Return to Transcripts main page

Early Start with John Berman and Zoraida Sambolin

White House and Congress Near Budget Deal; U.S. Ship Passes Near Chinese Artificial Island; View from Front Lines of War Against ISIS. Aired 5:30-6a ET

Aired October 27, 2015 - 05:30   ET

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

[05:30:01] CHRISTINE ROMANS, CNN ANCHOR: Stunning video of a school resource officer body slamming a female student. Throwing her across the room.

JOHN BERMAN, CNN ANCHOR: Breaking overnight. The White House with a budget deal with Congress. A deal that could prevent a government shutdown, avoid the default on the debt. Will Republicans buy it?

ROMANS: Breaking news this morning. China sharply warning the U.S. after a Navy warship sails through waters claimed by the Chinese.

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

ROMANS: I'm Christine Romans. 30 minutes past the hour this morning.

BERMAN: We're going to begin with disturbing new video taken on a cell phone inside a high school classroom in South Carolina. It shows a school resource officer body slamming a female student after she apparently refused to get up from her chair and he drags her across the room.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: (EXPLETIVE DELETED). Give me your hands. Give me your hands.

(END VIDEO CLIP)

BERMAN: The officer in the video identified as Richland County Sheriff's Deputy Ben Fields has been placed on administrative leave while authorities investigate. Police are still trying to piece together exactly what led up to this incident.

(BEGIN VIDEO CLIP)

LT. CURTIS WILSON, RICHLAND COUNTY SHERIFF'S DEPT.: The student was asked to leave the class several times by the instructor at the school. The assistant principal was there was well. Then the officer was called on scene to actually have the student removed from that location. The student refused and the officer acted that you see on the video.

Now, again, what we saw was just a tidbit of what that video showed. Of course, we're going to look at what happened that led up to it. That accident that took place. And then what happened afterwards. All of that is going to take part in what the sheriff decides.

(END VIDEO CLIP)

BERMAN: We are learning that the officer in question, Ben Fields, has been the subject of two lawsuits in the past decade.

ROMANS: All right. Breaking overnight. A major budget deal that could bring relative peace to Washington for more than a year. Congressional Republicans, Democrats and the White House hammered out an agreement to avert a government shutdown, to avert a default on federal debt. But the deal is dividing congressional Republicans. Some conservatives are outraged. Many say that retiring Speaker John Boehner gave too much away in these negotiations with Democrats and that the next speaker, presumed to be Paul Ryan, should have been part of the Republican negotiating team. Many other Republicans believe this is the best deal they can get.

(BEGIN VIDEO CLIP)

REP. CHARLIE DENT (R), PENNSYLVANIA: I speak for myself. But the outline that was presented seems like a path forward.

REP. LOUIE GOHMERT (R), TEXAS: We should read the bill before we vote on them. Some of us remember that from 2010. Things like the presumptive speaker should be negotiating, too, not just the outgoing.

(END VIDEO CLIP)

ROMANS: Can the conservatives stop the deal when it comes to a vote set for tomorrow?

CNN's Manu Raju has the latest from Capitol Hill.

MANU RAJU, CNN SENIOR POLITICAL REPORTER: Guys, the White House and Republican leaders may reach a major fiscal deal to avert a possible debt default by next week. This deal would raise the national debt ceiling until March of 2017, essentially taking this fight off the table in an election year.

Pretty significant deal. In addition to that, it would raise domestic and defense spending by $80 billion in an effort to appease some of those defense hawks who are very worried of the across-the-board cuts known as sequestration would really hurt the Pentagon and national security programs. In addition, there's increased domestic money to appease Democrats who are worried that those same sequestration cuts would hurt a lot of those favored domestic program.

Now this deal is being pushed very aggressively by John Boehner because he wants to really -- it is what he said, clean the barn up before his likely successor, Paul Ryan, assumes the speakership later this week.

The big question is, how will House Republicans in the rank-and-file respond to this? Right now there are mixed reviews outside of the House Republican conference meeting Monday night. The question is, how will they deal with it when there's actually a vote on the House floor as early as Wednesday? We don't know the answer to that quite yet.

But, guys, right now, the betting is that House Republicans will pass this bill, it will pass the House. Likely pass the Senate and the president may have a major fiscal deal on John Boehner's final days in office -- John and Christine.

BERMAN: All right. Manu Raju, imagine that. This is a big deal.

Joining us now to discuss this, political economist and chief strategist at Horizon Investments, Greg Valliere.

Greg, this matters, right? I mean, this is the type of thing that there have been huge fights over between the White House and Congress over the last seven years. This time they managed to work it out perhaps without much acrimony.

GREG VALLIERE, POLITICAL ECONOMIST AND CHIEF STRATEGIST, HORIZON INVESTMENTS: You know, for everyone who thinks that Congress is incompetent, can't get anything done, you're right, this is a very big deal. And I would add, I think it's a pretty big deal for the financial markets as well.

ROMANS: You are paid to worry, Greg. That is your job.

VALLIERE: Right.

ROMANS: You are paid to worry.

BERMAN: I do it for free.

VALLIERE: Yes.

[05:35:01] ROMANS: You're paid to worry about what Washington is doing that could affect the pocketbooks of companies and for Americans. So with this off the table, if this happens and with this off the table, then what is -- what is the path of least resistance for the economy, I guess, and for the political economy?

VALLIERE: Well, I'll tell you, Christine, a little more spending and this will provide some more stimulus. I don't think it's that bad. I think it's probably a plus. The budget deficit continues to fall because of receipts. Not spending. Receipts look really good.

ROMANS: Because the economy is getting better. It's helping the budget deficit.

VALLIERE: Right. Unemployment is dropping. Payroll taxes are up. Corporate taxes are up. Individual taxes are up. And then specifically for sectors, I think the market today will look very favorably on Defense stocks. I've always argued Defense stocks are the purest play in Washington.

I think maybe stocks and companies that deal with NIH, health care companies will do well. I think construction companies will do well because we'll get a highway bill in the next few days. So there are some very positive aspects of this for the financial markets. BERMAN: I want to shift gears to the presidential race. In Houston

over the last two days, there's an unusual gathering. It was a family gathering, of donor gathering, a political gathering, the Bush family all turning out in support of Jeb Bush for president. George W. Bush was there. Barbara Bush was there. Former President George H.W. Bush was there.

This comes at a time when Jeb Bush is cutting back his campaign staff.

ROMANS: Yes.

BERMAN: Cutting pay for members of that campaign. And at a time when a day before a huge debate in Colorado where he really needs to turn things around, Greg.

VALLIERE: Yes. You'd have to say it in tomorrow night's debate, three candidates who have stalled out really have a lot on the line. The most obvious one is Jeb. He's got to show a little fire in the belly. Another one is Carly Fiorina. Her numbers have slumped in the last few weeks. And then finally John Kasich, who everyone has thought of as the modest alternative, his numbers have plateaud as well. I think all three of them need a strong debate.

ROMANS: And what about Donald Trump? You've said from the beginning that he's a risk. The longer the debate -- the longer the campaign goes on, the bigger risk that he is not the candidate. What do you make of Trump and what he has to prove tomorrow?

VALLIERE: Well, you know, I think we're still in phase one of people venting, not liking politicians, not liking Washington. This is the primal screen phase of the campaign. But we get to phase two by February 1, when the first caucuses start. People then will look at temperament. What kind of temperament did the candidates have? One could argue that is already beginning to affect Trump. I think people are looking at his temperament and saying, do we really want his finger on the nuclear button? Maybe not.

ROMANS: And you've seen that in those Iowa polls.

VALLIERE: Yes.

BERMAN: It's interesting, though, because when you talk about temperament, one person portraying himself as quite calm is Ben Carson, who has surged ahead in Iowa. He's got his new -- some new campaign ads out as well. He will be center stage with Donald Trump in this debate tomorrow night. I expect he'll face some tough questions.

VALLIERE: Yes.

BERMAN: Some direct questions about the economy where he will be asked to put some meat on the proverbial bone in terms of what his plans would be.

VALLIERE: Absolutely right, John. And I think that while he has a wonderful, calm and soothing personality, they're going to ask him about his desire to have tithing for tax policy and his criticism of Medicare. There are a lot of things that Carson has said that he's going to have to defend.

ROMANS: Can we talk about, you know, how hard it is then for Donald Trump to get his start in business? You know, he has talked about how he had this buy,

VALLIERE: Yes. Yes.

ROMANS: And there's been a lot of no's in his career. And then -- and then he dropped at this town hall yesterday that, you know, he just got a little $1 million loan from his father to start in business. Now how does that play? That little $1 million loan but I think in today's money it will be more like $6.8 million.

VALLIERE: Yes. You know, all of this -- I mean, he's had such a long list of appalling things. Talking about John McCain who was tortured in Vietnam, talking about Megyn Kelly, talking about his parents, on and on and on. I'm not sure this will be a big problem for him. But accumulatively, if you add up all of the outrageous things that he said, I think it goes to that issue I just mentioned of temperament. That may be his Achilles heel.

BERMAN: Except that, you know, in this case, Donald Trump's wealth is part of his appeal.

ROMANS: Right.

BERMAN: He says, look, I'm really, really, really rich. When he was pressed by Matt Lauer on what, did you really mean that $1 million is just a small loan? Trump responded, look, compared to what I'm worth now, it's nothing. It's peanuts.

VALLIERE: Fearless forecast, guys. I'm not sure how liquid Trump is. I mean, he has lots of holdings and on paper he's worth several billion. But in terms of liquid assets, this could become an issue for him. Jeb has over $100 million in his PAC. We know that. He's got to cut back on expenses. Michael Bloomberg has $38 billion to $40 billion. I'm not sure how liquid Donald Trump is.

ROMANS: Interesting. I like fearless forecasts. Those are the best kind.

All right, Greg Valliere, nice to see you.

VALLIERE: You bet.

ROMANS: Take it easy. All right, 40 minutes past the hour. Let's take a look at your money this morning.

[05:45:03] U.S. stock futures a bit lower. Ahead of a really big day. The Fed begins a two-day meeting. No change expected in interest rates. There's a slightly better chance of a rate hike in December. But nothing is certain. Still many people think that that first rate hike comes sometime next year. It's also a huge day for company earnings. BP, Alibaba, Ford, T-

Mobile, UPS, all this morning. The world's most valuable private company, looking to raise more money. Uber wants another $1 billion in funding. Valuing up between $60 billion and $70 billion. It makes the five-year-old company worth more than both Ford and General Motors. Uber has quadrupled in value since just last summer.

BERMAN: That's a lot of money.

ROMANS: It sure is.

BERMAN: All right. U.S. warship sailing into international waters claimed by the Chinese. China has a new warning out just a short time ago for the United States. We're live next.

(COMMERCIAL BREAK)

ROMANS: Breaking overnight, a U.S. warship passes within 12 nautical miles of an artificial island built by China in the South China Sea. The move in effect is a U.S. challenge to Chinese territorial claims and the Chinese are very unhappy about it and making sure the United States knows.

For the latest, I want bring in CNN's Will Ripley live at a U.S. naval base in Japan.

And Will, I mean, these which described as sort of unsinkable aircraft carriers, the Chinese have built basically a military installation out of nothing, and the U.S. wants the world to know this is navigable waters here. These are international waters, these are trade routes. China flexing its muscle. The United States flexing back.

[05:45:12] WILL RIPLEY, CNN CORRESPONDENT: Yes, I mean, China essentially has raised a lot of concern in this region because they built up over these coral reefs. These airstrips, docking ports, the potential to really militarized this area where trillions of dollars of trade come through. It's a lifeline for the United States' number one ally, Japan. And here at this naval base. This is actually the home base for the warship that was sent out to conduct what's known as a Freedom of Navigation Patrol.

Something that we may be hearing more of in the coming weeks as the United States military pledges to continue sending their destroyers, sending their ships, close to these manmade islands in the South China Sea 600 miles from mainland Chinese shores. They want to send a message to the Chinese government that they don't feel it's OK for China to continue to assert itself further and further from its borders.

China very upset about this. Their Foreign Ministry spokesperson saying that these actions by the United States could actually force China to speed up the development of their infrastructure in these areas.

And keep in mind, this isn't the only flashpoint. China and Japan have been engaged in a territorial dispute in the East China Sea for quite some time now as well. All of it boils down to the geopolitical instability in the region and what role the Chinese military will play as the United States tried to continue to maintain the status quo. But you have China implying that as a regional super power, a super power in this part of the world, they want to play a serious role as well.

They say that if the United States continues these activities, which they say are illegal, that there could be consequences. We'll have to see how it all develops -- Christine.

ROMANS: The U.S., a very strong ally of Japan. The U.S. a very large trading partner with China. That's why this is all so very important.

Thank you so much for that, Will Ripley.

BERMAN: All right. CNN on the frontlines inside Syria, in the fight against ISIS. We're live right after the break.

(COMMERCIAL BREAK)

[05:50:39] BERMAN: U.S. Secretary of State John Kerry set to brief the Senate Foreign Relations Committee today in a closed session on Syria. Later this week, he is expected to convene talks on a post- Assad Syria with roughly a dozen Arab and European countries.

Joining us now after touring the frontlines in the battle against ISIS in Syria, CNN's senior international correspondent Clarissa Ward.

And Clarissa, you saw what is really supposed to be, in a way, the tip of the spear in the battle against ISIS in Syria.

CLARISSA WARD, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, John, that's right. Just weeks ago, the U.S. air-dropped 50 tons of ammunition to a new coalition of Arab and Kurdish fighters that it really sees as the tip of the spear in this new offensive to try to defeat ISIS in Syria.

We spent a lot of time on the front lines with the main group in that coalition, Kurdish fighters known as the YPG. These men really are at the core of this latest U.S. strategy mostly because they've enjoyed major victories against ISIS on the battle field with the backing of U.S. and coalition airstrikes. And what the U.S. is hoping the YPG will do next is take the fight to ISIS' strongholds and particularly to the ISIS stronghold in the city of Raqqah.

But really, John, this would be a major operation. It would take tens of thousands of men. And from what we saw along the frontlines, the YPG fighters at this stage are exhausted after months and months of fighting. They are poorly equipped. They're lightly armed. Most of them fighting with old AK-47s. Some of them even fighting in sneakers or their sandals. And one commander was saying to us unless we get heavier weapons, unless we get armor-piercing weapon, it's going to be really difficult to defeat ISIS in their strongholds.

And that of course is because ISIS has very heavy weapons that they have managed to take from Iraqi forces. So there's still a big question mark as to whether this strategy will actually get any traction on the ground without more U.S. and coalition support for these YPG fighters.

BERMAN: Yes, indeed. Are they up to the task? Clarissa is going to have much more on this on "NEW DAY."

Thanks so much, Clarissa.

ROMANS: All right, winter is almost here. That's the bad news. I've got some good news for you. Your heating bill is going down. Way down. I'll tell you why next.

(COMMERCIAL BREAK)

[05:56:54] ROMANS: A bright Tuesday morning. I'm Christine Romans. Let's get an EARLY START on your money this morning.

Stock futures down slight this hour ahead of a big day for business news. It is day one of the Fed's two-day meeting on interest rates. No change expected this week. A slightly better chance of a rate hike in December. But most think sometime early next year, John, is when you're going to see the Fed raise interest rates.

It is a brisk morning for earnings. Alibaba, Ford, UPS, Pfizer before the bell, and Apple after the close.

All right, go outside and play. REI, the retailer, wants you to go outside not to shop in its stores on Black Friday. The retailer is giving its 12,000 workers Thanksgiving Day off and Black Friday, too, with pay. Customers can place orders online. But REI's home page will encourage buyers to explore the outdoors instead. REI's CEO says the holidays is just out of hand. He acknowledges the decision will put a dent in revenue. But might be, I guess, maybe a decent PR.

BERMAN: Really? You mean that 20-second read you just did right there? It couldn't possibly hurt.

ROMANS: A little bit of PR. Go outside. Don't go shopping.

Your heating bill will be lower this winter. Why? Predictions of extremely warm weather driven by a so-called Godzilla El Nino. That's what I call you when you're not listening. Godzilla El Nino.

BERMAN: Good for Mockery La Nino then the response?

ROMANS: We've got a 9 percent natural gas tumble on Monday to a three-year low. Nine percent in one day, they're down 20 percent in October. It's been a warm fall and abundant surprise there. Americans are already saving big at the gas pump, too, thanks to cheap oil. So that's another little energy-related stimulus for you, guys. You're probably going to have much lower heating bills this winter.

BERMAN: All right. All right. We have some stunning new video of a student being thrown to the ground by a school resource officer. "NEW DAY" picks up that discussion right now.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: First thing, I don't see the beginning of the video.

UNIDENTIFIED FEMALE: This is a teenage girl.

UNIDENTIFIED MALE: It makes you a little bit of afraid of what is actually happening within our schools.

UNIDENTIFIED MALE: Would I have done it the same way? No.

UNIDENTIFIED FEMALE: Defiance is a part of what makes teenagers, teenagers.

UNIDENTIFIED MALE: Why is Ben Carson gaining momentum in Iowa?

UNIDENTIFIED FEMALE: We've seen Carson officially knocked Trump from his perch.

UNIDENTIFIED MALE: Ben Carson has played this brilliantly. He has not gloated about polls.

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: Carson is lower energy than Bush. I don't get it.

UNIDENTIFIED REPORTER: ISIS fighters often go at night to that building just over there.

JOHN BERMAN, CNN ANCHOR: On the frontlines in Syria.

UNIDENTIFIED REPORTER: Who trained you how to use this?

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

(END VIDEO CLIP)

CHRIS CUOMO, CNN ANCHOR: Good morning. Welcome to your NEW DAY. It is Tuesday, October 27th, 6:00 in the East.

Now up first, you're going to have to see this to believe it. I cannot describe what happened in this violent classroom confrontation between a cop and a high schooler adequately, but I'll tell you this. It has triggered outrage in South Carolina and videos of the incident are going viral everywhere.

They capture a school resource officer, which is really a cop, pulling a female student from her seat, body slamming her in front of the class. You will watch, we will discuss, you can decide. Here's a taste.

ALISYN CAMEROTA, CNN ANCHOR: So there's the officer dragging the student across the classroom while other students are watching. Then she is restrained and arrested. That officer now placed on administrative leave by the sheriff's department. Some in the community demanding that he be fired. So let's begin our coverage with CNN's national correspondent Jason

Carroll.

Jason, what do we know?