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EARLY START WITH JOHN BERMAN AND ZORAIDA SAMBOLIN

U.S. Sending Patriot Missile Batteries to Turkey; Fiscal Cliff Faceoff; Rice Out of the Running; Nuke Talks Between Iran And U.N.; 6.4 Earthquake Hits Off Coast Of California

Aired December 14, 2012 - 06:00   ET

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


CHRISTINE ROMANS, CNN ANCHOR: Breaking news this morning on the war in Syria. The U.S. now committing missiles and troops to the region.

JOHN BERMAN, CNN ANCHOR: President Obama and Speaker Boehner face-to- face. The president and speaker trying again in person to stave off that fiscal cliff.

ROMANS: Susan Rice, out of the running. The president's U.N. ambassador, she gives up on hopes to be the next Secretary of State.

Good morning. Welcome to EARLY START this morning. I'm Christine Romans. Zoraida is off this Friday.

BERMAN: And I'm John Berman. It is 6:00 a.m. in the East.

ANNOUNCER: This is CNN Breaking News.

BERMAN: We do have breaking news this morning, a major step by the United States concerning the fighting in Syria. We learned overnight that Defense Secretary Leon Panetta has signed an order sending two Patriot missile batteries to Turkey to assist that nation in defending against any military action by Syria.

Now this move was expected as the civil war in Syria destabilizes the Assad regime (inaudible). In addition, 400 U.S. troops will be deployed to operate these missile batteries. Just over the border from Syria.

CNN's Nick Paton Walsh joins us now from Beirut. Good morning, Nick. What is the latest?

NICK PATON WALSH, CNN INTERNATIONAL CORRESPONDENT: We don't know precisely where these batteries are going to be, John. But as you say, there will be hundreds of U.S. troops there to assist in the operation, two from the United States.

Germany expected shortly to approve two battery of its own with hundreds of Germans to assist their operation and also Holland contributing too. Let's give you the back story to this.

In the past few months, there have been exchanges of fire. The Syrian army accused of shelling into Turkey causing destruction, injury and death there as well. Turkey often firing back leading Turkey asking NATO, which it's a member to send this kind of assistance.

These Patriot missiles are good at taking out missile shells in the air and also potentially usable against aircraft too, but a significant move by NATO because now they have substantial hardware on that volatile border.

And, of course, you would have heard Secretary of Defense Leon Panetta's comments as well that the United States does have contingency plans in the event that they see the Assad regime preparing or using chemical weapons, John, so a significant move by the U.S.

BERMAN: That's right, hardware and also skin in the game with 400 U.S. troops. Nick Paton Walsh in Beirut this morning, thanks for joining us.

ROMANS: On to the fiscal cliff fiasco, House Speaker John Boehner and President Obama going face to face in the White House again, and the stakes could not be higher with 18 days to go until we go over that cliff.

Trigger massive tax hikes, spending cuts and the House set to go home for the holidays today. Yesterday, President Obama telephoned Speaker Boehner, asked him to meet at the White House.

Afterward, both sides called the discussion, quote, "frank" and said, quote, "The lines of communication remain open." Senior congressional correspondent Dana Bash joins us live from Washington.

Dana, House members are scheduled to break for the holidays today, but they've been told they may have to stay late, yet Speaker Boehner plans to go home to Ohio today. I mean, his spokespeople say they have airports and phones in Ohio. But where is the urgency around this?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: That is a great question. Really actually is stunning. With regard to the House, they were told that they should come back at a moment's notice, and also told -- I was informed by several Republican lawmakers not to make plans for Christmas.

So you have this meeting yesterday. It was done at the last minute by the president to try to jump start things, but as you said, both sides said that the meeting was frank, which in Washington speak, mostly diplo speak, means it didn't go that well.

I spoke to a Democratic source this morning who said there was no new information, new no offers on the table. It was just a discussion of what each side has to do to reach agreement, which is very surprising, Christine.

Given the fact that it is not a secret what both sides need to do to reach agreement. Republicans need to give a little bit more on revenue. Democrats need to give more on spending cuts and that's what they have to do. ROMANS: And if you own a small business in America, you are trying to figure out how you are going to do your payroll in the beginning of the year, software changes that take more than a couple of weeks to do so.

For some, they are assuming that we are going over the cliff because they are not going to be able to get it together in time for the first paychecks in January. You talk to two former Senate majority leaders from opposite sides of the aisle who know who've had to tussle and know how to make a deal. Tell us about that.

BASH: That's right. Trent Lott, the Republican and Tom Daschle, the Democrat, they have tussled over many things, a balanced budget in 1996, welfare reform, you name it, very tough -- tough going.

But they admit that things are very different now. The politics is a lot more divisive. But both men did predict there will be a deal, just a matter of when.

(BEGIN VIDEO CLIP)

TRENT LOTT (R-MS), FORMER SENATE MAJORITY LEADER: I feel hopeful at least that they will come to an agreement. There is an argument you don't want to make it too early because that gives people that may not be too happy more time to undermine it. So the tempo and timing is important.

TOM DASCHLE (D-SD), FORMER SENATE MAJORITY LEADER: I've heard people say in the last couple of days, Republicans and Democrats, that the time has come to put our country ahead of our party and that's really what it's going to take putting the country ahead of the party.

(END VIDEO CLIP)

BASH: Putting the country ahead of the party, again, for Democrats that means biting the bullet, saying, OK, we're going to cut entitlement spending. For Republicans it means biting the bullet.

What people on the Hill say frankly privately they say it will happen anyway to give into the president on those rate increases for the wealthiest, maybe not all the way up to pre-Bush era percentages of 39.6, maybe somewhere in between.

But again, it speaks to what we were just talking about. Everybody has a really good idea of what they need to do to come to compromise. It's just a question of where they are on the deadline and what people can swallow politically.

ROMANS: I just got an e-mail from Greg Valiary, who is a political strategist, watches Washington for business. He calls this the most incompetent, dysfunctional, gridlocked, constipated Congress ever. And he says and sure enough there's virtually no chance that the fiscal cliff deal can be completed by Christmas. Prospects are fading for a framework by New Year's Eve.

I mean, even people who are watching this, you know, for business, who have been a little more upbeat until now are saying this is just a real mess.

BASH: It is a mess. All sides are really dug in. And you know, I laugh there, but it obviously is not funny. It would be funny if it wasn't so serious. If it was a movie, you wouldn't believe it.

ROMANS: Yes, ha, ha, not funny. Ha, ha, just unbelievable. Thanks, Dana.

In the next half hour, we're going to talk about the fiscal cliff infighting within the Republican Party and the future of the GOP when we are joined by Tony Perkins, president of the Family Research Council.

BERMAN: Yes, there other big news in Washington, of course, that stunner from Ambassador Susan Rice. She's going to meet with the president today after taking herself out of the running to be the next Secretary of State.

In a letter to the president, Rice said the confirmation process would be lengthy, disruptive and costly to you and to our most pressing national priorities. That trade off is simply not worth it to our country. President Obama talked about her decision last night.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I had made a decision about who would be our next Secretary of State. There is no doubt that Susan is qualified. There are other people who are qualified as well. Her interest is in serving me, but most importantly serving the country. She has done an outstanding job. I could not be prouder with her. She will continue to be one of the top members of my national security team.

(END VIDEO CLIP)

BERMAN: Rice drew heavy criticism from Republicans over her statements after the attack of the U.S. mission in Benghazi. She said the attack, you will remember, killed U.S. ambassador to Libya Chris Stevens and three other Americans.

ROMANS: Signs of process. A nuclear arms talk between Iran and the United Nations. The two sides met in Tehran yesterday. Inspectors from the U.N.'s International Atomic Energy Agency are asking for access to the suspect Parshan Military site, southeast of Tehran. No word if they are making progress there. More meetings between the Iranians and the IAEA are expected to take place, John, in mid- January.

BERMAN: A hearse brought the remains of Jenni Rivera to a mortuary in Long Beach, California, last night. Fans lined up outside to pay their respects. Rivera's remains were identified through DNA testing. The Spanish language singer and possibly six other people were killed Sunday when a private plane crashed in Mexico. The company that owns the jet is a defendant in two lawsuits. It could be a year before the final report on this crash was ready. ROMANS: An aspiring comedian and actor killed when he fell into smoke stack on the roof of the Intercontinental Hotel in Chicago. Police say 23-year-old Nicholas Wieme was taking pictures on the hotel's famous onion shaped rooftop dome, when he became wedged in the chimney it took firefighters hours to get him, but he was pronounced dead 45 minutes after they were able to free him.

BERMAN: It's awful. All right, so not exactly political statesmanship in Ukraine's parliament, a political fight turned into a brawl. Check out this, pushing, shoving, the punches.

The scuffle apparently started after members of the opposition party accused two of their members of planning to defect to the ruling party. I guess the good news, it's intra-party bickering, not partisanship here in the Ukraine, like we have here in the U.S.

ROMANS: Wow. At least they are talking.

BERMAN: Yes.

ROMANS: If you believe the doomsday scenario in the Mayan calendar, you still have some time to squeeze in the vacation of a lifetime. "Travel Weekly" says people are flocking to the Yucatan Peninsula, not so much to witness the end of the world, but to take in celebrations, traditions and rituals marking the end of the Mayan cycle of time.

(BEGIN VIDEO CLIP)

MEL GONZALEZ, OWNER, JULAMIS HOTEL: Judging by the number of hotels being built and tour operators being created, we can tell there is a lot of expectation. A few hotels in town are giving discounts, because it's the end of the world.

(END VIDEO CLIP)

ROMANS: It is good advertising for the Mayan ruins.

BERMAN: The Mayan apocalypse turns out to be a great business strategy.

ROMANS: Look at the beautiful pictures. Some pretty beautiful stuff down there. Bottom line, even if the world ends on the 21st, it would go out with the party to end all parties.

BERMAN: That is the good news. If the world ends, I think it will be a nice party.

ROMANS: I still don't think you should spend all of your retirement money.

BERMAN: No. I think you're probably right. That's wise advice.

All right, so bullets fly as the camera rolls, coming up, surveillance video captures the moment shots ring out on a train, chilling, chilling stuff.

(COMMERCIAL BREAK)

ROMANS: Breaking news right now out of California. A powerful earthquake just hit off the coast. We're hearing that it was a 6.4 magnitude earthquake about 137 miles south/southwest of San Clemente Island, California, and about 140 miles south of St. Nicholas, California on Baja California.

Meteorologist, Rob Marciano joins us live from Atlanta. Rob, what do you have for us?

ROB MARCIANO, AMS METEOROLOGIST: Actually we've got two reports. This maybe condensed into one, but at this point, about 25 minutes ago, two reports of earthquakes. One is 6.4 as you mentioned, another is 6.1, both just off the coastline by about 100 miles or so. The smaller one, a little bit closer to the coast.

These are strong enough and certainly close enough to be felt in not only Baja California, but the San Diego area, likely the islands off L.A. and also L.A. proper here, likely no damage with this.

And also no tsunami warnings have been issued with this, typically anything below a seven is unlikely to trigger that, an active area where the Pacific plate bumps into the North American plate. So this is nothing new for folks who live in southern cal.

But anything that is over a 6 is certainly enough to wake up the masses and I'm sure our viewers have felt it this morning. A 6.4 magnitude quake and 6.1 magnitude quake, both about 100 to 150 miles just off the coastline of the California and Mexico border here just about 25 minutes ago, as we get reports from our viewers, we'll relay them to you.

ROMANS: Thanks, Rob. And, you know, if you felt this, if you felt something, can you tweet us everybody @EarlyStartCNN. Just tweet what you are seeing and if you felt anything.

Thanks, Rob.

MARCIANO: All right.

BERMAN: Other news now: Washington is still abuzz this morning from the diplomatic shocker. U.S. ambassador to the United Nations, Susan Rice, taking herself out of the running. She will not succeed Secretary of State Hillary Clinton.

She explained it in a letter to President Obama. She said, "The confirmation process would be lengthy, disruptive and costly to you and to our most pressing national and international priorities. That tradeoff is simply not worth it to our country," she says.

Foreign affairs reporter Elise Labott is in Washington and with the latest. Elise, and Susan Rice is going to meet with the president today.

ELISE LABOTT, CNN FOREIGN AFFAIRS REPORTER: She is going to meet with the president today, John. She spoke to him yesterday I'm told before she sent that letter, obviously, a very disappointing day for Susan Rice. Really, her whole life had hoped to be Secretary of State.

But I talked to some of her aides yesterday. They said she has been thinking about it for several weeks. She was up -- she thought ultimately she could be confirmed.

But, you know, after things started piling on beyond Benghazi, they did the math and they think Susan Rice had a very good record at the U.N. She was instrumental in passing sanctions on Iran, on pushing for U.S. action in Libya, and a lot of other things. And they feel this was not only a distraction for the president, but a distraction for her work at the U.N. right now.

Let's listen to what Susan Rice said yesterday about why she withdrew her name from consideration.

(BEGIN VIDEO CLIP)

SUSAN RICE, U.S. AMBASSADOR TO THE UNITED STATES: I didn't want to see a confirmation process that was very prolonged, very politicized, very distracting and very disruptive, because there are so many things we need to get done as a country.

(END VIDEO CLIP)

LABOTT: And, John, the president said and Rice's aides said that she will go back to the U.N., she will continue her work. There's a lot going on, as you know. Not just on Syria, the ongoing crisis there, but efforts to get some sanctions against North Korea and a lot of other hotspots, John.

BERMAN: That's right. And they've all made clear at the White House, that she has a role moving forward, maybe one day as national security adviser and someday possibly, as Secretary of State down the line.

As for who will be the next Secretary of State, that pick could come in the days, and there seems to be a short list of essentially one person right now.

LABOTT: One person, Senator John Kerry, who has made no secret that he wants the job, and his colleagues in the Senate have made no secret that he would be easily confirmed. You remember that as this was going on with Susan rice, a lot of people floated John Kerry's name as a suitable candidate.

John Kerry, he's the chairman of the Senate Foreign Relations Committee. He has a lot of world stature, a lot of relationships with world leaders and is really seen as someone who can do delicate diplomacy. Currently, he has in many years of the Obama administration been going out as of a kind of quasi-envoy in areas of Afghanistan, Pakistan, Syria at one point. So certainly he has the chops for the job. Over the next couple of days, we could see a nomination.

BERMAN: All right. Elise Labott in Washington -- thanks for that.

Of course, back in Massachusetts, wondering what will happen to his Senate seat. But that discussion will go on for sometime. Thanks, Elise.

LABOTT: That's right.

ROMANS: All right. Police in Philadelphia searching for two young men involved in a shooting aboard an elevated train. Surveillance video captured this confrontation between a few men who police say argued over a basketball game. That's when one of the suspects as he was leaving, turned, fired a handgun into the train. Two people are wounded there.

BERMAN: The lawsuits are starting to snowball from the spinal meningitis outbreak. The Boston area pharmacy blamed for it is facing at least 50 federal lawsuits in nine states, 37 people died and more than 500 were sickened after getting steroid injections.

The plaintiffs say the company that prepared them was negligent.

ROMANS: "The Washington Post" reports about a disgraceful treatment a disabled vet received aboard a Delta flight last week. Marine Lance Corporal Christian Brown lost both legs in Afghanistan. On the flight, he was clumsily wheeled to the back of the plane, obviously humiliated according to a fellow vet. And when others tried to have Brown moved to first class, the crew on that Delta flight refused to allow him to move up to first class. They said they had to keep the aisles clear and get the plane going.

In a statement, Delta said it's investigating the incident and holds service members in high regard.

But, clearly, another military member on that flight wrote a sort of scathing, scathing play-by-play of what and said it was just -- unforgivable.

BERMAN: A shame, a shame to see something like that.

Twenty minutes after the hour right now. One more way the fiscal cliff could cost up just one more way. Coming up, what happens to your paycheck if there's no deal in Washington.

(COMMERCIAL BREAK)

BERMAN: That is New York City, folks. We're sitting right in the middle of it now. Lovely lights of New York, the financial capital of the world.

And we're lucky because Christine is minding your, mine, all of our business this morning.

ROMANS: Mind your own business, Berman. No, I'm minding your business. Stock futures up slightly this morning, about -- worries about the fiscal cliff, they kind of persist. So, they keep undermining any kind of small gains we get.

The S&P 500 yesterday snapped a six-day winning streak because of those concerns about the fiscal cliff and despite modestly upbeat economic data on initial jobless claims and retail sales. Congress failed to reach a deal on the cliff, 2 million long-term unemployed Americans will see their federal jobless benefits disappear on that first week in January. Another million will lose them in the coming weeks. The long-term unemployed or have been out of work, those are people who have been out of work for 40 weeks or longer, they currently make up 40 percent of the unemployed population.

As you might expect, federal jobless benefits now a crucial lifeline to people who have been out of work 40 weeks or more and are quite frankly waiting for the economy to start creating enough jobs to absorb them back in.

And call it the payroll tax cliff. Of all of the tax issues being negotiated in Washington, there's one many middle class families will certainly feel. That's the payroll tax holiday. This is money that comes directly from the paycheck, right? It funds payrolls basically. If funds -- I'm sorry -- Social Security.

The last two years, workers have been paying a rate of 4.2 percent of their earnings, up to 110,000 or so into payroll taxes. In 2013, the rate is set to go back up to 6.2 percent on those wages up to, I guess, $113,000.

So, take a look at this -- someone making $50,000 will see $19 per less in take home pay per week if the payroll tax holiday goes away. It's only a small piece of the fiscal cliff puzzle. It's sort of the year end, all of the things changing. But, of course, it could affect your paycheck immediately.

The one thing you need to know about your money today? Have you noticed, have you noticed, everyone? Gas prices falling 22 straight days now and many think they're going to continue to go down the rest of the year. According to the American Automobile Association, the national average price for a gallon of unleaded falling to $3.29. That's a 4.2 percent decline since November 23rd.

Of course, good news for you hitting the road for the holidays.

BERMAN: We always complain, we complain, complain, complain, when gas prices go up, but we never say thank you. We're never grateful when they go down.

ROMANS: No, because they're still a little bit higher than they were last year at this time.

BERMAN: So you're still complaining.

All right. So does the Republican Party have a brand problem? Coming up, we're going to talk about that when we are joined by Tony Perkins, the president of the Family Research Council. We're going to be talking about the future of the GOP and much, much more.

(COMMERCIAL BREAK)