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Early Start with John Berman and Zoraida Sambolin

Pipeline Shutdown Sparks Worries About Higher Gas Prices; Cases In India Below 400,000 For First Time Since May 6; Japan's Prime Minister Says Olympics Decision Is Up To The IOC. Aired 5:30-6a ET

Aired May 10, 2021 - 05:30   ET

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

[05:30:00]

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NATASHA CHEN, CNN NATIONAL CORRESPONDENT (on camera): -- who live and work in the county to get vaccinated, including for the 36,000 travel industry employees who work at MIA.

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LAURA JARRETT, CNN ANCHOR: Thanks to all of our correspondents for those reports.

EARLY START continues right now.

Good Monday morning, everyone. This is EARLY START. I'm Laura Jarrett.

CHRISTINE ROMANS, CNN ANCHOR: And I'm Christine Romans. It is exactly 30 minutes past the hour.

We begin with this pipeline news. A criminal group from Russia believed to be behind a cyberattack that temporarily shut down Colonial Pipeline, one of America's top gas suppliers. This pipeline carries 100 million gallons of gasoline and other fuel each day from Houston to New York Harbor.

Analysts worry the shutdown could result in a spike in gas prices ahead of the summer travel season. Prices already rising before this pipeline shutdown. Drivers in Pennsylvania, Illinois, and Washington already paying $3.00 a gallon. It's $4.00 a gallon in California.

The Department of Energy, the FBI, and the Department of Homeland Security all involved in the response here. The Department of Transportation now says tanker truck drivers will be allowed to work longer hours after a federal emergency was declared for much of the east and the Gulf Coast.

Colonial says some of its smaller lines are now back up and running but its main lines still shut down.

The attack could also trigger challenges for jet fuel deliveries. Many major east coast airports maintain only three to five days' worth of inventory, so a pipeline suspension could have real ramifications for moving fuel to airports that rely on the direct supply, like Hartsfield-Jackson in Atlanta, Laura.

JARRETT: So this pipeline attack shows the expansive threat cybercriminals pose to vulnerable infrastructure that keeps the nation's energy moving. It's one reason this is such a big week for President Biden, too. He will push key priorities that could define his first term, including his sprawling infrastructure plan.

CNN's Jasmine Wright is live at the White House. Jasmine, good morning to you.

So the White House scrambling after this pipeline had to be shut down, convening meetings. What more are you learning about this?

JASMINE WRIGHT, CNN WHITE HOUSE REPORTER: Well look, Laura, this is going to be a critical week for President Biden's economic agenda, but White House officials now have to divert, at least in part, some of their attention to dealing with the fallout of this cyberattack.

So we know that they launched an interagency working group over the weekend to address some of the concerns. "The New York Times" is now reporting that a longtime planned executive order to beef up cybersecurity -- now people are asking whether or not it's going to be enough. And that would affect federal agencies and contractors.

But if we kind of take a few steps back, right, this comes as President Biden is really about to continue his push on this massive $4 trillion infrastructure and jobs package for the first time in this cycle, really testing out whether or not he can work with Republicans in these high-profile Oval Office meetings taking place this week.

On Wednesday, he will meet with the big four congressional leaders and that includes Senate Minority Leader McConnell and House Minority Leader McCarthy. An official tells us that it will be the first time that both of those two gentlemen will be in the Oval Office since President Biden took office, right. So there are really conversations that are now starting to happen.

And on Wednesday, he invited Republican Sen. Shelley Moore Capito to the White House and she offered that counterproposal. She will bring with her a gang of Republicans and they will sit down and talk about infrastructure bills -- I mean, excuse me, infrastructure plan -- not yet a bill.

Now, White House officials -- I think if you would ask them they don't think anything firm is going to come out of it, but it's going to set the precedent of whether or not Biden can actually work with Republicans on a compromise.

Last night on Axios, Chief of Staff Ron Klain really laid out the argument.

(BEGIN VIDEO CLIP)

RON KLAIN, WHITE HOUSE CHIEF OF STAFF: What President Biden has said is that he want to try to find common ground with Republicans on his economic measures that have been bipartisan in the past. Building bridges, building roads, connecting people with broadband, building electric charging stations for the roads in the future -- all these things. These things shouldn't divide our two political parties.

Most of these Republicans have stood in front of a Rotary Club or a Kiwanis Club and given a speech about how we need to fix our bridges, roads, our highways, our infrastructure. People say they give speeches all the time about how people should have affordable childcare.

It's basic, basic things that we're putting forward -- and again, I think they should have bipartisan support.

(END VIDEO CLIP)

WRIGHT: So to get that support, Laura, White House officials have been working the phones, meeting all weekend.

We know an official told us that Transportation Sec. Pete Buttigieg and Education Sec. Jennifer Granholm have been reaching out to lawmakers, and governors, and mayors on both sides, really trying to drum up some consensus and some compromise for this bill. But the question going forward is -- excuse me, for this plan -- but the question going forward is what does compromise look like.

Now, last night in a local interview, McConnell said that Republicans want compromise and he envisioned that most want somewhere between $600 billion to $800 billion. But again, that falls far short of President Biden's $2.3 trillion initial asking price. So the question is whether that is enough for the White House -- Laura.

[05:35:13]

JARRETT: All right, Jasmine Wright live at the White House. Thank you so much.

It's now time for three questions in three minutes. Let's bring in CNN White House correspondent John Harwood. John, good morning.

ROMANS: Hi, John.

JARRETT: So for months, the prevailing narrative --

JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: Good morning.

JARRETT: Hi -- has been that the president is trying to transform the American economy. But this morning, you write that Biden's economic agenda isn't quite as transformative as it seems. You take the contrarian view. Explain yourself.

HARWOOD: Well, what I'm saying Laura is that yes, this is a large plan with very major spending proposals that will affect the lives of Americans and affect the status of American infrastructure in substantial ways. However, it is not a revolutionary plan. We have done many of these things --

ROMANS: Yes.

HARWOOD: -- before.

We have the child tax credit, for example, which is large and is going to people who weren't previously eligible because they didn't have income for which to claim that credit. This is something that's existed for more than two decades.

We've invested at much higher rates in the past.

For example, in the mid-1960s when we were going to the moon, when we were paying for the great society, building Dwight Eisenhower's interstate highway program, we invested six percent of the size of the economy in Washington's investment in growth in the future. Now we're investing under three percent. If we were still investing at two percent we'd be spending twice as much every year in addition than what Joe Biden is proposing.

So these are things -- they feel transformational because they are set against the conservative era of the last 40 years, but they're not dramatic.

And the tax increases also fall into that category. The president wants to raise the corporate rate to 28 percent. It was over 30 percent for --

ROMANS: Yes.

HARWOOD: -- decades before it went down to 21 percent. The top personal rate -- he wants to take to 39.6 percent. Ronald Reagan signed his first tax cut and put it down to 50 percent. These things are not unprecedented.

ROMANS: More restorative than transformational. We'll tweet out that piece because it's really --

HARWOOD: Exactly.

ROMANS: -- it's really well done.

A big debate sparked on Friday about that jobs report, which was not as strong as we had expected, right? And you're starting to see -- I think it's so interesting this talk of a worker shortage.

At the same time, you've got all these people in South Carolina, Arkansas, Montana -- some of these Republican governors taking steps to curb that extra $300 a week in jobless benefits because they say that is discouraging people from going back to work.

I argue that it took --

HARWOOD: Right.

ROMANS: -- $300 extra a week for millions of Americans to actually earn a living wage and it might be hard to go back to the ways things were before. What say you, John Harwood?

HARWOOD: Well look, I think we, first of all, have to admit we don't know exactly why that jobs report was so bad.

ROMANS: Exactly.

HARWOOD: A lot of smart people expected us to gain a million jobs. So we're all scratching our heads to try to figure out exactly why that is.

It is likely that a mix of factors, including the safety security blanket of that --

ROMANS: Yes.

HARWOOD: -- unemployment check, but also fear of the pandemic, lack of childcare -- other things that make it difficult for people. There are supply chain issues as well where some factories can't open because they don't have microchips.

All of these things play into why more people didn't go back to work, we think, but what's happening is people on the side of governments doing too much in some of these red states are going to seize on the fact that happened to confirm their belief that government shouldn't have been spending this much money. They want to pull it back and see what happens.

This is a once-in-a-century pandemic and the recovery from it is going to unfold in unpredictable ways.

ROMANS: Yes.

JARRETT: John, while we have you I want to get your thoughts on some politics now. House Minority Leader Kevin McCarthy -- he's officially backing Congresswoman Elise Stefanik to take over Liz Cheney's role as the number three in the House GOP. This is the same party that constantly rails against so-called cancel culture but they're not going to oust one of their own for telling the truth.

But was are seeing a few Republicans step up opposing this. Take a listen to Maryland Gov. Larry Hogan.

(BEGIN VIDEO CLIP)

GOV. LARRY HOGAN (R), MARYLAND: I think they're concerned about retaliation from the president. They're concerned about being attacked within the party. And, you know, it just bothers me that you have to swear fealty to the dear leader or you get kicked out of the party. It just doesn't make any sense.

That's sort of a circular firing squad where we're just attacking members of our own party instead of focusing on solving problems.

(END VIDEO CLIP)

JARRETT: Congressman Adam Kinzinger also compared the party to the Titanic. Is he right?

[05:40:00] HARWOOD: Look, the Republican Party is in a very difficult place and the irony is they are in a difficult place even though history would tell us they're likely to take back the Congress next year.

But this is a party that is not organized around philosophy or ideas or policies. It is motivated by the fear of a segment of the American population -- that they're being left behind. It's principally blue- collar white voters.

They are desperate for someone to be their champion. They see Donald Trump as their champion. But that is a shrinking demographic over time. That is not a winning long-term formula.

And the question is when do Republicans feel the motivation to change their message, change their approach to try to reach out to a broader cross-section of Americans. That's how they're going to grow and thrive in the long run.

This is what Kinzinger was saying about the Titanic, is that they're getting tighter and tighter organized around this particular group and this particular leader, and that is something that will take them down in the long term.

The question is what is that timeframe? If they win the Congress next year, which history would say they would -- they're only down a few seats, and almost always the president's party loses seats in a midterm election. Is that going to motivate them to change? Probably not.

But we have another presidential election in 2024.

ROMANS: Yes.

HARWOOD: They've lost the popular vote seven of the last eight times. They have not gotten the message to change on that yet.

JARRETT: All right, John. Always great to have you up. Appreciate it.

All right, now to this. The government watchdog over the U.S. Capitol Police set to testify that the department lacks important countersurveillance resources, which may have hobbled it during the U.S. Capitol riot.

Inspector General Michael Bolton released a summary of his much- anticipated report lawmakers are going to grill him about later today. Lapses in communication and intel have been a central focus for members of Congress investigating the January sixth insurrection. Bolton says a standalone entity dedicated to countersurveillance would improve the department's ability to disrupt illegal activity aimed at Congress.

We'll be right back.

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[05:46:17] JARRETT: Welcome back.

China is creating a line of separation at the summit of Mount Everest, trying to keep climbers from Nepal from mingling with climbers from the Tibetan side. Base camp on the Nepali side has been hit hard by coronavirus since late April, a surge that has been driven by neighboring India.

Overnight in India, new daily cases dipped below 400,000 for the first time since May sixth.

Anna Coren is tracking the latest developments. She joins us live from Hong Long. Anna, good morning to you.

ANNA COREN, CNN INTERNATIONAL CORRESPONDENT: Hi, Laura.

Yes, in India, which has been ravaged by the second wave of COVID, more than half the states and union territories have gone into lockdown in a desperate attempt to try and control the spread.

There are calls for the Prime Minister Narendra Modi to impose a nationwide lockdown. He's refusing to do so. We should note that the prime minister has not addressed his people publicly in almost three weeks, and this is during the worst crisis to ever hit India.

Now, "The Lancet" medical journal said that the government has squandered its early success and that its handling of this pandemic is inexcusable.

The Supreme Court -- it has had to step in and set up a nationwide task force to address the oxygen crisis and try and sort out distribution and supply. Because as we've been seeing over the many weeks, hospitals falling desperately short of oxygen.

Now, the crisis engulfing India has now spread over into neighboring countries. Nepal, Bangladesh, Pakistan, and Sri Lanka are seeing a surge in cases.

In Pakistan, it has imposed a nine-day lockdown in preparation for aid, which marks the end of Ramadan. In Pakistan, a country of almost 220 million people, there's generally a mass movement and the government has brought in the military to try and stop people returning to their homes and further spreading the virus, Laura.

JARRETT: All right, Anna Coren. Thank you so much for that report.

ROMANS: Indian-American doctors helping with India's COVID crisis from thousands of miles away, staying up nights when it's day in India so they can give advice to patients for free on video calls. The doctors say they want to help ease the burden on emergency rooms in India. Organizers say in just a week, the program has been inundated with hundreds of Indian COVID patients.

JARRETT: Back here in the U.S., some parents are livid and now planning to sue UMass Amherst after their kids were kicked out of school for this photo. It shows them unmasked at an off-campus party. The parents say they lost their appeals about this and the three freshmen were thrown out, forfeiting the semester and their $16,000 tuition.

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UNIDENTIFIED FEMALE: This process has been horrible -- like, horrible and so not fair, and there's nothing that I can do as a mother. It's so -- it breaks my heart.

UNIDENTIFIED MALE: These beautiful young ladies who were honor students have had a full academic year stripped away and their paths broken of their higher education for alleged COVID violations.

Yet, in the same period of time, the university hosted a parade/event to celebrate UMass hockey team's national championship game, violating every single one of the violations that they accuse these girls of and also violating a standing executive order by Charlie Baker that says no parades, no festivals.

(END VIDEO CLIP)

JARRETT: UMass Amherst told CNN it doesn't comment on disciplinary cases but says no student was suspended for merely not wearing a mask.

ROMANS: It certainly seems like a big contradiction there.

All right, 49 minutes past the hour.

[05:50:00]

Japan's prime minister says the final decision on the Olympics is up to the International Olympic Committee. The Tokyo games set to begin July 23rd in the middle of a pandemic.

CNN's Blake Essig live in Tokyo with more. What do we know, Blake?

BLAKE ESSIG, CNN INTERNATIONAL CORRESPONDENT: Well, Christine, the daily case count nationwide is increasing. The number of patients with serious symptoms continues to break records. In Western Japan, the medical system has collapsed with people dying at home because they can't get into the hospital. And several prefectures, including Tokyo, are under an extended state of emergency order.

Despite all that, it seems almost nothing will stop the Olympic Games from taking place on schedule this summer. It's a reality that serves as a primary reason explaining why these games remain deeply unpopular among Japanese residents. It's the idea that the health, safety, and well-being of the Japanese people doesn't really matter.

Now, even during this state of emergency order while people are being asked to stay home and bars and restaurants are asked to close early, an Olympic track and field test event was held at the new national stadium here in Tokyo. Hundreds took part inside the empty stadium while about 100 people stood outside protesting the event.

With the unpopularity of the games seemingly gaining momentum, Japan's prime minister said today that the decision to hold the games is up to the IOC. Now, it's worth noting that the IOC is a non-profit and generates 90 percent of its revenue from the summer and winter games.

Now, it's clearly a -- the financial stakes here are huge and the IOC will be doing everything possible to make sure that the games go ahead.

Here's IOC vice president Dan (sic) Coates over the weekend.

(BEGIN VIDEO CLIP)

JOHN COATES, VICE PRESIDENT, INTERNATIONAL OLYMPIC COMMITTEE: We are implementing those kind of measures. You've read the playbook. You can -- you can see those. They've all been countermeasures predicated on there being no vaccine, so that situation's improved and the games are going ahead.

(END VIDEO CLIP)

ESSIG: Now, IOC president Thomas Bach was scheduled to arrive in Japan early next week but because of the current state of emergency order it was just announced that his visit will be postponed -- Christine.

ROMANS: All right, Blake for us in Tokyo this morning. Thank you so much for that.

Let's get a check on CNN Business this Monday morning. First, looking at markets around the world to start the week, a mixed performance in Asia and London, and Paris and Frankfurt also barely moving this morning. On Wall Street, stock index futures are mixed here.

A disappointing jobs report Friday showed hiring slowed down in April. It sparked a vigorous debate about a growing shortage of workers.

The Dow closed up 229 points to a record high. A record for the S&P 500, too.

Two hundred sixty-six thousand jobs added back in April. That's the picture of recovery here. The economy is still down 8.2 million jobs since February of last year. The jobless rate ticked up to 6.1 percent.

And notable here, average hourly earnings jumped 21 cents. Fatter paychecks, of course, a win for workers but another potential sign of inflation.

Potential barometers of the recovery. Disney and Airbnb report their first-quarter earnings this week. The pandemic shut down Disney parks around the world, hurting its core business. Vaccinations have allowed for more capacity at Disney properties and more bookings for newly- public Airbnb. Airbnb bookings fell 37 percent last year due to stay- at-home orders.

Critical for the inflation picture in the rubbed-up economy, reports on consumer and producer prices this week. In March, consumer prices rose for the fourth straight month and producer prices had their largest annual gain in 9 1/2 years.

All right, looking for a way to get rid of that box of Barbies you've got hidden in the back of your closet or in that attic -- you've had it since the 90s? Mattel wants your Barbies -- wants to recycle them in a new program called Mattel Playback to recover and reuse materials from old toys to make new ones.

It will start with three iconic brands -- Barbie, Matchbox, and Mega toys. Mattel says it's part of a plan to use 100 percent recycled or bio-based plastic by 2030.

JARRETT: Very cool.

ROMANS: I don't have any in the closet.

JARRETT: I wish I had kept it.

ROMANS: My sister pulled the heads off and cut their hair, so they're gone.

JARRETT: All right, now to this. An appropriate honor for women who changed the world. Writer and poet Maya Angelou and NASA astronaut Sally Ride will appear on a new series of quarters beginning next year. The coins, part of a new U.S. Mint program and will feature as many as 20 American women through 2025. The coins went into circulation in January and will include a new design of George Washington.

Very cool.

ROMANS: So cool.

JARRETT: You know, sometimes I think these things feel like small gestures but you cannot be what you cannot see. It's important.

ROMANS: That's exactly right. Heads, it's George Washington; tails, it's somebody who really also changed the world.

All right, thanks for joining us, everybody. I'm Christine Romans.

JARRETT: I'm Laura Jarrett. "NEW DAY" is next.

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[05:59:25]

BRIANNA KEILAR, CNN ANCHOR: Hello, I'm Brianna Keilar alongside John Berman.

On this new day, it's being called the most significant successful attack on America's energy infrastructure ever. Now the White House is scrambling to deal with a cyberattack believed to be the work of a criminal group from Russia.

Plus, Dr. Anthony Fauci says it's time for the U.S. to loosen indoor mask mandates as he sets a new date for a return to normal. JOHN BERMAN, CNN ANCHOR: The Republican leader of the House

officially backing the ouster of Liz Cheney as the conspiracy caucus gets ready to cancel here for telling the truth.

And two of the doctors who worked at the hospital where Putin foe Alexey Navalny was treated died. And just in, a big developing in the hunt for a third doctor who had vanished.