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Early Start with John Berman and Zoraida Sambolin

River Cruise Ship Sinks in China; TSA Screening Failure; Introducing Caitlyn Jenner; Aired 5:30-6a ET

Aired June 02, 2015 - 05:30   ET

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

[05:30:03] JOHN BERMAN, CNN ANCHOR: Rescuers are scrambling to save survivors from the cruise ship that capsized in the storm with more than 400 people were onboard. Crews report hearing sounds through the hull. They're desperately trying to reach passengers they believe might still be trapped inside. Chinese state media reports just 15 survivors have been rescued leaving hundreds more missing. Among them the captain and chief engineer, they are now in police custody.

For the latest, let's bring in CNN's David McKenzie live on the scene -- David.

DAVID MCKENZIE, CNN INTERNATIONAL CORRESPONDENT: Well, John, just those few that have been rescued and hundreds missing. And if you look behind me, Charlie will push into the scene there. That is where the staging ground of this dramatic rescue is happening. They believe people might still be underneath the hull of this river cruise. Hundreds of them, mostly elderly who were spending some days in this cruise when a wind gust, we believe, smacked into the side of the ferry. And it's believed at this stage in minutes, the ferry capsized over.

Questions being asked now about the captain and the chief engineer. They have been taken into custody. Just a handful of people who survived, potentially swam to shore in the evening hours. You can just imagine the horrible scenes here on the Yangtze River, a popular pleasure cruise route here in China. Now the elements are already working against them. It's raining here.

It's been raining heavily. There's a heavy military presence. We had to walk more than a mile to our live position through the police and military checkpoints. Now they're doing everything they can, tapping on the hull with a hammer to hear if they can hear people crying out for help to get them out.

One woman, a 65-year-old, another man, were pulled out just hours ago from the scene. So there's hope, still, but that hope is fading fast -- John.

BERMAN: All right. Our David McKenzie on the scene of this capsized ferry. You get the sense of the level of concern there by the level of response from the Chinese leadership which has been immense and very public which is not always common in that country.

David McKenzie, thanks so much. CHRISTINE ROMANS, CNN ANCHOR: All right. Breaking overnight, the

acting head of the TSA losing his job after tests found that airport screeners failed to detect weapons and explosives 95 percent of the time.

Homeland Security Secretary Jeh Johnson announcing overnight that acting TSA administrator Melvin Carraway is being reassigned. The chairman of the House committee that oversees the TSA, Jason Chaffetz, calling the results deeply alarming.

Aviation and government regulation correspondent Rene Marsh has the latest for us this morning from Reagan International Airport.

RENE MARSH, CNN AVIATION AND GOVERNMENT REGULATION CORRESPONDENT: Well, Christine and John, undercover agents with the Department of Homeland Security's Office of Inspector General, they tested the system at airport security checkpoints. They tried to smuggle weapons as well as fake explosives through these checkpoints. They performed 70 tests and they were successful 67 times.

This sort of operation has been done for years. The goal is to test the vulnerabilities as well as to strengthen the system. So by design, this test is very difficult. But as one former TSA official puts it, there's no way, absolutely not, the failure rate should not be as high as it was. It was 95 percent.

We are hearing from the Department of Homeland Security. Secretary Jeh Johnson says that he has called for six actions. The first one, he wants revised screening procedures. He wants the results of the testing to be shared with airports across the country. He wants more training for TSA officers. He also wants TSA screening equipment to be retested and reevaluated. He wants these covert operations to continue, and lastly, Secretary Johnson says he is appointing a team to make sure this happens in a timely fashion -- Christine, John.

ROMANS: All right. Rene, thank you for that.

Developing overnight, Secretary of State John Kerry arrived in Boston for surgery on his broken leg. Kerry broke his leg, his femur, Sunday during a biking accident in the French Alps. Nuclear talks with Iran had hit a critical stage. Less than a month to reach a deal. And it's not clear when the 71-year-old secretary of state will be able to fly again. Staffers insist, though, he is working the phones. He was firing off e-mails. They say the injury will not affect the talks.

Meanwhile, international inspectors report Iran's stockpile of nuclear fuel has increased 20 percent during the last 18 months of negotiations. The White House has been claiming Iran's nuclear production has been frozen during the talks.

BERMAN: Secretary Kerry will miss a critical meeting in Paris today. Senior officials from the U.S.-led coalition will be holding a strategy session to discuss how to battle ISIS. The meeting comes on the heels of some failure, the fall of Ramadi. The U.S. has delivered 2,000 anti-tank weapons to Iraq to defend against ISIS suicide bombers. Those bombers were crucial in taking Ramadi. ISIS is on the move again. This time in Syria, launching a surprise

weekend attack near Aleppo, in the northern part of that country. That latest push brings ISIS closer and closer to controlling a city that has been under siege for years.

[05:35:10] ROMANS: All right. Time for an EARLY START on your money this morning. Asian and European stocks are lower. Greece has a looming debt deadline. U.S. stock futures ticked down two after the Dow climbed yesterday about 30 points.

The economy looking strong. Gas prices are low. Job creation is underway. Even so, Americans are hesitant to spend their money. Americans spent less in April than in March. And that's part of a trend. Instead, Americans are increasing their savings. The annual savings rate is now 5.6 percent. Significantly higher than the pre- recession norm of about 3 percent. Well, we know the lowest savings rate didn't do us very much good with what the recession did.

Now you've heard it a million times, though. Consumer spending drives the economy. So this may be economic sacrilege, folks, but I'm actually encouraged people are paying more attention to their personal balance sheets. I also think until wages start to rise meaningfully, people want to make sure they have back up.

BERMAN: So if it's not the economic growth that they're predicting, it will be your fault?

ROMANS: It won't be my fault because people are spending money on cars. And that is the pocketbook paradox. They are spending money on cars like crazy. We're going to get great car numbers I think today. But they are -- that savings, that gas savings, they're not spending it right into the economy.

BERMAN: Might be a good thing.

All right. Turns out it was Caitlyn Jenner who broke the Internet. Now sharing her story of transformation, getting support from the president, and yes, breaking records online.

This is a big story. There's a lot to discuss. Brian Stelter with us right after the break.

ROMANS: Every paper this morning.

(COMMERCIAL BREAK)

[05:40:07] BERMAN: No more Bruce. It is Caitlyn Jenner now. And she is introducing herself in a big way. A big glossy cover story in "Vanity Fair." The 65-year-old Jenner talking openly about the gender transition. The new persona and new name, they were an immediate hit on social media. Caitlyn collecting more than a million Twitter followers in a matter of hours.

Brian Stelter, CNN senior media correspondent and the host of "RELIABLE SOURCES," joins us to talk about this.

And it is a big moment. Look, it's a big moment for Caitlyn Jenner. It's a big moment for media and it's a big moment for society.

BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: Yes, for a lot of people who have never known a transgender individual, now they do. Because now that person is on the front page of this magazine, on the front page of the papers this morning, and on our television screens. So it creates and stimulates conversations that people might have never had before.

ROMANS: Let's talk about the secrecy around the "Vanity Fair."

STELTER: Yes.

ROMANS: It was a famous writer, Buzz Bissinger, who wrote the piece. It's a very famous photographer, Annie Leibovitz, who took the pictures.

STELTER: Yes.

ROMANS: And no one now knew this was coming.

STELTER: No. There were rumors last week that maybe there was going to be a magazine cover. But nobody saw the pictures. It didn't leak ahead of time. It was a top secret strategy at "Vanity Fair." Literally people were not kept in the loop. Who was going to be on the cover. You know, and this went to the printing press in a special way. They were all being very careful because they wanted this to have a lot of impact when it came out yesterday.

And it sure did. You know, Caitlyn Jenner took this opportunity to launch new social media accounts. Because what do you do in the digital age when you change your name? You set up a new Twitter account, new Facebook account, new Instagram account. She's almost up to two million followers on Twitter now and over half a million on Facebook. So she's got a lot of support online that you see. And that's something that she'll be able to use in the future to amplify her message.

BERMAN: It's interesting because this is no soft launch. I mean, this is as big as it gets.

STELTER: Right. Yes.

BERMAN: And look at this. I mean, this is not, you know, walking around with her new persona out in society seeing if people notice. This is glam photos.

STELTER: Yes. Facial reconstruction surgery and lingerie. This is a full statement. You know, which began with the Diane Sawyer interview where Bruce Jenner at the time said I am transgender. But at the time still wanted to be called Bruce and still want to be referred to with a male pronoun. Now it's call me Caitlyn.

BERMAN: And there are sort of three aspects of this. Number one, it shows how comfortable she is, how public she wants to be with this. I think number two, you know, it helps promotes the discussion about transgender issues. ROMANS: Yes.

BERMAN: Really put it into the forefront. And number three, let's be honest. I mean, Caitlyn Jenner is now running a Caitlyn Jenner business.

STELTER: That's right. That's a good way to put it. There's always with the Kardashians, with the Jenners, it's family and it's always business at the same time. These things are mingled in between.

ROMANS: Let's talk about the family then because his sons from his two first marriages are not going to participate in his reality show. There's a reality show that comes with this, too. What about the -- from the article, the "Vanity Fair" article.

STELTER: Yes.

ROMANS: You get the sense that it's going to be difficult and a little messy with the family.

STELTER: Well, the family is being, I think, careful and smart about showing support, showing that they're wrapping their arms around Caitlyn Jenner, supporting her through this transition. We saw Kim Kardashian and Khloe and Kourtney, all speaking, you know, yesterday on Twitter and on red carpets and all that.

ROMANS: Right.

STELTER: But at the same time, this reality show apparently will just be Caitlyn. It won't be really about the family.

ROMANS: He said he was disappointed by that. That it's --

STELTER: Yes. Yes. That's right. That's what -- that's what was in the Buzz Bissinger article.

BERMAN: I've got to say it, though. The remarkable thing about the article was that the complications with the family have very little to do with the gender -- you know, the gender transformation. It has everything to do with how messed up the Jenner and Kardashian families have been over the last several decades.

STELTER: Well, because it is this empire and because there are all these complicated relationships. I wonder if I'm one of the Kardashian daughters who have built in their own businesses. Maybe they don't want to be on Caitlyn's show because they're focused on their own show. There are all those sorts of complications that none of us normal families would ever have to think about.

ROMANS: We say she really trumped all of the Kardashian hype, though, with how this has been rolled out. So the public relations machine --

STELTER: Yes.

ROMANS: -- that is the Caitlyn Jenner transformation is amazing.

STELTER: Well, Sunday night, Kim Kardashian said she was having a second child.

ROMANS: She did? I didn't notice.

STELTER: Well, that's because Sunday afternoon, this came out. And this was on the cover of "Vanity Fair." So last night on the red carpet in New York, Kim Kardashian kept getting asked about the pregnancy, but also getting asked about Caitlyn Jenner.

BERMAN: And quickly, Brian, you've been incredibly skillful. The he, she, and pronoun issue is something that --

ROMANS: You've got it perfect.

BERMAN: That people have to do.

STELTER: But I've actually practiced a little bit. You know, I want to get it right. I think it's important for journalists to get it right. But be honest about the fact that it's not always easy. All right? Because it does require a mind shift in the same way that it did years ago with Chaz Bono, in the same way that it did recently with Bradley Manning turning into Chelsea Manning.

ROMANS: America is coming along, though. This is a real important moment for the transgender community because we are talking about the style guide, really, a national style guide for how to deal with this.

STELTER: The best tweet I saw about this has said, I had hope everyone who is correcting people who missed gender Caitlyn Jenner will do the same thing for non-famous transgender people.

ROMANS: Yes.

[05:45:00] STELTER: You know, this conversation that's happening about an A-list celebrity will then trickle down perhaps to more normal conversations about transgender people who are not A-list stars.

BERMAN: Brian Stelter, thanks for coming in this morning. Really appreciate it. Interesting discussion.

ROMANS: Thanks, Brian.

All right. Let's take a look at what's coming up on "NEW DAY." Alisyn Camerota joins us now.

Hi, Alisyn.

ALISYN CAMEROTA, CNN HOST, "NEW DAY": Hey, guys. Great to see you. So as you know there are desperate rescues under way at this hour to find hundreds of people still missing in that cruise ship disaster. Did weather play a role or was this human error? So we are live at the scene with the latest.

And we'll look at brand new CNN-ORC polls that paint a very interesting picture of the 2016 race. Is Hillary Clinton's campaign in trouble, and which Republican is polling lower than many had expected? So we'll break down all those surprising results for you when we see you at the top of the hour.

ROMANS: Thanks.

BERMAN: Those results come out at 6:00 a.m. I've had a sneak peek. They are fascinating. Stay tuned for those.

CAMEROTA: Hot off the press.

BERMAN: All right. Severe storms pummeling the northeast this morning leaving communities in several states under water. We will tell you what to expect today. Here's a hint. Rain.

(COMMERCIAL BREAK)

BERMAN: All right. The good news, Texas and Oklahoma are drying out. But the bad news? The East Coast getting its turn to face severe weather. The reports Monday from Florida to New Jersey of large hail, high winds and funnel cloud, flash flooding, with more on the way in today's forecast.

ROMANS: In Washington, D.C., high winds toppling trees with unfortunate timing for the city bus. Flash flooding from Monday's heavy thunderstorms flooded Amtrak's Union Station and city streets. The flooding also turned the stairs of the Metro System's Capitol South Station into a waterfall.

[05:50:14] And there is more wet potentially dangerous weather in today's forecast. Meteorologist Ivan Cabrera is tracking the weather forecast for us.

IVAN CABRERA, AMS METEOROLOGIST: John and Christine, we're going to focus on the northeast, not just today, but over the next several days. They already have anywhere from two to as much as four inches falling yesterday. But another spot here across the north central U.S., that's where we're going to have severe storms. I don't think it will be severe across the northeast, but the problem here is not going to be damaging winds, it's going to be very heavy rainfall.

This is what's already happened across the northeast. A good area of two to as much as four inches. So the ground is saturated. Can't take much more rainfall here. Specific totals there, we had a couple of records in Wilmington and also in Baltimore as well, 2.5 inches of rainfall fell in a very short amount of time. And that is why we continue with these flood watches across the northeast corridor.

This is going to continue not just today but into tomorrow as well. We're going to have a series of disturbances moving through here. So heavy rainfall the potential here certainly, anywhere from D.C., Philly, heading all the way up across 95 from two to four inches in the next 48 hours -- guys.

BERMAN: All right, Ivan, thanks so much.

Expected later today, a vote on the Senate on restoring the NSA's surveillance programs that lapsed over the weekend when legal authority for them expired. On Monday, Republican Senator Rand Paul once again thwarted Majority Leader Mitch McConnell's efforts to get a speedy vote on the USA Freedom Act.

Senator Paul wants to tweak the bill adding more restrictions on NSA data collection. But any amendments would send the measure back to the House and extend the time that the NSA goes without the bulk collection capabilities for America's telephone records.

ROMANS: All right. The Pentagon now says live anthrax samples were sent to three additional labs in Canada. That means live anthrax. Live anthrax, one of the most deadly things on the planet has been mistakenly sent to 12 states, Washington, D.C. and three countries. The samples originated at an army lab in Utah. Scientists intended to ship inactive strain of the deadly spores for research. Officials -- Defense officials say so far no one has been sickened by those samples.

BERMAN: Goodness.

Health insurance premiums could increase as much as 30 percent next year for consumers who purchases policies through Obamacare. According to the Obama administration, major U.S. carriers are seeking major rate hikes for 2016. Among the largest proposed rate increases, Blue Cross and Blue Shield of Illinois looking to raise premiums by 29 percent or more for certain plans.

Last year, Obamacare premiums increased an average 5.4 percent. And again, the low premium increase had been something that the White House has pointed to support Obamacare over the last few years. If those premiums go way up like this that'll be something of a political problem for them.

ROMANS: Yes. All right. Should Publix Grocery Store workers be allowed to wear beards, to have beards? There is a huge fight over facial hair, John Berman. I've got that for you next.

BERMAN: Yes, Wolf Blitzer on the phone with us to discuss. Stay with us.

(COMMERCIAL BREAK)

[05:57:05] ROMANS: I'm Christine Romans. Let's get an EARLY START on your money this morning. Stocks lower around the world. European stocks are down with -- excuse me -- growing concerns about Greece's ability to pay its bills. U.S. stock futures are lower, too. Yesterday, the Dow climbed 30. But with the Fed interest rate hike on the way, you can expect more wild swings. I think it's fair to say this month.

The Apple Watch is the company's most successful product debut ever.

BERMAN: Really?

ROMANS: Apple has sold seven million watches since April compared that to 125,000 iPods in the first quarter of 2001.

BERMAN: No way. ROMANS: Or 1.1 million iPhones. That's right. The watch has one

major advantage. It was the first product Apple released in more than one country on the very same day. Watch me trying it on. I tried it on a -- like $14,000 one. Demand for the watch is expected to keep growing.

All right. Should employees of the Publix Grocery chain be allowed to wear beards at work? 19-year-old Brandon Wesley thinks he should be able to wear a beard. He started a petition on coworker.org asking to change Publix's facial hair policy. That has now 6500 signatures.

Now here at CNN employees are allowed to grow beards. Just look at John Berman here. He grew a beard once.

What was that for? I can't remember.

BERMAN: Yes. But I didn't have it on. I didn't have it on the TV. I grow a beard every vacation because I hate shaving.

ROMANS: Wolf Blitzer has a beard.

BERMAN: He does.

ROMANS: But should you be allowed to have a beard? The hipsters have beards. You're technically not really a hipster.

BERMAN: I think yes. I think the easy answer is, you know, Yankees can't grow beards.

ROMANS: Really?

BERMAN: New York Yankees, they have a no beard policy. That's why they all have those mustaches in the ball.

ROMANS: Really?

BERMAN: Yes.

ROMANS: I wonder what the Publix mustache policy is. I think it's no facial hair, it is no facial hair.

BERMAN: All right.

A frantic search and rescue mission now under way. Hundreds of tourists missing after their cruise ship sank. "NEW DAY" picks up the breaking news right now.

(BEGIN VIDEO CLIP)

ROSEMARY CHURCH, CNN ANCHOR: A desperate search is under way.

BERMAN: Rescuers scrambling to save survivors from a cruise ship that capsized in the storm.

CHURCH: The ship's captain and chief engineer have been taken into police custody. UNIDENTIFIED MALE: A major security breach.

UNIDENTIFIED FEMALE: TSA screeners didn't detect the fake weapons.

UNIDENTIFIED MALE: Is it the technology that's failing or is it the screeners themselves?

UNIDENTIFIED FEMALE: Some say police are afraid to do their jobs.

UNIDENTIFIED MALE: The reason that we have these protests is because people want better policing.

UNIDENTIFIED MALE: We're identifying the spilled milk but we're not talking about how to clean it up.

DON LEMON, CNN ANCHOR: Good-bye, Bruce, hello, Caitlyn.

UNIDENTIFIED FEMALE: This is a huge story.

CAITLYN JENNER, FORMERLY BRUCE JENNER: As soon as the "Vanity Fair" cover comes out, I'm free.

(END VIDEO CLIP)

ANNOUNCER: This is NEW DAY. With Chris Cuomo, Alisyn Camerota and Michaela Pereira.

CHRIS CUOMO, CNN ANCHOR: Good morning and welcome to your NEW DAY. It is Tuesday, June 2nd, 6:00 in the East.

And we do have breaking news this morning. 458 people are in the water and at risk. Many are feared lost as rescuers battle darkness after a river cruise capsizes in China.

What you're looking at right now is that man on the hull that is sticking out of the water tapping it with a small hammer to see if there's survivors trapped inside. And they believe there are. We have other pictures you'll see of them starting to go to work with a blow torch to cut inside the hull.

[06:00:07] ALISYN CAMEROTA, CNN ANCHOR: Rescuers able to pull only a handful of victims so far from this sunken vessel. Among the survivors, the ship's captain and chief engineer.

(END)