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EARLY START

Trump Digs In: Obama "Founded ISIS"; Republican Party Leaders Worry Trump Will Hurt Down-Ballot GOP Candidates; HHS Secretary Redirects Funds For Zika Fight. Aired 5:30-6a ET

Aired August 12, 2016 - 05:30   ET

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


[05:32:00] ALISON KOSIK, CNN HOST: Donald Trump taking heat but not backing down after claiming President Obama created ISIS. Now the head of the RNC is concerned Trump's campaign could cost the party in other races. What Trump has to say about that, ahead.

RYAN NOBLES, CNN HOST: Hillary Clinton facing growing accusations of pay to play over ties between her State Department and her charitable foundation. How close did Clinton come to a corruption probe?

KOSIK: And, Team USA racking up the hardware. Michael Phelps with another gold medal and two American ladies are setting a new bar. We are live in Rio with a recap. Welcome back to EARLY START, I'm Alison Kosik. Good morning.

NOBLES: I'm Ryan Nobles. It is 32 minutes past the hour. Thank you for being with us. Donald Trump doubling down this morning on his claim that President Obama founded ISIS. Digging in, rejecting conservative radio host Hugh Hewitt's attempt to get Trump to adopt a moderate sounding clarification of the founder accusation.

This, as Republican Party chairman Reince Priebus calls Trump, trying to get him to tone down his rhetoric in the interest of down-ballot GOP candidates. Let's get more now from CNN's Jim Acosta. He is with the Trump campaign in Florida.

(BEGIN VIDEOTAPE)

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Alison and Ryan, Donald Trump once again referred to President Obama as the founder of ISIS at a rally outside of Orlando. Trump said that the president bears responsibility for the rise of the terror group because he did not leave, what he called, a relatively small force in Iraq. But that runs contrary to what Trump told CNN back in 2007 when he said that the U.S. should declare victory and leave. Here's more of what Trump had to say at this rally outside of Orlando.

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: Barack Obama is the founder. Hey, if he would've -- folks, we should have never been in Iraq. We were going to destabilize the Middle East. I said it. I was a civilian, nobody cares. I was a civilian, nobody cares.

We should have never been in -- they should have understood it. They made a mistake, but we should have never ended it the way they ended it. By ending the way he ended it, and he got everybody out and he let them know when, and we're leaving, and they just sat back -- they just sat back and they went in.

ACOSTA: Even before Trump started addressing the crowd at this rally there was an incident inside the venue. Three men were holding up a Confederate flag and refusing to take it down for 15 to 20 minutes. Eventually, campaign staffers and local law enforcement officials convinced the men to take the flag down. So far, no reaction from the Trump campaign -- Alison and Ryan.

(END VIDEOTAPE)

KOSIK: OK, Jim Acosta, thank you. More now on that chat where Reince Priebus reportedly warned Trump about the damage he can inflict on down-ballot candidates, something that has leading Republicans very worried. Seventy-five of them signing a new letter urging the party to shift its resources away from Trump and toward at-risk House and Senate candidates. Trump says such a shift never came up in his talk with the party chairman.

(BEGIN VIDEO CLIP)

TRUMP: But I'm the one that's funding. I'm the one that's raising the money and other people are getting to use the money that I raise, so all I have to do is stop funding the Republican Party. I'm the one raising the money for them. In fact, right now I'm in Orlando. I'm going to a fundraiser for the Republican Party, so if they want to do that they can save me a lot of time.

(END VIDEO CLIP)

[05:35:00] KOSIK: Sources familiar with the call tell CNN that Priebus never threatened to shift party resources and it's too early to make that decision anyway. But those sources say Priebus did underscore the need for Trump to take public criticism from vulnerable Republicans without lashing back.

NOBLES: All right, let's break this down with -- the political action on both sides. CNN politics reporter Tal Kopan live in our Washington bureau this morning. Tal, thank you for the joining us.

KOSIK: Good Morning.

TAL KOPAN, CNN POLITICS REPORTER: Good morning.

NOBLES: I want to talk about this interview that everybody seems to be talking about, and it was Rudy Giuliani on "NEW DAY" yesterday with Chris Cuomo. It was an interview that went 30 minutes, and if you haven't watched it you can go back to cnn.com and see the whole thing. But I want to play just a small clip from that lengthy interview and talk about it with Tal, so let's take a listen.

(BEGIN VIDEO CLIP)

RUDY GIULIANI (R), FORMER MAYOR, NEW YORK CITY: Because you don't give him a fair shot. You take his words and you parse them and you take them apart. The media took words that were not violent words and the media interpreted them as violent words. You're coverage -- I don't mean you, I mean the press' coverage of him

is so unfair compared to the press' coverage of the pay for play Sec. of State who revealed emails that put the national security of this country in jeopardy. That is a massive scandal. There are allegations coming out day after day, email after email --

CHRIS CUOMO, CNN HOST: And we've covered them -- many. Often, they come out of this outlet.

GIULIANI: Not with the same vigor, not with the same tremendous emphasis.

(END VIDEO CLIP)

NOBLES: And that went on for pretty much the entire half hour. But it shows us, Tal, how Trump's supporters really have to go out there and battle for him in these forums and they continue to try and paint this narrative that he is getting an unfair shake from those of us in the press. Is it working?

KOPAN: Well, you know, this has been a talking point for conservatives for some time and we've spoken about Donald Trump sort of learning on the trail. One of the most memorable moments in some of the debates -- I believe it was actually Ted Cruz who really scored points in one of the debates by bashing the media and we saw it really -- Donald Trump was doing it but we saw it even pick up probably from then.

And it happens on both sides. I think we, in the media, know we're constantly getting attacked by both sides who don't like our coverage. That's just kind of how it goes and it's an example of sort of playing the ref. You try to intimidate them or argue your case as much as you can. But to a certain extent, it's probably working.

Some of us are probably wondering how many undecided voters there could possibly be left in this country. There's so many people who seem to have such strong opinions. But there's a play out there for every single one of those people who may not yet have made up their minds.

KOSIK: OK, so here's the thing, you know. The Trump camp saying listen, we're not given a fair shake in the media. And then you have Trump going on the Hugh Hewitt radio show where the host, himself, is saying wait a minute, almost throwing him a lifeline, saying Mr. Trump, you didn't really mean that. Let me let you hear it and then we'll talk about it.

(BEGIN VIDEO CLIP)

HUGH HEWITT, HOST, "THE HUGH HEWITT SHOW": Last night, you said the president was the founder of ISIS. I know what you meant. You meant that he created the vacuum, he lost the peace.

TRUMP: No, I meant he's the founder of ISIS, I do. He was the most valuable player. I give him the most valuable player award. I give her, too, by the way -- Hillary Clinton. HEWITT: But he's not sympathetic to them. He hates them. He's trying to kill them.

TRUMP: I don't care. He was the founder.

(END VIDEO CLIP)

KOSIK: All right, so he's given the chance here to redeem himself and he just doesn't take it.

KOPAN: Yes, it's a pretty remarkable interview where Hugh Hewitt sort of probe him over several questions and said but what you meant to say, and Donald Trump was just having none of it. He says what I meant to say is what I said and that's sort of classic Donald Trump. He doesn't want to be coached, necessarily, by the powers that have been for so many -- so many years. He thinks that he is bringing something new to the table and he trusts his gut, and that's what has made him successful in his business life and that's what he's trying to do in the political sphere.

NOBLES: Meanwhile, there are Republicans across the board who are trying to figure out to handle Donald Trump and are also, perhaps, preparing for what could happen in this election. And among them is Steve King, who is from Iowa. A staunch conservative, formerly a Ted Cruz supporter. And listen to what he said at the Iowa State Fair yesterday.

He said, "I've sat across the table with Hillary Clinton eye-to-eye, and when you're working outside of staff and outside of the press she is somebody I can work with." And we have to stress that Steve King is by no means a fan of Hillary Clinton's, but if someone like him is saying such nice things about Hillary Clinton what does that say about Donald Trump and his relationship with the Republican Party?

KOPAN: Well, this is going to be a talking point we see from the Clinton campaign forward. They've already rolled out so many Republican endorsements. They really want to paint her as someone who can actually get things done and work across the aisle. You know, one of the interesting things about this, though, is that there is a point where you start to wonder if she begins to alienate her liberal base by how much she's reaching out to Republicans and how much -- it's almost damning by praise, right?

[05:40:00] NOBLES: Right.

KOPAN: The Republicans can come out and endorse her all they want. At a certain point, some of her liberal base are going to say why are we supporting someone that seems to be so popular with Republicans.

NOBLES: Right. All right, Tal Kopan, great stuff from Washington. Thank you for being with us this morning.

KOSIK: Thanks so much.

KOPAN: Thank you, guys. KOSIK: You know what, though? Regardless of who wins November's election, the next president will be the highest paid leader in the world. A new "CNN MONEY" analysis is finding that President Obama's $400,000 salary is the largest among any presidents or prime ministers, even in the world's biggest economy.

So when you convert their salaries into U.S. dollars at current rates, Canada's Justin Trudeau is second at $260,000. He's followed by Germany's Angela Merkel, Prime Minister Shinzo Abe from Japan, and South African President Jacob Zuma. Now the last time the U.S. president got a raise was back in 2001 but I'm not crying any tears for them because they get a boatload in speaking fees.

NOBLES: Right, and they also have public housing. They live for free at the White House.

KOSIK: You got it, and a big expense account.

NOBLES: And a plane.

KOSIK: That, too, yes.

NOBLES: The Americans keep dominating in Rio. Michael Phelps adding to his record collection of golds, and two newcomers steal the show as well. We are live in Rio, next.

[05:41:20] (COMMERCIAL BREAK)

[05:45:40] NOBLES: American swimmer Michael Phelps making history again, adding new medals to his record Olympic haul, winning his 22nd career gold on Thursday. Phelps is now four for four at the Rio Games and the gold rush for Team USA did not stop there. CNN's Coy Wire is following it all for us. He is live in Rio this morning. Another great day for the Americans, Coy.

COY WIRE, CNN CORRESPONDENT: Absolutely, Ryan. Twenty-two golds for Phelps, though 26 career medals overall. Ryan, I found at the source, looked up great. You have prominent, illustrious, distinguished, esteemed, acclaimed like Kosik, notable like Nobles. Still not enough adjectives to describe Michael Phelps with all the medals, all the records.

Once again, dominant in the 200-meter IM, winning the event for the fourth straight Olympics, the first time that's been done in swimming. It was a highly anticipated showdown -- final showdown, if you will -- between Phelps and his good teammate Ryan Lochte, but Lochte not a factor, finished fifth. And we will get to see Phelps again today, guys, in the 100-meter butterfly final, and if he wins that will be four Olympic golds in that event, as well.

You have to see the scene from the Ravens preseason game, though, last night. Put Phelps' race up on the Jumbotron and watched him win during a time out. Phelps is from Baltimore. He's a huge Ravens fan and it's clear that Baltimore is a huge fan of him, as well.

Now, another historical moment yesterday. American swimmer Simone Manuel winning gold in the 100-meter freestyle. She actually tied Canadian swimmer Penny Oleksiak, setting an Olympic record in the process. But Manuel becomes the first African-American woman to medal in an individual swimming event.

Let's go to gymnastics. The U.S. women's team literally leaping over their competition in Rio with Simone Biles winning the all-around final, taking home her second gold medal. Crazy stat for you, guys. She had 2.1 margin of victory. That's more than the margins of victories from 1980 to 2012 combined. And get this, she still has three more events to go. She very likely could have five gold medals before it's all over.

Now, her teammate Aly Raisman also putting in an outstanding performance that garnered her a silver medal. These ladies are simply amazing and addicting when you watch them. You'll want more.

Medal board -- the USA on top, 38 overall medals. China in second with 30, and Japan is in third with 22. We have another full slate of events today, guys and we'll get to see Katie Ledecky going for her fourth gold medal of these Rio Games. Eight-hundred meter freestyle is the event. It's her best event. She won it as a 15-year-old in London four years ago.

What else do we have today? U.S. men's basketball team playing Serbia. And track and field officially gets going. A lot of the Olympians here looking to claim gold and represent the USA in a wonderful way -- guys.

NOBLES: All right, Coy Wire, thank you for joining us from Rio this morning.

KOSIK: Let's take a look at what's coming up on "NEW DAY". Chris Cuomo joining us now. Chris, I got to say, I really enjoyed your conversation with Rudy Giuliani yesterday.

NOBLES: Yes, everybody's talking about that, Chris.

CHRIS CUOMO, CNN HOST: Thank you very much. Well, that's what we're trying to do here, is keep the conversation going, and we have a big question this morning. Why is a master of media manipulation playing and pushing such an obvious false claim? That is the question for Donald Trump, insisting on saying President Obama and then-Secretary of State Clinton founded ISIS.

The move is raising real concern. It's also distracting from a real issue that he could be using right now, which are these new emails from the State Department showing ties between the Clinton Foundation and the State Department. We're going to dive into both deeply this morning.

Plus, we're going to tell you about this scare in the sky. Two dozen people on a cross-country flight are rushed to the hospital with what's being called extreme turbulence. Next on "NEW DAY" my friends. Happy Friday to you. I hope you both have a good weekend.

KOSIK: And happy Friday to you. NOBLES: You, too. Thanks, Chris.

KOSIK: You know, for the first time the median home price in one U.S. city is more than $1 million. We're going to tell you where when we get an early start on your money, next.

[05:50:00] (COMMERCIAL BREAK)

[05:54:10] KOSIK: Welcome back. Eleven explosions rocking five provinces across Thailand in the past 24 hours. At least four people have been killed with dozens more wounded, including tourists from Italy, Germany, Austria, and The Netherlands. Four of the blasts targeting the same location, the seaside resort town of Hau Hin. Police say two other bombs were diffused before they could go off. Thai officials are calling the attacks coordinated but it's unclear who could be behind them.

NOBLES: The president of Ukraine putting his troops along the border with Russian-controlled Crimea on high alert. He's warning Vladimir Putin is looking to restart hostilities in the region. On Thursday, the Russian president accused Ukrainian agents of engaging in terrorist activities on the Black Sea peninsula and vowed to respond with very serious measures.

[05:55:00] KOSIK: Health and Human Services secretary Sylvia Burwell is redirecting $81 million from other departments to keep the fight against the Zika virus outbreak going. She is exercising her authority to transfer the money from the National Institutes of Health and the Biomedical Research Authority. The White House asked Congress for $1.9 billion in Zika funding back in February but lawmakers failed to act.

NOBLES: Outrage in Colorado after a former university student was spared a prison sentence for a sexual assault conviction. Twenty-two year old Austin Wilkerson got two years in a county lockup, making him eligible for work release or to attend school during the day. Under Colorado law, his sentence could have been anywhere from eight years to life. Critics say it is disturbingly similar to the case of an ex- Stanford swimmer sentenced to six months for raping an unconscious woman.

KOSIK: OK, let's get an early start on your money. The Dow, Nasdaq, and the S&P 500 all hitting record highs at yesterday's close. That's a trifecta if you ask me. It hasn't happened since 1999, the height of the dot.com boom. Now, right now we are seeing futures pointing slightly higher. Markets in Europe are mixed. We did see Asian markets have some gains overnight. Oil prices are steady, back above $43 a barrel after a big gain yesterday.

We're also watching shares of Macy's today. That stock jumping 17 percent yesterday after the retail chain announced it was closing 100 stores. That's despite reporting some strong quarterly earnings. Investors like the plan, which Macy's executives are saying is necessary to meet fast-changing demands of customers.

Now, Macy's is just the latest retail chain to be squeezed by the changing landscape of the retail industry. Shoppers really seem to prefer fast fashion chains like H&M and discounters like T.J. Maxx and online retailers like Amazon.

OK, for the first time ever the median home price in one U.S. city, get this, is more than $1 million. And, no, it's not in New York, it's not in San Francisco, it's in San Jose, California where, now, the median home price of $1,085,000 there.

That's according to a new report from the National Association of Realtors. Homeowners there can thank Silicon Valley. The recent tech boom, oh yes, has pushed prices sky high because there's a huge demand and tight inventory. You know that relationship, supply and demand, is working here.

NOBLES: Yes.

KOSIK: After San Jose it's San Francisco at nearly $900,000, and then the Anaheim area and urban Honolulu. Both of those areas have median prices of more than $700,000. It was Hawaii that used to be the place --

NOBLES: Right.

KOSIK: -- with the highest prices.

NOBLES: And not in the top four, New York, where you live, Washington, D.C., where I live.

KOSIK: It's very surprising.

NOBLES: Yes. Donald Trump facing growing blowback as he stands by his claim that President Obama founded ISIS. "NEW DAY" picks up the coverage right now.

(BEGIN VIDEO CLIP)

TRUMP: Barack Obama and Hillary Clinton -- these are the founders of ISIS.

NOBLES: The Republican Party chairman trying to get him to tone down his rhetoric.

TRUMP: I'm really a message of a common sense conservative.

HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: Mr. Trump may talk a big game on trade but his approach is based on fear, not strength.

TRUMP: She's going to try and negotiate trade deals. She can't do it.

CLINTON: I'm running for president to build an economy that works for everyone.

WIRE: Simone Biles clinching gold.

KOSIK: Michael Phelps making history, yet again. WIRE: Powering past teammate Ryan Lochte.

NOBLES: And the gold rush for Team USA didn't stop there.

(END VIDEO CLIP)

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

CUOMO: Wow, USA all the way. That Simone Biles, amazing last night.

BRIANNA KEILAR: That's right, and I have an interesting fact.

CUOMO: Let's hear it.

KEILAR: That Michael Phelps is the winningest individual of all time, surpassing, yesterday, Leonidas of Rhodes --

CUOMO: Leonidas of Rhodes.

KEILAR: -- who won his last races in 152 B.C. I mean, that's -

CUOMO: I loved him in 300.

KEILAR: Exactly, lovely.

CUOMO: Good morning, welcome to your new day. It's Friday, August 12th, 6:00 in the East. Alisyn is off. Brianna Keilar, master of facts, here with me this morning. Up first, Donald Trump insisting the President of the United States, Barack Obama, and then-Secretary of State Hillary Clinton, founded ISIS. He says he is not kidding. Now this false claim is fueling real concern about his campaign and GOP fears of a Democratic landslide in November.

KEILAR: This, as Hillary Clinton's email controversy continues to haunt her campaign. Growing questions about what newly-released emails show about ties between the State Department and the Clinton Foundation. Let's begin our coverage with CNN's Athena Jones. She is live for us in Washington. Good morning, Athena.

ATHENA JONES, CNN CORRESPONDENT: Good morning, Brianna. There's been a lot of talk about how this campaign needs to be about the issues Americans care about -- jobs, the economy, national security. This week could have been about issues with both candidates delivering big economic speeches and, yet, here we are ending another week that was dominated by outrageous headline-grabbing statements from the Republican nominee and he's been repeating his latest lines of attack every chance he gets.