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EARLY START

The President's Agenda; Kushner Laying Low; Merkel Doubles Down; Manchester Returning to Normal Life. Aired 4:30-5a ET

Aired May 30, 2017 - 04:30   ET

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


(COMMERCIAL BREAK)

[04:31:08] DAVE BRIGGS, CNN ANCHOR: The Paris climate deal, the search for a new FBI director, troops in Afghanistan, and perhaps a staff shake-up -- plenty to do as the White House tries to get back to business.

CHRISTINE ROMANS, CNN ANCHOR: Meantime, the Russia probe still the dark cloud hanging over this White House. Now, the West Wing is set to blame Jared Kushner's secret back-channel request on the Kremlin.

BRIGGS: And German Chancellor Angela Merkel standing behind the suggestion Europe can't rely on the U.S. What's in store for American ties with Berlin and Europe as a whole? Some suggest that maybe it's time that Europe start taking some self-responsibility and not going it alone, but we'll get into this later on.

Welcome back to EARLY START. I'm Dave Briggs.

ROMANS: I'm Christine Romans. Thanks for joining us.

President Trump back in the Oval Office today trying to get back to the country's business after a long holiday weekend and an even longer overseas trip. Key issues on his very full agenda, whether to pull out of the Paris climate accords and the search for a new FBI director. The president is also weighing a strategy going forward for Afghanistan. That could include more troops, a decision all the more significant after President Trump's first visit to Arlington National Cemetery as commander-in-chief.

BRIGGS: The president also weighing whether to shake up his team. Sean Spicer set to brief the media this afternoon amid questions about changes to the press office. It will be the first time since the president left for his nine-day trip that any White House official has briefed in front of cameras and the first since penetrating questions began to swirl around senior adviser and first son-in-law Jared Kushner.

Jeff Zeleny begins our coverage from the White House.

(BEGIN VIDEOTAPE)

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Christine and Dave, the White House is back in business after the long holiday weekend and after the president's first international trip, they are still desperately trying to change the subject from the Russia investigation, trying to make a pivot, but the chances of doing that are probably fairly unlikely. The deepening Russia investigation is still consuming the White House here, at least in terms of how they're going to respond to it.

Now, Jared Kushner, the president's son-in-law and senior adviser, he is telling associates he is willing to talk to the FBI, he's willing to talk to members of Congress about those back-channel communications he was trying to set up with Russian officials. They say it was simply something that they were trying to offer to do to sort of build the connection with the Russian government here, but so many questions about that because they were acting at the time as private citizens, but they were members of the transition.

Coming up, there are some key agenda items the president has on his desk he wants to act upon. First and foremost, is he going to withdraw or keep the U.S. inside that landmark climate agreement? He was lobbied last week at the G7 summit in Sicily. European leaders urged the president to stay, but most people here at the White House would be surprised if the president would decide to stay in the landmark climate agreement. But it raises the question, if the U.S. pulls out of this agreement, what does it do to its standing on the world stage? What does it do to the rest of the president's agenda?

Also, the president is facing a decision on Afghanistan. When will he act on his military commander's recommendation to send more U.S. troops to Afghanistan? That certainly was made even more poignant as he visited Arlington National Cemetery on Memorial Day.

Those are two of many issues facing the White House, but the Russia investigation is still dominating things here inside the West Wing -- Christine and Dave.

(END VIDEOTAPE)

BRIGGS: Jeff Zeleny, thanks.

Investigators are trying to figure out exactly why Jared Kushner met in December with a Russian banker who has links to Vladimir Putin. What the point of the meeting was. That's according to "The New York Times."

CNN already reported Kushner met with Russian Ambassador Sergey Kislyak, seeking to engage further with Russia. Kushner was then told to meet with Sergei Gorkov, the head of a Russian bank under sanction from the United States.

[04:35:02] ROMANS: Also this morning, the White House is ready to push back on new reporting Kushner tried to set up a secret back- channel with the Russians, pushing back by claiming -- by blaming the Russians, claiming it was their do.

A source tells CNN's Gloria Borger that they asked to talk to Michael Flynn about Syria. The source says Kushner did not say he would arrange it and it was never arranged.

BRIGGS: For the time being, though, expect Kushner and his wife, Ivanka, to keep their heads down. Administration official tells CNN both are laying low and focusing on work, unfazed by the scrutiny. The source claims Ivanka is not involved with this war room currently being established, even though she was seen at the White House with the president's personal attorney Mark Kasowitz.

ROMANS: CNN has also learned Jared and Ivanka have told friends they will continue to evaluate whether they plan to remain in Washington, D.C., something they discussed before the news broke about Kushner's request for a back-channel to Moscow.

BRIGGS: OK. German Chancellor Angela Merkel giving new weight to her view that Europe can no longer completely rely on the U.S. the way it once did. Merkel restating her concern about U.S. reliability at a speech in Berlin one day after saying her eyes had been opened by her experience at NATO and G7 meetings with President Trump.

(BEGIN VIDEO CLIP)

ANGELA MERKEL, GERMAN CHANCELLOR (through translator): We are convinced Transatlanticists, and, precisely because we are, we know that transatlantic relations are of immense importance for us all. They rest on mutual values and interests, particularly when we are in times as we are in now of intense challenges. The last few days showed me that the days where we could completely rely on others are over.

(END VIDEO CLIP)

ROMANS: Germany's foreign minister taking an even harsher tone, saying President Trump has, quote, weakened the West, accusing the U.S. of standing against the interests of the European Union.

Want to sort through the European reaction here. Senior international correspondent Frederik Pleitgen is in London.

And, Fred, how is all of this being received by the Europeans? Do they agree with Angela Merkel?

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, I would say most of them, Christine, do agree with Angela Merkel. If you look to France, for instance, you some similar comments coming from the French president as well. The Brits take a little bit of a different view. They're just leaving the European Union in the next two years. So they're looking for closer ties with America, but most of the Continental Europeans, they probably feel the same things.

And one of the interesting things that Angela Merkel said, for instance on this climate deal that Jeff Zeleny was just talking about, she said in the G7 countries, so the biggest economies in the world, there's basically a 6-1 situation right now where all of them want to have the climate deal continue, but the U.S. still isn't sure about its position, so that's one thing. Then you have NATO, where obviously President Trump last week made

some comments that really a lot of Europeans didn't want to hear. On the one hand saying that the U.S. was paying too much, Europeans were paying too little, but at the same time, they were missing a full commitment that the U.S. was committed to the security of European nations. And I think that's really what prompted Angela Merkel to say what she said. And so, there certainly is a lot of frustration in Europe about some of the things coming out of the White House.

BRIGGS: An interesting story in the "Wall Street Journal," an opinion piece, Fred, this morning. Essentially, here's the last line: The Atlantic alliance may even benefit from more such candid talk on both sides.

Is there any sentiment that maybe some self-reliance on behalf of Europe and Germany, it's time for?

PLEITGEN: Yes, you know what, I think that to a certain extent might be true. I mean, one of the things that is certainly a fact is that many European countries have been spending far too little on defense, as far as America is concerned. But also as far as they themselves are concerned, the commitment they've made as well.

You take, for instance, a country like Germany, which by far is the largest economy in Europe. They're supposed to spend 2 percent of their annual budget on defense. Right now, they're at 1.2 percent, and they keep saying they can't really boost defense spending that much that quickly, but it's one of the things that has led to frustrations not just with the U.S. but with other countries as well.

So, certainly from a defense perspective, there is some merit to some of this, what the "Wall Street Journal" calls candid talk. But at the same time, if you look at trade, for instance, where the Germans are saying, look, we're creating so many jobs in the U.S., while at the same time, obviously, there is a lot of import and export between the two countries, they really felt that that part of President Trump's comments were quite unfair to them.

ROMANS: Right.

BRIGGS: Fred, I should add, that "Wall Street Journal" piece also said Mr. Trump's lack of basic knowledge about the economics of trade is dangerous. So, it wasn't all complimentary.

ROMANS: Yes, we know that the biggest exporter of cars from the United States happens to be a German company that employs thousands and thousands of people and German automakers employ, what, 100,000 people or more in the United States.

What does this mean for Europe, and by extension, the U.S. in terms of that remark from Angela Merkel, if it were to play out in policy, Fred?

PLEITGEN: Well, I think -- I think it certainly will play out in policy, but I'm not sure how big the long-term effects are going to be, Christine. [04:40:02] On the one hand, Angela Merkel said she was committed to

the transatlantic alliance, but at the same time, she said right now with this White House in place, it really is unclear to the Europeans where they stand.

So, one thing that I think you will see is you will see a lot more orientation by European countries towards themselves, towards strengthening European ties, especially now with the Brits also leaving the European Union. You'll see that axis of Paris and Berlin really trying to deepen their relations.

And at the same time, I think you'll see countries like Germany, but also France as well, really trying to up their cooperation with Asian countries as well. The Germans have been doing it for a long time. They actually have, strangely, a pretty balanced trade with China, if you look at the monetary value of things. So, that's already been going on and it seems as though they could boost that a lot, if indeed they feel that the U.S. isn't reliable anymore.

BRIGGS: Interesting. Frederik Pleitgen live for us in London, great insight. We really appreciate it.

All right. It took a few days, but President Trump now condemning last week's fatal, racially charged train stabbings in Portland. The president tweeting, quote: The violent attacks in Portland on Friday are unacceptable. The victims were standing up to hate and intolerance. Our prayers are with them.

That coming from the POTUS account, not the president's personal account.

Two men were killed. Another was wounded by a suspect who was aiming hateful remarks at two female passengers. One of the women was wearing a hijab. The victims died while trying to intervene.

ROMANS: Just trying to --

BRIGGS: Just a heartbreaking story.

ROMANS: Good Samaritans trying to stop a dangerous situation and they lost their lives.

All right. A record 107 million Americans have auto loans, but a new report shows growing concern that many people can't really afford them. The report found the largest subprime auto lender, Santander, only checked the incomes from 8 percent of applicants. Subprime, of course, refers to people with poor credit.

By comparison, Santender's main competitor checked 64 percent of applicants. This concerns experts because it mirrors practices that led to the home loan crisis. It also creates uncertainty over whether customers can make their car payments.

However, car loans are for more smaller amounts, and mortgages account for a tinier portion of the economy, but still something to watch here. This is more bad news for the auto industry. Rising inventory, declining prices and low sales may signal that its seven-year boom is over.

Sales have been on the rise since 2010 but fell for the first four months this year. We'll see the latest report later this week. Automakers report May's new car sales Thursday.

And I love to watch car sales because it is such an important barometer of the health of the economy. When you can buy a car, it shows you have confidence in your job, it shows you have confidence in where you live, it shows that you have confidence that you can make that paycheck. When so many people are buying cars and they haven't even checked how much money they make and they're buying on incentives or buying on credit, that starts to get a little worrisome.

BRIGGS: And the president came into office really trumping the auto business and the exciting things we're doing domestically. So, you hope --

ROMANS: Maybe he came in just at the peak for autos.

BRIGGS: Yes, you do wonder.

All right. Well, Tiger Woods apologizing after a DUI arrest in Florida. What he says led to the arrest when we come back.

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[04:47:15] ROMANS: A near brawl erupting during the final regular session of the Texas legislature. Hundreds of people packed the capitol rotunda on Monday. They were protesting a new state law that bans sanctuary cities and punishes local governments that don't comply with immigration rules and detention requests. Things got really heated when Republican house member Matt Rinaldi announced he had called ICE to report protesters who were holding signs that read: I am illegal and here to stay.

BRIGGS: Rinaldi says he was then assaulted verbally and physically by fellow lawmakers, admitting he threatened to shoot one Democrat in self-defense. It was all too much for this Texas lawmaker.

(BEGIN VIDEO CLIP)

STATE REP. ALFONSO "PONCHO" NEVAREZ (D), TEXAS: Yes. I mean, the guy made a comment, a very stupid comment. He's racist. He's a bad person. We're not going to allow people like that to get away with saying things like that because they think nothing's going to happen to them.

(END VIDEO CLIP)

BRIGGS: Democrats deny assaulting Rinaldi and ICE officials say they never received a phone call from him about the protesters.

ROMANS: Tiger Woods apologizing to his family, his friends, his fans, following his arrest Monday on suspicion of driving under the influence near his Florida home. Woods issued a statement to media outlets saying this; I understand

the severity of what I did and I take full responsibility for my actions. I want the public to know that alcohol was not involved. What happened was an unexpected reaction to prescribed medications. I did not realize the mix of medications had affected me so strongly.

BRIGGS: Woods adding he expects more from himself and will do everything in his power to make sure it doesn't happen again.

Police in Jupiter, Florida, say he was arrested at 3:00 a.m. Monday some ten miles from home and spent several hours in jail before being released without bail. The 41-year-old Woods has been off the pro tour rehabbing from a fourth back surgery last month. Presumably, he knows his blood alcohol level will not be a factor in this if he says that.

And look how clever the New York tabloids were this morning --

ROMANS: Same headline.

BRIGGS: Oh, wait, matching headlines in "The New York Post" and the "Daily News," DUI of the Tiger.

ROMANS: Ouch.

BRIGGS: Look, you hope this is not the final chapter of arguably the greatest athlete of our generation.

ROMANS: Thank goodness he didn't hurt someone. I mean, thank goodness he didn't hurt --

BRIGGS: Indeed, that's what you always hope with these cases.

ROMANS: OK. In the South, storms and increasing humidity mean heat indexes into the triple digits.

Let's bring in meteorologist Pedram Javaheri. Good morning.

(BEGIN VIDEOTAPE)

PEDRAM JAVAHERI, AMS METEOROLOGIST: Good morning, Dave and Christine.

Yes, you know, the soggy perspective here across not only just the South but also around interior New England here going to be the big story as we go through much of this afternoon into tomorrow, and the forecast there even into the early-morning hours actually has brought those temperatures up into the middle 70s out of Panama City. New Orleans sits there at 72 degrees, Washington at 67 degrees. And in places like Washington, I wouldn't be surprised to see a few storms roll through by this afternoon across that region.

[04:50:04] But the strongest storms really confined out towards interior portions of New England. That's where about 5 million people are in line for a risk of severe weather, and generally, it is for damaging winds and some gusty winds, not much in the way of say tornadic activity. But look at this, across the south, some very wet weather expected.

In fact, some of the wettest weather in the country right there around the southern parishes of Louisiana, where over the next two days could see locally up to 6 inches of rainfall come down, but generally a couple inches in the forecast the next several days. Beyond that, just a gradual warming trend across the south as well.

Atlanta it makes up to the middle 80s. New York City not too bad, around 75 degrees by late week.

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ROMANS: All right, we'll take it. Thank you, Pedram.

All right. The $1,000 stock club is about to get two new members. "CNN Money Stream" next.

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[04:55:00] BRIGGS: Breaking overnight, Panama's government announcing the death of former dictator Manuel Noriega. Noriega had been in intensive care for two months after suffering a hemorrhage during surgery to remove a brain tumor. The former general ruled from 1983 to 1989 before being ousted by a U.S. invasion. He was in prison for corruption and murdering his political opponents before he was hospitalized this year. Noriega was 83 years old.

ROMANS: Police in Manchester are looking for a critical piece of evidence this morning and they're asking the public's help in tracking down this hard-sided, blue-rolling suitcase the bomber was seen with in the days leading up to last week's blast.

BRIGGS: A counterterrorism official telling CNN investigators are still not sure whether the suicide bomber at the concert actually built the bomb himself, calling it the key question in the investigation.

Meantime, this morning, Manchester returning to its normal life step by step.

For more, let's bring in CNN's Muhammad Lila in Manchester.

Good morning.

MUHAMMAD LILA, CNN INTERNATIONAL CORRESPONDENT: Well, good morning, Dave. You can see behind me people are still coming out to this vigil, although as you said, we're coming out of the end of a long weekend, and so, people are going back to work.

But as far as the investigation is concerned, police put out images of this blue, distinctive suitcase. They believe that the suspect was seen with this suitcase, wheeling it around Manchester, in fact, right here in Manchester City center in the days and hours leading up to the attack.

Now, they believe that he used a backpack bomb, in other words, explosives that were stuffed into a backpack, to carry out the attack, but that's also why they want to know what was so important that he was seen wheeling around this suitcase here in Manchester. They don't believe that there is any cause for concern in the sense that there are any explosives in that suitcase, but they're asking people if they do happen to see that suitcase to not approach it but to call the police and let them know what they see.

And this is very important because as you say, police are desperately trying to track down the suspect's whereabouts in the last four days leading up to the attack and they want to know exactly what was in that suitcase and if what was in there could lead them to other potential suspects -- Dave and Christine.

BRIGGS: OK, Muhammad, thank you.

ROMANS: Fifty-seven minutes past the hour. Let's get a check on "CNN Money Stream" this morning.

Global markets and futures mostly lower right now. It is a short week for Wall Street. Markets were closed for Memorial Day, stocks closed mixed ahead of that holiday, but that was enough for the NASDAQ and the S&P 500 to hit new record highs. All three indices gained at least 1 percent for the week.

Investors this week will tune in for the end of the strong earnings season, the best since 2011. Data, personal income and spending that is out this morning, and the May jobs report released Friday, unemployment dropped to 4.4 percent in April. That's the lowest level since 2007.

We'll also be looking for any progress on tax reform. "The Wall Street Journal" with a big story this morning saying, you know, it's faltering at this point. Tax reform in Congress is faltering.

All right. Two more stocks are about to be worth $1,000 per share. Amazon and Google parent Alphabet could hit that milestone today. On Friday, Amazon hovered around $999. Alphabet topped $996. Right now, only seven U.S. stocks trade above $1,000 a share.

This is just further proof that a few big-named stocks are driving the market. For example, Amazon is up more than 1,500 percent since 2009, but experts warn this makes the market vulnerable if any -- of a fall. In fact, the five biggest stocks in the S&P 500 account for one-third of its gains this year.

Americans' credit scores hit levels not seen in the recession, and that's great news for spending. The average credit score hit 700 in April. That is the highest since 2005. The riskiest consumers, those with a score below 600, hit a record low.

This could be good for economic activity. As credit scores rise, lenders will likely make more credit available, and that could boost consumer spending. Interesting, right?

BRIGGS: Very exciting news.

ROMANS: Good.

BRIGGS: We need something good economic news.

ROMANS: Sure do.

BRIGGS: EARLY START continues right now. What's the agenda?

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BRIGGS: It's a full agenda awaiting President Trump and his team at the White House as the administration fights back against growing questions about ties to Russia.

ROMANS: The adviser at the center of those questions, Jared Kushner, laying low. Now the White House is blaming Kushner's secret back- channel request with the Kremlin.

BRIGGS: And German Chancellor Angela Merkel not backing down from her suggestion Europe must go it alone. What does it mean for the U.S. relationship with Germany and the European Union?

ROMANS: I've listened to that sound bite three or four times, trying to just kind of grasp what that could mean for policy.

BRIGGS: Yes, she's careful with words, but she certainly meant to send a message indeed.

Good morning, everyone. Welcome to EARLY START. I'm Dave Briggs.

ROMANS: And I'm Christine Romans. It is Tuesday, May 30th. It is 5:00 a.m. in the East.

President Trump back in the Oval Office today, trying to get back to the country's business after a long holiday weekend and an even longer overseas trip. Key issues on his very full agenda: whether to pull out of the Paris climate accords, and a search for the new director of the FBI.