that killed all those children and those teachers, it's a company called Freedom Group. And it's basically owned by a bunch of investors, Cerberus Capital Management, a private equity group, and there's teacher's pension fund money that invests in Cerberus.

So you look at this trail, you see a California teachers pension fund giving money to Cerberus, which created Freedom Group, which owns Bushmaster and of course, that Bushmaster is the company that makes that military style rifle that was used in those killings.

Today, we're hearing from Cerberus they are going to sell Freedom Group, which owns Bushmaster. Cerberus, a private equity fund, is going to sell it. This is what they say.

They say in the statement: "It is apparent the Sandy Hook tragedy is a watershed event that has raised the national debate on gun control to an unprecedented level. It is not our role to take positions to attempt to shape or influence the gun control policy debate. There are, however, actions that we as a firm can take."

One reason they might be taking that action because of their big investors, Calsters, the California teachers pension fund. They are investors in Cerberus and that optic, that chain from teachers here to a product here that is used to kill teachers is a difficult optic to settle. According to friends at "Fortune," there are a lot of products that can be used responsibly or irresponsibly and in this case it was used irresponsibly.

Now that a tragic event like this occurred, I'm sure that it is something that we will be discussing going forward, meaning whether California teachers pensions fund should be used to fund gun manufacturers. Quickly about gun manufacturers, this is a private company -- the Bushmaster Company is a private company. Bushmaster Firearms it's called, but there are some public companies.

Yesterday, those two big public companies were down either 3 percent on the stock exchange or 5 percent on the stock exchange. A company called Olin, which makes ammunition, it was up just a little bit.

We're also calling this morning all the big retailers, because there are gun shops which reports, John, that they are seeing a spike in interest in buying weapons, because there gun owners who are concerned about the gun control debate right now.

But the big, big retailers where you can buy soccer gear for your kids and you can buy military style assault rifle. Dick's Sporting Goods is going to stop selling some semiautomatic weapons and they're stopping all gun sales in the store closest to Newtown, Connecticut.

I have a call into Wal-Mart. Unclear. Wal-Mart is no longer advertising these military style rifle that was used in this attack, but on Friday early afternoon, I googled Bushmaster 223. First thing that came up was a sponsored link to Wal-Mart saying I couldn't get it online but go to Carney, New Jersey. Says it aims straight and true, a military style rifle.

You don't see that on the Wal-Mart Web site. Not clear if Wal-Mart is just not advertising this gun or whether it's going to stop selling it.

BERMAN: I'm fascinated about what Cerberus has done here basically, pulling out of at least one part of the gun business. They are in business to make money and clearly made a decision that owning this company that made the Bushmaster is bad business.

ROMANS: People who follow private equity this morning are saying, wow, this is actually a big move. The company is saying in a press release, it's not taking a stand. People who cover private equity are saying it's rare.

Usually, companies can weather any kind of political fallout or something. But Freedom Group, which Cerberus created, owns not just Bushmaster, but ended up owing like a suite of 10 different companies involved in firearms and ammunition industry. That whole group, they're now going to put it up for sale.

BERMAN: All right. Let's shift gears now. What's the one thing we need to know about our money today?

ROMANS: One thing you need to know about your money -- stock futures are up. And we're seeing incremental evidence that the fiscal cliff could resolve. That would bode well for markets. So, stock futures are up this morning.

BERMAN: You get the sense that the market would love it, if and when they reach a deal. ROMANS: Well, they have to decide who Washington decided is rich. Is it 250 grand, is it 400 grand, is it $1 million a year? Once they settle that and talk about some real spending cuts, the closer you get to a deal.

BERMAN: All right. Christine Romans, always great to see you. Thanks very much.

ROMANS: You're welcome.

BERMAN: There are some big news, other big news, sad news out of Washington.

Tributes pouring in this morning for a giant of the U.S. Senate. Daniel Inouye served Hawaii since the day it became a state in 1959. He's now died at the age of 88 from respiratory problems. Inouye was the second longest serving member ever of the Senate, just behind late Senator Robert Byrd of West Virginia.

Inouye was a veteran of World War II. He lost an arm charging machine gun nests in Italy. That service earned him the Medal of Honor. He also witnessed the bombing of Pearl Harbor as a high school student. He was a legend of the Senate, a towering figure, now gone.

Today, Congress may receive a report by an independent panel that examined the deadly attack on U.S. consulate in Benghazi, just in time for congressional hearings this week. The report was ordered by Secretary of State Hillary Clinton, although she will not testify due to illness. That stomach bug that -- she fell over, she got a concussion.

You remember the attack back in September killed four Americans, including Chris Stevens, the U.S. ambassador to Libya.

BERMAN: James Clapper staying on as Director of National Intelligence. CNN has learned that the president asked him to stay in the position, and he agreed to remain for the foreseeable future. Clapper has taken a lot of heat for the response to the September 11th attacks on that U.S. mission in Benghazi.

FedEx grounded. Hundreds of packages never made it to their Nebraska destinations. Postal inspectors say a delivery driver working as a private contractor for FedEx was spotted dumping the packages from his truck onto the street last month. Only 30 of more than 400 packages were found intact and finally delivered. The driver, as you can imagine, he was fired.

The New York Mets, they're exporting Cy Young Award winner, R.A. Dickey. Dickey traded to the Toronto Blue Jays in a seven-player deal. R.A. Dickey is a 38-year-old knuckleballer. Such a great story, he went from baseball scrap heap to the king of the hill last year, winning the Cy Young, going 20-6 for the Mets. I think we all wish him well. One of the true good guys in baseball.

A mother and blogger putting the issue of mental illness front and center, declaring "I am Adam Lanza's Mother." We're going to hear from her. It is controversial, coming up.

(COMMERCIAL BREAK)

O'BRIEN: Welcome back, everybody. You're watching EARLY START. We're coming to you live this morning from Newtown, Connecticut.

It is an emotional and difficult day here, as some children heading back to school.

Veronique Pozner, she is the mother of Noah Pozner -- he is a 6-year- old boy killed in the mass shooting -- released the eulogy she gave yesterday before she buried her son whom she called her little man. Some of it was published in "The New York Times" and we were going to share some of it with you this morning.

And it begins like this: "The sky is crying and the flags are at half- mast. It is a sad, sad day. But it is also your day, Noah, my little man. I will miss your forceful and purposeful little steps stomping through our house. I will miss your perpetual smile, the twinkle in your dark blue eyes, framed by eyelashes that would be the envy of any lady in this room."

She ends her eulogy by saying this: "I will join you some day, not today. I still have lots of mommy to give to Danielle, Michael, Sophia and Arielle. Until, then, your melody will linger in our hearts forever. Momma loves you little man," is how she ends it. The whole thing is reprinted in "The New York Times" this morning.

SAMBOLIN: We were talking about that, the courage that it takes to give the eulogy for your own child. But, you know, wonderful way to honor him and to remember him.

O'BRIEN: I don't know how you can do that.

SAMBOLIN: Yes, there he is. Beautiful smile on his face, the way she would want him remembered.

And the mother of a mentally ill child, under fire for the blog posting with the title "I am Adam Lanza's Mother." The post has gone viral. The author Liza Long says the blog post was a cry for help. She writes about the difficulties of parenting a teenage son who she describes as seriously disturbed.

Long spoke to CNN's Erin Burnett last night.

(BEGIN VIDEO CLIP)

LIZA LONG, BLOGGER, "THE ANARCHIST SOCCER MOM": Sometimes for no apparent reason, he will just turn into this absolute raging -- I don't know how to describe it. You'd have to see it to believe it. I stopped and said to myself, you know, this isn't normal. I have to face up to the fact that I have a sick son, and we need help.

(END VIDEO CLIP)

SAMBOLIN: Liza telling CNN that she loves her son, but that he, quote, "terrifies me."

O'BRIEN: And I have talked to many parents of mentally ill children and adults who have said the same thing, that they don't know what to do.

SAMBOLIN: Right.

O'BRIEN: They are completely at a loss. And the only thing sometimes that can be done is to bring criminal charges against them, if you can get them commit some kind of crime, get them criminally incarcerated. Her son is 13 years old.

SAMBOLIN: And the older they get, right, they become stronger. And so the fear absolutely makes sense. It makes sense.

O'BRIEN: Yes.

The postal service is establishing a post office box for anyone who would like to reach out to the people here in Newtown, Connecticut. Here is the address. It is for Messages of Condolence, P.O. Box 3700, Newtown, Connecticut. And the zip code, 06470.

BERMAN: And to find out how you can help those affected by this tragedy, go to CNN.com/impact.

And I went to the site here, not only can you get information on how you can help those affected, but if you need some help also, perhaps on how to tell your child about this tragedy, how to explain it. There are links to all of the Facebook pages that's been set up for these children as well. So a lot of information there for you if you'd like.

SAMBOLIN: Meantime, President Obama, has his point man as he gets ready to put gun control on the agenda. More on that coming up.

(COMMERCIAL BREAK)

SAMBOLIN: The tide could be turning on the gun control debate, a major corporation and even some Republicans showing signs of change.

O'BRIEN: An anxious morning here in Newtown, Connecticut. Many students and parents here, kind of put their fear aside as they head back to school.

SAMBOLIN: Two-week warning until the fiscal cliff. One-on-one meeting at the White House results in major movement toward a deal.

Welcome back to EARLY START. We're glad you're with us this morning. I'm Zoraida Sambolin.