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Early Start with John Berman and Zoraida Sambolin

Biden Hits The Road To Pitch Infrastructure Bills; Biden: China Agrees To Abide By Taiwan Agreement; Investigators Probing Whether Ship Anchor Caused California Oil Spill. Aired 5:30-6a ET

Aired October 06, 2021 - 05:30   ET




RYAN NOBLES, CNN CONGRESSIONAL CORRESPONDENT (on camera): Now, Patel has said publicly that he'd received the summons with no reason to believe that the other two individuals have not been served.

But this just shows that at every step along the way, trying to glean this information, particularly from those individuals that are close to the former president, Donald Trump, is going to be difficult for the January 6 Select Committee. We'll have to see how they respond in the days ahead -- Laura and Christine.


LAURA JARRETT, CNN ANCHOR: Ryan, thank you so much for that.

EARLY START continues right now.

CHRISTINE ROMANS, CNN ANCHOR: Good morning, everybody -- it's Wednesday. This is EARLY START. I'm Christine Romans.

JARRETT: I'm Laura Jarrett. It's 30 minutes past the hour here in New York

And we begin this half-hour with President Biden leaving behind all the partisan drama in Washington and taking his infrastructure pitch to a key swing district. He traveled to Central Michigan on Tuesday, making the case that his ambitious legislation is badly needed to support middle-class and working families.


JOE BIDEN, PRESIDENT OF THE UNITED STATES: These bills are not about left versus right or moderate versus progressive, or anything that pits Americans against one another. These bills are about competitiveness versus complacency. They're about opportunity versus decay. They're about leading the world or continue to let the world pass us by, which is literally happening.


ROMANS: Back in Washington, moderate and progressive Democrats scrambling to find common ground on the president's agenda.

More now from CNN's chief White House correspondent Kaitlan Collins.


KAITLAN COLLINS, CNN CHIEF WHITE HOUSE CORRESPONDENT (on camera): Good morning, Christine and Laura.

President Biden was on the road in Michigan to sell his domestic agenda, but Democrats are still arguing back in Washington over what exactly that final agenda is going to look like and whether or not they are going to vote for it.

And that big argument, of course, lately within the Democratic Party has been over that bigger social spending package that is also going to address climate change, based on what Democrats have laid out so far in the price tag, though you are seeing Democrats get closer to each other on what that price tag should look like, with the president telling progressives that he believed that what moderates would go for is about $1.9 trillion to $2.2 trillion. Of course, that is a far cry from that $3.5 trillion that they had initially laid out, though progressives are still saying actually, maybe it would be closer in the neighborhood of $2.5 trillion.

Of course, while they are still trying to decide what the price tag is going to look like, it also is raising questions about what will be included and, of course, which of the president's priorities will have to be watered down, scaled back, or potentially even eliminated in this bill.

One thing that has also been a point of contention between moderates and progressives is the Hyde Amendment which, of course, blocks federal funding for most abortions, though there are some cases of exception. But the president has said he will sign the bill either way, whether it includes the Hyde Amendment or not.

That is something that Sen. Manchin has said his condition is based on, right now, if it's included in there. Progressives have said they will not support it if it's included. So it remains to be seen how that eventually gets hashed out.

Kaitlan Collins, CNN, the White House.


JARRETT: Kaitlan, thank you for that.

At the same time, time is running out for lawmakers to prevent a default on the federal debt and avert an economic catastrophe. Republicans have vowed to make Democrats pass legislation to raise the debt ceiling on their own and plan to filibuster debate on it today.

Democrats are privately talking about changing the chamber's rules so that the borrowing limit can be raised with a simple majority vote, but they're looking at other options as well, we're learning.

CNN's Daniella Diaz is on Capitol Hill following it all. Daniella, good morning.

There's been so much debate about using this process known as reconciliation to get this done without Republican help. Democrats disagree on that a little bit. But now we hear lawmakers are also floating this nuclear option. How would that work? Lay it all out for us.

DANIELLA DIAZ, CNN CONGRESSIONAL REPORTER: Well, Laura, really it depends on whether all Democrats can even get on board to be able to do this so-called nuclear option which, of course, would mean that they could pass debt ceiling suspension or raise the debt ceiling with just a simple majority in the Senate. So, they would just need Democratic support to be able to do this, but the problem here is every single Democratic senator needs to get on board for this to happen.

And right now, we talk about him all the time on our network, but Sen. Joe Manchin of West Virginia, a moderate Democrat, has said that he is not behind changing any sort of filibuster rules in the Senate, so that they could be -- that this bill could be passed using a simple majority, which means it wouldn't need 60 votes for it to pass.

But Democratic leaders are scrambling, Laura. They need to be able to raise or suspend the debt ceiling before October 18th, which is when Treasury Sec. Janet Yellen has warned that this nation will default on its debt. And Republicans have been clear, especially Senate Minority Leader Mitch McConnell, that they are not going to help Democrats at all with this measure to raise or suspend the debt ceiling.


So, they have been discussing, yesterday and for weeks now, how they're going to address this. Of course, that one nuclear option is one thing they're looking at. Some of them are -- considered budget conciliation, which means they could include it in this massive tax and spending bill, but Democrats -- some Democrats don't want to do that. So that's the problem here.

So now, Democrats are trying to figure out how they're going to address this. But they're going to vote on the bill today -- a House- passed bill that would suspend the debt ceiling. So that is the issue here.

Now, they're also putting pressure on the White House to possibly have Joe Biden address the debt ceiling. One of the ways he could do that is through the 14th Amendment, which says that validity of the public debt shall not be questioned. So that is one way Joe Biden could do this. But this has been untested by the courts so it's unclear whether this is a measure he could take.

But the bottom line here is Republicans are not going to help Democrats, and Democrats are trying to figure out how they're going to do this. And the clock is ticking. They're running out of time.

JARRETT: All right, Daniella. As the world turns on Capitol Hill. Thank you so much -- appreciate it. ROMANS: It really is a soap opera, but with really dangerous consequences. Not raising the debt ceiling is simply playing with fire.

The chairman of the Securities and Exchange Commission warning a default would mean historic stress for world financial markets.


GARY GENSLER, CHAIRMAN, SECURITIES AND EXCHANGE COMMISSION: I think that though we don't know for sure, we'd have significant volatility in the markets and we'd seen some breakages in the system. There is a such a base of treasuries that underpins our entire capital markets that if we were to go into default, we'd be in for some of the greatest challenges we've seen in our financial sector.


ROMANS: Yes, let me be clear. The entire global financial system is built around America borrowing money and always paying the interest and paying the bills. The Treasury has been moving money around trying to keep those bills paid, but it's running out of wiggle room.

At some point, the Treasury will have to start choosing which bills to pay. That means federal payments to millions could be halted. Social Security checks could stop for nearly 50 million seniors. Troops wouldn't be paid. Imagine giving American troops an IOU instead of a paycheck. Critical monthly child tax credit payments could stop.

And if the U.S. can't issue new debt and pay the interest on its current obligations, you would see a global financial crisis and real devastation in the bond market. Interest rates on mortgages, credit cards, and cars could spike. Even an accidental short default could damage America's sterling credit, risk a financial crisis and a recession, and cost the government billions more to borrow.

JARRETT: You know, we talk about October 18th being this drop-dead date --


JARRETT: -- for when this has to get done. But I would imagine if lawmakers can't come up with a plan even, say, a week before then, aren't the markets going to go nuts?

ROMANS: Yes. I mean, already, you have agencies that are preparing for --


ROMANS: -- what they're supposed to do, which is not what you do in a mature -- a mature economy with mature people in Washington who are supposed to fix this.

JARRETT: Yes. This has got to get done fast.

ROMANS: All right, now this story to watch here, folks.

China's air force is sending a strong message to Taiwan -- a potentially dangerous development. Taiwan officials say just this week, 57 Chinese warplanes have entered Taiwan's air defense zone, and this has been going on for some time now. Some 150 military aircraft have made incursions since the beginning of October. These are fighter jets, nuclear-capable bombers, anti-sub aircraft.

Here's what President Biden said last night.


BIDEN: I've spoken with Xi about Taiwan. We agree we'll abide by the Taiwan agreement. That's who we are. And we made it clear that I don't think he should be doing anything other than abiding by the agreement.


ROMANS: Now, let's go live to CNN senior international correspondent Ivan Watson for the latest. And Ivan, I know the Taiwan air force released video this week of them readying their own planes for these incursions. It seems like a dangerous situation.

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes. I mean, this -- the root of this, Christine, is that China views Taiwan -- even though it has been a self-governed -- democratically-governed island with more than 20 million inhabitants -- never under Chinese Communist Party rule -- China views it as a breakaway region of its own territory.

And it has been flying these planes in large numbers over the course of a holiday weekend in China. That's National Day, the 72nd anniversary of the founding of the People's Republic of China.

The analysts and experts that we've been talking to say that China's basically trying to send a message to a number of different audiences -- some of them domestic -- by flying these planes. It's a show of military strength on this kind of patriotic holiday.


Worth noting that on Monday alone, they flew some 56 planes close to and into China's air defense identification zone. But that number tapered off on Tuesday to just one plane.

So, it's a show of strength at home, analysts say. It's a way for the Chinese military to conduct real-time exercising, moving large aircraft into the skies at the same time. And it's also sending a warning not only to Taiwan, showing displeasure and kind of affirming the fact that Taiwan can't effectively stop this even though it scrambles its own planes and sends radio warnings and its air defense systems, but also to its U.S. friend.

Because the U.S. State Department issued a warning on Sunday saying it expressed concern about these military actions by China. And it also repeated the fact that the U.S. would continue to support Taiwan's self-defense.

Going one step further, you've got the U.S.'s national security adviser Jake Sullivan. He is about to meet in the coming hours with a senior Chinese official in Switzerland. It is likely that Taiwan could be an issue that will be discussed. The U.S. and China do not agree on this.

There have also been huge tensions between Beijing and Washington ever since the final years of the Trump administration. But there are signs of, perhaps, hope ever since a phone call between President Biden and the Chinese leader Xi Jinping a little bit less than a month ago where both leaders seemed to come to some agreement that they need to find a way to create guardrails for the current competition between the world's two largest economies -- Christine.

ROMANS: And Ivan, remind our viewers -- we heard the president say -- the President of the United States say that he talked to Xi and they agreed to abide by that Taiwan agreement. Remind our viewers what that Taiwan agreement is. What the U.S. obligation is there.

WATSON: Well, it seems that President Biden misspoke a little bit. There is the One-China policy, which the U.S. agreed to, which views all of China as one basic government and doesn't essentially view Taiwan as an independent nation-state.

And China gets very angry every time U.S. officials travel to Taiwan. They don't want it to be viewed as an independent country. And they certainly get very angry every time the U.S. sells weapons to Taiwan.

But there is clearly disagreement on what kind of support the U.S. offers Taiwan about how much of it China will tolerate.

So that's just one of the many flashpoints --


WATSON: -- in the current U.S.-Chinese relationship. They also extended trade in the South China Sea, and human rights here in Hong Kong, Christine.

ROMANS: A lot -- a lot in that mix.

Thank you so much, Ivan Watson. Nice to see you.

JARRETT: All right, a little note for your weekend programming here. The new CNN original series "DIANA" introduces viewers to the person behind the princess and reveals a life even more complicated and fascinating than the world knew. "DIANA" premieres Sunday at 9:00 p.m. on CNN.



JARRETT: Welcome back. The largest oil spill in three decades now prompting the governor of California to declare a state of emergency in Orange County. Officials are investigating whether the spill is due to a large commercial ship hooking its anchor in the wrong location and damaging an oil pipeline. That spill sent up to 144,000 gallons of heavy crude into Southern California waters over the weekend.

CNN's Sara Sidner has more.


SARA SIDNER, CNN SENIOR NATIONAL CORRESPONDENT (on camera): Christine and Laura, it's a bit jarring when you come here to some of the California beaches and you can see the oil platforms right off the shore. Now, we understand that the one that ended up springing a leak in a pipe underneath the ocean actually is about 4 1/2 miles away from the shore here in Huntington Beach.

We have learned that there was a 13-inch gash in one of the pipelines that they believe is responsible for this leak. Also, that the pipeline -- about 4,000 feet of that pipeline had been moved -- displaced by 105 feet.

And now there is an idea that perhaps this was caused -- the leak -- by an anchor from a large ship dropping down on it. There is a preliminary report looking at that. There is also the company saying that may be the cause.

What we do also know is that there have already been some really disturbing pictures of animals that have been affected by this very tarlike, gooey, toxic substance that is crude oil. They have cleaned some of the birds -- been able to capture some of the birds. We have seen some ourselves that seemed to have difficulty flying.

But at this point, what we are now trying to figure out is the communication. How early did Amplify know? How early did the Coast Guard know? And people say that they reported smelling something on Friday night, but Amplify says it didn't discover that there was a leak until Saturday. So there's a discrepancy there that the government is trying to figure out as well -- Laura and Christine.


ROMANS: All right, Sara. Thank you so much for that from beautiful Huntington Beach, California.

All right. The Red Sox eliminate the Yankees in the winner-take-all American League wild card game, adding another chapter to baseball's biggest rivalry.

Andy Scholes has this morning's Bleacher Report. Hey, Andy.


You know, in 2003, Yankees' manager Aaron Boone hit that famous walk- off home run in game seven of the ALCS to beat Boston. But since that moment, the Red Sox have owned the Yankees in the post-season, knocking them out in 2004, 2018, and now, last night.

The Yankees had their ace, Gerrit Cole, on the mound. Bottom of the first, runner on, Xander Bogaerts, who had been struggling bad at the plate, crushed it -- a home run to center. Red Sox go up 2-0. Cole, who the Yankees paid $324 million for, didn't even make it out of the third inning before being pulled.


A big spot in the sixth -- 3-1 Red Sox. Giancarlo Stanton hits this one off the Green Monster for the second time in the game. The Red Sox, though -- the perfect relay to get Aaron Judge at the plate. The Boston crowd just goes wild and they partied the rest of the night as the Red Sox send the Yankees packing, 6-2.


KYLE SCHWARBER, BOSTON RED SOX OUTFIELDER: You feed off that energy. You get excited (ph) for that. And Red Sox -- Red Sox Nation brought it tonight and we needed it. And you can't say enough about the crowd tonight.

AARON BOONE, NEW YORK YANKEES MANAGER: The guys are crushed. And tonight was another tough one to -- tough one to -- tough one to take. And we've been through a lot of wars with guys in that room and we got a lot of scars. So the guys are -- the guys are bummed.


SCHOLES: All right.

The National League wild card game between the Dodgers and Cardinals takes center stage tonight on our sister station TBS. The Dodgers won 106 games this year but their season could end in one game tonight. One hundred six wins, the most ever for a team not to win their division. But tonight's starter for the Dodgers, Max Scherzer, says don't feel sorry for them.


MAX SCHERZER, LOS ANGELES DODGERS PITCHER: Look, you have to win your division. We didn't win our division. There's no crying in baseball. So, if we're in second place, we're in the wild card game.

You kind of throw streaks, stats, everything out the window. It's the playoff baseball. Anything can happen. I've seen baseball -- some crazy things happen when you get into October baseball.


SCHOLES: All right.

The Milwaukee Bucks, meanwhile, tipping off their preseason last night, but they didn't even get to finish the game because of a faulty fire alarm. The FedExForum in Memphis was evacuated at the end of the third quarter. And rather than trying to get all the people back inside, since it's just the preseason, the league decided to end the game.

All right. Finally, "The Match 5." It's going to feature the golf matchup between Brooks Koepka and Bryson DeChambeau -- the matchup we've all been waiting for.

The two -- they've really had a rivalry brewing all year long, trading barbs. And it appeared they really didn't like each other leading up to the Ryder Cup. They're going to settle the score on the course playing 12 holes in Vegas the day after Thanksgiving on our sister network TNT.

And you know, guys, I was really hoping -- or, Christine, I was really hoping that they had this match maybe a couple of months ago when that rivalry was really heated --


SCHOLES: -- and it appeared they really didn't like each other. You know, they shared a hug at the end of the Ryder Cup after the U.S. won. It seemed like that maybe it's simmered a little bit. Maybe it will get going again and we'll see a great match between the two.

ROMANS: All right, Andy. Nice to see you this morning. Thank you.

SCHOLES: All right.

ROMANS: Let's get a check on CNN Business this morning. Looking at markets around the world right now, you can see that Asian shares closed mix and London has opened lower here. Markets in Mainland China, by the way, are on holiday. And European markets still grappling with some inflation concerns still top of mind there as the global supply chains remain tangled, quite frankly.

On Wall Street, stock index futures, right now, leaning lower after a bounce back yesterday. Look, the Dow finished up 311 points. The S&P 500 and the Nasdaq also ended the day higher.

We're going to get a peek into the labor market later this morning with a private sector report on hiring. And the government jobs report comes Friday. Progress report here: we are still down 5.3 million jobs since February 2020.

The global supply chain may be tangled but trade is surging ahead of the holiday shopping season. You can see the demand in these trade deficit numbers. The U.S. trade deficit hit $73.3 billion in August. That's a record high. Imports and exports both rose. Exports are now above their pre-pandemic levels.

The U.S. trade deficit with China also up as demand for Chinese-made goods increased. Earlier this week, the U.S. trade representative, Katherine Tai, condemned China's unfair trade practices and plans new talks with her Chinese counterparts in the coming days.

Kellogg workers in the U.S. are on strike. Fourteen hundred workers stopped work at factories in Battle Creek, Omaha, Lancaster, and Memphis Tuesday. The union said it's asking for a fair contract for workers and claims Kellogg's demanded workers give up healthcare, retirement benefits, and holiday and vacation pay.

Work stopped at plants that make iconic brands like Frosted Flakes, Raisin Bran, and Corn Flakes. Kellogg's told Reuters it is implementing contingency plans to deal with potential supply disruptions.

JARRETT: Finally, it may have taken nearly six years but now the wait is almost over. Adele is back. The singer shared a black and white teaser for her new single "Easy On Me" on social media Tuesday.


ADELE, SINGER-SONGWRITER: Social media teaser for new song, "Easy On Me."


JARRETT: The video has been viewed more than 12 million times on Instagram if that is any indication of the hunger people have for Adele. Fans have been eagerly anticipating new music from her -- from the 15-time Grammy winner's album "25" which was released back in 2015.


This new song is supposed to be released next week. Everyone loves Adele.

ROMANS: She is so talented. I can't wait to hear that.


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

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


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