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Deadly Explosion Rocks Istanbul; Clinton & Sanders Square Off in Iowa Forum; Trump Mocks Hillary Clinton on Late-Night TV; Obama to Give Final State of the Union Address. Aired 7-7:30a ET

Aired January 12, 2016 - 07:00   ET

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

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

CAMEROTA: Good morning, everyone. Welcome to your NEW DAY. Chris and Michaela are in New York. I'm in Iowa this morning, where later today I will be sitting down with Hillary Clinton.

The Democratic frontrunner is in a tighter than expected race here in Iowa with Bernie Sanders. The two are locked in a virtual tie. Sanders claiming that Clinton's campaign is in, quote, "serious trouble."

We have a very big program ahead for you, getting into the 2016 race and tonight's State of the Union. We will be speaking with Republican presidential candidates Ben Carson and John Kasich. We will also hear more of CNN's exclusive interview with Vice President Joe Biden. All of that is proving pretty fascinating to listen to. So we'll have more on all of that in a moment. But first, we want to get back to Chris in New York with some breaking news.

CUOMO: That's right, Alisyn. At least ten people killed after a powerful explosion rocked the central square in Turkey near the capital's, the famous Blue Mosque in Istanbul. The all-too-obvious question is was this attack the work of ISIS?

Let's get right to CNN senior international correspondent Arwa Damon live on the phone from Istanbul. What do we know now, Arwa?

ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT (via phone): Well, Chris, Turkey's president has just come out -- I'm just coming out of a press conference saying that this attack was the work of a suicide bomber with Syrian origin.

This attack happened in the heart, the very core of Istanbul's historic but also main tourist district. This is the area where, if you're coming to Istanbul to visit, this is one of the main, if not the main areas that you come to.

The attack happened at about 10:15 in the morning, just around when you begin to see the most traffic in terms of tourism and also locals that regularly do come through here.

Now, no direct links at this stage to any particular terrorist organization, but of course, a lot of suspicions at this stage being directed at ISIS, especially given that Turkey is very involved in its own battle against ISIS within its borders but also across the border in Syria.

And the past two significant attacks that happened here in October, the twin suicide bombings that took place in the capital, Ankara, that killed more than 100 people and then the bombing that happened over the summer in the town along the Turkey/Syria border. Those the Turkish government had blamed on ISIS at the time.

This perhaps an indication of just how precarious the security situation is despite what the authorities say is their best effort to go after and contain any sort of threat. In the last year, hundreds upon hundreds of individuals have been detained in massive country- wide sweeps, all of them with alleged links to terrorism. This took place just a few days ago. There was a city-wide sweep in Istanbul itself of individuals suspected of having links to various different terrorist organizations.

This is not just a blow to Turkish security, to the Turkish psyche, to those who lost loved ones in this attack. But the repercussions of it could very well extend to the country's tourism industry that is also, in and of itself, at the very core of the Turkish economy.

CAMEROTA: OK, Arwa. Thank you. We will obviously check in with you throughout the show. Keep us posted on that breaking news.

Back to politics now. Candidates on both sides of the aisle getting testier as the clock ticks closer to the Iowa caucuses and the race tightens. With just 20 days to go, Hillary Clinton and Bernie Sanders exchanged jabs at a forum here in Iowa last night.

So let's begin our team coverage with CNN's senior political correspondent, Brianna Keilar, who joins me now.

Brianna, how are they feeling 20 days out?

BRIANNA KEILAR, CNN SENIOR POLITICAL CORRESPONDENT: I would say Bernie Sanders is feeling almost lethal. I interviewed him yesterday. And he's certainly rather happy that the race has tightened here in Iowa.

The Clinton campaign is saying, look, we knew all along this was going to be competitive in Iowa and New Hampshire. I will add I don't think they knew it would be quite this close here in Iowa.

But Hillary Clinton and her campaign confident that, unlike in 2008, they have the ground game that they need, those volunteers and those organizers to get people out to the polls in New Hampshire and out to the caucuses here in Iowa.

(BEGIN VIDEOTAPE)

KEILAR (voice-over): In a head-to-head Clinton/Sanders matchup over two battleground states, the latest polls say it's either candidate's race.

UNIDENTIFIED FEMALE: Be our next president. Help us keep families together and protect religious freedom.

KEILAR: Last night in Des Moines, the virtually tied Democrats were pressed on hot-button multicultural issues at Iowa's Brown and Black Forum.

UNIDENTIFIED MALE: Can you promise that you won't deport children?

KEILAR: Secretary Clinton taking a new stance against DHS raids, not ruling out the deportation of children.

HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: What I don't like are the mass roundups and the raids. And that should end.

[07:05:04] KEILAR: The neck-and-neck candidates spent Monday facing off in the Hawkeye State.

CLINTON: Think hard about the people who are presenting themselves to you, and particularly, for those of us who are Democrats, their electability.

KEILAR: Sanders unfazed by Clinton's jabs, pointing to recent Iowa and New Hampshire polls showing him outperforming Clinton against Trump and Cruz.

SEN. BERNIE SANDERS (D-VT), PRESIDENTIAL CANDIDATE: We are doing a lot better than Hillary Clinton does. So I think, in terms of electability in the general election, I think Democrats might want to look at Bernie Sanders as their candidate.

KEILAR: And boasting Monday night that the Clinton camp is running scared.

UNIDENTIFIED MALE: Have you noticed lately that she's been getting more aggressive with you?

SANDERS: Yes.

UNIDENTIFIED MALE: Why is that? Why is that?

SANDERS: I don't know. It could be that the...

UNIDENTIFIED MALE: You tell me.

SANDERS: It could be that the inevitable candidate for the Democratic nomination may not be so inevitable today.

KEILAR: Secretary Clinton admitting the 2016 election so far has been chock full of surprises.

UNIDENTIFIED MALE: Can you say categorically tonight that Senator Bernie Sanders cannot win the presidency?

CLINTON: I don't -- anybody can win. I mean, this is a -- this is -- who would have thought Donald Trump would be leading in national polls? I mean, for those of you who ever thought about running for president, take heart. I mean... (END VIDEOTAPE)

KEILAR: Hillary Clinton now trying to stand out on income inequality, more of a Bernie Sanders issue and also on guns, one that her campaign certainly thinks works in her favor. She proposed a surcharge, 4 percent, on those earning $5 million or more.

And she's also picking up a key endorsement this morning from the Brady Campaign to prevent gun violence, Michaela, as she tries to highlight Bernie Sanders' more moderate stance on gun laws.

PEREIRA: Such an important issue in the nation right now. All right, Brianna. Thank you so much for that.

Meanwhile, Hillary Clinton, the target of Donald Trump's punch lines on late-night television. The GOP frontrunner teased Clinton for having, quote, "a tough time" competing against Bernie Sanders and defended his stance on Muslims.

Athena Jones live in Washington with more for us.

Hi, Athena.

ATHENA JONES, CNN CORRESPONDENT: Good morning, Michaela.

That's right. It wasn't all laughs last night. But, you know, Donald Trump knows his supporters. He knows what appeals to his base and, despite what others in his party or in the country may think about his proposed ban on preventing all Muslims from entering the country, it's the kind of proposal that resonates with his supporters, the kind of proposal he defended last night. Take a listen to that exchange.

(BEGIN VIDEO CLIP)

JIMMY FALLON, HOST, NBC'S "THE TONIGHT SHOW WITH JIMMY FALLON": The Muslim thing, not allowing any Muslims into the United States...

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: Temporary basis. Starting to clap. What?

FALLON: Only one person.

TRUMP: There's something happening. And we're talking about on a short-term basis, temporary. But Jimmy, there's something happening out there. There's hatred. We've got to figure out what's going on. We don't know in this country. We don't know.

(END VIDEO CLIP)

JONES: So Trump defending that proposal. In other news, FOX has released the lineup for the main stage for their debate on Thursday night. The seven candidates invited to participate in that primetime debate are, in order, John Kasich, Chris Christie, Marco Rubio, Donald Trump, Ted Cruz, Ben Carson and Jeb Bush.

Not on that stage, as you can see, are Rand Paul and Carly Fiorina. They have been invited to the second-tier debate with Rick Santorum and Mike Huckabee. But Paul told our own Wolf Blitzer yesterday that he won't attend that second-tier debate, saying FOX made a mistake in not including him, because he's a top-tier candidate -- Chris.

CUOMO: All right. Athena, thank you very much.

We are just hours away from President Obama's final State of the Union address. The White House is promising a nontraditional speech with few, if any, requests for Congress. Instead, he's expected to appeal to voters directly to keep calm but still take action.

CNN White House correspondent Michelle Kosinski joins us now with a preview. Help us reconcile this. He is going to give a call to action but not involve Congress. So then what?

MICHELLE KOSINSKI, CNN WHITE HOUSE CORRESPONDENT: How different the speech is going to be has been a question. Now, some senior administration officials are telling us, well, they wouldn't necessarily use the word "nontraditional" that's been circulating out there. This is, after all, going to be a speech. It's not as if the president is going to set it to music or put it out as a series of tweets or anything like that, although that would be interesting.

What we do know is that, even though this is his last State of the Union, it's expected to be not longer but shorter than usual. That the president doesn't want to spend pages and pages focusing on his accomplishments. He will touch on them, of course, but he wants to look well into the future, focusing on, as he put it, the big things affecting Americans.

We have seen the White House try some different approaches surrounding this speech. I mean, they've enlisted entities like Amazon, Google, Genius, YouTube and Snapchat. They also tweeted out this preview, complete with organ music.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I want us to be able, when we walk out this door, to say we couldn't think of anything else that we didn't try to do; that we didn't shy away from a challenge because it was hard; that we weren't timid or got tired.

(END VIDEO CLIP)

KOSINSKI: Maybe that music is sort of a symbol of what's to come. The White House says in terms of tone, expect it to be very optimistic and passionate, urging Americans not to let cynicism affect how they approach problems. This is the way the White House has been setting up a contrast between the president and how they view, yes, the Republican presidential candidates -- Chris.

CUOMO: Tone matters. Of course, we'll have a little bit of a wait and see. But we'll have Josh Earnest, the spokesperson for the White House, on later on. So we'll be able to test him on what that matters. Thanks to Michelle Kosinski and back to Alisyn in Iowa, the cold front in the battle for the nomination on both sides. Is that better than hot bed?

CAMEROTA: Indeed it is. It's zero degrees at this hour. So there's a little taste of Iowa for you. So what are Republicans expecting from tonight's State of the Union? And how will they respond?

Congressman Kevin McCarthy is a Republican from California. He's also the House majority leader. He joins us now.

Good morning, Congressman.

REP. KEVIN MCCARTHY (R-CA), HOUSE MAJORITY LEADER: Good morning. Thanks for having me.

CAMEROTA: Thanks for being on. So you just heard Michelle Kosinski's report. The president built this as a nontraditional State of the Union. What are you expecting?

MCCARTHY: Well, I don't know, because he says it's nontraditional. It sounds like it's going to be more of a campaign speech.

I'm really hoping to hear personally, from a personal level, what is our strategy to defeat ISIS? Where are we about security in this nation? Because when you think about it, from Paris to San Bernardino to Philadelphia now to Istanbul, this is an unsafe world. And it's not something that we should wait to the next president. We need to have a plan to solve this today.

CAMEROTA: Of course, you know, the president has said that it is Congress's responsibility to declare war on an enemy. And he's pressed Congress to do so, but Congress hasn't. So where are you on what you expect of your colleagues versus the president?

MCCARTHY: Well, the president today has the authority. There's two authorizations, AUMFs, that this president has the authority to go do whatever needs to be done. If the president needs anything more, he's going to find very open arms right here inside of Congress to help them with that.

You know, just on the floor today, before the president speaks, we'll be voting in a bipartisan manner. You'll see Democrats and Republicans joining, putting new sanctions on North Korea. Look at what they were now testing and nuclear weapons just last week. We'll also have on the floor new sanctions against Iran because of what they're doing in missile testing.

The world is becoming less and less safe from them. Every morning you see on the news from a new disruption, no matter where it's at. I think we need to get together and have a strategy to defeat ISIS and make this world safe.

CAMEROTA: The president has said that this will be, or at least Michelle Kosinski has reported this will be less of a laundry list of requests in what he hopes to do, as well. As much as looking back at what he has accomplished. And one of the things that it appears that he would trumpet is the economy, that he has been able to bring the economy back from the brink, that he inherited it. In fact, the latest jobs report was, as you know, very strong. Do you give the president credit for that?

MCCARTHY: Look. If I look at the median household income, it's lower today than it was in January 2000. So I don't think that there's a lot to trumpet there. It's only up 1.9 percent from 2009 when it started the movement of this economy.

So how much do you want to be able to weigh that? There's 94 million Americans that are out of the work force. So I don't think it's something to trumpet. I think it's something we can work together on to find economic prosperity, to find an ability to move this economy in a much stronger manner.

CAMEROTA: OK. Let's talk about the GOP race. I am here in Iowa where the race is incredibly tight on both sides of the aisle. What do you think of Donald Trump raising whether or not Ted Cruz is eligible to be president?

MCCARTHY: I think Ted Cruz's mom is an American. I think that answers the question.

CAMEROTA: So for you, he is eligible, and the fact that he was born in Canada is a nonissue?

MCCARTHY: No, not for me. His mother is an American, and there's no doubt about that.

CAMEROTA: So which candidate are you leaning towards?

MCCARTHY: Well, I have not endorsed any. I want to see the ideas move oud there. I think it's still going to be a little early. I think New Hampshire is really the state that Republicans start to focus in. And after that, you go into SEC Tuesday, as they like to call it. I think that's when it's really going to start to shake out.

But right now, a lot of people thought Donald Trump would fall behind. And he's still in the lead.

You know, Iowa is different than the other states. Iowa is a caucus. So it means about organization.

[07:15:06] Now, if you put this on the Democratic side, remember, eight years ago, Hillary Clinton was stronger than she is today. She won California. She won Texas, and she won New York. But she did not win the nomination. She lost every state that had a caucus.

So I know we focus a lot on the Republican one, but I think that Democratic campaign is closer than people are actually giving it attention. And I think ours will start to shake out after New Hampshire.

CAMEROTA: It is close here. I mean, the Democratic side is within the margin of error. But something interesting is happening in New Hampshire that I wanted to ask you about. Because John Kasich is now tied for second. So John Kasich has moved up. He does appear to have momentum, and he's tied with Ted Cruz for second.

Donald Trump is still first there in New Hampshire. So that seems to be the clash of the establishment candidates versus the outsider that we've heard so much about in this campaign season. Do you think that the establishment candidates still stand a chance this year?

MCCARTHY: Well, I don't know. If you know John Kasich, no one really thinks he's establishment. He's always been an outsider, trying to change from within. When he was in Congress, he balanced the budget. He transformed Ohio. So I know people like to label people, but I'd take a second look at John Kasich.

But New Hampshire has always been a place. Remember, that's where John McCain came back. That's where Ronald Reagan grabbed the microphone and said, "I paid for this microphone" and started coming back.

And so New Hampshire's been a unique state for deciding who the Republican nominee is. And I think it's going to make a major difference this time, as well.

CAMEROTA: It sure is. Congressman Kevin McCarthy, thanks so much for joining us on NEW DAY.

MCCARTHY: Thanks for having me.

CAMEROTA: Well, the president's final State of the Union airs tonight at 9 p.m. Eastern. Coverage begins at 7 right here on CNN. So tune in for that.

Also, a quick programming note. Later this morning, I sit down with Hillary Clinton for a wide-ranging interview. And you can catch our interview on "ERIN BURNETT OUTFRONT" tonight at 7 Eastern and then, of course, tomorrow morning, right here on NEW DAY.

All right, let's go back to New York and Chris and Michaela.

CUOMO: All right, Alisyn. Thank you very much. We have news for you, the U.S. destroying ISIS cash in Iraq. In an unusual airstrike, U.S. defense officials say they dropped a pair of 2,000-pound bombs on a building in a civilian area in Mosul. Millions in ISIS cash, they say, is now gone. Why do they need the cash? Well, it's used to pay ISIS's forces, finance ongoing operations, the obvious.

U.S. officials say they plan to hit more financial targets to take away ISIS's ability to function.

PEREIRA: A story of some cash of a different sort. Who wants to be a billionaire? The Powerball lottery jackpot is now $1.4 billion. It's going to keep rising until the drawing tomorrow evening. That lump sum payout, if you're wondering, comes to roughly $868 million.

Powerball fever has turned one community into a community event. In Plainview, New York, more than 1,000 Long Islanders lining up to pull their money together, each of them giving ten bucks each.

Any winnings will be split evenly. So far collected some $10,000 to buy tickets as a community. So we put the question to you: what would you do if you win the Powerball? We've been loving these responses that have been coming in so far. And some of them have been kind of interesting. They run from the selfless, like this one from Cheryl Malone, who says, "I would help the local mission and food bank, help my daughter and open a soup kitchen. And having a soup kitchen has been my dream, since I was a little girl."

CUOMO: Nice.

PEREIRA: I vote for you winning, Cheryl.

The NEW DAY staff thinks this guy is our new best friend. This is Don Earl Nelson. He says he'd "buy Starbucks coffee for everybody at NEW DAY each day for the next 2,739 years, your favorite pastry included." You got the vote of all of the staff.

CUOMO: I saw somebody do a little bit of math.

PEREIRA: Yes.

CUOMO: And if you were to take that amount of money and divide it among all American people, let alone families...

PEREIRA: Yes.

CUOMO: ... each would have a few million dollars.

PEREIRA: Actually, they dropped -- I think they dropped the zero. I think it only ends up being, like, four bucks each.

CUOMO: I don't think so.

PEREIRA: I think so. I'll check the math.

CUOMO: I'll check it on the break. Let's see who's right once again.

It's among the first of President Obama's last. He'll deliver his final State of the Union address tonight. We'll get a preview from White House spokesman Josh Earnest. Let's put him to the test when we come back.

PEREIRA: Did he buy a Powerball?

(COMMERCIAL BREAK)

[07:23:16] CUOMO: Tonight will be different. That is what we are told from the White House as the president prepares for his final State of the Union of address. It will, of course, be tonight.

Here's the clock on the bottom of your screen, so you can note down to the second. So what is he going to try to do in his final year in office? We hear this is going to be as much about you and what he wants you to know and do as any plans he has for Congress. Let's discuss.

We have Josh Earnest, White House press secretary, with us this morning.

Good to see you, Mr. Earnest, as always.

JOSH EARNEST, CNN WHITE HOUSE PRESS SECRETARY: Good morning, Chris.

CUOMO: Let's set the mood of the country, my friend. People satisfied, dissatisfied? Troubling numbers: 72 percent dissatisfied. How will tonight be different?

EARNEST: Well, Chris, traditionally with the State of the Union address, the president will come before the country and talk about all the progress that we've made over the last several years and walk through the president's to do list for the year ahead.

The president certainly has a lot that he can talk with when it comes to our accomplishments over the last seven years as a country. And certainly, he's got a long to do list for this year. But the president does want to try to do something different. The president actually wants to talk about the broader issues that will be debated not just in this upcoming election but that will actually be debated in elections for the next 20 years or so.

And the president is going to start with the economy. The fact is right now we have an economy that is being changed rather dramatically by technology. That has had the effect of spreading prosperity in unimaginable ways, but it has also had the effect of displaying workers in a variety of places. It's not just technology that's displacing workers on the factory floor any more. They're displacing workers in a variety of sectors.

So the question is what are we going to do to orient our government and our broader social compact with workers across the country to make sure that we both successfully confront the challenges that are posed by new technology but also make sure that we capitalize on the tremendous opportunities that are available.

[07:25:07] You know, certainly part of this is the Affordable Care Act. But -- but there's certainly more that we can do. And those are the kinds of things that are not going to just be resolved in the next election. But it's critical to the success of our nation, that our leaders here in Washington, D.C. focus beyond just the next election and actually start talking about our ability to meet these difficult challenges.

CUOMO: The criticism will be that it is good for him to avoid making any big promises at the State of the Union. Not only because he's in what politically they call the lame duck year, but because he doesn't have a great record of getting big things done that he announces in the State of the Union.

If we put up a graph of what's been compiled in terms of big promises as the State of the Union versus getting things done. 2009, you had Gitmo. It's still open. John McCain on this show said that he's still waiting for plans from your staff as to how they can close it. Immigration reform is stalled. Afghanistan troop withdrawal. We decided you had to keep some people there. The Republicans keep saying there's no clear plan for ISIS.

You did have the two free years of community college. They can't put that completely on the president. But you know, you point to the ACA, Obamacare. Now, the big narrative on that is you said we could keep our doctors, and you lied. You said we could keep our plan, and you lied.

Where did you see the big wins for the administration?

EARNEST: Well, Chris, actually, if you just take a look at what's happened in the last couple of months, there are a lot of wins to point to. The first is we got a compromised budget proposal that actually funded our economic and national security priorities by $50 billion more than Republicans wanted to. That was a big Democratic win.

We reauthorized the export/import bank. We succeeded in actually getting a transportation bill that will lock in funding for our transportation projects for five years. Before that, there had been 50-some-odd short-term patches. We got a five-year commitment. Now there certainly is more funding that we need to add there, but that is going to be good for our economy.

The president's also succeeded in completing an international climate deal at the end of last year. That's going to be good not just for the future of our planet. It's actually also going to be good for our economy, too. There now is a global market for the kinds of renewable energy industries that our economy is growing faster than any other.

We've also succeeded in securing an international agreement to prevent Iran from obtaining a nuclear weapon. Republicans opposed that proposal. Even though they have a majority in Congress, they weren't even able to muster a vote to announce their disapproval for that agreement. We're moving forward with implementing that agreement.

We're working to normalize relations with Cuba. That's going to be good for our economy and our national security. So we are certainly working to make some progress. And we're doing that even in the face of a Republican majority in Congress that doesn't actually want to do anything, other than do what they did at the end of last week, which is vote for, like, the 55th time to repeal the Affordable Care Act, despite the fact that they actually haven't put forward their own proposal for how it should be replaced.

So the fact is we're seeing record signups through the Affordable Care Act. And that's spread health care security for more than 18 million Americans who now have access to healthcare that they didn't have before the Affordable Care Act went into effect.

CUOMO: So you're going to have the policy part of tonight. Then you're going to have the personal part. Many are wondering if President Obama is going to make an appeal to seeing better out of Washington, maybe owning some of the mistakes of this dynamic, asking for better.

And the president making it more personal seems to be a trend. Certainly saw that with his emotion about gun violence in this country. And then we have what just happened in the Joe Biden interview with Gloria Borger.

Let me play this, because I have to tell you, this is a story unlike any I've ever really heard in political relationships, let alone between president and vice president. Listen to this, what Vice President Biden just said.

(BEGIN VIDEO CLIP)

JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: And so I was having lunch with the president. And he's the only guy other than my family I confided in all along in everything that was going on with Beau, because it was an actual responsibility to do that, so he knew where I was, my thinking.

And I said, you know, "My concern is," I said, "If Beau resigns, he has no -- there's no -- nothing to fall back on, his salary." And I said, "But I worked it out. I said, but Jill and I will sell the house. We'll be in good shape."

And he got up and he said, "Don't sell that house. Promise me you won't sell the house." He's going to be mad at me saying this. He said, "I'll give you the money. Whatever you need. I'll give you the money. Don't, Joe, promise me. Promise me."

I said, "I don't think we're going to have to anyway."

He said, "Promise me."

(END VIDEO CLIP)

CUOMO: President Obama, Josh, often gets remarked on for his cerebral qualities, for being mild, for not getting too high and too low. This is going to come as a big surprise to people. How does this square with the man you've come to know as president?

EARNEST: Well, you know, Chris, this is -- the president certainly does take a cerebral approach, that he's somebody who does try to confront the difficult challenges that are facing our country in a really rational way, to make sure that he is identifying the priorities of the country and making sure that we're pursuing them.

But look, Chris, the president got his start in public service by being a community organizer, by working with people in communities that had been left behind by our changing economy. And that starts by building relationships with people.

And, you know, obviously --