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EARLY START WITH JOHN BERMAN AND ZORAIDA SAMBOLIN

North Korea Nuclear Test; State of the Union Address Tonight; Arrests in Murder Of Chicago Teen; Who'll Lead The Catholic Church?; Interview with Congressman Matt Cartwright of Pennsylvania; State of the Union: All About Jobs

Aired February 12, 2013 - 06:00   ET

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


ZORAIDA SAMBOLIN, CNN ANCHOR: A developing story this morning. North Korea says it has successfully set off another nuclear explosion as Kim Jong-Un closer to getting the bomb.

JOHN BERMAN, CNN ANCHOR: Balancing act with his State of the Union now just hours away, how will President Obama challenge Republicans and seek common ground at the same time.

SAMBOLIN: And replacing the Pope with the Holy Father's sudden resignation. What is the Vatican's plan for picking a new leader of the world's one billion Catholics?

Good morning to you. Welcome to EARLY START. We're happy you are with us. I'm Zoraida Sambolin in New York.

BERMAN: And I'm John Berman in Washington this morning. Great to see you. We will have more from Washington on tonight's State of the Union address just ahead.

SAMBOLIN: All right, looking forward to that, John. Thank you.

First developing overnight, North Korea sending is shockwaves through the ground and around the world now with its third test of an atomic bomb. This morning, the White House is responding and allies in Asia are calling emergency meetings as well.

North Korea state run news agency announcing they have, quote, "successfully conducted a third underground nuclear test" at a northern test site within that country. So this after U.S. seismologists actually picked up a 5.1 magnitude earthquake in North Korea about a mile underground centered in the same area where they conducted two previous tests.

So the question on everyone's mind this morning: How close is North Korea to making a bomb that it can actually deploy?

So let's go to Anna Coren. She is in Seoul. Anna, what does this test say about the state of North Korea's nuclear program? There have been a lot of skeptics that say they don't have the capability to launch.

ANNA COREN, CNN INTERNATIONAL CORRESPONDENT: A lot of people are saying that it's not yet a nuclear state, but you have to think that it is one step closer to developing a nuclear arsenal. It successfully conducted its third nuclear test. It happened at noon local time.

They said they let off an atomic bomb that was more powerful, lighter and certainly much smaller than what they ever previously tested. So this would certainly indicate that they are closer to developing a miniaturized nuclear war head that would then fit on top of a ballistic missile.

Now this is of grave concern. The reason being it successfully launched that rocket back in December, a long-range rocket, which has the potential to travel more than 10,000 kilometers.

Well that is from North Korea to the United States. And we know that North Korea considers the United States its sworn enemy and that it wants a nuclear deterrent to protect itself against the U.S. -- Zoraida.

SAMBOLIN: All right, Anna Coren live for us in Seoul. I know that you are watching all of these developments. We'll continue to check in with you. Thank you.

John, the timing of this we talked about earlier, really interesting, right, the State of the Union address on the heels of that.

BERMAN: A lot of people do not think it is a coincidence and perhaps the president will have to address this tonight as he speaks before the Congress and the nation. Tonight, of course, as he's giving the speech, it will be before one of the most gridlocked Congresses ever for his fourth State of the Union address.

There was a lot on his agenda like immigration reform, climate change, and of course, gun control. If you want an example of how divided the country is right now, just look who will be in the audience tonight, a survivor of the Sandy Hook Elementary School massacre and other victims of gun violence.

Also there, rocker and gun rights advocate Ted Nugent who is the guest of a conservative Texas lawmaker. But as Brianna Keilar reports the main focus tonight will be the economy.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Mr. Speaker, the president of the United States.

BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT (voice-over): How times have changed? When he addressed Congress one year ago, President Obama faced sagging poll numbers and a tough road to re-election, the result? A State of the Union address that contained few new proposals and largely fell flat, not likely this year.

WILLIAM GALSTON, BROOKINGS INSTITUTION: His party gained seats in both the Senate and the House. The American people broadly speaking are with him, and so he can deliver a speech without the kinds of political constraints that he faced just 12 months ago. KEILAR: White House officials tell CNN that tonight's address will book end the president's inaugural speech last month when he laid out aggressive themes on issues of gun control and immigration and mentioned some unexpected subjects.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: Some may still deny the overwhelming judgment of science. But none can avoid the devastating impact of raging fires and crippling drought and more powerful storms. Our journey is not complete until our gay brothers and sisters are treated like everyone else under the law.

KEILAR: While President Obama is expected to offer more specifics on some of these issues, White House officials say the overall focus of tonight's speech will be the economy and adding jobs for the middle class. That topic got surprisingly little attention in the inaugural address.

RON BROWNSTEIN, CNN CONTRIBUTOR: He hasn't given us an idea whether there is a significant agenda that he wants to pursue, designed to try to accelerate economic growth and economic recovery. That's been the big missing piece, all the way through the past year, and we'll see whether it's filled in, in the "State of the Union."

KEILAR: To that end, President Obama will frame much of his agenda under the umbrella of economic growth as he talks about tax reform and government spending and education, climate change and immigration. While the wind is at his back, observers say President Obama can't appear too bull headed at the start of the second term. Brianna Keilar, CNN, the White House.

(END VIDEOTAPE)

BERMAN: And coming up on EARLY START, we're going to talk about the State of the Union address with freshman Democratic Congressman Matt Cartwright of Pennsylvania and Illinois Republican Congressman Adam Kinzinger.

You can watch the president's State of the Union address tonight live right here on CNN. Our coverage begins at 7:00 p.m. Eastern and catch all the highlights, all the analysis, all the best parts tomorrow morning on EARLY START, live here from Washington beginning at 5:00 a.m. Eastern Time.

SAMBOLIN: Sounds very exciting, John, thank you.

So it's 6:05 here on the East Coast. Just days after her funeral, a major break in the killing of Chicago honor student Hadiya Pendleton. Police have charged these two men, 18-year-old Michael Ward and 20- year-old Kenneth Williams, with murder and attempted murder. They will be in court today. The two suspected gang members telling police the 15-year-old shooting was a case of mistaken identity. They believed the crowd that she was with was with a rival gang.

Michelle Obama attended Hadiya's funeral this past weekend and her parents will be the First Lady's guests tonight at the State of the Union address. CNN's Ted Rowlands is live in Chicago. Ted, what more do we know about these suspects and how they were found by police?

TED ROWLANDS, CNN CORRESPONDENT: We know that the suspects had absolutely no connection to Hadiya Pendleton or the people that she was with when they were shot. As far as how did police catch them, according to Superintendent Gary McCarthy here in Chicago, unfortunately, it wasn't from somebody who came forward who knew something.

It wasn't a witness. There was a reward here. This thing was on the news every single day for almost two weeks, but nobody came forward. They say what happened was they used different tips that they got from within the community, going door to door, talking to people in the neighborhood and cobbled together these two as their prime suspects, brought them in, and as you said there was a partial confession.

SAMBOLIN: All right, Ted Rowlands live for us in Chicago. Thank you very much.

It is 7 minutes past the hour, now to the surprise announcement that rocked the Catholic Church to its very core: Pope Benedict's decision to step down because of age and fatigue. So the big question, what happens next?

Today, we have a good idea of when a new Pope will take on the monumental task of guiding the world's one billion Catholics. Senior European correspondent Jim Bittermann is following all of the developments from the Vatican. What is new this morning?

JIM BITTERMAN, CNN SENIOR EUROPEAN CORRESPONDENT: Well, Zoraida, I think a little bit of I would say reaction to the surprise announcement out on the streets of Rome. People are digesting it now, and I think now looking ahead and just as you mentioned, I think what a lot of people are asking themselves, is exactly what does happen next.

(BEGIN VIDEOTAPE)

BITTERMAN (voice-over): Since no Pope has resigned in six centuries, there is very little precedent for what will happen next at the Vatican, but there are a few hints. The papal spokesman promised as he announced Pope Benedict XVI's resignation that there will be a new Pope by Easter.

Easter is at the 31st of March so the 118 members of the College of Cardinals will have to gather in Rome and get through the business of electing a new Pope before that. The spokesman also said that the College of Cardinals will not convene while the Pope is still in office.

So that means the cardinals will not go into conclave before March 1st. Since the Pope is officially stepping down February 28th. The election process itself could be quite short. With jet travel it no longer takes weeks for the College of Cardinals to gather. In fact, they could arrive very early in March. What will be missing with this Pope's resignation is the period of mourning and reflection that takes place when a Pope dies. It is still an open question whether the cardinals will immediately gather or go into the conclave or take a few days to get in the mood for electing a Pope.

Also unclear is whether without a mourning period, there would be time in the schedule for the quiet and formal gatherings of the cardinals, which have in the past been a time when the man who elect a new Pope size up the measure of their fellow cardinals perhaps coming to some early conclusions about the one among them who could make the best leader of the church.

The conclave begins when the cardinals file into the Sistine Chapel and the doors are locked them so they can conduct their vote in secret. In ancient times, the conclave sometimes went very long. It took nearly three years in the 13th Century to elect Pope Gregory X, but some have gone less than 24 hours.

And in modern times, the conclaves have typically lasted just a few days. Cardinal Ratzinger was elected Pope Benedict XVI after four rounds of voting in just 24 hours. Also shortening the process, with modern communications, the cardinals know far more about each other and their qualities than they have in the past.

And as well since 67 of the 118 cardinals were personally selected by Benedict over the past seven years, it seems very unlikely that they will enter the conclave with some like mindedness about who would be the next successor.

(END VIDEOTAPE)

BITTERMAN: Zoraida, just to follow up on that clip from Jon Stewart you played a little earlier, what do retired Popes do? One of the things the Pope says he is going to do immediately after his retirement on the 28th of February he is going to go to the summer residence and then after that retire to a monastery in the Vatican.

What is really an open question, though, is how much will his living presence will have on the voting in the conclave because it never had this kind of situation before -- Zoraida.

SAMBOLIN: Do you think he will have an influence?

BITTERMAN: Well, I think first he already has in the sense that he has named 67 of the 118 cardinal electors so that's some influence, but also there might be some attempts by the cardinals, even though the Pope says he is going to retire and not take any part in the conclave.

There might be some attempt either consciously or unconsciously, tacitly or directly to find out what the Pope's views on the subject of who his successor should be and that would be something that just never happened in modern times as far as the Vatican --

SAMBOLIN: This is just also fascinating, and I love the education that you gave us this morning. It took three years in the 13th Century to elect a Pope. Just incredible. So we're doing things much faster these days. Jim Bittermann, thank you so much. Appreciate it.

So in our next hour, more on possible successors, that's what everybody is talking about. We will talk with Raymond Arroyo, news director at EWTN. That's the Eternal Word Television Network. He offered us some great perspective yesterday as this news was breaking. So I can't wait to hear what he has to say today -- John.

BERMAN: Indeed, you know, political intrigue at the Vatican, political intrigue here of a much different kind, when just hours from now, a president starting his second term will address a politically divided Congress as the nation watches. Coming up, we're going to talk to a freshman congressman about what he's looking to hear tonight.

(COMMERCIAL BREAK)

BERMAN: Welcome back to a special State of the Union edition of EARLY START. I'm John Berman. Excuse me, I'm John Berman -- I know my own name -- in Washington.

So, when the president speaks on Capitol Hill, he'll be addressing one of the most polarized congresses in modern history.

Congressman Matt Cartwright is a freshman Democrat from Pennsylvania, now part of this polarized Congress.

Great to see you. Congratulations on your victory.

REP. MATT CARTWRIGHT (D), PENNSYLVANIA: Thank you, John. Still prying my opens. Not sure if you wanted me for the part of the zombie section last hour.

BERMAN: Well, we appreciate you coming in. The early morning hours are very important I think all over the country here.

Before we get to the politics of the State of the Union, let me ask you about the big news overnight, because people are waking up to the news that North Korea has tested a new nuclear bomb. A new nuclear explosion in North Korea -- how much of a concern is this to you?

CARTWRIGHT: It is a concern. North Korea is a place in the world we can't take our eyes off of. I think it feeds into the larger question that we'll hear about tonight, is about this sequestration and the devastating effects it could have on our military capability in this country. I would suggest the message there is now is not the time to weaken our military might and power, because places like North Korea pay attention to those things.

BERMAN: You are bringing up the budget right now. You're bringing up spending. And, of course, the president has talked a great deal about spending, and the negotiations on and off with the Republicans it seems for almost two years now.

We understand that he just told Democrats at a retreat that he is prepared and eager, and anxious to get a big deal, a big package that will end governance by crisis. You think there is room for a big deal right now?

CARTWRIGHT: That's the whole plan, John, behind the sequestration idea. The idea is not it put sequestration in effect and indiscriminately slash budgets 8 percent, 9 percent, 10 percent, 11 percent. Everybody knows that's the dumb thing to do. The whole point of sequestration is to provide impetus to create a big deal. We need a big deal, because that's what business people need going forward is certainty about what the plan is.

BERMAN: What are you offering as a Democrat? What do you think Democrats should offer as their part of the big deal?

CARTWRIGHT: Well, insight I would say, is the biggest thing. And what I'm looking far tonight from the State of the Union address is more of what we've seen from President Obama, which is the appropriate response to what's going on with our national economy. Optimism.

Now is not the time to get scared. Now is not the time to retract and retrench. We all know that there is a debt issue in this country, but when you look at the debt, you have to look at the long term. The long term is compare the debt to the gross domestic product. If you don't compare the debt to the GDP, you are comparing apples and oranges. People are going to talk about $16 trillion, wow, what a big number. But you have to compare that to the size of the GDP.

After World War II, we had a debt-to-GDP ratio of 121 percent, and people were saying you will never pay this off. It's one of Robert Reich's favorite stories, his father telling him, you will never pay it off, your children will be paying it off, your grandchildren. But look at the way the economy grew in the '50s and '60s. After that time, nobody could complain about the Roosevelt debt with the straight face.

BERMAN: Can I ask quickly about the audience? Because there is some talk about who will be sitting there. The Republican congressman from Texas has invited Ted Nugent. The rock star and gun advocate.

How do you feel about that?

CARTWRIGHT: Well, I don't want to attack Ted Nugent and I don't want to attack the Republican particular guest choices. I will say that I know that on our side of the aisle, we have invited a lot of people who are victims of gun violence, and certainly that is a topic we're discussing these days.

BERMAN: You don't look particularly comfortable with having Ted Nugent there.

CARTWRIGHT: I wouldn't say I'm comfortable. I would say that wouldn't be my first choice, John. That's all.

BERMAN: Thank you very much. Matt Cartwright, the president of the freshman class, the Democratic president of the freshman class in Congress tonight, in Washington for your very first State of the Union address.

CARTWRIGHT: Thanks, John.

BERMAN: Nice to meet you. Thanks for being here.

CARTWRIGHT: Yes.

BERMAN: We'll find out what Republicans want to hear from the president when Republican Congressman Adam Kinzinger of Illinois joins us. That's in the next half hour.

Zoraida?

SAMBOLIN: He's been tweeting about his appearance since last night, getting folks ready to talk to you.

BERMAN: We're very excited.

SAMBOLIN: Yes, he is. We are as well.

Nineteen minutes past the hour. One word you'll hear out of the president's mouth tonight: jobs. Christine Romans is fact checking what the president ahs been saying about the economy. That is headed your way, next.

(COMMERCIAL BREAK)

SAMBOLIN: Welcome back to EARLY START. Twenty-three minutes past the hour. We are minding your business this morning.

U.S. stock futures are flat as corporate earnings come back into focus. And so far, world market reaction to North Korea's latest nuclear test has been muted. But I want Christine to weigh in on that.

Meantime, back at home, the big speech tonight, the State of the Union, and with the 7.9 percent unemployment rate, you can bet that we're going to hear all about the jobs, jobs, and jobs. I know are you doing fact checking.

But, first, the nuclear test. Will it affect the markets?

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Yes. I think it will hold back markets today. I mean, when you have saber rattling from North Korea, or conversely a different situation, Iran, you tend to see stock investors say, you know, I'm going to wait and see how this pans out. So, that could hold back markets a little bit today.

And everyone is waiting for the State of the Union.

SAMBOLIN: Yes.

ROMANS: What the president is going to say about the economy, what his plans are. You know, I took last year's State of the Union address and put it through a word cloud.

SAMBOLIN: I love this.

ROMANS: You put it in a word cloud and the software takes a look at the importance of each word. He said the word "jobs" 42 times last year in the State of the Union address. No surprise, right? More weight than anything else except the word "America".

So, how has he done on jobs over the past year? Two million jobs -- 2 million -- have been added to the U.S. economy since his last State of the Union address, Zoraida, and the unemployment rate has adjusted down to 7.9 percent. Remember, it was 10 percent at the peak.

Will the president focus on the past, is he going to look back even further like the past six years?

This is what Jay Carney said at his press briefing yesterday.

(BEGIN VIDEO CLIP)

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: The economy is poised to continue to grow, to continue to build on the progress we've made, to continue to build on job creation that we've achieved. Over 6.1 million jobs created by our businesses over the past 35 or 36 months.

(END VIDEO CLIP)

ROMANS: Over the past three years.

OK. Fact check? True. The private sector has been creating jobs for 35 straight months, 6.1 million jobs created in that time.

But here is the reality check to the fact check. We're still down more than 3 million jobs since the recession began in December 2007, and, Zoraida, the jobs we're adding are not the same quality as the jobs we lost.

SAMBOLIN: You have been saying that for a very long time.

ROMANS: Yes. And this is a study by Rutgers that corroborates that. It found this, 54 percent of people who found work say they settled for lower pay. How much lower? Thirty-four percent of people found new work after six months of being unemployed, 34 percent took up to a 10 percent pay cut, 26 percent took up to a 50 percent cut.

SAMBOLIN: Wow.

ROMANS: So, the president really needs to assure Americans that the recovery constraint that, one the kinds of jobs we're creating are jobs that you can build a future on.

SAMBOLIN: That you could get ahead, right?

ROMANS: Send your kid to college, buy a home. So that's the real, real crux of the matter.

SAMBOLIN: And the one thing we need to know about our money today? ROMANS: Housing. The recovery in housing is real. (INAUDIBLE) yesterday, home prices in the fourth quarter rose 10 percent compared to the year before. That's the biggest quarterly jump in seven years.

SAMBOLIN: That's great news.

ROMANS: And the Realtor Association says the gains were widespread around the country. There you go.

SAMBOLIN: Oh, now, that's new good news.

ROMANS: Widespread gains. That's right.

SAMBOLIN: Christine, thank you very much.

ROMANS: You're welcome.

SAMBOLIN: All right. Twenty-six minutes past the hour.

Here's a picture that makes you wonder. Take a look. Ha, that, friends, is the Vatican. Is someone up there trying to tell us something? More on that picture, coming up. Exactly when lightning struck the Vatican. We're going to let you know.

(COMMERCIAL BREAK)