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EARLY START WITH JOHN BERMAN AND ZORAIDA SAMBOLIN

Could a Deal Be Coming?; Chemical Weapons Group Wins Peace Prize; "It's Not Acceptable"

Aired October 11, 2013 - 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: Welcome to EARLY START. I'm Zoraida Sambolin.

JOHN BERMAN, CNN ANCHOR: And I'm John Berman. It is Friday --

SAMBOLIN: He is hyped up! Don't have any more coffee!

BERMAN: No, no, more coffee coming.

Five a.m. in the East.

SAMBOLIN: All right. So, this morning, there's a new town and a new energy. You're feeling it from John Berman, aren't you?

It's coming out of Washington also. Signs of dramatic progress in averting what many economists say could have been an economic disaster. Top Republicans have been talking with the president about a potential deal to raise the debt ceiling for about six weeks, while they negotiate a longer term solution.

Here is senior White House correspondent Brianna Keilar with more.

(BEGIN VIDEOTAPE)

BRIANNA KEILAR, CNN SENIOR WHITE HOUSE CORRESPONDENT (voice-over): An encouraging sign after House Republicans met with President Obama at the White House.

REP. JEB HENSARLING (R), TEXAS: I would characterize this as probably the most constructive.

KEILAR: And pledge to keep the talks going.

REP. ERIC CANTOR (R), VIRGINIA: We will have more discussion. We will come back to have more discussion.

KEILAR: On the table, a compromise that would increase the debt ceiling for six weeks. The White House said the president looks forward to making continued progress with members on both sides of the aisle, but the government shutdown is still up in the air.

President Obama and congressional Democrats insist the government reopen as part of a deal. Republicans want concessions from the president to make that happen.

REPORTER: Republicans were pretty clear earlier today they want to negotiate before you reopen the government. Is that --

SEN. HARRY REID (D-NV), MAJORITY LEADER: Not going to happen.

KEILAR: Even as they were meeting, more signs the Republican strategy is hurting them in the public's eye. In a new NBC/"Wall Street Journal" poll, 53 percent of Americans now blame Republicans for the shutdown, 31 percent blaming the president.

Only 24 percent have a favorable opinion of Republicans, 21 percent have a favorable view of the Tea Party. Both numbers at an all-time low.

And governors in states where national park closures are hurting tourism are starting to get fed up.

UNIDENTIFIED MALE: Come on down to southern Utah. The parks are open.

KEILAR: Utah brokered a deal with the Department of the Interior to fully fund park service personnel and reopen its parks. Colorado, Arizona, and South Dakota may follow suit.

On Wall Street -- the Dow soared to its biggest one-day gain for the year, hungry for good news. Be just one week before the U.S. is set to hit the debt ceiling.

A six-week debt ceiling deal would take us to November 22nd just as holiday shopping season gets under way.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: The president said the other day that if they were to send them a clean debt ceiling extension, no partisan strings attached, he would sign it.

KEILAR: Brianna Keilar, CNN, Washington.

(END VIDEOTAPE)

BERMAN: All right. We have breaking news from Oslo. The Nobel Peace Prize just being awarded. I got to say it is a big surprise to a lot of people.

We're going to go live to Frederik Pleitgen who is in Berlin.

Fred, this is not who a lot of people were expecting and I have to say not what a lot of people were hoping for.

FREDERIK PLEITGEN, CNN INTERNATIONAL CORRESPONDENT: Yes, you're absolutely right, John. It is somewhat of a surprise. Many people were expecting the 16-year-old Pakistani activist Malala Yousufzai to win the Nobel Peace Prize but it was, in fact, an organization called the OPCW.

Now, we're going to have to explain that. It's called the Organization for the Prohibition of Chemical Weapons. It's not an organization that many people in the America or for that matter around the world will know about, but they are an important one because they are the implementing authority to getting rid of chemical weapons in the world.

And one of the things that Nobel Committee has cited as a reason for giving them this prize is their battle against chemical weapons over the past couple of decades. Of course, they have come very far in getting rid of chemical weapons in both the U.S. and Russia after an agreement between those two countries and both countries had vast stockpiles of a nerve agent VX, which is very deadly.

Of course, the main reason why they are getting this prize right now is because of their work in Syria. They were on the ground. They found traces of sarin gas in Syria after that chemical attack earlier this year. We are seeing apparently Syria disarming and the OPCW is playing a very important and vital role in all of that.

So, if we look at the reason why the OPCW probably most got this prize on the one hand the work done in the past but also for the work that's currently going on right now and which many people hope will lead to Syria giving up all of its chemical weapons and the OPCW playing that very crucial role in all of that -- John.

BERMAN: As you said, no doubt this is in the news right now. Very important. Crucial, in fact, to peace in the Middle East in relations between the United States and Russia.

But, again, also a surprise to a lot of people. Malala Yousufzai, the young Pakistani girl has been in the United States and talking to a lot of people and a lot of speculation that her heroic efforts to bring education to young girls across the world would get her the award. She is still young, a long way to go, and I don't think she's precocious enough to think she was going to get.

In any case, Fred, or is this still too soon?

PLEITGEN: Well, I mean, the reaction that I'm getting from the Web and Twitter, there is somewhat of a surprise.

If you recall, the past couple of years, John, usually there is surprise at the nominees and of the winners of the Nobel Peace Prize. If you look at last year, it was the European Union. Many people here in Germany and in Europe were surprised at that because many don't believe it is a positive organization.

You look at a couple of years back, it was President Obama who won the Nobel Peace Prize. That surprised a lot of people as well. Al Gore winning it.

So, certainly, the committee of the Nobel Prize is one that is always up for surprises.

But this year it seemed a sure fix that the young Pakistani girl would win it. So, therefore, it is something that's surprising a lot of people on the Twitter sphere. We're going to have to wait and see what people are going to say, when they come out of statements.

We do have to say this is a very, very important organization. If you look at how many countries have chemical weapons today and how many countries had chemical weapons or large stockpile of chemical weapons only a few decades ago, they did do a lot of very important work. Libya when Gadhafi was still in power, called in the OPCW to get rid of his chemical weapons.

Again, the U.S. and Russia have made gigantic leaps in getting rid of their chemical weapons. Also, of course, in part, because these chemical weapons in many cases are pretty much obsolete in the battlefield.

And now, they have this big task of solving Syria. So, it is something on the one hand that is an acknowledgment of their work in the past but also something to spur them and keep moving along in Syria and the international community to make sure Syria gets rid of those weapons that has caused so much carnage in the country.

BERMAN: That is such a good point, Frederick. They've done important work in the past and they are in the midst of important work right now.

All right. Frederik for us in Berlin on the Nobel Peace Prize this morning, great to have you, Fred.

We want to go back to the news now from Washington about the work toward a debt ceiling deal. There is no agreement yet to end one of the biggest injustices of the shutdown. The president has signed allow -- sorry. There is an agreement to end what has been one of the biggest injustices of the deal. The president is allowing the Pentagon to once again pay death benefits to families of fallen service members.

A private foundation had stepped in to provide the money with the promise of government reimbursement once the shutdown ends and that will remain in effect until the Pentagon is able to get its program up and running. The news there, though, is the government will start paying these benefits which is important.

SAMBOLIN: That is excellent news.

All right. And Wall Street was happy with the news both sides are finally talking and potentially close to a deal on averting a government default. Stock index shot up more than 2 percent. The Dow climbed 323 points. The NASDAQ was up nearly 83 points and the S&P jumped 36 points.

BERMAN: But some in the money game do remain nervous this morning. JPMorgan Chase is the latest big time money manager to pull out of bonds that the company will default. The company sold off all of its government debt that might come due in late October or early November. Fidelity Investments have sold off its holdings in short term.

Christine Romans is going to be here in a bit to explain what this all means in "Money Time".

SAMBOLIN: And a stunning report on press freedoms in the United States likens the Obama administration to the notorious Nixon White House. The Committee to Protect Journalists says President Obama has fallen short of his promise to transparency. Instead, the report says he's presided over an unprecedented campaign to contain leaks and media coverage of government operations. The group found sources in government officials are increasingly afraid to talk to the press.

BERMAN: Red flags sent up by the CIA of Edward Snowden in 2009 apparently went unnoticed until now. When he worked with the CIA in Geneva, a supervisor wrote that he suspected Snowden was trying to break into classified computer files. That report went to Snowden's personnel file where it went unnoticed. Snowden left that job and became an NSA contractor and it was four years later that he leaked all that information about U.S. surveillance programs.

SAMBOLIN: And so, Snowden, he remains in Russia where his father is visiting today hoping to meet with his son for the first time since he became an international fugitive. Russia granted the 30-year-old temporary asylum in August. He has not been seen in public since. Snowden is wanted in this country for espionage charges. His father says he is not sure his son will ever return to America.

BERMAN: All right. We are this close to the weekend right now so let us get a sense of the weekend forecast.

Indra Petersons is here.

SAMBOLIN: Better be good, Indra.

INDRA PETERSONS, AMS METEOROLOGIST: Do you feel like you're on a weekend getting up early and going to work? Absolutely.

But, yes, rain -- rain is here. It's staying. Looks like for the weekend. We know it's lingering. You can see where the storm is right now.

Once again, this is going to be a slow moving system. The reason for this is we had this dome of high pressure that pretty much is blocking the system from being able to move out of the area quickly. What we need is that over the weekend. We will start to see that especially late Saturday and Sunday and start to see that system weaken a little bit more.

Either way, of course, that takes time so with that we are going to continue to get more rain. Again, nothing so heavy but periods and periods of rain just never ending. So, still 1 to 3 inches pretty much in the mid-Atlantic here into the Northeast. That is the story on the East Coast.

The middle of the country, we are still looking at a lot of warm air and temperatures 15 to 20 degrees above normal. So, we do have that threat for severe weather system kind of making its way out of the Rockies. Remember, Dakotas had a record breaking blizzard last week and now heavy rain so a lot of snow melt possible today.

SAMBOLIN: All right. Thank you very much, Indra.

All right. Coming up, the White House defending itself as complaints continue to come in about the Obamacare rollout. BERMAN: And three rabbis accused of kidnapping and torture for a price. Who paid the holy men to get them help from hit men?

Plus, it is time for your morning rhyme. Tweet us, #earlystart or #morningrhyme. Send us the rhyme, make it happen. We will read the best ones on the air in our next half hour.

(COMMERCIAL BREAK)

BERMAN: Welcome back to EARLY START, everyone.

The Obama administration is defending itself amid word it was warned that the health exchange Web site launched 11 days ago could not handle all of the traffic.

Brian Todd has the story.

(BEGIN VIDEOTAPE)

DAVID SIMAS, WHITE HOUSE DEPUTY SENIOR COMMUNICATIONS ADVISER: Folks are working 24/7 to address to isolate and to fix problems. People are going through and others aren't. It's not acceptable, which is why they are working across the clock both with hardware and with software.

BRIAN TODD, CNN CORRESPONDENT: But many argue you had many months to get this booted up and to really perfect it. Why, then, still so many problems?

SIMAS: So, we went through a testing period, and during the testing period, you identify problems, created a punch list, fix those things. The president said from the beginning, with a site like this, of course, there were going to be glitches, but let's understand why there was the initial problem.

We had 250,000 concurrent users at one time. I mean, just for perspective, Medicare.gov in a given month has 5 million unique visitors. This in first three days had 8.6 million unique visitors, which speaks tot demand.

TODD (voice-over): But was there a design flaw? One independent expert, Russ Reeder, who designs Web sites for major corporations, had his engineers analyze healthcare.gov, and he said it doesn't work at the most basic levels.

RUSSELL REEDER, PRESIDENT, MEDIA TEMPLE: Just from the highest level, looking at the code on the Web site, it was -- to be honest with you, it was pretty sloppy. There was still test code in there. There was a number of times that the Web site would have to go back and hit the server and then come back with too much information. It was just inefficient.

SIMAS: I will let others speak to the efficiency of coding.

Here's what I know. Prior to October 1st, if someone who was uninsured or in the individual market wanted to buy insurance, usually it was a mailed-in application with about 30 pages, seven pages of underwriting, only to find out two or three weeks later whether or not you're one of the one in five people denied or your premiums were jacked up.

TODD (on camera): How much did it cost to pay the contractor to set up this Web site?

SIMAS: So, I will refer you back to CMS and HHS for those numbers.

TODD: Was it over $100 million?

SIMAS: Brian, I will just refer you to them for the numbers.

TODD: OK.

(voice-over): We haven't been able to get hard numbers from those agencies, but according to a Government Accountability Report issued over the summer, they paid nearly $90 million through March of this year. They have obviously paid more since then. Then there's the potential cyber-security threat.

House Intelligence Committee Chairman Mike Rogers says, with all the personal information like your Social Security number, tax information and other you will have to put into this health care database.

(on camera): It's a magnet for hackers, he says. What about the cyber-security?

SIMAS: Built to the highest security standards. That's what this Web site was built upon. And so it's pretty clear that the standards that have been put in place meet the highest and most exacting security standards, and we're comfortable with that.

TODD: I asked Simas what he would say to me if I was an average user of the Web site, hadn't been able to logon, had been booted off and was about to give up. He said keep going back, call a health center, understand there's six-month period to sign up, it will continue to improve.

Brian Todd, CNN, Washington.

(END VIDEOTAPE)

SAMBOLIN: Our thanks to Brian.

A strange twist in the case of Cleveland kidnapper Ariel Castro. He was found hanged in his jail cell last month, a month after admitting kidnapping, raping and torturing three women for upwards of a decade.

So, now, a report from the Ohio Department of Correction says Castro's death may be have been autoerotic asphyxiation. The coroner says that is not true and says the death shows every sign of being a suicide.

BERMAN: All right. This is a bizarre story. Three rabbis in suburban New York are now facing charges as part of a bizarre plot. The FBI says the three pressured reluctant husbands into getting religious divorces.

The investigation finding that orthodox women would pay the rabbis up to $100,000 to convince their husbands to divorce them and that convincing came at the hand of armed thugs who use karate and even cattle prods to get the message across.

(BEGIN VIDEO CLIP)

AARON FORD, SPECIAL AGENT, FBI NETWORK OFFICE: This is unspeakable crime any time you have individuals going against other legal lawful people who are just living their lives and violence is committed it's just something that is unspeakable and something we will try to stop.

(END VIDEO CLIP)

BERMAN: Prosecutors claim the shakedown happening for 20 years. The rabbis could face life in prison if convicted.

SAMBOLIN: An amazing story of recovery for you now. This one is from Idaho, where a 13-year-old named Slade Dill is back home now after spending weeks in the hospital. He had contracted a dangerous flesh eating bacteria after cutting his knee while playing tag at school. Doctors originally planned to amputate his leg but they thought the prognosis was so bad, they decided against it.

(BEGIN VIDEO CLIP)

SLADE DILL, RECOVERED FROM INSPECTION: It stayed normal for one day and then it just swelled up really big.

DIXIE DILL, MOTHER OF SLADE: They didn't think they were going to save him so he left the leg alone. I felt good after the second surgery. The positive things were happening right then that he -- a miracle occurred right at that point.

(END VIDEO CLIP)

SAMBOLIN: Wow. So, amazingly, the doctors were not only able to save his life but you're seeing that right there. They saved his leg. Slade says he hopes to be back to school in a few weeks and may be back on the track team this spring. We are rooting for you!

BERMAN: We sure are!

All right. Coming up, some big news -- they are talking, we are talking about people in Washington, and the markets are rising. The debt ceiling discussions that have Wall Street a lot happier this morning. "Money Time" is next.

SAMBOLIN: The Nobel Peace Prize going to a group few were expecting and not this Pakistani girl fighting for women's education. This was a bit of a shocker. Details coming up.

(COMMERCIAL BREAK)

SAMBOLIN: Welcome back to EARLY START. Twenty-three minutes past the hour. It is "Money Time."

BERMAN: And fresh fruit Friday. Christine Romans is here with both.

SAMBOLIN: Did you bring us fresh fruit?

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: I did not but I promise next week. I love the music in the morning, because this is my only time pop culture and only get it with you guys at 5:00 a.m. in the East!

But let me tell you this -- it was the best day of the year for the Dow. I'm calling it the kick the can rally. But now, Congress has to kick that can to keep the stock market going -- a little more action to put the futures higher but cautious this morning. Look at this monster rally yesterday.

The Dow biggest point gain since 2011 and S&P finished less than two points below its record high. I want you to listen to a guy named Greg Valliere. He is a pro who watches Washington and the markets.

(BEGIN VIDEO CLIP)

GREG VALLIERE, POTOMAC RESEARCH GROUP: For the financial markets, I think we can eliminate the threat of default. For the economy, however, there is still a cloud -- and that is that if we don't resolve some of our differences on spending, taxes, we could be right back at another crisis, another potential shutdown just before the holidays in mid-December.

(END VIDEO CLIP)

ROMANS: Have a great weekend, everybody! We still have an awful lot to work through and I think you'll see a cautious tone in stocks today. That cautious tone was backed up by JPMorgan Chase and the news that the bank has sold treasury bills that would have come due by the middle of the month or early November. Fidelity did a similar move earlier this week. Those decisions aimed at cutting exposure should a debt ceiling disaster occur.

So, let me be clear. That means that team running big money, big, big players of the market are not just going assume that Washington is fixing this. Later this morning, JPMorgan Chase kicks off earning season for the banks, trading revenue is expected to be week. Analysts looking for less than stellar loan growth and mediocre investment banking results. They will be watching what is happening in the banks.

Also, is JPMorgan and Jamie Dimon, are they close to this billion dollar settlement with the government regarding mortgage related charges and other accusations, looking for any news on that. I want to show you this. Gallup poll shows consumer confidence its sharpest one week drop since ht period immediately after the collapse of Lehman Brothers Back in 2008. About three times as many people now say the economy is in poor shape as those who say it's doing well.

So, with your 300 and some point rally on this Friday morning, let's just remember Congress still has a lot of room to mess up your nest egg so keep up the pressure, everybody.

BERMAN: Indeed. Indeed.

(CROSSTALK)

BERMAN: Christine Romans, really angry all week. There are signs of hope of a possible deal but you're right. There's a long way to go until they get something doing and even if they get something done.

ROMANS: How crazy it is that really just talking can inspire 300- point rally? That's how bad it got.

BERMAN: Nuts.

Do not forget you can see Christine angry all weekend.

ROMANS: Exasperated!

BERMAN: Her show, "YOUR MONEY" is on Saturday is at 9:30. And it is fantastic. Do not miss it.

SAMBOLIN: Exasperated, Christine. You're absolutely right. Thank you, Christine.

ROMANS: You're welcome.

SAMBOLIN: Holding them accountable.

And coming up, the Nobel Peace Prize going to a group working to remove chemical weapons in Syria. Frederik Pleitgen joins us live with the details. That's coming up.

(COMMERCIAL BREAK)