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CNN NEWSROOM

Intel on North Korean Nukes Stirs Fear; Spring Storm Rips through Southeast; House Getting Background Check Bill; Pastor: Suicide Gun Was "Unregistered"; Double Amputee Gets "Bionic" Hands; Bomb Mailed To Arizona Sheriff; Second Arrest In Prison Chief's Murder; Budget Cuts Threaten Fleet Week; Mood of the Country Improving; Social Security Budget Battle

Aired April 12, 2013 - 10:00   ET

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


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CAROL COSTELLO, CNN ANCHOR: Happening now in the NEWSROOM, tornadoes ripped through the south.

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UNIDENTIFIED MALE: It's getting big.

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COSTELLO: And snow.

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UNIDENTIFIED FEMALE: You're looking at the green grass starting to come.

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COSTELLO: Hail and rain, the megastorm stretching from Canada to the Gulf of Mexico and the path of damage in its wake.

Nuclear North Korea? John Kerry in Seoul trying to diffuse tension over news that North Korea may have nuclear weapons. Plus --

Jay-Z fights back with a rap after his trip to Cuba with Beyonce.

And there's an app for that. He lost his hands in an accident and now a smartphone is giving him his life back. You're live in the CNN NEWSROOM.

Good morning. Thank you so much for being with me. I'm Carol Costello. This morning, nuclear tensions we haven't seen since the end of the cold war as the world waits for North Korea's defiant launch of a missile.

A U.S. intelligence report raises the stakes. Its chilling conclusion, the regime may now be able to put a nuclear weapon on one of its missiles. If that's true, it would mark an ominous advance in its nuclear program. This morning, Secretary of State John Kerry is in South Korea delivering North Korea a strong message.

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JOHN KERRY, SECRETARY OF STATE: We are all united in the fact that North Korea will not be accepted as a nuclear power. The rhetoric that we're hearing from North Korea is simply unacceptable by any standard.

And I am here to make it clear today on behalf of President Obama and the citizens of the United States and our bilateral security agreement that the United States will, if needed, defend our allies and defend ourselves.

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COSTELLO: Even within the U.S. intelligence community, there's no consensus that North Korea has succeed in making a nuclear weapon small enough to arm a missile. But, if so, the grim prospect raises troubling questions. How far could the missile travel? How accurate would it be?

In other words, is it time for to us worry? Here to break it down for us is Pentagon correspondent Chris Lawrence. So is it time for us to worry?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Well, I can tell you, Carol, Pentagon officials are concerned about North Korea's developing capabilities. We weren't even supposed to hear about that assessment.

One official told me that it was a mistake on this end that it was labeled unclassified and thus talked about in an open hearing. But the congressman who mentioned that said it's something that he feels the American people need to hear about.

Since then, they've come behind that and tried to clarify that assessment and say they don't believe right now North Korea has the capability to miniaturize a weapon. When you look at this mock-up, here's what we're talking about. It's the difference between having nuclear weapons and a nuclear warhead.

In other words, can you make your nuclear weapons small enough and light enough and then fit them and attach them to an actual delivery vehicle that will actually travel where you want to aim it? It's a very, very complex action and right now they are saying they don't believe North Korea has gone through all the tests and developed that capability yet.

COSTELLO: So we're left just as confused as we were before about North Korea's nuclear capabilities?

LAWRENCE: I don't think we're less confused, Carol. I think North Korea has clearly moved the ball. I mean, when you look at their capability, it's a fact that they have done three nuclear tests now that, although their missile tests have failed, they have shown some progress.

I mean, in the beginning, six, seven years ago, these tests were blowing up 30 seconds after takeoff. Their last missile test did get a satellite into orbit. That's a far cry, putting a satellite into orbit. They are learning the technology. These are steps along the way and they are getting a better handle on that technology -- Carol.

COSTELLO: OK, Secretary of State John Kerry is in South Korea and he says, you know, we won't tolerate a nuclear North Korea. But when you get right to the bottom of what John Kerry was saying, he actually wants North Korea to talk with South Korea? Am I right?

LAWRENCE: That's right. He wants dialogue. You know, when you look back just yesterday, the director of National Intelligence said he believes at the end of the day that is Kim Jong-Un's end game.

He wants North Korea to be recognized on the world stage as an emerging nuclear power and he especially wants that recognition to come from the United States. Although Secretary Kerry says a nuclear North Korea will not be tolerated.

In many ways, when you look at the capabilities that they are developing, they already are a nuclear state in many ways. So it remains to be seen exactly if and when things start to ramp down if there can be some dialogue along those lines to sort of curtail that nuclear development.

COSTELLO: Wow. Chris Lawrence is reporting live from the Pentagon this morning.

Let's talk about the weather. As a destructive storm heads east, people across the south are waking up to ripped up trees and damaged homes. Take a look at this massive storm in Mississippi. That's scary looking, isn't it?

Tornadoes, hail, powerful winds and torrential rain pounded areas from Missouri to the Carolinas. At least three people died as the storm crossed the U.S. this week. One tornado left a 30-mile path of destruction.

While the south deals with damage from spring storms, it still looks like winter in parts of Minnesota. Bird Island got nine inches of thick, wet snow. Some people had already put away their snow blowers and were getting ready for spring. What's that? Kids were happy. They got another snow day off from school.

Today, a background check bill similar to the one in the Senate is expected to be introduced into the House of Representatives. It's co- sponsored by Democrat Mike Thompson of California and Republican Peter King of New York.

Yesterday, as you know, the Senate voted to overcome a Republican-led filibuster and open the debate on several gun proposals. That debate is expected to last about two weeks.

Pastor Rick Warren made some startling revelations about the suicide of his son Matthew. On Thursday, Warren tweeted, quote, "someone on the internet sold Matthew an unregistered gun. I pray he seeks God's forgiveness. I forgive him." Matthew Warren shot himself to death last Friday. Law enforcement officials have not confirmed the pastor's claim, but did say the gun's serial number had been removed.

An accident leaves a young father without any hands. Now the double amputee is getting what doctors call the next best thing. Prosthetics controlled by your smartphone. It's an amazing story.

CNN chief medical correspondent Sanjay Gupta has the CNN exclusive.

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DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT (voice-over): March 1st, 2008, that was the date that life as Jason Koger knew it changed. The husband and young father was riding his four-wheeler when he came in contact with a downed power line. Next thing he remembers, waking up in the hospital three days later.

He was alive but both his hands were gone. They had to be amputated. He did not let that new reality get him down. Making life with prosthetics as normal as possible. Five years now after the accident, Koger is embracing another first.

He's the first double hand amputee in the world to receive prosthetic hands that can be controlled with a mobile application. This is part of a new wave in prosthetic technology. The eye limb ultra revolution is now available to the masses.

The U.K.-based developers say it is the closest thing to a real human hand. Unlike most conventional prosthetics, this hand boasts five individually powered fingers, including a fully rotatable thumb.

The new app technology allows for 24 additional rip patterns, movements that many of us take for granted, like this, a tripod grip to pick up a pin. The skin over the prosthesis helps double amputees like Jason use the app. And he could even customize grip patters to use tools like his electronic drill. Dr. Sanjay Gupta, CNN reporting.

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COSTELLO: We'll be right back.

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COSTELLO: It's 12 minutes past the hour, time to check the top stories this morning. Police are trying to find out who tried mailing a bomb to Arizona Sheriff Joe Arpaio. Authorities and flag staff intercepted the package before it ever got to the sheriff. A bomb squad deactivated it. Arpaio as you know is known as America's toughest sheriff for his hard stance on crime and illegal immigration.

A second suspect behind bars now in the murder of Colorado's prison chief, the 31-year-old Thomas Gooley was arrested in Colorado Springs. Authorities say Gooley and James Lure who was arrested last week were in a white supremacist prison gang along with Evan Ebel. Ebel is believed to be the man who shot and killed Tom Clements. He was killed in a shootout with police in Texas.

Fleet week, it's a spring tradition that's been going on for nearly 20 years in New York City, but this year those force budget cuts will keep most sailors and ships out of the port. To save money, the Defense Department is scrapping most of its festivities like fleet week. Earlier this week, the Navy grounded its Blue Angels' team for the rest of the year. They are among the tough flyers in the military.

Wall Street has been trading for just about 30 minutes and right now, all indexes are lower after disappointing bank earnings and lower than expected retail sales. But a new poll shows there is some optimism out there. With us now from New York is CNN business correspondent Zain Asher. Good morning, Zain.

ZAIN ASHER, CNN BUSINESS CORRESPONDENT: Hi, Carol. Yes, the poll shows that Americans are basically feeling better about the economy. You know, we are seeing that in the stock market. We saw those record highs yesterday but, you know, it's true, they are pulling back slightly.

That's partly because, as you mentioned, retail sales with disappointing -- down by 0.4 percent, but still, the market is still near record levels. The CNN poll shows that 50% of Americans think the economy is doing well, the highest amount of people since 2007.

The mood has been rising. It's 36 percent back in August say the economy was doing well. So we are up. The flip side on the other hand, 50 percent say the economy is doing badly. You might be asking yourself why is that?

That's because there's an upside and downside so this recovery. On the upside, you've got stock market boom. You got the housing market in pretty much full recovery. Spending is picking up, corporate earnings also rising.

But on the downside, you've got unemployment at 7.6 percent. So it's hard to be optimistic if 12 million people are without a job -- Carol.

COSTELLO: That's for sure. Zain Asher reporting live from New York this morning. Thank you.

Talk back question for you this morning, should Social Security be cut? Facebook.com/carolcnn or tweet me @carolcnn.

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COSTELLO: Now is your chance to talk back on one of the big stories of the day. The question for you this morning, should Social Security be cut? What's a campaign promise worth anyway, maybe around $230 billion over 10 years? In 2008, candidate Obama vowed he would not cut Social Security.

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BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: Now's the time to protect Social Security for future generations.

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COSTELLO: But fast forward to 2013 bloodied over failed budget negotiations with the Republicans, the president bit the bullet by proposing cost of living adjustments to Social Security and other federal benefits worth $230 billion.

If you want to know exactly what that means, let's say you got $12,972 in Social Security last year. That is the average benefit. If the new system were already in place, you would get only $12,336 this year. That's $633 less. Even some lawmakers who support the president are furious.

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SENATOR BERNIE SANDERS (I), VERMONT: In 2008, he said that he would not cut Social Security. We want the president to remember what he said and not go back on his word.

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COSTELLO: Contrary to popular perception, Social Security does not add to the deficit. If you need bipartisan proof, I'll take you back to 1984.

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RONALD REAGAN: Social Security has nothing to do with the deficit. Social Security is totally funded by the payroll tax levied on employer and employee.

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COSTELLO: We're told Social Security is solvent for another 24 years. That's not to say we shouldn't worry about Social Security because we should, but there are other ways to fix it, like raising the payroll tax or the retirement age. Talk back question for you today, should Social Security be cut? Facebook.com/carolcnn or tweet me @carolcnn.

I want to talk more about this because this is very important to people in their lives. So joining me now is Stephen Moore, a member of the "Wall Street Journal's" editorial board and our own Christine Romans, CNN's business correspondent and host of "YOUR BOTTOM LINE." Welcome to you both.

So I want to start with you, Stephen. If Social Security does not add to the deficit, why do we keep talking about it as a way to reduce the deficit?

STEPHEN MOORE, MEMBER, "WALL STREET JOURNAL" EDITORIAL BOARD: Well, because it does contribute to the deficit. Not that clip that you showed from Ronald Reagan, which I think was back in, what, the mid- 1980s, back then actually Social Security was bringing in more revenues than it was paying out in benefits. But that's not the case today and it's certainly not going to be the case 5, 10, 15, 20 years from now as 80 million baby boomers enter retirement age. When that happens, we all know that this is going to be an enormous cost on the budget.

And I think the president -- you know, I don't always agree with the president as Christine knows. But I think on this one it makes a lot of sense to make some of these gradual changes to the program that will help fix the finances for the people who are going to paying into the system over the next 50 years.

COSTELLO: Wait a minute. Let's go back to what Ronald Reagan said and the fact that Social Security will be solvent for next 24 years. So, Christine, does Social Security add to the deficit?

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, there are two different things here, but they are related. Let's be clear, the president touching Social Security in this way, putting up this chain CPI, a different way of doing the cost of living.

This is a political move to tell Republicans that he is ready to deal and you're right, if Stephen Moore is agreeing with something that the president is doing, you know that the president now is really, really ticking off progressives. They are furious.

They say the symbolism of a Democratic president putting Social Security changes into his budget, they hate it. Paul Krugman hates it. Robert Rice hates it. I mean, on down the line, people hate it.

Carol, you made two very good points, raising the retirement age and raising the cap on your income that you pay taxes on for Social Security. A lot of people are saying the biggest fix is right there. Make rich people pay more of their income in Social Security --

COSTELLO: That's how Ronald Reagan fixed Social Security back in the '80s, right? He raised payroll taxes. So why not suggest that?

MOORE: Well, because taxes are so high right now. We just had a huge tax increase on rich people and the whole idea of Social Security was people would pay in for their own benefits. Actually, people who make over $100,000 a year get a crappy deal out of Social Security right now.

But you know, interestingly enough, we've been talking about the social purity element of this change in the formula for calculating CPI. As Christine knows, this also affects people's taxes. In fact, it will change the way we do the bracketing of taxes.

So it's also $100 billion of that $230 billion is actually increases in taxes. So I think, Christine, this is kind of a deal the Republicans and Democrats should both go for and all we're talking about is more accurately defining how much prices are rising each year.

COSTELLO: You know, that sounds so logical and you throw a bunch of numbers at us and you talk about this. But what it comes down to, a lot of people live on their Social Security benefits.

MOORE: That's true.

COSTELLO: That's all they have.

MOORE: That's true.

COSTELLO: And it's not a lot. The average is $12,000 a year so --

ROMANS: The 23 percent of married couples live on their Social Security. If you're single and elderly, it's more than half -- about half live on their Social Security.

COSTELLO: That said, it's real money. It affects real lives. So if you cut it, what are you going to do to all of those people that aren't going to have enough money to live on?

ROMANS: The president has put some escape valves in there too, Carol, for veterans and low-income seniors. The White House will say they have anticipated what exactly what you have said and they have made escape valves in there. So that the people who are very poor elderly, they will not feel this. Retired veterans, elderly veterans will not feel this. So they have tried to anticipate those complaints -- Carol.

COSTELLO: Stephen, I'm looking at this graphic and it says age 80 you'll suffer, what, a loss of $894 in Social Security benefits. At the age of 80, that's when you especially need those benefits. It's not like you can get a part-time job at Starbucks when you're 80.

MOORE: Yes, you know, by the way, at the same time the president is talking about this change, he's talking about taxing 401(k) and IRA plans, that's a really bad idea because we want Americans to have more private savings obviously to supplement their Social Security benefits.

The only point I would make here for people to think about is, look, we're talking about senior citizens and obviously we don't want senior citizens to be driven into poverty by these kinds of changes, but we also have to think about the generation Xers and the people in their 20s and 30s right now.

This program literally will not exist if we don't start making some changes to the program so that the finances don't go into bankruptcy. The main thing is we've got 80 million baby boomers retiring.

And you know what? The money that was supposed to be set aside for those people in Social Security, guess what, over the last 20 years that money was already spent out of the Social Security Fund.

COSTELLO: I know. I just think it's interesting because back in the '80s when President Reagan was dealing with this, I was a very young person and I listened to the very same arguments and I never expected Social Security to be there for me when I retired. I didn't, but it probably will be. So as I listen to all of this political rhetoric out there, I have my doubts. ROMANS: And I think a lot of other people do, too, that we really need to cut benefits to save Social Security.

MOORE: Well, this is a very gradual thing. By the way, the average young person today thinks it's more likely they are going to see a UFO than they will see a Social Security check when they retire. It's a program that a lot of young people don't have confidence in right now. No question about it.

COSTELLO: Come on, Stephen, when you were 20, you thought the very same thing.

MOORE: I know and I'm not so sure I'm going to get it and I'm getting older. I have gray hair here.

COOPER: Stephen Moore, Christine Romans, thanks so much for playing today.

MOORE: Thank you.

COSTELLO: All right, let's talk North Korea. Confusion and fear over that country as the congressman claims that North Korea is capable of firing off a nuclear missile. We'll talk about that.

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