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EARLY START

Moore's Victory A Blow to GOP Establishment; Trump Focuses on Puerto Rico; Trump Stands By Anthem Remarks; Trump Threatens North Korea; Rocket Lands Near Kabul Airport During Mattis' Visit; Saudi Arabia to Let Women Drive. Aired 4:30-5a ET

Aired September 27, 2017 - 04:30   ET

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


(COMMERCIAL BREAK)

[04:30:18] CHRISTINE ROMANS, CNN ANCHOR: Going from bad to worse for the Republican establishment. A Senate runoff now in Alabama goes to evangelical Roy Moore, opening the door for other newcomers looking to shake up the party in 2018.

DAVE BRIGGS, CNN ANCHOR: President Trump heads to Puerto Rico, trying to silence critics who say the disaster response has been too slow. He's deploying resources and planning a trip next week.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Was I preoccupied? Not at all. Not at all. I have plenty of time on my hands. All I do is work.

(END VIDEO CLIP)

ROMANS: Plenty of time on his hands. The president says he is not preoccupied with the national anthem controversy. More than two dozen tweets later, he's still not letting up on the NFL.

Welcome back to EARLY START. I'm Christine Romans.

BRIGGS: Oh, he's not done on that one by any means. I'm Dave Briggs. It is 30 minutes past the hour.

Good to see you all.

A major blow to the Republican establishment this morning, that's where we start, with Roy Moore winning the Alabama GOP Senate runoff, defeating Luther Strange who was backed up by President Trump. The race for the Senate seat vacated by Attorney General Jeff Sessions.

ROMANS: Moore was supported by former White House chief strategist Steve Bannon. The bombastic evangelical Christian was ousted twice as Alabama's chief justice. Twice he lost that job, including for refusing to follow the Supreme Court ruling legalizing gay marriage.

Moore campaigned on the platform of placing Christianity at the center of public life. BRIGGS: Moore says he spoke with President Trump who congratulated him on the victory. The president said nothing about the race as he returned to the White House late Tuesday, but he was active on Twitter deleting three recent tweets he had posted supporting Luther Strange.

For context, he didn't delete that tweet a ways back about an Iranian missile launch that never happened.

CNN's Alex Marquardt was at Moore's election headquarters in Montgomery, Alabama.

(BEGIN VIDEOTAPE)

ALEX MARQUARDT, CNN SENIOR NATIONAL CORRESPONDENT: Good morning, Christine and Dave.

Well, of course, this was a Republican primary election on the surface, but really it was about so much more than that. It was the latest in the battle for the soul of the Republican Party. Tonight's election dealt a huge blow to the Republican establishment in Washington and a significant blow to the president who of course endorsed the opponent of Judge Roy Moore who is the victor.

ROY MOORE (R), ALABAMA SENATE CANDIDATE: We can support the president. Don't let anybody in the press think that because he supported my opponent that I do not support him and support his agenda.

MARQUARDT: This was a race about the insiders versus the outsiders, the grassroots versus the establishment and, of course, the president against so many in his base.

Instead, many of the president's top supporters like Sarah Palin and Steve Bannon, the former senior adviser, came out in support of Judge Roy Moore, who's very much the outsider, someone who had never worked in Washington, someone who talked routinely about draining the swamp.

The president made it clear why he was supporting interim Senator Luther Strange at a rally in Huntsville, Alabama on Friday saying it was all about loyalty.

At that same rally and almost the same breath the president wondered allowed with Senator Strange standing not too far away whether he had made a mistake wading into this race, whether he had made a mistake supporting Senator Strange. He said that if Strange lost, he would suffer a major embarrassment. The president presumably now trying to come to terms with that embarrassment.

The president also said that no matter who won this race, that he would support him against the Democrat Doug Jones -- Christine, Dave.

(END VIDEOTAPE)

ROMANS: All right. Alex, thanks for that.

Roy Moore's win not the only body blow for Republicans. Tennessee Senator Bob Corker announcing he will not seek a third term next year. Once considered a key Trump ally, Corker traded insults with the president during the August break, but sources tell CNN President Trump had encouraged Corker to run for re-election in 2018. There has been the suggestion that Corker who chairs the Senate Foreign Relations Committee would face a primary challenge from the fair right. His decision to retire creates the first open Senate seat of the 2018 election cycle.

BRIGGS: President Trump intensifying and publicizing his personal involvement in the growing crisis in Puerto Rico. He's been criticized for a lackluster response to the devastation inflicted by hurricane Maria. Now, there's an increased urgency in the White House. The president surprising staffers by announcing he president plans to travel to Puerto Rico across that big ocean next week.

ROMANS: It's a very big ocean.

BRIGGS: Yes, very big.

(CROSSTALK)

ROMANS: -- United States and Puerto Rico.

We're told he demanded aides set up that trip after his top homeland security advisor Tom Bossert returned from the island in a meeting late yesterday with senior officials. The White House says the president made it clear there is no such thing as over-responding, ordering all elements of the government to plan for the long-term support of Puerto Rico and the U.S. Virgin Islands.

[04:35:03] And he said that the response -- his response from the administration has been great, amazing, tremendous. A lot of people he said are saying they've done a good job in Puerto Rico.

BRIGGS: They've done a lot. Everybody has been saying it.

And a much more compassionate tone from President Trump in this late night tweet. America's hearts and prayers are with the people of Puerto Rico and the U.S. Virgin Islands. We will get through this and we will get through this together.

Earlier in the day, the president found himself on the defensive, pushing back against claims that his administration fumbled the response to the hurricane relief effort.

(BEGIN VIDEO CLIP)

TRUMP: We've gotten A-pluses on Texas and in Florida, and we will also in Puerto Rico. But the difference is this is an island sitting in the middle of the ocean, and it's a big ocean. It's a very big ocean, and we're doing a really good job.

It's out in the ocean. You can't just drive your trucks there from other states.

(END VIDEO CLIP) ROMANS: The Pentagon is planning to deploy the hospital ship USNS Comfort to help with the medical crisis there and the U.S. Air Force is sending additional aircraft to Puerto Rico and the Virgin Islands to ramp up the volume of daily relief missions.

BRIGGS: A thousand miles from Miami to San Juan.

All right. The catastrophic conditions in Puerto Rico after Hurricane Maria complicating efforts to get aid to the people on the island who so desperately need it. In about half an hour, a relief flight organized by the Department of Homeland Security will be heading to Puerto Rico and CNN's Rosa Flores will be on that flight embedded with U.S. Customs. She joins us now live in Homestead, Florida.

Good morning to you, Rosa.

ROSA FLORES, CNN CORRESPONDENT: Good morning, Dave.

Well, as you know, there is so much need in Puerto Rico right now, the majority of the island without power. People are starting to go hungry, they're starting to go thirsty and hope is arriving by the planeful.

As you mentioned, we will be embedding with U.S. Customs and Border Protection agents that normally use their Dash 8 aircraft for intelligence missions. This morning, it's going to be a humanitarian mission. What's going to be on this flight, about 3,500 pounds of everything that you see around me, from water to MREs, to baby supplies.

Now, here is the schedule. That flight is scheduled to leave at about 5:00 a.m. this morning. The flight will take between three and a half to four hours. Once we arrive, the supplies will be offloaded and what will agents find there? There are desperate people at that airport who have been waiting for days, some of them fanning themselves, trying to keep cool because of the heat and the -- just the humidity conditions there.

The good news, Dave, about 28 people will be able to board the flight and come back here to the United States to the mainland. Now, those 28 people will be the families of federal employees. As you know, there are still so many people waiting there, hoping to get off of that island and hope arriving by the planeful -- Dave.

BRIGGS: Triple digit heat index there today and the Pentagon says 44 percent of Puerto Ricans lack clean drinking water.

Rosa Flores, good luck to you. Thanks for joining us.

ROMANS: Just imagine. That is an incredible percentage, 44 percent without clean drinking water.

Maria causing billions of dollars in damage in Puerto Rico, years into a recession. It has no position to bear the entire cost.

So, who can help this island? Insurance is the first line of defense, but only half of Puerto Rican homes have wind insurance and fewer than 1 percent have flood insurance. That leaves federal aid to make up the difference. FEMA funds go directly to disaster relief but FEMA's budget only has $11 billion through next year and there are two other hurricanes to deal with.

That leaves donations. Starbucks, Verizon, Google has pitched in. Many of the airlines are bringing in supplies. There are celebrities like Jennifer Lopez, for example, whose parents are from Puerto Rico. She has personally pledged a million dollars. The NFL will fundraise during Thursday's game.

But Puerto Rico's economy was in trouble before this storm. It is crippled by $74 billion in debt. Just posted the largest U.S. -- filed for the largest U.S. municipal bankruptcy in history.

Puerto Rico may have to renegotiate with its creditors. So, who owns its debt? American savers and investors own it through mutual, muni bond mutual funds, and Wall street pros through hedge funds.

This is going to take, Dave Briggs, an awful lot of really important financial leadership to figure out quickly a rescue for this -- for Puerto Rico. A lot of people have pointed out that the president is the king of debt. He knows a thing or two about trying to get out from under bankruptcy. Maybe the president could be able to use some of his negotiating skills to talk to those hedge funds and creditors and figure out a way to get Puerto Rico out from under this mess.

BRIGGS: The art of the comeback part two.

All right. President Trump doubling down on his feud with protesting NFL players, while insisting it has not slowed the administration's response to Puerto Rico.

[04:40:00] The president firing off five tweets Tuesday on the NFL anthem issue, including one last night dragging all time great sprinter Usain Bolt into the fray. Mr. Trump saying, quote, even Usain Bolt from Jamaica, one of the greatest runners and athletes of all time showed respect for our national anthem.

ROMANS: When that picture taken though? Do you know?

BRIGGS: Five years ago, five, six year ago, during an interview where he posed for the anthem.

ROMANS: Interesting. All right. Again, the president dismissing claims that he has been distracted by his fight with NFL players.

(BEGIN VIDEO CLIP)

TRUMP: I wasn't preoccupied with the NFL. I was ashamed of what was taking place because to me that was a very important moment. I don't think you can disrespect our country, our flag, our national anthem. To me, the NFL situation is a very important situation. I've heard that before about was I preoccupied. Not at all. Not at all.

(END VIDEO CLIP) ROMANS: Since Friday, he has tweeted more than two dozen times on the NFL compared to five on the situation in Puerto Rico.

BRIGGS: Not over yet, folks.

Republicans are also moving on from health care again after their latest repeal and replace efforts flamed out again. What Mitch McConnell says their future holds in store on health care in this country, next.

(COMMERCIAL BREAK)

[04:45:30] ROMANS: Welcome back.

Republicans are now turning to tax reform now that health care has fizzled out again. Senate Republicans opting not to vote on the Graham-Cassidy bill because they simply don't have the votes. Senate Majority Leader Mitch McConnell insisting the health care fight is not over, it's just on hold.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY), MAJORITY LEADER: We haven't given up on changing the American health care system. We are not going to be able to do that this week, but it still lies ahead of us and we haven't given up on that.

(END VIDEO CLIP)

BRIGGS: President Trump told House Republicans who attended a bipartisan meeting on tax reform if they failed to act on health care, he will work with Democrats. It's worth noting the House did pass an Obamacare repeal bill earlier this year, something Paul Ryan drove home yesterday in a press conference.

A Justice Department lawyer says there are no plans to extend the deadline for hundreds of thousands of young undocumented immigrants, so-called DREAMers, looking to renew their protective status. The cutoff date will remain October 5th. Federal judge hearing a lawsuit challenging the president's decision to end the program called the move heartless. He had suggested the Department of Homeland Security extend the deadline while Congress worked on a possible solution to amend the program.

ROMANS: All right. North Carolina Congressman Mark Walker apologizing after making a remark demeaning to women. Walker who chairs the conservative Republican Study Committee was addressing the group's goals at a press event when he said this.

(BEGIN VIDEO CLIP)

REP. MARK WALKER (R), NORTH CAROLINA: The accomplished men and women of the RSC and women -- if it wasn't sexist, I would say the RSC eye candy, but leave out of the record.

(END VIDEO CLIP) ROMANS: RSC eye candy. Walker is also a pastor. He says in a statement to CNN that his flippant remark was meant to be light- hearted but fell short.

The Republican Study Committee has nearly 160 conservative members, 16 of whom are women.

BRIGGS: If it wasn't sexist, he'd say that. He just said that, into a hot microphone.

ROMANS: But we'll leave it off the record.

BRIGGS: Yes, there's a mike there and cameras too.

As Maria finally fizzles, more seasonal weather is on tap. Let's get to meteorologist Ivan Cabrera for the latest forecast.

(BEGIN VIDEOTAPE)

IVAN CABRERA, AMS METEOROLOGIST: Hi there, Christine. Good morning.

Once again we're looking at a big cool-down the next few days. In fact, if you're in the Midwest, you're already feeling it. Temperatures today with cooler air settling in. We'll have high temperatures in the 60s and 70s.

But one more day of heat and it's going to be potentially record heat for nine cities across portions of the mid-Atlantic and the Northeast. The front that's going to be pushing Maria away is the one that's going to bring us cooler air and thankfully that will be the case. It is far away from the outer banks of North Carolina, but it's still impacting you there with some very gusty winds, the rip currents will continue in the next 24, 36 hours.

But for this very front, we'll push everything to the north and east, clear things out and cool this off big time across the Northeast. We'll have high temperatures. In fact, we're shaving about 10 degrees, places like Boston will go from mid-80s to mid-70s, to eventually mid-60s by the weekend.

So, these nine possible record highs. This is for one day only. By tomorrow, we'll be much cooler with temperatures tumbling there after. There you see highs by Friday once again from the 80s to the 60s.

(END VIDEOTAPE)

ROMANS: Wow. All right. Thanks for that, Ivan.

Twitter is testing a new character limit for tweets. Details on CNN "Money Stream" next.

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(BEGIN VIDEO CLIP)

[04:53:20] TRUMP: If we take that option, it will be devastating, I can tell you that. Devastating for North Korea. That's called the military option. If we have to take it, we will.

(END VIDEO CLIP)

BRIGGS: Familiar warning there from President Trump as North Korea increases its military readiness by moving fighter jets, fuel tanks and air to air missiles to a base on its east coast. The White House wrapping up the pressure on Kim Jong-un, imposing new sanctions on eight North Korean banks.

Let's go live to Seoul and bring in CNN's Paula Hancocks.

Paula, good morning to you. What's the reaction there?

PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: Hi, there, Dave.

Well, there are more moves in this economic warfare really between the U.S. and North Korea. Those unilateral sanctions that President Trump has announced, so about two dozen individuals have been targeted. These are North Koreans living in places like China and Libya and also eight banks which many of them do in fact do business with China as well. That is the key connection that the U.S. president has said, all along wanting China to do more to try to rein North Korea in and to try to stop all that cash and the revenues getting to the country to be used for the missile and nuclear program.

Now, we know there are a number of front companies that North Korea uses to try and circumvent these sanctions, so this is the latest move that the U.S. is making to try and cut off the cash. Now, we know that the Secretary of State Rex Tillerson is heading to China on Thursday and Friday potentially laying the ground work for the president's visit there in November but also to potentially talk about these unilateral sanctions. They will potentially impact China.

[04:55:00] China does business with some of these banks that have been sanctioned and certainly they are not particularly happy about these unilateral sanctions that the U.S. president announced as well, saying that anyone who does business with North Korea will be penalized as well. That puts China in a very difficult situation. So, I think there will be some tricky discussions going on over the next couple of days -- Dave.

BRIGGS: Even those bold moves by China don't seem to be slowing Kim Jong-un.

Paula Hancocks live for us in Seoul, thank you.

All right. Breaking news out of Afghanistan. A rocket landing near Hamid Karzai International Airport in Kabul as U.S. Secretary of Defense James Mattis visits that country. A spokesman for the Afghan Interior Ministry said Secretary Mattis had left the airport when the incident happened. No casualties or damage reported.

The Saudi Arabian government has finally decided to allow women to drive. Let me say that again, it's 2017.

BRIGGS: Yes. ROMANS: Women in Saudi Arabia will be allowed to drive an automobile. It's a historic day in the kingdom. A committee is now being formed to implement the decree. The government will have until next year to act on the recommendations.

BRIGGS: Of course, they still have guardian laws there. They might not have been able to do much.

The decision has huge implications for the Saudi economy and a woman's ability to work. This just the latest in a series of reforms since the rise of the 32-year-old crowned prince Mohammad bin-Salman. President Trump praising the move, calling it a positive step toward promoting the rights and opportunities of women in the Saudi Arabia. But they just got the right to vote in 2015. So, there have been too much credit.

ROMANS: You cannot have happier populations sidelined and want to be a modern economy and they're trying to diversify away from just being an oil economy. And to do that, they're going to have -- so, there's self-interest at play here too, no question.

BRIGGS: Yes, absolutely.

ROMANS: All right. Fifty-six minutes past the hour.

Let's get a check on CNN "Money Stream" this morning. Global stocks higher as investors wait on one very important thing, U.S. tax reform. President Trump unveiling the details of his tax plan today. Expect the business rate cut to 20 percent. That could potentially boost corporate profits.

Wall Street closed flat after Fed chief Janet Yellen hinted again at a December rate hike. Tech stocks rebounded. The Dow now down about four days in a row.

Equifax CEO Richard Smith may be out, but he still has to testify about Equifax's huge data breach and its botched response. The company announced Smith's sudden retirement yesterday, just three weeks after disclosing a hack that affects 143 million Americans. Equifax faces a federal investigation. Smith is set to testify on Capitol Hill next week.

Smith walks away without a bonus this year but he could eventually receive $90 million in salary and stocks. That's according to company filings. Ninety million dollars is equivalent to 63 cents for every American exposed in that breach. FYI.

Twitter is testing out twice as much tweet. For the first time in history, Twitter is changing its character limit doubling it from 140 characters to 280 characters. The company will test the longer limit on a small portion of users and then monitor the response for several weeks before making a final decision. Twitter says it hopes people will embrace the change.

What do you think? Weigh in, Dave Briggs. Do you need more room to talk? BRIGGS: I -- my first reaction was just, don't let the president be

involved in that small group, not until we resolve the North Korean nuclear situation.

I like the small character limit. You?

ROMANS: I think it makes you channel your inner Hemmingway. You have to go back and edit, edit, edit down to just the essence of what you're trying to say.

BRIGGS: It's a challenge.

ROMANS: It's a challenge I like.

BRIGGS: I like.

All right. EARLY START continues right now with the latest on the Alabama Senate race.

(MUSIC)

ROMANS: The insurgency claims victory in Alabama. Bombastic evangelical Roy Moore wins the Republican Senate runoff, leaving the GOP establishment with an air of uncertainty this morning.

BRIGGS: President Trump pivots to Puerto Rico, trying to silence critics who say the disaster response has been slow. He's deploying resources and planning a trip there next week.

(BEGIN VIDEO CLIP)

TRUMP: Was I preoccupied? Not at all. Not at all. I have plenty of time on my hands. All I do is work.

(END VIDEO CLIP)

ROMANS: The president says he is not preoccupied with the national anthem controversy, but nearly two dozen tweets later, he is not letting up on the NFL.

Good morning and welcome to EARLY START, everyone. I'm Christine Romans.

BRIGGS: And Usain Bolt is now part of the conversation.

I'm Dave Briggs.

ROMANS: Whether he likes it or not.

BRIGGS: Yes, reluctantly probably dragged into this fray.

I'm Dave Briggs, Wednesday, September 27th, it's 5:00 a.m. in the East.

Breaking overnight, a major blow to the Republican establishment. Roy Moore winning the Alabama GOP Senate runoff defeating Luther Strange who was backed by President Trump in the race for the Senate seat vacated by Attorney General Jeff Sessions.

ROMANS: Moore was supported by former White House chief strategist Steve Bannon. The evangelical Christian was ousted twice as Alabama's chief justice once for refusing to follow the Supreme Court's ruling legalizing gay marriage.