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Early Start with John Berman and Zoraida Sambolin

Sanders Calls Clinton "Not Qualified"; Pennsylvania A Must-Win for Sanders; Clinton & Sanders Fight Over "Not Qualified" Claim; Democrats Trade Fire Over NRA; Both Parties Turn Toward New York; Trump Stumps in New York, 10,000 Supporters Pack Long Island Rally; Mississippi Religious Freedom Law Under Fire; Tennessee House Passes Mental Health Bill Allowing Counselors to Turn Away LGBT Patients; South Carolina Takes Up Bathroom Bill; McDonald's Goes Healthy; Iraqi Forces Advance on Mosul, New U.S.-Backed Push to Take Back Iraq's 2nd- Largest City. Aired 5:30-6a ET

Aired April 07, 2016 - 05:30   ET

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

[05:31:00] CHRISTINE ROMANS, CNN HOST: New late night attacks on the run for president. Bernie Sanders calling Hillary Clinton not qualified for the job.

MIGUEL MARQUEZ, CNN HOST: And a battle for votes in New York. Donald Trump on his home turf blasting competitor Ted Cruz late last night.

ROMANS: A CNN exclusive taking you to the frontlines of the war on ISIS in Iraq. Some amazing pictures and reporting there. Welcome back to EARLY START. I'm Christine Romans.

MARQUEZ: And I'm Miguel Marquez. It is 31 minutes and 19 seconds past the hour. Breaking news overnight. Bernie Sanders targeting Hillary Clinton with his toughest attacks yet. At a huge rally in Pennsylvania, Sanders repeatedly calls the Democratic front-runner unqualified to be president. CNN's Brianna Keilar has the latest from the Sanders campaign.

(BEGIN VIDEOTAPE)

BRIANNA KEILAR, CNN SENIOR POLITICAL CORRESPONDENT: Bernie Sanders, before a crowd of more than 10,000 here in Philadelphia at Temple University, pushing back on the some of the recent charges from Hillary Clinton and her campaign, where they've taken issue with some of his recent answers and certainly some of his struggles to explain some of the key parts of his campaign promises. Here's what Bernie Sanders said to Hillary Clinton.

BERNIE SANDERS (D-VT), PRESIDENTIAL CANDIDATE: And she has been saying lately that she thinks that I am quote, unquote, "not qualified to be president." Well, let me just say in response to Sec. Clinton, I don't believe that she is qualified if she is, through her Super PAC, taking tens of millions of dollars in special interest funds.

I don't think you are qualified if you have voted for the disastrous war in Iraq. I don't think you are qualified if you've supported virtually every disastrous trade agreement which has cost us millions of decent paying jobs. KEILAR: Pennsylvania, a very delegate-rich state, a must-win for Bernie Sanders if he is going to have a pathway to the White House. Right now he's looking to build on momentum from a string of recent wins, push towards the New York primary, and then onward to Pennsylvania, as well as California -- Miguel and Christine.

(END VIDEOTAPE)

ROMANS: All right, Brianna. Thank you for that, Brianna. Hillary Clinton's camp returning fire overnight. Her press secretary tweeting "Hillary Clinton did not say Bernie Sanders was not qualified. But he has now - absurdly - said it about her. This is a new low."

What Clinton did do, in an interview on CNN, was question whether Sanders is ready to be president. She criticized Sanders for being unable to answer journalists' questions on just how he would go about breaking up big banks. This has been a cornerstone of his campaign.

(BEGIN VIDEO CLIP)

HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: In the interview it seemed unclear as to whether he understood how Dodd-Frank works, how we would go about breaking up banks that were posing risks to our economy. So I was, I think, a little bit surprised that there didn't seem to be a lot of substance to what he was saying. I think the presidents who are successful know what they want to do and they know how to do it and they hit the ground running, able to do every aspect of the job, both as president and as commander in chief.

(END VIDEO CLIP)

ROMANS: Clinton and Sanders also battling over ties to the NRA. Sanders tweeting "Only one Democratic candidate takes gun lobby money to fund her campaign." That attack, a reference to a fundraiser last month co-hosted by former NRA lobbyist Jeff Forbes. Clinton firing back at Sanders, "Only one Democratic candidate has voted for the NRA's 'most important piece of legislation in 20 years. You." Meaning Sanders.

MARQUEZ: It's getting nasty. Helping us to assess the race -- the battle between the Democrats and everybody's pivot toward New York, CNN's political digital reporter Eric Bradner. Good morning to you, Eric.

ROMANS: Morning.

ERIC BRADNER, CNN POLITICAL DIGITAL REPORTER: Good morning.

[05:35:00] MARQUEZ: So, here we are in New York. It's Sanders v. Clinton. The two people -- he was born here, she was adopted by the state. We want to play for you some sound. Some of the back and forth between these candidates in their campaigns over who is ready to be president.

(BEGIN VIDEO CLIP) JEFF WEAVER, SANDERS CAMPAIGN MANAGER: Don't destroy the Democratic Party to satisfy the Secretary's ambitions to become president of the United States.

CHRIS CUOMO, CNN HOST: Response to that idea.

CLINTON: (Laughing) Well, I mean it's just ludicrous on the face of it. You know, I have been campaigning for Democrats, fundraising for Democrats, recruiting Democrats to run and win for a really long time. I think about 40 years. And Sen. Sanders, by his own admission, has never even been a Democrat.

(END VIDEO CLIP)

MARQUEZ: So, his campaign manager saying it. Sanders saying it on the stump, saying that she's not qualified and her just sort of laughing it off, basically. Are these going to stick? I can't imagine that Sanders is going to do it. Is he just trying to come back from that interview the Daily News?

BRADNER: Well, this is sort of a new low in the Democratic race -- candidates questioning each other's qualification to be president. That's someplace that neither of them really wanted to go. But this battle over who is better for the Democratic Party is an interesting one because on one hand Sanders has brought a lot of independence into this process. He's breaking turnout records and that sort of thing by really engaging a lot of young voters who might have otherwise skipped this year's contest.

But on the other hand, the race is now shifting to some states, New York, first and foremost, that have what are known as closed primaries. What that means is only registered Democrats can participate. These are the sorts of people who are going to be thinking about the down-ballot effects of the top of their ticket, whether -- that means in Senate races, gubernatorial races, things like that. And Hillary Clinton has, throughout the entire primary, done better with those people -- with registered Democrats.

ROMANS: Right.

BRADNER: And so, that's really going to help her in the next few weeks.

ROMANS: Well, what's interesting, the outsider label has brought in the new voters for the Democrats and the Republicans. Bernie Sanders is an outsider even though he's been a career politician, basically. But he's the outsider of the Democratic Party, and you've got Donald Trump.

But, politics is about helping other people get elected. It's about campaigning for other people in your party and that's something that Bernie Sanders and Donald Trump -- now that they have to reach into that reservoir of goodwill from the establishment, they don't have it.

BRADNER: That's right. So, Sanders actually, believe it or not, has a long history of helping Senate Democrats raise money, but that's something that he does not tout on the stump. That's something you don't hear him talk about, in part because it sort of goes against his brand right now.

Hillary Clinton, on the other hand, can point out that Bernie Sanders has outraised her over the last few months but she has done a lot more to help the Democratic Party. She's done a lot more joint fundraisers, that sort of thing. And she also has a long history of helping recruit candidates and help down-ballot. She has a lot of ties to Senate Democrats who have endorsed her, candidates who have endorsed her. So that's certainly something that you'll hear Clinton talk a lot about.

MARQUEZ: And the Democrats smell blood this year because of the Supreme Court nomination, because of the negativity on the Republican side, and they really want a strong candidate going into the general, clearly. Speaking of that candidate for the general on the Republican side, Mr. Trump going after the values statement that Ted Cruz talked about during the debate so long ago. Here's what he said last night in Bethpage.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: Do you remember during the debate when he started lecturing me on New York values, like we're no good? Like we're no good. I've got this guy standing over there looking at me talking about New York values with scorn on his face, with hatred -- with hatred of New York. So folks, I think you can forget about him.

(END VIDEO CLIP)

MARQUEZ: You've got to give it up to Ted Cruz. Here's the Daily News -- take the F -- you know, that other train that doesn't exist, Ted. Can we say that? The Daily News is really -- boy, their covers have gotten good. Ted Cruz basically saying oh, what I meant by that was oh, it's all the Democrats that he's supported over the years. Just look at his checkbook. He's written checks to --

ROMANS: New York values are Charlie Rangel, Anthony Weiner, Andrew Cuomo.

MARQUEZ: And Hillary Clinton and everybody else that he's given money to over the years. But I take it that this is going to stick in New York and Donald Trump is going to quite well.

[05:40:00] BRADNER: Yes, you have to think so. Now listen, to get to the 1,237 delegates he needs, Donald Trump has to crush everybody else in New York and even that won't be enough. So, a key question to watch is whether -- say Cruz is badly damaged by those comments. Can John Kasich then come in and start to peel away some moderate congressional districts, some suburban districts, urban districts where Trump might not do as well as he does in rural areas?

It's all about the delegate count right now, and even as Donald Trump looks likely to win the big count from New York statewide, other candidates can peel away some from individual congressional districts and that's something to watch in the coming days.

ROMANS: I know that Donald Trump has to win 60 percent of the delegates from here on out. Ted Cruz has to beat 88 percent -- almost nine out of 10, and John Kasich 125 percent, which is impossible.

MARQUEZ: That's impossible, yes. My math says impossible.

ROMANS: All right, Eric Bradner, nice to see you this morning.

MARQUEZ: Thanks, Eric.

ROMANS: Happy Thursday.

BRADNER: Thank you, thank you.

MARQUEZ: New states drafting religious freedom laws that critics say legalize discrimination. The controversy and confusion surrounding those laws coming up.

(COMMERCIAL BREAK)

[05:45:00] ROMANS: Major corporations and human rights activists are blasting a new religious freedom law in Mississippi. The city of Seattle, the states of Minnesota and Vermont, and both New York City and state all now instituting employee travel bans to Mississippi because of this new law. The measure allows business owners to deny service to the LGBT community based on their religious beliefs. Critics say the law is just a license to discriminate. Several advocacy groups have filed lawsuits challenging its legality.

MARQUEZ: And Mississippi is not the only state to pass or consider a religious freedom bill. In Tennessee, the House just approved a measure that would allow mental health counselors to turn away patients based on their personal principles. The Senate still has to vote on the bill. Critics call it an unprecedented attack on the counseling profession and the LGBT community.

And a South Carolina lawmaker has just introduced a bathroom bill that would require members of the transgender community to use public restrooms that correspond with the sex on their birth certificate.

ROMANS: All right, it's 46 minutes past the house. Let's get an early start on your money this morning. Searching for direction, I think it's fair to say, after a nice day yesterday. The Dow up 112 points, Nasdaq up almost 1.6 percent, the S&P 500 up a percent.

Much of the optimism coming from the Federal Reserve. Minutes from the March meeting suggest the Fed won't raise rates until at least June. Investors now wagering just a 23 percent of a rate hike then. The Fed's target sits at a meager 0.25 percent. The Fed originally wanted to hike rates four times this year but is on hold now. The crashing oil prices, the slump in the stock market, concerns about global growth. So, because the Fed is not moving right now, that was something investors like to see.

MARQUEZ: It's amazing how much power that has. ROMANS: Oh yes, so true.

MARQUEZ: Well, let's take a look at what's coming up on "NEW DAY". Alisyn Camerota, hello.

ROMANS: Speaking of power.

ALISYN CAMEROTA, CNN HOST: Hello, thank you.

MARQUEZ: The powerful Alisyn Camerota.

CAMEROTA: That's better, thank you. Let's write that in for every intro. I appreciate it. Wow, l like how this day is going. Bernie Sanders is using a new line of attack against Hillary Clinton, saying that Clinton is not qualified to be president. This, after Clinton says Sanders is not a Democrat. We have reaction from the Sanders campaign and Chris' interview with Hillary Clinton.

On the Republican side, the candidate descending on New York. Trump and Cruz stumping in the big apple, attacking each other over New York values. Guess which one is winning at the moment? We'll hear from the Trump and Cruz camps on that, so see you guys soon.

ROMANS: All right, thank you so much. Nice to see you.

MARQUEZ: The Daily News cover. Take a look at that one. That's a good one. Oh, don't show me. It's too dirty.

ROMANS: I know, you are such a --

MARQUEZ: I'm a wimp.

ROMANS: -- such a good, good young man.

MARQUEZ: I'm a good boy, yes.

ROMANS: All right, are there cracks showing in the U.S. economy? Three major banks think there are cracks. We're going to tell you why when we get an early start on your money, next.

Kale with your egg McMuffin. It could be coming to a McDonald's near you. The fast food giant looking to capitalize on that with new healthier options. "CNN MONEY" Cristina Alesci has an inside look.

(BEGIN VIDEOTAPE)

CRISTINA ALESCI, CNN CORRESPONDENT: After years of customers clamoring for McMuffins in the afternoon, McDonald"s finally gave in last year, rolling out all-day breakfast. How has it been for business?

NICOLE ENEARU, FRANCHISE & OWNER OPERATOR, MCDONALD'S: It's been great for business.

ALESCI: But on a national level the story wasn't always so rosy. Sales were in a tailspin for several years and only a bold move like all-day breakfast would stop the decline. Why do you think it took so long?

OFELIA MELENDREZ-KUMPF, VP, MCDONALD'S SOUTHERN CALIFORNIA: I think, frankly, it was ourselves in large part. Sometimes we stand in the way of ourselves.

ALESCI: That's an understatement. As soon as McDonald's introduced all-day breakfast sales turned around. The CEO even credits all-day breakfast for the company's about-face. Now the burger giant wants to take it one step further.

ENEARU: We have two different kinds of bowls. One has egg whites with turkey sausage. We have another one that has chicken chorizo with scrambled eggs.

ALESCI: For now, it's being tested at 800 locations in Southern California, but does the rest of the country want a kale breakfast bowl and chobani shake from the golden arches? The way that it's been positioned is these are healthier offerings. How is the company changing?

MELENDREZ-KUMPF: We realize that by our customers having more choices, it's going to change the way they think about McDonald's.

ALESCI: Perhaps, but McDonald's customers haven't always taken to healthy items in the past, but customer want more options which is why owners like Nicole are on board.

ENEARU: The customers are just excited that they can get what they want when they want it.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

[05:54:00] MARQUEZ: And now to a CNN exclusive. A new push for Iraqi forces backed by the U.S. to take back Mosul, Iraq's second- largest city, from ISIS. CNN's senior international correspondent, Arwa Damon, with exclusive access to the frontlines where Iraqi troops are advancing. She joins us live from Erbil. Arwa, how are the Iraqi troops performing?

[05:55:00] ARWA DAMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, they've got quite a few challenges that they are already facing at this stage, bearing in mind that both Mosul and much of Nineveh province has been in ISIS's hands for the last two years, giving them plenty of time to fortify their defenses.

Now, what the Iraqi security forces have done is launch the first phase of this operation to eventually advance and try to retake Mosul. What did as the first step was gain control of a handful, it must be said, of villages. And we went to one of these villages with them and that really gave us a bit of insight as to what it is that they are facing when it comes to trying to confront ISIS fighters.

And there, even though they were able to take and hold the village, ISIS fighters snuck in overnight. They took hold of a building. They began launching a counterattack against the Iraqi army. An airstrike was called in eventually and that swayed the battlefield back in the favor of the Iraqis. But then they also were facing wave upon wave of suicide bombers, as well as ground fighters.

Now, that same success is not necessarily repeated elsewhere. In some of these other villages the Iraqis have gone in, in what seemed like was going to a successful operation and then there have been a series of battlefield mishaps. And they were, despite the fact that they had coalition support, forced to withdraw to a certain degree. Those operations ended in failure. So it's very, very tough and very slow going at this stage, Miguel.

MARQUEZ: Sounds like it's going to be a long, hard slog into the summer. Arwa Damon, thank you very much for being there for us.

ROMANS: All right, 56 minutes past the hour. Let's get an early start on your money this morning. Dow futures turned lower after a brief rise overnight. Oil prices also changing direction. They're now down. Same thing for stocks markets in Europe. They've turned lower shares and Asia closing with slim gains overnight.

Economists dramatically cutting their forecast for U.S. economic growth in the first quarter. The Atlanta Federal Reserve sees 0.4 percent for growth in the first three months of the year. A huge drop from 2.5 percent it had predicted. Bank of America sees growth at 0.6 percent. That's down from 2 percent. You can see Well Fargo also slashing. Look at that -- 0.1 percent. That's barely growing.

The reason? Falling car sales in March, lower equipment purchases by businesses, weaker than expected reading on consumer spending. All of those darkening the view. These global revisions come after the Federal Reserve marked down its forecast for growth in the U.S. to 2.2. percent from 2.4 percent.

Now, the consensus among economists is that the U.S. is not headed for a recession, but there are some of these cracks developing the U.S. economy that are starting to show. The question is, is it rearview mirror? Did it happen in the first quarter? That things have picked up again? We've seen strong hiring, so we'll have to wait and see.

MARQUEZ: It's amazing how 2008 and what happened and still just everything is so --

ROMANS: Oh, yes. Oh no, it's a shadow over everything still. You're right.

MARQUEZ: Yes, I see. New attacks launch in the race for president. "NEW DAY" starts now.

(BEGIN VIDEO CLIP)

CLINTON: Senator Sanders, by his own admission, has never even been a Democrat.

SANDERS: I don't believe that she is qualified.

CLINTON: There didn't seem to be a lot of substance to what he was saying.

SANDERS: Secretary Clinton appears to be getting a little bit nervous.

CLINTON: (laughing)

TRUMP: Lyin' Ted. The bible held high, he puts it down and then he lies.

CRUZ: Donald can always be counted on to demonstrate class.

TRUMP: He started lecturing me on New York values, like we're no good.

CRUZ: The people of New York know exactly what those values are.

TRUMP: Folks, I think you can forget about him.

(END VIDEO CLIP)

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

CHRIS CUOMO, CNN HOST: Good morning. Welcome to your new day. It's Thursday, April 7th, 6:00 in the east. I'm not qualified, you're not qualified. That is the state of play between Sanders and Clinton in the Democratic race for president. The charge from him? You can't be the Democratic nominee. You're all about special interest money. Clinton's return? You're not even a Democrat. How can you be the Democratic nominee?

That's what's going on. This is all about a race that's coming to a head right here in New York. A week from today the CNN debate in Brooklyn is going to be where it all comes down.

CAMEROTA: Meanwhile, on the GOP side, Donald Trump hoping to rebound in his home state of New York after that bruising loss in Wisconsin. The GOP rivals getting even feistier as they prepare for a convention floor fight. We have this race covered the way only CNN can so let's begin with senior political correspondent, Brianna Keilar. She is live in Washington. Good morning, Brianna.

KEILAR: Good morning, Alisyn. These comments by Bernie Sanders last night were red meat for his supporters. I was at this rally. They were eating this up. Bernie Sanders, clearly, not taking kindly to the Clinton campaign's new strategy to take him on aggressively, despite some concerns about unifying the Democratic Party for a general election.

Hillary Clinton had seized on his remarks to the New York Daily News where he had a number of stumbles, including where he seemed unclear about how he would break up the big banks. Last night he responded by coming out swinging.

(BEGIN VIDEO CLIP)

SANDERS: She has been saying lately that she think that I --