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Early Start with John Berman and Zoraida Sambolin
Donald Trump Quotes Sanders Attacks on Clinton; Clinton Calls Trump's Foreign Policy "Dangerous"; President Obama Dives into 2016 Fight; Trouble in Iraq's Fight for Falluja; Signal Detected from EgyptAir Flight 804. Aired 4:30-5a ET
Aired June 02, 2016 - 04:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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[04:31:21] CHRISTINE ROMANS, CNN ANCHOR: Donald Trump and Hillary Clinton go to war. Trump calling Clinton a liar unfit for office as Clinton goes after Trump's foreign policy. Why the frontrunner is calling his plan dangerous.
Welcome back to EARLY START. I'm Christine Romans.
JOHN BERMAN, CNN ANCHOR: I'm John Berman. Thirty-one minutes past the hour.
Happening now, police in San Jose, California, they are on alert preparing for a Donald Trump rally there tonight. Now in the past Trump events like this one you're seeing video of from Albuquerque, New Mexico, they have been hit with protests, fights and arrests there. So, San Jose police have been holding tactical meetings to get ready just in case.
Last night on the trail, that's Donald Trump, he was in Sacramento unleashing a barrage of new putdowns on Hillary Clinton. This came after Clinton slammed Trump University and Trump himself calling Trump a fraud.
CNN's Sara Murray traveling with the Trump campaign has more.
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SARA MURRAY, CNN POLITICS REPORTER: Good morning, John and Christine.
On a day when Donald Trump took some harsh incoming fire, he fired right back. Hillary Clinton went after Trump for Trump University, calling him a fraud, he was trying to scam America. And here in Sacramento last night, Donald Trump opened his speech, unleashing a series of counter-punches against Hillary Clinton, calling her crooked Hillary and saying she was one of the worst secretaries of state in history.
DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: She's not qualified because she has bad judgment. Now, who said that? Bernie Sanders said that about Hillary. She's not qualified. So, here are seven points that I marked down which I think are
important. And they talk about Hillary and her incompetence.
She is one of the worst secretaries of state in the history of our country. Now she wants to be our president. Look, I'll be honest. She has no natural talent to be president. This is not a president. They talk about me. Actually, a lot of people think I look extremely presidential, if you want to know the truth.
But do you really believe Hillary is presidential? This is not presidential material.
MURRAY: That's Trump swiping Hillary Clinton over foreign policy comes as she prepares today to deliver what she and her campaign are billing as a major foreign policy address.
As for Donald Trump, he's back on the campaign trail once again in California today in San Jose.
Back to you, guys.
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ROMANS: All right. The major foreign policy speech Hillary Clinton is set to give today will focus extensively on Donald Trump. Senior policy adviser Jake Sullivan tells CNN Clinton will reel off a list of what he calls dangerous that Trump backs related to nuclear proliferation, war crimes, NATO, banning Muslims among other things. All this while Clinton is keeping other eye on Sanders in California where they are neck and neck in the polls there.
Clinton flew to California following a rally in New Jersey last night. The other big state with a primary on Tuesday. CNN's Jeff Zeleny was there. He's got the latest.
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JEFF ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT: John and Christine, Hillary Clinton going after Donald Trump at some of the most pointed and personal ways yet, saying that he's committed a fraud and he's been scamming the American people all over that controversy at Trump University.
HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: His own employees testified that Trump U -- you can't make this up -- that Trump U was a fraudulent scheme where Donald Trump enriched himself at the expense of hard working people.
ZELENY: Now, as Hillary Clinton focuses squarely on Donald Trump, Bernie Sanders is out in California trying to win over voters. Hillary Clinton is flying to California today as well. She realizes that it's a very tough race. A new poll shows it's dead-even.
[04:35:01] She's only slightly up by about two points.
Bernie Sanders took a bit of delight in that Wednesday as he campaigned there.
SEN. BERNIE SANDERS (I-VT), DEMOCRATIC PRESIDENTIAL CANDIDATE: And I'm shocked. You know why? Because you all told me the campaign was over. I wonder -- I wonder why Secretary Clinton and her husband Bill are back in California.
ZELENY: Now, Hillary Clinton does not need to win California, but she certainly would like to. It's the biggest delegate price of all, some 475 delegates next Tuesday. That's why she'll be spending the next five days there campaigning but also going after Donald Trump, including at this foreign policy address later today in San Diego, trying to present Donald Trump as unqualified and unfit for the presidency -- John and Christine.
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BERMAN: All right. Jeff Zeleny, thanks so much.
The 2016 race feels like it's about to get a major new player. President Obama is attacking what he calls economic myths pushed by Republicans, prescription that he says benefits that rich at the expense of the middle class. Without mentioning Hillary Clinton or Donald Trump in Indiana. The president sent clear signals he is ready, even eager to join the fray.
More now from White House correspondent Michelle Kosinski.
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MICHELLE KOSINSKI, CNN WHITE HOUSE CORRESPONDENT: Hi, John and Christine.
Right. You look at President Obama there in Elkhart, Indiana. This was the first place he traveled as the president with the recession raging around him. And you see him looking relaxed. His sleeves rolled up. He's on the campaign trail, but not quite on the campaign trail.
Clearly, though, this is a taste of what's to come. And sources in the White House tell us that he's ready to get out there. But at this point, he's not even mentioning names yet.
However, this was a long speech. It was an hour, at times fiery and shouting. You clearly want to throw everything in there. Look at where we are -- a place where he won in 2008, but was absolutely trounced in 2012. He called it a whooping, a place where Bernie Sanders just won the primary.
So, he wanted to do two things. First, tout his policies and how much they changed the economy. At the height of the recession, Elkhart, Indiana, had a nearly 20 percent unemployment rate. Today, it's down to around 4 percent, although the governor there just said that the economy has improved, in spite of Obama's policies.
Then, he also wanted to hit out at the Republican rhetoric. I mean, again, not mentioning Trump by name. In fact, when people started booing the candidate, as he called him, he told them not to. But here's what he did say.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Don't think that actually this agenda is going to help you. It's not designed to help you. And the evidence of the last 30 years, not to mention common sense, should tell you that their answers to our challenges are no answers at all.
KOSINSKI: The president hit out at cynicism, at voting out of fear or based on provocative tweets. I wonder who he is referring to there. But the question, of course, is will his words and there were an hour's worth of them, register with the voters that he's wanting to target here? Those who are voting Republican or thinking about it -- John and Christine.
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ROMANS: All right. Michelle Kosinski, thanks for that.
You know, the last time Obama was in Elkhart, Indiana, the economy was crumbling. It was February 2009, the labor market lost 703,000 jobs that month, one of the largest drops of the recession. The economy shrank almost 5.5 percent.
Look at the Dow. It crashed 1,000 points that month. That's about 12 percent. What a difference seven years makes. Elkhart's unemployment rate now is below the national average.
GDP isn't great. It's about 0.8 percent, but it's expected to bounce maybe two or three percent in the second quarter. Look at the Dow. It more than made up for that crash. It's up 151 percent since President Obama gave that speech in Elkhart, Indiana, in 2009. That is more than 10,000 points. But it does make his hair -- his hair is still gray, though.
BERMAN: His hair is gray because he knows that a lot of those blue collar and white working class jobs that exists in Elkhart, Indiana, and Michigan and Pennsylvania, a lot of those voters are looking at Trump right now thinking he is okay. And, you know, Obama is trying to make the case and the president is, that they should be looking Trump's way. It will be interesting to see how this plays the next few months.
Thirty-nine minutes after the hour. The former I.T. specialist who set up and maintained Hillary Clinton's private e-mail server when she was secretary of state plans to plea the fifth at a deposition next week. Brian Pagliano is cooperating with the FBI after accepting an immunity deal from the government earlier this year. That's a separate case. He will not answer questions next week when he is deposed for Freedom of Information lawsuit against the State Department by the conservative watchdog group Judicial Watch.
An embarrassing admission by the State Department. Officials there now acknowledge someone in their public affairs bureau made a deliberate request to cut several minutes of video from an archive 2013 press conference. The edited video contained questions from a reporter demanding to know whether the administration was lying about holding secret talks with Iran.
[04:40:04] Officials later revealed the department had not been telling the truth. Why? They say they're trying to protect delicate negotiations. No one involved claims that he or she can remember who ordered the cuts.
ROMANS: All right. New this morning, a big overhaul for the payday loan industry. The Consumer Financial Protection Bureau is proposing overnight new rules to protect borrowers. Now, payday loans, these are technically tied to a borrower's next paycheck. You're borrowing against future earnings. The CFPB says the average annual percentage rate, look at that, John, 390 percent. The loans are often used to cover basic living expenses, like rents or utilities, right? So, you're kind of always in hock for the next paycheck.
Here is what the government wants payday lenders to do. First, make sure the borrower can afford payment's on the loan and the "debt trap" cycle, making it harder for lenders to refinance existing loans. The CFPB says 80 percent of loans are re-borrowed within a month.
BERMAN: Wow.
ROMANS: Finally, regulate penalty fees. Many payday lenders have access to borrower's checking accounts and they directly withdraw payments on due dates.
BERMAN: It's like 10 billion red flags here.
ROMANS: Yes. If there aren't enough funds available, this can lead to huge overdraft fees for borrowers. So, the Consumer Financial Protection Bureau really wants to try to protect people.
I'll tell you, though, supporters of the industry, or advocates of the industry say there is a big trend to the American public who literally survive on these payday loans. You know, they survive on having access to future cash because they are not making enough money.
BERMAN: They're still going to be protected, though.
Dramatic 911 calls released from the mother whose 3-year-old boy who fell into the gorilla enclosure at the Cincinnati Zoo. You're going to hear those 911 calls, next.
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[04:45:52] ROMANS: The mother of the 3-year-old boy who fell into the gorilla habitat at the Cincinnati Zoo made a frantic call to 911 moments after making the terrifying discovery. That audio recording is now being released as the Cincinnati police wrapped up their investigation.
Now, police recommending no charges be filed against the boy's mother. More now from CNN's Jessica Schneider.
(BEGIN VIDEOTAPE) JESSICA SCHNEIDER, CNN CORRESPONDENT (voice-over): John and Christine, it was 90 seconds of helpless horror from that mother as she called 911 dispatchers while simultaneous trying to calm her toddler son. She was just one of several people calling 911 on Saturday.
MOTHER: Hi. My son fell in the zoo exhibit at the gorillas. The Cincinnati Zoo, my son fell in with the gorilla. There's a male gorilla standing over him. I need someone to contact the zoo, please.
DISPATCHER: OK, we do already have that started -- we do already have started there, OK?
MOTHER: OK -- be calm. Be calm. Be calm.
DISPATCHER: How old --
MOTHER: Be calm! He's grabbing my son. I can't watch this. I can't, I can't, OK, I can't watch this.
DISPATCHER: How old is your son?
MOTHER: I can't watch.
CALLER: Had it slammed against the wall earlier.
DISPATCHER: OK. Can you -- is any of the zookeepers next to you right now?
CALLER: Oh, God. Oh, God. He's got his pants. He's taking the baby.
DISPATCHER: OK, ma'am, listen to me.
CALLER: He's taking the baby. He's taking the baby into the cave. Oh my God.
SCHNEIDER: The imminent danger of Harambe possibly taking the toddler into the cave may shed light on why the dangerous animal response team moved in in those ten tense minutes and decided to eventually shoot and kill Harambe John and Christine.
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BERMAN: Jessica Schneider.
The UCLA professor who was killed in a murder/suicide that put the campus on a lockdown is being remembered this morning as a brilliant scholar and caring teacher. The 39-year-old William Klug, a bio mechanics professor, Little League coach and father of two, will be remembered tonight at a candlelight vigil. The man who killed him left a note behind. But police have not released his identity or motive.
ROMANS: Six New York City concerts have been postponed by promoter Live Nation in the wake of a deadly shooting in the Manhattan nightclub last week. Three rap concerts scheduled for the Irving Plaza Club this week have been called off now after one person was killed and three others injured there. Three other shows at the Gramercy Theater also have been pulled by Live Nation which says it's meeting with New York City police to develop a new security plan for the shows. BERMAN: Kansas is joining a growing number of states challenging the
Obama administration's transgender bathroom guidelines for public schools. The state senate dominated by Republicans voted 30-8 to challenge the directive in court. Democrats tried unsuccessfully to keep the focus on school funding during the last day of the legislative session. The Kansas attorney general says he has not decided whether to join a class action suit with 11 other states or sue separately.
ROMANS: All right. Massachusetts lawmakers are close to sending a bill to the governor there that would expand protections against discrimination for transgender people. The measure would also permit use of bathrooms corresponding to a person's gender identity. The House and Senate have passed different measures. Once those differences are reconciled, Republican Governor Charlie Baker is expected to sign that bill into law.
BERMAN: Severe flooding has prompted the governor of Texas to declare a state of disaster across dozens of counties. This is Lubbock, Texas, right now. Inflatable boats being used to help people stuck in the waist-deep water there.
In Houston, you can see the neighbor is completely submerged. A flood warning is in effect until Saturday. Evacuations are also under way in the city of spring. Authorities have had to rescue hundreds of people. One man there says the situation is dire.
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UNIDENTIFIED MALE: This is real serious. Do not play with this. You see what we're going through. Thank the Lord for good friends and family.
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ROMANS: All right. More rain and more flooding ahead for Texas, unfortunately. Let's get right to meteorologist Allison Chinchar.
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ALLISON CHINCHAR, AMS METEOROLOGIST: Well, John and Christine, we have even more rain expected for portions of Texas. So, for that reason, flood watches, flood warnings, even flash flood warnings are in effect for the next several days in anticipation of that additional rain.
Here you can say on the forecast radar again, a lot of this heavy moisture moving into Dallas, San Antonio, Austin, stretching over towards Houston. Again, a lot of these areas that just simply do not need more rain. Widespread, additional 1 to 2 inches. Some areas could pick up as much four to six inches. Again, you have to keep in mind, this is on top of the many inches in
some locations, feet of rain that they've already had. Again, more showers and thunderstorms in portions of the Southeast and Midwest and along the front. Very hot temperatures, 84 in Detroit, 78 in New York, 83 in Washington with balmy 91 in Atlanta.
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ROMANS: All right. Allison, thank you for that.
All right. Uh-huh, John Berman, a week of strong economic news, looks so good and then, a speed bump. What it means for your 401(k). We'll get an early start on your money, next.
BERMAN: I blame you.
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[04:55:08] BERMAN: New developments in the Iraqi push to free Fallujah from ISIS control. Iraqi government forces say they are concern about doing harm to civilians, including an estimated 20,000 children.
Let's get the latest from CNN's Jon Jensen joining us from Abu Dhabi.
Jon, obviously, there is concern for the civilians inside that city. But the Iraqi forces, they know, they've been there for some time.
JON JENSEN, CNN REPORTER: That's right, John.
Iraqi forces are facing stiff resistance from ISIS fighters on the outskirts of Fallujah. While inside the town, there are concerns of humanitarian crisis unfolding. We understand that Iraqi army units have essentially dug their heels then just outside Fallujah. They've been holding positions for the past 48 hours or so.
They are facing a number of deadly counterattacks from ISIS, including roadside bombs, snipers and booby trapped houses. The Iraqi prime minister, though, says there will be no halt and the advance will go on. Meanwhile, the humanitarian situation inside the city is approaching catastrophe. That's what aid groups are saying. The 20,000 children you mentioned are part of an estimated 50,000 residents stuck inside Fallujah.
The concern right now, John, for those children is that they could be forcibly recruited to pick up arms for ISIS or even be used as human shields.
Keep in mind this city has been under siege for some six months. So, food is limited. Water supplies are limited. Medical supplies are also very low. The concern is that the water may be contaminated. All the stores, U.N. and other aid groups fear that a cholera outbreak could happen in the coming days. So, the situation is very dire indeed -- John.
BERMAN: Humanitarian crisis surrounded by a security crisis all at the same moment.
Jon Jensen, thanks so much.
ROMANS: All right. The Treasury Department imposing tough new sanctions on North Korea, cutting off access to the global financial system and designating the country as one of the world's primary money launderers. That's after private cyber security firms linked North Korea to recent brazen digital bank heists in which at least $81 million was swiped from world banks. The move also a way for the U.S. to respond to North Korea's third nuclear weapons test which happened back in January.
BERMAN: A French navy ship has detected underwater pings from at least one of the black boxes onboard EgyptAir Flight 804. A specialized deep ocean search vessels are expected to reach the location within a week. Finding and retrieving the flight data recorders is critical obviously. They could hold the key into trying to figure out what brought that jetliner down.
Search teams now believe they are within three miles of the black box, the maximum range for those signals.
ROMANS: All right. Let's get an early start on your money this morning. Dow futures are lower after a resounding move yesterday. The average Dow up two points yesterday. Stock markets in Europe are mixed.
BERMAN: A stock market joke, stock market humor at 4:57.
ROMANS: Asian shares finished mixed as well overnight.
Big important OPEC meeting today. Oil is higher, buzz that OPEC may cap production. But we've heard that before.
We are getting a pretty extensive look inside the American economy this week. June started with a ton of econ news. Strong readings on consumer spending. Strong home sales to start the week.
But then, auto sales hit a speed bump. General Motors suffered an 18 percent decline in May. Sales at Toyota dealership slipped 9 percent. Ford posted a 6 percent drop. These are year over year drop. So, it was a strong -- strong May last year. Fiat Chrysler managed to post a small increase, that's because of strong demand for jeep.
SUV sales are a bright spot this year following the drop in gas prices. But some analysts are telling us the slump in May signals auto sales may have peaked. The industry sold a record number of cars and trucks last year.
Some of those new cars may have defective Takata air bags in them when they rolled up the assembly line. That's according to a new Senate report. How is that possible? Tens of millions of the older versions of these air bags are recalled. The newer versions being installed today, they are expected to be recalled but likely not until 2017 or 2018. And that has some Takata critics upset. The bigger problem is supply. They can't make enough new air bags to
replace the old ones. And Takata is having trouble finding other suppliers to help replace the estimated -- get this -- 30 million recalled air bags. Just almost unbelievable to think of the scope of that recall.
BERMAN: It's not going away.
ROMANS: Exploding airbags.
BERMAN: EARLY START continues right now.
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ROMANS: Donald Trump and Hillary Clinton go to war. Trump calling Clinton a liar with no talent who should not even be allowed to run for president.
BERMAN: Hillary Clinton launching a new counterattack on Trump. This happens in just a few hours. A foreign policy speech set to go after what she calls Donald Trump's dangerous plans.
ROMANS: President Obama diving into the 2016 fight. Blasting the GOP. Promising to campaign vigorously once someone clinches the Democratic nomination.
All right. Good morning. Welcome to EARLY START. I'm Christine Romans.
BERMAN: I'm John Berman. Great to see you today. It is Thursday, June 2nd, 5:00 a.m. in the East.
