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STARTING POINT WITH SOLEDAD O'BRIEN

Hillary Clinton to Testify Before Congress; Interview with Congressman Ed Royce; U.S. Housing Market Improves

Aired January 23, 2013 - 07:00   ET

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


SOLEDAD O'BRIEN, CNN ANCHOR: Good morning. Welcome, everybody. Our STARTING POINT this morning: a deep and deadly freeze. Bitterly cold temperatures across much of the country today. Four people are dead. The question is, will the freeze loosen its grip any time soon? We got a live report, just ahead.

And then, the long-awaited testimony from the Secretary of State Hillary Clinton. What did she know about the attack on the U.S. consulate in Benghazi? What will the fallout be?

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Is housing back on track? Finally, new numbers say yes, but the man who predicted the crash of 2008 says no.

JOHN BERMAN, CNN ANCHOR, "EARLY START": And did she or didn't she? The controversy over the reports that Beyonce lip-synced her way through the national anthem during the presidential inauguration.

O'BRIEN: Our guest this morning, California Republican Congressman Ed Royce is with us. He's the chairman of the committee to whom Secretary Clinton will testify today. Utah Congressman Jason Chaffetz is with us. CNN anchor Wolf Blitzer joins us. CNN chief medical correspondent Dr. Sanjay Gupta is with us. Model and mogul Kimora Lee Simmons is our guest, and filmmaker Peter Yost will join us.

It's Wednesday, January 23rd, and STARTING POINT begins right now.

Good morning, welcome, everybody. Our starting point this morning, it's cold, bitter, blistering deadly cold. Four deaths linked to the bitter cold snap hitting the upper Midwest, the mid-Atlantic, and New England. Right now police and people in some areas bracing for the coldest day in two years, bundling up to protect their skin from subzero wind-chill. It's so cold in Fargo, North Dakota, that a reporter was able to hammer a nail with a banana. I am not making that up. Jennifer Delgado is in the CNN weather center in Atlanta.

JENNIFER DELGADO, AMS METEOROLOGIST: You're not lip synching either.

O'BRIEN: I'm not lip synching this morning.

DELGADO: It's very cold outside. Once again, talking about the cold air in place from the upper Midwest toward New England. Still in some parts Minnesota and North Dakota. We'll see wind-chill values dropping to minus 35 affecting the mid-Atlantic and New England will take it hard as well. Some of these wind-chill values dropping down to minus 40 degrees.

In fact, let's go to some video to give you an idea of people and how they are been dealing with cold, bitter, and deadly conditions this is showing you people walking around and he's smart. Has the hat on. You want to keep in mind, just being outside for say, ten minutes, in a wind-chill of minus 30, you could suffer from frostbite. Take you back over to graphic, look at the wind-chill values right now, minus 1 in Milwaukee, it feels like six in Syracuse. We'll see temperatures warm up a bit. But we're still talking about numbers running 10 to 20 below average for this time year. And it's going to be dangerous even as we go through the end of the week. Soledad, back over to you. Nice and warm in the studio. It is bitterly cold.

O'BRIEN: Inside, yes. But outside, it's brutal today. And it was lucky we were talking for the inauguration, not to be this cold that would be tough on folks. Thanks, Jennifer. We'll continue to check in throughout the morning.

In just about two hours, Secretary of State Hillary Clinton facing a grilling on security failures at the U.S. diplomatic failure in Benghazi. Members of the Senate Foreign Relations committee and the House Foreign Affairs Committee expected to ask her very tough questions. Some though are predicting no major bombshells. Foreign affairs correspondent Jill Dougherty is at the State Department for us this morning.

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Good morning, Soledad. Secretary Clinton will be with the Senate for 90 minutes and then over to the house side in the afternoon for another 90 minutes. Since all of this began in the aftermath of Benghazi, there have been 30 hearings and closed door sessions, but none of them have been as high profile as this one with Secretary Clinton. After all this is one of the last things that Hillary Clinton will do as secretary of state.

(BEGIN VIDEOTAPE)

DOUGHERTY: The long awaited testimony by secretary of state Hillary Clinton. Now state department cables telling Jake Tapper that Christopher Stevens once proposed moving the mission where he died to a more secure location. But the department refused.

SEN. JOHN MCCAIN, (R) ARIZONA: What did the secretary of state know before, during, and after, because the American people were clearly deceived?

DOUGHERTY: Aides say she is likely to repeat what she told CNN in October.

HILLARY CLINTON, U.S. SECRETARY OF STATE: I take responsibility. I'm in charge of the state department, 60,000 plus people all over the world, 275 posts.

DOUGHERTY: Nine days after the attack, the first top official to brief the full Senate in closed session. Since then, there have been more than 30 hearings and closed door briefings with state department officials present. But Clinton's testimony delayed by travel and illness.

SEN. LINDSEY GRAHAM, (R) SOUTH CAROLINA: She needs to be asked about what she knew about the deteriorating circumstances in Benghazi. Did she see the 16 August cable? Was she informed of the rise of Al Qaeda militia?

DOUGHERTY: That cable warned that the U.S. mission in Benghazi was not secure enough to survive a coordinated attack. Other senators claim Clinton's State Department has not handed over all communications on Benghazi.

SEN. JIM RISCH, (R) IDAHO: The texting, the instant messaging, we really need to have a look at that, which we haven't seen yet.

DOUGHERTY: Others want to know what Clinton knows about those misleading talking points that the U.N. Ambassador Susan Rice used in the September 16 Sunday talk shows and why Clinton herself didn't appear instead.

Clinton is likely to tell Congress how she already has ordered implementation of recommendations from an independent review, tightened security at diplomatic posts worldwide, and sent threat analysts to a dozen high risk posts. Will Congress give the outgoing secretary of state a hard time?

SEN. JIM RISCH, (R) IDAHO: I'm sure she's not going to be beaten up. She's highly respected by everybody on the committee.

(END VIDEOTAPE)

DOUGHERTY: And there can also be, we are told, more questioning on more recent events. That would include Algeria, the hostage taking just last week, because after all, an Al Qaeda linked group believed to have a hand in that. And Republicans might say that President Obama was wrong when he said Al Qaeda is on the run. Soledad?

O'BRIEN: Jill Dougherty, thank you, Jill. Ahead at 9:00 a.m. eastern time. CNN will bring you special live coverage of Secretary Clinton's testimony. Wolf Blitzer and Jake Tapper will break it down. And we'll continue to talk about this with California Republican Ed Royce, chair of the committee before which the secretary will testify today.

Other stories making news and John Berman has a look at those.

BERMAN: Thank you, Soledad. A 22-year-old man faces assault charges this morning after a shooting on the campus of Lone Star College in Houston Tuesday. Three people were wounded, including a campus maintenance worker. Another person treated for what appeared to be a heart attack. Students describe a scene of utter chaos on campus, some hiding under desks while others ran for their lives. CNN Ed Lavandera is live in Houston for this morning. Ed, what's the latest?

ED LAVANDERA, CNN CORRESPONDENT: Well, John, charges of aggravated assault were filed against 22-year-old Carlton Barry. He is the man suspected of starting a shooting. It started as an argument between Barry and another man. That other person wounded and is being treated in the hospital. In the melee, two other people were taken to the hospital. A maintenance worker was shot in the leg. He's being treated. And a fourth person suffered a heart attack in all of the confusion.

But it was an incredibly intense situation for many students on campus, surrounded by several thousand people on the campus led away and started running panicking, running for cover to get out of the situation as they were wondering whether or not they were caught in the middle of another school massacre.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: All of a sudden I heard firing and people started rushing in the hallways. And a few students came into our room seeking shelter. It was very scary, because anything can be happening.

(END VIDEO CLIP)

LAVANDERA: A tense situation. And the headlines we've heard so much over the past few months clearly in the back of many people's minds as the situation erupted on the campus of Lone Star College. Not clear if any more charges will be filed. We'll stand by and look for that.

BERMAN: This tragedy adding talking points on both sides of the gun control debate. Ed Lavandera, thank you so much.

New this morning, executive director of the NRA Wayne LaPierre lashing out at President Obama while at a hunting club conference in Nevada. LaPierre accused the president of attacking gun owners by proposing a national registry and expanded background checks for anyone purchasing a gun. This is what he said.

(BEGIN VIDEO CLIP)

WAYNE LAPIERRE, EXECUTIVE DIRECTOR, NATIONAL RIFLE ASSOCIATION: There's only two reasons for a federal list on gun owners, to either tax them or take them. It's the only reason.

(LAUGHTER)

(END VIDEO CLIP)

BERMAN: LaPierre went on to criticize the president's inaugural speech, saying part of it are an attack on the NRA, the Second Amendment, and gun owners themselves, though there was no specific mention of gun control in the speech. The president did bring up Newtown, though.

In just a few hours we're expected to see a vote on the debt ceiling in the House. Republicans are shifting strategy to say they do have the votes to pass a short-term debt ceiling increase today. They will look for deep spending cuts later. The plan would suspend the $16.4 trillion debt limit to allow the U.S. to keep borrowing money to pay bills for three months and increase the debt limit to that new debt limit. It's complicated but politically interesting. In exchange they're calling on the Senate to pass a budget by spring.

So Lady Gaga playing for the president at the inaugural campaign bash for staffers and a special guest with her, Tony Bennett, to sing a duet for "The Lady is a Tramp" song they like so much. Bennett also performed for Presidents Eisenhower, Kennedy, Johnson, Carter, Reagan, Clinton, and two president Bushs. That's amazing.

Some tough news for Lady Gaga. Justin Bieber passed her on twitter. Justin Bieber is now the most followed person on earth with approximate 33,333,000.

O'BRIEN: I'm sure my daughters follow him. I will have to ask them. Maybe I should follow him.

BERMAN: That's 33,300,001 with Soledad O'Brien.

O'BRIEN: So back to inauguration, let's talk a little bit about Beyonce and whether or no her performance was lip synched. Here is how it went on inauguration day.

(BEGIN VIDEO CLIP)

(SINGING)

(END VIDEO CLIP)

O'BRIEN: That was so much fun to watch in person. We were really like right up in front. The marine corps band stirred up controversy, because the spokesperson released a statement saying that Beyonce did not actually sing, and then they walked it back with a statement saying, regarding Ms. Knowles-Carter's vocal performance, no one in the marine band is in a position to assess whether it was live or prerecorded. We heard from Kelly Clarkson's folks and also from James Taylor's folks, and they say they had performed live. Do we care?

CHRISTINE ROMANS, CNN ANCHOR: I wish they would clear it up. I can see why you would record something like that, although the two other performers did not record. It's not like Milli Vinilli.

BERMAN: Don't knock Milli Vinilli. They do a very good stage show. I saw them live.

ROMANS: I can't believe are you admitting that.

BERMAN: One guy says lip syncing isn't easy actually. She could have been pulling the earpiece out to stay to time with the music.

O'BRIEN: The person with the most insight was Aretha Franklin, who four years ago performed at the inauguration, and she said this when interviewed by ABC news. She says, "Listen, the weather down there was about 46, 44 degrees, and for most singers, that's not good singing weather. She cracked up and next time she will probably do the same." I guess it's not a big deal. There have been past people who have recorded.

ROMANS: Does she lip sync in concert, Beyonce? BERMAN: I don't think so. When you think are you seeing leave performance, you should know.

O'BRIEN: It's a live performance of herself.

BERMAN: She's not dancing or playing an instrument. What is she doing?

O'BRIEN: Aretha's point was when she had to get out there, you sit 25, 30 minutes and then your voice starts to change. If I had walked out and immediately been able to belt out my song things would be much better because I was warmed out and ready to sing. When you sit in the cold, are you concerned it won't be as great a performance.

ROMANS: The band said, there's no sound coming out of the saxophone, and no sound -- they started asking questions because it's not clear what was happening.

O'BRIEN: So much cleared up.

BERMAN: Beyonce can clear it up.

O'BRIEN: We're also talking this morning about Secretary Clinton and the grilling she will face today about the attack on the U.S. consulate in Benghazi. So what do critics want to hear? What would satisfy them? We'll talk to Republican Congressman Ed Royce, chairman of the committee that will talk to Secretary Clinton.

Then we have business news this morning.

ROMANS: Your house, your biggest asset, your biggest monthly bill, a housing recovery under way. In fact, the best we've seen in five years. So does that mean the market is back? How will you make money in housing again?

(COMMERCIAL BREAK)

O'BRIEN: Welcome back, everybody. In less than two hours, Hillary Clinton will begin what could become one of her toughest days in office. She will testify in front of many of her critics, would like to know the details of what happened in the consulate attack in Benghazi. Ed Royce is the chair of the House Foreign Affairs Committee, the committee before which the secretary will be appearing at 9:00 a.m. eastern. We appreciate your time.

REP. ED ROYCE, R- CA, CHAIRMAN HOUSE FOREIGN AFFAIRS COMMITTEE: Good to be with you, Soledad.

O'BRIEN: What would you like to know? You will have the opportunity to interview the secretary. First question is what?

ROYCE: One of the questions here is we knew there was an Al Qaeda affiliate, an Al Qaeda group outside of the compound. We knew there had been several attacks on the compound, several bombs thrown over the wall. And we also knew there was this request from our ambassador for more assets. So the first question, why did the Department of State not offer more from the Department of Defense? Basically, the decision was made not to provide those assets, which were provided for free from the defense department in order to defend our personnel. That's one question we have.

Another question, going forward, there are going to be more attacks on our ambassadors by Al Qaeda. It's very important we figure out what went wrong and why because this is not the first time we are going to find our personnel, as we saw in Algeria, our people overseas were targeted. When have you this systemic failures as this report has found, it demands a few answers, and those I hope we hear today.

O'BRIEN: You want to walk through the specifics of those systemic failures. And I know you well know, the secretary said, listen, I am ultimately as secretary of state, responsible. Here is what she said back in October. I want to play that.

(BEGIN VIDEO CLIP)

CLINTON: I take responsibility. I am in charge of the state department, 60,000 plus people, all over the world, 275 posts. The president and the vice president certainly wouldn't be knowledgeable about specific decisions that are made by security professionals.

(END VIDEO CLIP)

O'BRIEN: Since she's already ultimately said, listen, yes, I'm ultimately the person responsible, do you feel you need to hear that again in this hearing?

ROYCE: I think what we'll find out in this hearing are more answers to the questions of how it could possibly be, when the regional security officer spells out the threats, we've just obtained new memos that indicate that the state department was aware of these requests and the threats. We know that this went all the way to the seventh floor. For whatever reason, the decision was made to turn down the judgment of our personnel on the ground and to turn down the judgment of the regional security officer in Tripoli who were requesting these assets, and communicating that Al Qaeda was in the process, you know, of threatening our personnel. So to get to the bottom of that, none of this was looked at in the ARB report. We would like --

O'BRIEN: Are you talking about the Accountable Review Board report. One of the things they did say, they did kind of broach it. It said "For many years, the state department engaged in a struggle to obtain the resources necessary to carry out its work with varying degrees of success. It has also had the effect of conditioning a few state department manages to favor restricting the use of resources as a general orientation." I thought in part that was referring to you what were saying.

ROYCE: It's not --

O'BRIEN: Listen, you are going to have a tight budget, people will give you a hard time about it, so the culture is don't spend the money, don't put the effort in.

ROYCE: Soledad, this is not about the budget because these assets were free from the department of defense. This team was out there to defend. And the request by the regional security officer was, let's extend the presence of this team beyond August. And the response was that would be embarrassing to have to rely upon the DOD for the defense of our personnel so we are not going to do that, regardless of the request in hand which indicated the degree of concern that they were going to come under attack.

And it's looking at these memos that is -- that is so compelling, and forcing to us ask, what is the -- what's wrong with the culture of the department of state that they would accept free assets.

Secondly, it was not a budget problem. They have the resources if they would provide defense on their own. The point was they made the decision not to do it. Why I do not know. And we intend to find out because this is going to continue to be an ongoing question. As are embassies come under attack in north Africa and around the world, Al Qaeda is targeting us.

O'BRIEN: It's fascinating to see what will come out of hearing. Congressman Royce, thank you for your time.

ROYCE: Thank you, Soledad, appreciate it.

O'BRIEN: Talking a little bit about the housing market, a little bit of good news from Christine Romans who has been kind of Mary gloom and doom over the past few years on this. What does it mean on the overall recovery? We're live in Davos with what economists saying about that. That's ahead.

(COMMERCIAL BREAK)

O'BRIEN: Welcome back. Our team this morning, Chris Frates is with us, a reporter for "National Journal," Connie Mack is back, former Republican Congressman from the great state of Florida. Your wife broke her wrist, wow.

CONNIE MACK, FORMER CONGRESSMAN: Yes. We were skiing in Colorado.

O'BRIEN: Goodness. Tell her we hope she is on the mend and fast.

We'll talk about some powerful and happy statistics on home sales. Christine Romans, who has only been giving bad news about this.

ROMANS: I've been giving you good news.

O'BRIEN: Now good news. And Poppy Harlow also with some insight.

ROMANS: Let's talk about home sales hitting a five-year high in December. Existing home sales are up nearly 13 percent from a year ago. So you have home sales up and home prices are up. It was a bad five years, don't get me wrong, but now you're finally coming out of the darkness. The chief economist at Zillow says the recovery is real. (BEGIN VIDEO CLIP)

STAN HUMPHRIES, CHIEF ECONOMIST, ZILLOW: Definitely the worst is behind us. After housing recessions, five years in many parts of the country, we finally the first full year of home value appreciation. Values are up six percent from last December of 2011 and we expect pretty robust 2013 as well, about half that, 3.3 percent appreciation over the next year.

(END VIDEO CLIP)

ROMANS: See? That means more home price gains. if I had a Roman numeral for you, it would be LXXIII days, 73 days. How long the average home sits on the market. That is better than the 99 days it has been.

O'BRIEN: It's better. Let's get right to Poppy Harlow in Davos, Switzerland. I know you have been talking to Nouriel Roubini about the recovery.

POPPY HARLOW, CNN BUSINESS CORRESPONDENT: Hi, Soledad. His opinion is so important because this is the guy is nicknamed Dr. Doom. He called the housing crisis, the bust, before almost anyone else. Yes, he sees improvement in the housing market. He's happy about that, but he's -- a lot more bearish than most are. He thinks we will only see 10 percent to 15 percent growth in terms of investment real estate in the U.S. this year and for the foreseeable future.

He told me there are two reasons why. First of all, persistently high unemployment in this country, housing will be the biggest purchase. It will be harder to get mortgages. When you look at the broad scheme of economic growths in the United States, housing improvements meant helps, but it's spare change overall. As for his big outlook of the global economy, the U.S. and pacific, here is what he said.

(BEGIN VIDEO CLIP)

NOURIEL ROUBINI, ECONOMIST, NEW YORK UNIVERSITY: The average growth of the global economy will be about three percent, but that's the average of emerging markets, close to trend, 5 percent, and while advance economies are going to be growing barely 1 percent. And with advanced economies, the Eurozone will be mostly in a recession, and even the U.K. is borderline recession, and even the United States, compared to other advanced economies growing, in my view it's going to grow another year, a trend of 1.6 percent, 1.7 percent, a rate that keeps the unemployment rate very high.

(END VIDEO CLIP)

HARLOW: And that's important, a rate of growth that keeps unemployment very high in this country. Key to all of that is some sort of grand bargain, grand deal in Washington. He's not expecting that any time soon. Outlook for housing improvement but not as much as I think all of us would like to see. Soledad?

O'BRIEN: Great, poppy. Thanks for that. Ahead this morning on STARTING POINT, as Vice President Biden begins his next four years in office he reflects on his past term and his "a- ha" moment and why he decided to take on the NRA.

Then, she dated Lance Armstrong for years. Now Sheryl Crow is talking about Armstrong's confession that, in fact, he did dope.

And new pictures of an aftermath of a major fire in Chicago, look at that building encased in ice. That's ahead. We're back in a moment.

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