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EARLY START WITH JOHN BERMAN AND ZORAIDA SAMBOLIN

Iran Claims U.S. Drone "Captured"; Fiscal Cliff Futility; Three Storms in One Week

Aired December 4, 2012 - 05:00   ET

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


ZORAIDA SAMBOLIN, CNN ANCHOR: New this morning: Iran says they have captured an unmanned American drone after they say it came into restricted airspace. But U.S. officials say they have accounted for all the drones. We are live in the Middle East, straight ahead.

CHRISTINE ROMANS, CNN ANCHOR: In 28 days, your paycheck will get smaller. In 28 days, your taxes will go up. Coming up: a new proposal from Republicans to keep us from plunging over the fiscal cliff.

SAMBOLIN: Three storms in one week. The West Coast is getting hammered by rain. We have a live report just minutes away for you.

ROMANS: Good morning. Welcome to EARLY START this Tuesday morning. I'm Christine Romans. I'm in for John Berman this morning.

SAMBOLIN: I'm Zoraida Sambolin. It is Tuesday, December 4th. It is 5:0 a.m. in the East.

And we begin with breaking news. Iran claiming it has captured a U.S. drone. This is video from state television in Tehran. It shows two revolutionary guard commanders examining what appears to be an intact ScanEagle drone. We don't know if it's the one that they claim they captured.

But just moments ago, a U.S. defense official told our Barbara Starr, quote, "The U.S. Navy has fully accounted for all unmanned vehicles operating in the Middle East region."

Reza Sayah is following the very latest developments and he joins us on the phone now. He is in Cairo.

And, Reza, a U.S. source says that if the Iranians do have something, it is not an actively operating U.S. Navy drone. So, what would that mean? Could this actually be a fake?

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT (via telephone): It could be. It's not clear right now, but Iranian officials obviously have a different story. We don't know when or how this U.S. drone was allegedly captured, but you can be sure Iran is going to count this as a big intelligence victory over the U.S.

And you can also be sure they'll use this to portray the U.S. as the aggressor in the region. That's what Iran has done for more than three decades.

Briefly, let's tell you about the reports from state media in Iran. Reports say Iran captured a drone flying over the northern Persian Gulf waters after it allegedly flew into Iranian airspace. This is a region close to Iran's only nuclear power plant. That's the Bushehr power plant.

A statement by Iran's revolutionary guard said this happened over the past few days. The statement described the drone as a U.S.-made ScanEagle. This is a short-range drone with a 10-foot wide wing span. Iranian officials claim it was spying in Iranian airspace.

Of course, U.S. officials have not confirmed this report. They say all their drones are accounted for. U.S. officials saying if Iran has a drone, it's not one of theirs. It's not actively operating in the U.S. Navy, Zoraida.

SAMBOLIN: Reza, Iran did capture a U.S. drone last December. And last month, Iran fired at a U.S. drone that it said invaded its airspace.

Will this incident escalate already tensions between the United States and Iran?

SAYAH: You know, I really don't think it will escalate things, but it certainly won't help tensions. You can take a few things away from this. First off, the U.S. continues to be very active with its drones in the region doing spy work apparently. And it certainly doesn't help the tensions. Iran and the U.S. keep going back and forth.

Iran is going to use this to bolster its position that it is the U.S. meddling in affairs of foreign countries, and it's the U.S. that's the bully in the region -- and back and forth they go. I really don't think this is going to escalate things between them.

SAMBOLIN: All right. Reza Sayah live in Cairo for us -- thank you very much.

ROMANS: All right. Up next this morning, fiscal cliff futility. In 28 days, crippling tax hikes and spending cuts become a painful reality for nearly every American if a deal doesn't get done.

Republicans are offering up a counterproposal to what the President offered -- a counter proposal that calls for $2.2 trillion in deficit savings over the next decade. It includes $800 billion in tax reforms, $600 billion from Medicare reforms and $600 billion in spending cuts.

Because it doesn't contain tax hikes for the wealthiest Americans or specifics about which deductions or loopholes will be eliminated, the President immediately rejected this Republican proposal.

Want to know how far apart Democrats and Republicans are? Listen to this.

(BEGIN VIDEO CLIP) SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: I think we're going over the cliff.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: It's unfortunate the White House has spent three weeks doing basically nothing.

TIMOTHY GEITHNER, TREASURY SECRETARY: What we can't do is sit here trying to figure out what works for them.

BOEHNER: The President's idea of negotiation is, roll over and do what I ask.

GRAHAM: It's pretty clear to me they made a political calculation.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: If their ideas are different from ours, we can't guess what they are.

GEITHNER: Basically, (INAUDIBLE).

CARNEY: We look forward to the time when they are specific.

UNIDENTIFIED MALE: They need to be more specific.

CARNEY: Some specificity from Republicans.

UNIDENTIFIED MALE: Some of their specifics.

BOEHNER: I looked him and said, you can't be serious.

UNIDENTIFIED MALE: Haven't even begun to be serious.

BOEHNER: We need to get serious.

GRAHAM: I don't think they're serious.

BOEHNER: I would say we're nowhere, period. We're nowhere.

(END VIDEO CLIP)

ROMANS: Brianna Keilar is live in Washington.

And, you know, I was in your fair city yesterday. And it was grim -- to talk about fiscal was grim and no one is making New Year's Eve plans because a lot of people think this will be a real clincher.

What about the Republican plan? How does it differ from the White House proposal? Where are these two sides right now?

BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: Well, looking at sort of the big headlines from Speaker Boehner's plan, $800 billion, as you mentioned, in tax reform savings. So, this is the new tax revenue. This is the amount, $800 billion. This would be through closing loopholes, not through increasing tax rates, which Republicans remain opposed to.

And then also, the $600 billion in health savings, that is the entitlement reform, that's Medicare cuts and other spending cuts to entitlement programs.

Now, take a look at how this compares to the White House plan -- $1.6 trillion in new taxes, which is two times the amount of revenue in Speaker Boehner's counteroffer. And also, $400 billion in cuts to Medicare and other entitlements. So, that's $200 billion less in cuts to entitlements. Also asking Congress to give up its authority on the debt limit vote, to have a very long debt limit vote, which is a non- starter for Republicans. They obviously like to have that power.

The White House dismissing this, Christine, as nothing new. They're saying it lacks specifics, as you heard in sort of conglomeration of sound bite there's, because Speaker Boehner doesn't outline exactly what deductions he would target. He doesn't outline his entitlement cuts.

But there's a lot of lacking specifics on both sides.

ROMANS: And, you know, both plans propose entitlement cuts. Neither have given specifics. The GOP plan does call for an increased in tax revenue, Brianna, but no specifics on where that will come from.

How much of this is real negotiation? How much of it is politics? And in the game of politics, who is winning here?

KEILAR: Most of this is politics. The White House and congressional Democrats have the upper hand here and certainly feel that they do. It's a question of how much of the upper hand. But here's why they hold more cards, because when you ask people, this is a recent poll that was done.

When if you ask people how should you increase tax revenue? Twenty- one percent said reduce tax deductions, which is what Republicans are proposing. Twenty-nine percent said increase tax rates. Thirty-nine percent said do both. So, you got seven out of 10 people who are saying increasing tax rates should be part of how you increase revenue, which is what Democrats are talking about, what the White House is talking about.

And here's why you are not hearing specifics on entitlements, and why this is so tricky, and why you're not hearing it from both Democrats and Republicans. When you ask people what should you not be cutting spending on? Seventy-seven percent say Social Security, 80 percent say Medicare. So, that really shows you how tough it is to stake out a position on entitlement reform here.

But Republicans are saying the White House and congressional Democrats are overreaching here. But the fact is they're coming from an inferior bargaining position and they are trying to get everything they can here in the next few weeks.

ROMANS: All right. Brianna Keilar, thank you, Brianna.

SAMBOLIN: It is eight minutes past the hour.

The rain and flooding are relentless in northern California. Three storms in less than a week and at least one death attributed to those storms. And more rain is expected today, I am sad to report that.

Meteorologist Rob Marciano is following it all from the CNN weather center in Atlanta. A lot of rain headed their direction, Rob?

ROB MARCIANO, AMS METEOROLOGIST: Yes. Well, not as much as last week, but the ground is already saturated, Zoraida. You see, you're seeing some of the pictures that you just show there, especially just north of San Francisco, across northern California, into southern Oregon.

Napa Valley has been getting hit hard. The Russian River up and over its flood banks. ands now, they will ease back into the riverbeds, but with additional rainfall expected today, it may go back into flood stage there. So, flood watches are back up where warnings have eased that past couple of days. There you see the latest video showing a couple of glimmers of sunshine, that was short-lived yesterday.

All right. How much rainfall have we seen in the last few days? In a six-day total, almost two feet of rain at Mount Shasta. My goodness. Sterling City seeing 21 inches of rainfall. Sims, California, 17.9. You've got the picture. This is tremendous rainfall for a non- tropical area. It has a tropical connection, because it's coming from the direction of Hawaii, but we're still talking about a mid and northern latitude situation.

Seattle and Portland seeing some rain, snow at the higher elevations. If anything is a saving grace, it's a little bit cooler this go- around, so some of that moisture getting locked up in higher elevations in the form of snow.

And look at the rainfall right now, is mostly well north of San Francisco and just to the north of Napa Valley. So, this is going to sink a little bit further south. We'll get another punch, a little piece of energy later on today that will, kind of, spin up across the Bay Area and that will intensify the rainfall. That's what we're going to be watching very closely.

Our computer models highlight that. One pulse to the north, and another one kind of fills in as we go a little bit further to the south. But it shouldn't be nearly what we saw last week.

But again, the ground is saturated. Rivers are swollen. So, it's not going to take much to get more in the way of some flooding.

Once we get past that, though, Zoraida, we are looking at a fairly dry scenario going over the next few days. So, today is the day. Then tomorrow we'll hopefully be breathing a sigh of relief.

SAMBOLIN: Yes, a little good news headed their way. Thank you, Rob. Appreciate it.

MARCIANO: You got it.

ROMANS: This morning, intense fighting in Syria outside the city of Aleppo. Rebel fighters trapped hundreds of government soldiers inside a military base and say they are giving them a chance to defect. This as President Obama warns Syrian President Bashar al Assad that there will be serious consequences if he uses chemical weapons against his own people.

Last night on "OUTFRONT", Peter Brookes, a former Deputy Assistant Secretary of State, spoke about the dangers of the Assad regime.

(BEGIN VIDEO CLIP)

PETER BROOKES, FORMER DEPUTY ASSISTANT SECRETARY OF STATE: This regime is a real problem for us. Its alliance with Iran, its possession of chemicals -- chemical weapons, weapons of mass destruction. Its human rights record, its support of terrorism.

You know, this is a regime we would like to get out of the way. We don't want to see it replaced with people we don't support either.

(END VIDEO CLIP)

ROMANS: The Syrian foreign ministry denies they have plans to use chemical weapons.

SAMBOLIN: The family of Jovan Belcher is speaking publicly for the first time since he fatally shot his girlfriend and killed himself. Belcher's sister and uncle stood by his aunt as she spoke outside the home where the football star lived with 22-year-old Kasandra Perkins and their 3-month-old daughter.

(BEGIN VIDEO CLIP)

MARY KIMBLE, BELCHER'S AUNT: We will cherish the wonderful memories we have of Jovan and pray those memory also bring us peace as we grapple to understand the unpredictable and tragic ending of his life and the life of Kasandra Perkins.

(END VIDEO CLIP)

SAMBOLIN: Kansas City police confirmed that the gun used by Belcher was purchased legally. Belcher's mother has been given temporary custody of the couple's daughter, Zoe.

ROMANS: New evidence coming to life in the Trayvon Martin investigation. A picture of suspect George Zimmerman released by his attorney, reportedly taken by a police officer the night Zimmerman shot and killed Martin. The bloody picture itself isn't new, but the fact it's a high resolution color photo is. Zimmerman's attorney says it gives the case more contexts.

(BEGIN VIDEO CLIP)

MARK O'MARA, GEORGE ZIMMERMAN'S ATTORNEY: Is it devastating? No. But it's just one piece of evidence that shows what George was going through that night and why he reacted the way he did.

(END VIDEO CLIP)

ROMANS: Zimmerman faces a second degree murder charge for killing Martin back in February. Prosecutors say Zimmerman profiled and pursued Trayvon.

SAMBOLIN: It is 12 minutes past the hour.

Let the speculation begin. Will and Catherine are expecting a baby. But what happens if they have twins? What happens if they have a boy and a girl? We talk succession coming up.

Plus, an ambulance gets a boot while on an emergency call. I am not making this up. Find out why after this quick break.

(COMMERCIAL BREAK)

SAMBOLIN: Welcome back to EARLY START. It is 16 minutes past the hour.

Britain is buzzing this morning with news that a royal baby is on the way. Buckingham Palace made all the rumors official yesterday, announcing that Catherine, the Duchess of Cambridge, and wife of Prince William, is expecting their first child.

Senior international correspondent Matthew Chance is live in London for us. Good morning to you, Matthew. I know that it is all the buzz.

So, we know the duchess is less than 12 weeks pregnant. The royal family was forced to announce the news early after she was taken to the hospital for acute morning sickness.

What's the latest on their condition?

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, we have not had any updates, Zoraida, on her actual condition. She is still in this hospital behind me, in King Edward VII Hospital in central London. She is starting her second day in bed there. She is expected to be there for the next several days with that acute morning sickness involving nausea and vomiting.

Generally, the risks associated with it have to do with dehydration. So, the understanding is she'll be getting fluids to deal with that intravenously.

In terms of latest visits we are hearing about, we understand that, of course, her husband, Prince William, came last night. He is expected to turn up any moment now as well to see his wife inside this private hospital.

Of course, you're right, a lot of -- a lot of excitement around the country and around the world as well about this news. Let me show you some of the newspapers that are coming out this morning.

This is the best selling daily newspaper in Britain, "The Sun", saying Kate's expectations, reference that the child will become the monarch. That's what we're dealing with here, the child, whether it's a girl or a boy that's given birth to in several months from now will go on potentially to be the heir to the throne in Britain. Another paper here, "The Daily Mail", saying "A Nation's Joy, A Husband's Nerves," referencing to the fact that Britain is very joyful. That was a nervous Prince William there pictured coming out of the hospital last night.

Finally, just briefly, Zoraida, this headline in "The Daily Telegraph". Interesting, "Could it be twins for Kate?"

SAMBOLIN: Yes.

CHANCE: The possibility of some kind of multiple birth for Kate, a lot of rumors about that. "The Daily Telegraph" just one of those papers hoping to spread that rumor.

SAMBOLIN: OK. You know what? I'm going to stay on that rumor then. Could it be twins? I've read perhaps even triplets, and part of the reason is because severe morning sickness sometimes is associated with having multiple births.

So, what I want to know -- have there been multiple births for the royal family, in their history, or for Middleton's family?

CHANCE: I mean, it goes back a long way. Of course, I'm sure there will have been in the past. I'm not familiar with actual incidence of multiple births in the royal family or the Middleton family either.

But you're absolutely right, I mean, one thing that points to multiple birth is this very severe morning sickness. It doesn't mean there will be one, but it's one of the indications that there could be the possibility of a multiple birth.

We'll get an update on her condition, perhaps an update on the state of her pregnancy as well later on in the day.

SAMBOLIN: All right. Matthew Chance, live in London for us -- thank you very much. Appreciate it.

And coming up in the 7:00 a.m. hour of "STARTING POINT", Soledad O'Brien talks to British former prime minister, Tony Blair.

ROMANS: All right. It is 19 1/2 minutes in the morning. Time for your "Early Reads" -- a look at your local news making national headlines this monring.

The "Sacramento Bee" reports a federal judge is barring the state of California from enforcing its new law banning day conversion therapy. Two mental health providers and a former patient are suing to overturn the ban. Judge William Shub ruling the First Amendment rights of mental health professionals outweigh concerns about the concerns of potential dangers associated with their practices. The judge's injunction will remain in place until the lawsuit is resolved.

SAMBOLIN: All right. A New Orleans man has been fired from his job at a convenience store and he's facing a criminal citation if you can believe it. Police say he booted an ambulance that was responding to an emergency call for a man with chest pain. Well, it turns out there is a sign at the store which warns that vehicles left unattended in the parking lot will be booted.

Police say the man claims he did not know the vehicle was an ambulance when he put the boot on it. There's a picture of it, right? So, it's pretty clear to us that it is an ambulance. But this guy is not from this country. So, he is telling police officers I had no idea that this was an emergency vehicle. At least, that is his excuse.

And this particular place enforces that you cannot be in there more than 10 minutes without being booted. So, he was doing his job.

ROMANS: Like four layers to that story.

SAMBOLIN: Yes.

ROMANS: All right. Coming up, amazement and dismay, that's how FedEx's CEO is describing the fiscal cliff crisis. I sat down with Fred Smith -- hear what he has to say and how other CEOs are also responding.

(COMMERCIAL BREAK)

SAMBOLIN: Twenty-four minutes past the hour. Welcome back to EARLY START.

We are minding your business. U.S. stock futures are up slightly as of now, but there's a lot of volatility in the markets because of the gridlock in Washington over this fiscal cliff.

And, Christine, you had a behind-the-scenes look yesterday at what's happening.

ROMANS: Right. Well, I went to Washington. I interviewed the CEO of FedEx yesterday about the fiscal cliff, and also about energy security and some other things. But along the lines of the fiscal cliff, there were a lot of people at this event, Gene Sperling, an adviser to the president, Roy Blount, who's a Republican senator from Tennessee, there as well.

People are grim right now about where we are on the fiscal cliff. I asked Fred Smith, the CEO of FedEx -- look, he employs people. He is shipping packages. He cares about the price of oil, price of energy, and he cares about the clarity of what's happening in Washington.

Listen so what I asked him.

(BEGIN VIDEO CLIP)

ROMANS: As a CEO, when you're watching the fiscal cliff -- I mean, how do you make decisions? Is it irrelevant to your business if we go over the fiscal cliff? I mean, how does a CEO look at what's happening in Washington and decide for next year?

FRED SMITH, CEO, FEDEX: Well, I think most of the CEOs look at the situation in Washington with complete amazement and dismay to be frank about it. The problem is the ideological pinnings on both sides of this argument are so difficult to bridge that it's going to be hard for them to get a deal.

(END VIDEO CLIP)

ROMANS: He also said that they're fighting the wrong fight. I asked would you be willing to pay higher taxes yourself? Warren Buffett says he thinks rich should pay higher taxes. He said, Christine, the fight should be about the corporate tax rate, about lowering taxes for corporations, doing things to goad corporations into spending money and into hiring, and, you know, into really building out their business -- not just for small business but for big business, too. That's what the argument should be.

The argument over tax rates for the rich is the wrong fight to be having here right now.

SAMBOLIN: I'll tell you what worries me about this. It's something that you said early on, you said these big CEOs like Fred Smith are going to make decisions as we get closer and closer to the fiscal cliff, because if we go there, even if we don't go there, they are going to have to kick in some of these changes. Do you get a sense that they were already prepared for it and already making those changes?

ROMANS: I'll tell you that in the GDP, the third quarter GDP report from last week, I saw that company spending on equipment was down almost 3 percent in the quarter. That's something you usually only see in a recession.

So, what that tells you is companies are putting off decisions waiting for Washington to get it. And I didn't get the sense yesterday, there were high-level Hill aides and, you know, people advising the President and senators and Republicans about this, I didn't get the sense anyone was optimistic.

SAMBOLIN: Oh, my goodness. Well, thank you for sharing.

ROMANS: You're welcome.

SAMBOLIN: Twenty-seven minutes past the hour.

Every time you send a text message, it could soon be recorded and it could be stored for two years. Up next, we'll tell you about new legislation proposed by some law enforcement agencies.

How do you like that?

(COMMERCIAL BREAK)