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EARLY START WITH JOHN BERMAN AND ZORAIDA SAMBOLIN

Winter Storm Pounds Midwest; Fiscal Cliff Stalemate; Fallout from Benghazi Report

Aired December 20, 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: Can you bear me singing? Dashing through the snow, in blizzard like conditions. It is holiday travel, folks, that's threatened by a blizzard, dazzling through parts of the Plains and the Midwest.

JOHN BERMAN, CNN ANCHOR: You have to put up with the snow and the singing.

SAMBOLIN: I know.

BERMAN: Meanwhile, butting heads over the fiscal cliff -- the once promising talks bogged down again with less than two weeks to go.

SAMBOLIN: And getting to the bottom of the Benghazi fiasco. Four at the State Department out of the job, with the hearings set to start in a matter of hours from now.

Good morning you to. Sorry about the singing this morning. Welcome to EARLY START. I'm Zoraida Sambolin.

BERMAN: And I'm John Berman. It's 5:00 a.m. in the East. She's been singing all morning.

We're going to begin with this storm, the cause behind all the singing. It is a big one. It is pounding the nation's midsection and threatening to really derail holiday travel plans for millions of Americans. What bad timing. A blizzard warning in effect for half a dozen states throughout the Midwest and Great Plains.

Colorado has already been clobbered. A 156-mile stretch of Interstate 70 had to be shut down in both directions yesterday. Look at that.

The storm is also hitting Iowa hard overnight, packing wind gusts over 50 miles an hour. The wind part of the real problem here. Some places could see a foot of snow or more. Emergency management officials as far north as Wisconsin offering this advice to early Christmas travelers.

(BEGIN VIDEO CLIP)

TOD PRITCHARD, WISCONSIN EMERGENCY PREPAREDNESS: I think the first thing you should think about is changing your plans for Thursday.

(END VIDEO CLIP) SAMBOLIN: Oh no.

BERMAN: You know, a lot of people getting on the road I think today and tomorrow --

SAMBOLIN: Yes.

BERMAN: -- for the Christmas season. So, they're going to have to deal with this.

SAMBOLIN: And traveling with kids, you know, the delays start at airport, no fun.

BERMAN: Look it could be sunny and 70 degrees and traveling with a kid ain't easy.

But it's so bad in Wisconsin that the governor there has already issued an executive order declaring a state of emergency before the storm even arrives.

Let's go now to meteorologist Alexandra Steele who is tracking this storm from the extreme weather center in Atlanta. Alexandra, what does it look like this morning?

ALEXANDRA STEELE, AMS METEOROLOGIST: Oh, good morning. You know, of course, Colorado yesterday, Texas yesterday, the roads be it the wind storms or whatever we saw. Today, it's I-80 through Iowa. Iowa will be virtually shut down.

Let me show you pictures from Wisconsin. You can see, of course, you heard what the governor is already doing in advance of the storm. The storm is coming in toward you, no question about that.

So what we're seeing and what we've already seen, that's where we are. Again for the most part, Nebraska is out of it. But Hastings already eight inches on the ground. But this is really -- this was phase one of the storm. We're getting into phase two of the storm which means more snow and incredibly stronger winds.

So eight inches in Hastings. You see in areas of Iowa, but seven inches. But Iowa will se an incredibly rough day.

Here's where the blizzard warnings are. Mind you, we're going to see a virtual shutdown of the state. The snow will be coming down. Winds will be gusting to 50 miles per hour.

Here's what we're expecting, six to 12 inches of snow. And then into Green Bay, northern Wisconsin could see a foot-plus in terms of snowfall. So, incredibly amount of snow today. More than we saw yesterday. And the winds will be so much more powerful.

Places like Chicago, a rainy start. But then late this afternoon and into tonight, we're going to see a change over from that rain to snow. And then look at this tight pressure gradient. It winds up and you can see, guys, the closer those lines are, the lines of equal pressure, the stronger the winds. So, the winds we've already seen have been strong. But the winds, the strongest yet to come. So, today, the Midwest will be incredibly hard hit, guys.

BERMAN: What day does it get out east, Alexandra?

STEELE: It gets to the East Coast before the weekend, actually. So, today, we're fine, into Friday night and Saturday night. But it moves quickly and it's just a rain maker.

BERMAN: All right. Alexandra Steele in Atlanta, thanks very much.

STEELE: Yes.

SAMBOLIN: I know we were laughing about it, but all of this creates that black ice and, you know, really, really treacherous driving conditions. So, folks, be careful out there.

All right. So what happened? What happened to the progress on the fiscal cliff negotiations? It is 12 days to go and a political stalemate has set in.

President Obama and House Speaker John Boehner appear to be digging in heals. The president has challenged Republicans to stop trying to best him and, quote, "take the deal". Meantime, the speaker intends to put his Plan B up to a vote in the House today. It would extend the Bush era tax cuts on incomes up to $1 million.

So, if it passes and some Senate Democrats block it, as is expected, Boehner says the president becomes responsible for the tax hikes that kick in when the nation goes over that fiscal cliff.

CNN political editor Paul Steinhauser is in Washington this morning. Your job is to explain al of this to us.

PAUL STEINHAUSER, CNN POLITICAL EDITOR: It really seems, Zoraida, like in a way, they're playing a game of political chicken right here. You heard the president and the House speaker yesterday come in front of cameras within two hours of each other. And both people, both men, were really talking against each other.

It was not very optimistic. You're right, optimism of earlier in the week seems to have dissipated. Take a listen to what both men said.

Well, we don't have that sound, unfortunately. But both men are really talking against each other there, Zoraida. Here's the sound.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: The president's offer of $1.3 trillion in revenues and $850 billion in spending reductions fails to meet the test that the president promised the American people a balanced approach. And I hope that the president will get serious soon about providing and working with us on a balanced approach.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: At some point, there's got to be, I think, a recognition on the part of my Republican friends that, you know, take the deal. You know, they will be able to claim that they have worked with me over the last two years to reduce the deficit more than any other deficit reduction package.

(END VIDEO CLIP)

STEINHAUSER: The president made his comments after an event on gun control after an announcement on gun control. Mr. Boehner, his news conference, Zoraida, lasted 56 seconds. He stormed off after making his comments.

The question today, Mr. Boehner, does he have the votes for plan B? Also, where do the negotiations for a wider settlement stand? Of course, if there is no agreement by the end of the year, as you mentioned, the country falls of the fiscal cliff, which means higher taxes for all Americans and massive spending cuts -- Zoraida.

SAMBOLIN: Well, the other question is: how do Americans feel about this? And you have brand new poll numbers to share with us. I can only imagine.

STEINHAUSER: We do have brand new poll numbers. And CNN/ORC, this is a national poll coming out, right now at this hour. As other polls indicated, Americans are siding more with the Democrats.

Take a look at this. Which party should compromise more to get a wider deal, to get bipartisan solutions? More people say the Republicans should compromise than the Democrats.

And who would be more responsible if the fiscal cliff occurs? The so- called blame game. Once again, more people would blame Republicans, 48 percent say Republicans in Congress would be to blame, 38 percent say the president, 11 percent, as you can see, say both sides would be at blame.

SAMBOLIN: Again, 12 days to go before that fiscal cliff.

Paul Steinhauser, live in Washington, thank you.

BERMAN: Some other big news in Washington right now. Today, they're dealing with the fallout from that report on Benghazi. One State Department official has resigned, three others on disciplinary administrative leave, after an independent review cited systemic failures in leadership and management deficiencies. Two State Department officials are set to testify before House and Senate Committees at 8:00 a.m. Eastern time this morning.

And we now know that next month, Secretary of State Hillary Clinton will testify before the House Foreign Affairs Committee about the attacks on Benghazi as one of her advisors told the chairwoman of the panel. Clinton is said to be feeling better after suffering concussion in a fainting spell.

SAMBOLIN: That's good news.

Seven minutes past the hour. In the wake of the Newtown school shooting tragedy, President Obama is now declaring a gun control or that gun control is a central issue of his second term. The president promising to submit sweeping new proposals to Congress by next month, insisting once again that he will use all the powers his presidency to push through meaningful reforms.

(BEGIN VIDEO CLIP)

OBAMA: The vast majority of responsible law abiding gun owners would be some of first to say that we should be able to keep an irresponsible, law breaking few from buying a weapon of war. I'm willing to bet that they don't think that using a gun and using common sense are incompatible ideas.

(END VIDEO CLIP)

SAMBOLIN: He also said that the dialogue, he'll have dialogue but he's not going to have a lot of dialogue. He's going to start pushing things through very quickly.

Vice President Biden has been tapped to spearhead to push new gun control laws through Congress.

BERMAN: He wants them back next month.

South Korea elected its first female president. Ruling party candidate Park Geun-hye, she's the daughter of a former military dictator who led South Korea in the '70s. Park is promising greater engagement with North Korea.

SAMBOLIN: It is show time for UPS. The courier says today's peak shipping day will be the busiest in its history. The men and women in brown will deliver 28 million packages in the United States. That's about 300 parcels every second, folks. Tomorrow is the deadline to make sure your gift arrives by Christmas.

BERMAN: You know, it feels like they're probably shipping a lot of coal to Washington right now, with this fiscal cliff thing.

(CROSSTALK)

BERMAN: Check your stockings there in Washington for that.

It is nine minutes after the hour. Detectives investigating the Newtown school shooting, retracing the steps of the gunman's mother in the days before the attack. We'll tell what you they found, coming up.

SAMBOLIN: Plus, the new trend among America's teenagers that you parents are going to -- us parents are going to want to hear about.

(COMMERCIAL BREAK)

BERMAN: We have some new details this morning about the days leading up to the Newtown massacre. Friends of Nancy Lanza, the shooter's mother, saying she was in New Hampshire taking a mini-vacation at a hotel. That's about a four-hour drive from Newtown. That was in the days before the attack. They say she felt comfortable enough to leave her son Adam Lanza alone for three days. The morning after her return, she was dead.

I want you to take a look at this photo. It's one that's really sad. It's all but one of the students in this first grade class picture, they were killed, all but one -- another reminder of the enormity of this tragedy.

And there is no end to the outpouring of emotions. Some 3,000 people gathering in Western Connecticut University to mourn and honor all of the victims.

Sandra Endo is in Newtown this morning, following the developments. And, Sandra, more victims being laid to rest today.

SANDRA ENDO, CNN CORRESPONDENT: That's right, John. Five more funerals today for the victims of the Newtown shooting. Three children and two adults: 6-year-old Allison Wyatt, 6-year-old Benjamin Wheeler, 6-year-old Catherine Hubbard and teachers Lauren Russeau and Ann Marie Murphy will be laid to rest today.

And being here for several days now, John, we have seen processions and funeral arrangements and these rituals have become a way of life here in Newtown and very sad. You can see the private pain becoming very public shared grief for this community and being felt around the country, actually, as more and more people come to Newtown to pay their respects.

You mentioned a big tribute last night. Three thousand people gathered in a neighboring town to memorialize the victims of this tragedy. They came together, trying to be uplifting, to offer comfort and support for the residents here in Newtown.

But, again, these funeral processions coming through town has unfortunately become a way of life here and will continue for days to come -- John.

BERMAN: And tomorrow, Sandra, of course, is the one week anniversary of the shooting. What's being planned for that?

ENDO: Well, obviously, it's going to be a very sad day for residents here as they remember the exact time, 9:30, when those gun shots rang out at Sandy Hook Elementary. And to commemorate that moment in time, we understand that church bells across this area will ring 26 times, 20 times for the children who were killed and six times for the teachers and the staff and the faculty members who died in that tragedy.

So, again, a very important moment for this town as they reflect on what happened here a week ago.

BERMAN: That's right. Another day of reflection, another somber moment for Newtown, Connecticut. Sandra Endo, thanks very much.

SAMBOLIN: Coming up a little bit later, I have a story. Three of the little girls that were killed attended this dance studio. And these teenagers actually taught them dance classes and summer classes.

And so, they wanted to remember the girls in a positive light. And so they share all these amazing stories. We're going to bring that to you shortly here.

It is 15 minutes past the hour. Let's get you up-to-date. Christine Romans has this morning's top stories.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: And the top story, weather, you guys. The season's first major winter storm dumping a foot snow, up to a foot of snow in the Midwest and the Great Plains.

A live picture to you from our affiliate WISN in Milwaukee. Also a stretch of Interstate 70 had to be shut down in both directions from Colorado to Kansas. A blizzard warning is in effect in half a dozen states.

In a rare move, President Obama phoned the Secretary of Army to personally express concern about reports of abuse at the daycare center at Ft. Myer in Virginia. This week, two workers at that facility were charged with assaulting a child.

And a review of all the workers there found several with questionable backgrounds including records of sexual abuse of a minor, sexual assault, and assault. An annual survey of drug abuse among teenagers finds that marijuana use leveled off after rising steadily in that age-group for four years in a row. For example, the study called monitoring the future finds of 6.5 percent of 12th graders say they smoke marijuana daily. That's actually down slightly from last year.

Remember this picture of the monkey in the jacket in an Ikea earlier this month? The Canadian woman who owns the animal will be in court today trying to get Darwin back. The owner claims Toronto Animal Services seized him illegally after he got out of her car. He's been living in an animal sanctuary since then.

BERMAN: I wonder if he kept the coat?

ROMANS: A horse in Palm Beach, Florida, jumped a fence, took a dip in a swimming pool.

SAMBOLIN: Oh my.

ROMANS: Veterinarians gave the 30-year-old horse a sedative. Firefighters attached a harness to Andy and used a tow truck to lift him out of the pool. When it's all over, Andy didn't have a scratch on him. So, he had a nice refreshing dip in the pool.

SAMBOLIN: I'm sure he enjoyed every moment of it. Thank you.

(CROSSTALK)

BERMAN: -- rescuing that horse.

All right. It's 17 minutes after the hour. Time for your "Early Reads" -- the local news that's making national headlines this morning.

We're going to start with "The Tampa Bay Times". Guns were pulled off the shelves of a Loan Star Pawn Shop in Seminole, Florida, this coming after the Sandy Hook School shooting. The owner says he'll lose half of his business but he's doing this for his daughters.

(BEGIN VIDEO CLIP)

FRANK JONES, LOAN STAR PAWN SHIOP OWNER: My daughter at this point associates firearms with evil people because of what she sees on TV and what she sees at school. My conscience overrides the need to make the money.

(END VIDEO CLIP)

BERMAN: He also said he couldn't bear think about selling the gun that might end up being used in another massacre.

SAMBOLIN: And thousands of miles away, but hitting a little to close to home. "The Sacramento Bee" talks about a Marine who called himself to duty, called himself to duty to guard an elementary school in Modesto. He was responding to a Facebook post urging soldiers to be posted at every school, of course, in the wake of last week's tragic shooting.

Another retired marine dug his fatigues out of the attic and answered the call in Tennessee, guarding a grade school where his son and daughter attend. He wasn't getting paid and he was not armed. Several parents came up thanking him for his service and for stepping up to make the children feel safe.

BERMAN: It is a statement though, that has come to this.

SAMBOLIN: Yes. I know. I know. But I'm grateful that they're doing.

For an expanded look at our top stories, head to our blog, CNN.com/EarlyStart. Can you also follow us on Twitter and, of course, on Facebook. Just search for EarlyStartCNN.

BERMAN: And as our leaders in Washington bicker at the edge of the fiscal cliff, your tax returns hang in the balance. Find out what happens to them if there is no deal. We'll tell you about it coming up. It ain't pretty.

(COMMERCIAL BREAK)

SAMBOLIN: We are minding your business this morning. Good morning, New York. Look at that great shot. Grab your cup of coffee, come on over.

After two strong days of gains, U.S. markets closed a little lower yesterday. And U.S. stock futures are down this morning as fiscal cliff talks stall in Washington.

BERMAN: So here's the deal. You can see a delay in getting your tax refund next year unless Congress moves on the fiscal cliff soon. This is going to hurt all of us.

Christine has details.

ROMANS: I mean, we're already there, you guys. I mean, tax season starts in a couple weeks. You're going to start getting 1099s at the end of January and you've got companies -- the government can't change in just one week or two weeks.

If you're talking about having to make retroactive tax changes -- I mean, it's really a mess. I want to talk about the AMT in particular here, because, you know, the IRS acting director has warned Congress about a real problem with not passing an AMT patch.

If the AMT patch goes away, every year, we patch this AMT. AMT, of course, was meant to make sure that rich people paid a minimum amount of tax now because of the way Congress designed it in the infinite black wisdom. It gets a bunch of middle class people every year. There is a patch to make sure you don't get slammed with AMT. Thirty million more people would pay the AMT and $100 million tax refunds would be delayed.

The IRS acting director, Stephen Miller, sent a letter to the House and Senate. Tax writers saying this is going to be unexpectedly higher taxes for many taxpayers who simply aren't aware of their new tax liability. It will be a total and complete mess -- 100 million tax refunds delayed, 30 million more people have to pay the AMT.

BERMAN: So, that is a mess. I want to shift gears here, because you've been looking into the business of guns all week. There is just fascinating stuff going on.

ROMANS: A billion dollars in profit this year. One forecast: a billion dollars in profit this year for this industry. I can't overstate how big, powerful and profitable it is to make the guns you're looking at on your screen.

The traditional bolt action rifles and guns you think as a big part of the industry, the fastest growing part of the market are these so- called sport rifles. There is a coolness and hipness factor in owning the military style rifles. And there is huge soaring demand for those.

There are more gun shops in America than there are supermarkets and McDonald's restaurants locations combined. Think of the impact of this part of the -- you don't talk about it every day. It's a huge industry. It is prevalent.

I was -- when we were putting the statistics together, I was thinking, I see McDonald's everywhere. I don't see gun shops everywhere. But I'm not necessarily looking for it, you know?

I mean, it's just a pervasive part of the American culture. We are the leader in guns. We own more guns than any other country in the world. And we lead the world in gun violence as well.

Gun stocks yesterday by the way bounced back. I told you they were three hard days for the gunmakers. Yesterday, investors said these have been punished enough. And now, we see value again in these stocks, in part because sales are up. It's been a 10-year trend of rising sales. And sales right now are up as people: (a), want to protect themselves and, (b), get ahead of any kind of what they think could be restrictions coming down the line. So, big bounces back for those stocks.

You know, I told you yesterday, the Smith & Wesson had a record second quarter for profit.

SAMBOLIN: Right.

ROMANS: When you look at gun sales over the past decade, as the economy moved side ways, gun sales have been up, up, up. It's been a really, really powerful industry and a profitable, profitable industry.

Investors will make $1 billion, investors and manufacturers a billion dollars this year.

BERMAN: A lot of money.

ROMANS: A lot of money.

BERMAN: Thanks, Romans.

SAMBOLIN: Twenty-six minutes past the hour.

Remember Tim Tebow?

BERMAN: Who?

SAMBOLIN: Yes, well. The New York Jets seemed to have forgotten about last year's NFL sensation. We're going to take a closer look coming up. I feel bad.

(COMMERCIAL BREAK)