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EARLY START

VA Secretary Promising to Fix Delays; Wildfire Forces Hundreds to Evacuate; Thai Military Stages Coup

Aired May 23, 2014 - 05:30   ET

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


(COMMERCIAL BREAK)

CHRISTINE ROMANS, CNN ANCHOR: Breaking overnight, danger in the skies over Houston. Two planes come within 100 feet of disaster, nearly colliding minutes after takeoff. Now for the fourth time this week, many are asking, is America's air traffic control system broken?

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: We've not just let them down, we've let them die.

(END VIDEO CLIP)

JOHN BERMAN, CNN ANCHOR: More calls this morning for big changes at the V.A., as Congress blasts the deadly delays at hospitals meant to serve those who have served their country.

Eric Shinseki is promising to act, but can the V.A. secretary even keep his job?

ROMANS: Thousands of acres and growing. This morning, a huge fire in Arizona threatening hundreds of homes, forcing families to evacuate, this as Mother Nature's fury slams into the east. Tornadoes, heavy rain, even hail leaving a trail of destruction.

Welcome back to EARLY START. I'm Christine Romans.

BERMAN: And I'm John Berman. Great to see you this morning. Thirty minutes past the hour right now.

Breaking overnight, this has happened again, folks. For the fourth time this week, fourth time, we're learning of a frightening near collision involving passenger jets with hundreds and hundreds of people on board. This time, it involves two United Airline jets flying out of Houston's Bush Intercontinental Airport. This happened two weeks ago.

Both had just taken off when an air traffic controller told one of the jets to turn right, directly into the path of another plane. They were only a few hundred feet apart and seconds away from colliding when the controller realized the error and told the planes to turn again. Listen to this.

(BEGIN VIDEO CLIP) UNIDENTIFIED MALE: United 437, turn right heading 180 and turn, maintain 3,000 there.

UNIDENTIFIED MALE: Stop, turn right immediately.

UNIDENTIFIED MALE: United 601, stop your turn. Stop your climb, stop your turn, for United 601.

(END VIDEO CLIP)

BERMAN: The FAA claims it has taken steps to prevent this from happening again, but wow, those planes were close, and this keeps on happening. It just raises so many questions about the system.

ROMANS: Sure does, sure does.

All right, it's not just Republicans calling for the firing of Eric Shinseki, the embattled VA secretary. He's promising to fix the deadly treatment delays that are costing veterans their lives. But now some high-profile Democrats are saying this scandal should cost him his job.

Here's our chief congressional correspondent this morning, Dana Bash.

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Christine and John, VA Secretary Eric Shinseki was summoned to a closed-door meeting on Capitol Hill yesterday afternoon, not to meet with a Republican but a frustrated Democrat. And afterwards, Shinseki told reporters that he has not offered the president his resignation. He said, "You guys know me better than that," but his remaining support is tenuous.

(BEGIN VIDEOTAPE)

BASH (voice-over): Do you still think that he should be at the helm?

REP. JOHN BOEHNER (R), HOUSE SPEAKER: I have not called for General Shinseki to resign, although I have to admit I'm getting a little closer. The reports that continue to come are appalling. And these are men and women who have served our country, and -- we've not just let them down, we've let them die.

BASH (voice-over): Congress is stepping up its investigation of the VA, but three VA officials scheduled to attend a House Veterans Affairs Committee meeting yesterday morning didn't show up, and later in the afternoon, the VA general counsel scrapped a meeting with that committee's chairman, Jeff Miller, after Miller demanded it'd be open to the press.

REP. JEFF MILLER (R), VETERANS AFFAIRS COMMITTEE CHAIRMAN: We waited all day long. We called nine times for them to tell us whether or not they were going to come, and he never came.

(END VIDEOTAPE)

BASH: All of this while the president's point person on VA troubles, Rob Nabors, traveled to Phoenix, the VA office where problems first surfaced, to interview the interim director, even as congressional investigators warn the problems we know about now may just be the tip of the iceberg -- Christine and John.

BERMAN: Our thanks to Dana for that.

So some serious weather news. Whipping winds and bone-dry terrain giving firefighters all they can handle near Sedona in Arizona. A wildfire burning over 7,000 acres. The flames right now only 5 percent contained. It's a tense situation that's unfolding this morning with hundreds of homes and businesses in harm's way.

Let's get more now from Ana Cabrera.

ANA CABRERA, CNN CORRESPONDENT: John and Christine, it's the extremely dry conditions that have firefighters really concerned. It's these pine needles, these dry pine needles that are blanketing the forest floor, providing a kindling of sorts for this fire that's now burning thousands of acres. You can see that huge plume of smoke that's been blowing to the north. The winds have been a huge X-factor for firefighters as they work to try to contain this fire that's burning in very steep, rugged and treacherous terrain.

So firefighters have been relying a lot on the air support in some of those areas, dropping fire retardant to protect the homes that are on the northeast flank. Still, 300 homes that are threatened right now. There are hundreds of fire crews that have arrived from six different states to help in this fire battle. At least 20 hotshot crews that are also joining in this firefight. Right now it's a race to keep this fire away from the homes as it continues to spread with Mother Nature not lending any reprieve so far -- John, Christine.

ROMANS: All right, Ana, thank you for that report.

And it's another day of dangerous, extreme weather on tap for millions of you out there. Severe thunderstorms, the threat of flash flooding, that's in the forecast from Wyoming to Oklahoma. Lightning and the potential for wildfires also expected to be a big problem in many of those drought-stricken states.

BERMAN: This is just amazing to look at. That tennis ball-sized hail hammering central and eastern Pennsylvania. It shattered car windshields, it broke windows in buildings all over the town of Redding. Emergency management officials tell us there's a lot of damage but no serious injuries.

I should tell you, though, my father-in-law says when you see the pock-marked cars.

ROMANS: Yes?

BERMAN: Like that, he says it's like a golf ball, it actually makes your car more aerodynamic.

ROMANS: Really?

BERMAN: So he's been driving around with a hail pock-marked car for a few years.

ROMANS: He just might be cheap.

BERMAN: That may be that, too.

ROMANS: Doesn't have insurance.

ALL RIGHT. Virginia hit hard by damaging winds, hail and driving rains. Tornado warnings late in the day sending people scrambling to find shelter in Richmond. A lot of destruction reported throughout the state, trees down, streets and highways flooded, more than 20,000 homes without power.

BERMAN: A lot of property damage also being reported in upstate New York. Thunderstorms packing ferocious winds and hail whipping through Albany, Schenectady and Montgomery counties. Many homes in the region devastated with trees and power lines down just all over. Look at these pictures.

ROMANS: And just look at the devastation in Kent County, Delaware. Look at that, that home flattened by a possible tornado. Several structure collapses are reported in the area. Got roads closed, power's out in more than 4,000 homes. The good news is, no serious injuries reported.

BERMAN: Let's talk about this weekend, right, the holiday weekend? Indra Petersons here with the forecast.

INDRA PETERSONS, AMS METEOROLOGIST: I'm still stuck on your dad. This is your dad, right?

BERMAN: My father-in-law.

ROMANS: I love it. I love it.

PETERSONS: Does he need an aerodynamic car? How fast is he really going? How old is he?

(CROSSTALK)

BERMAN: It's like a golf ball. It goes farther with --

PETERSONS: I hear you. I'm just thinking age. Anyway, I'm done. Let's talk about the weather today, we're not seeing as much as we saw yesterday. Notice just scattered showers kind of throughout the area, not a big deal, but we will have severe weather in some places. Keep in mind, the heaviest amounts of rain, it's exactly where we need it. Of course, it's Memorial Day weekend, but regardless, it is so necessary into the southern plains. That's where we'll see the heaviest amounts.

Northeast, scattered showers, barely. We're talking 10 percent, 20 percent chance. After today it's only a half an inch to an inch of rain. Each day gets better as we go towards Memorial Day itself.

Wilmington, Columbia, that's we're looking for severe weather front. Very isolated today and also of course New Mexico and tiny portions here of Texas. That's where we have the biggest threat for severe weather.

Who wants to talk about that, though? It's Memorial Day weekend. Let's talk about the good stuff, right? It is getting warmer every single day. Maybe going to Cape Cod not so bad, scatter showers yes on Friday, but each day gets a little better. Jersey shore, talking about a 10 percent chance there.

Keep in mind, you may want to go all the way out west. Don't go to Seattle. Sorry, guys, that's where you're going to get rained out. Austin, maybe in towards Monday. Miami, this is why they call it the heat is on, the heat, right? We're talking 90s. Feeling pretty good. I wouldn't mind a little, I don't know, Key West.

ROMANS: I know.

PETERSONS: Not bad, right? I can take that.

ROMANS: Key West.

BERMAN: You can tell she's excited for the weekend, right? She's just rattling it off. The heat is on, don't go to Seattle, it's this, this. She's all over the place.

PETERSONS: I'm already out, right?

ROMANS: I mean, just throws in Key West, the farthest place you could possibly go for the weekend.

PETERSONS: Not necessarily. True, but kind of.

(LAUGHTER)

ROMANS: OK. Thanks, Indra.

All right. President Obama set today to officially nominate two new members to his cabinet, moving Housing Secretary Shaun Donovan to head up the Office of Management and Budget. That's a key role. The current director Sylvia Matthews Burwell has already been nominated to become the next secretary of Health and Human Services.

San Antonio Mayor Julian Castro, in turn, would move from -- move north from Texas to replace Donovan as housing secretary. That, of course, upon Senate confirmation.

BERMAN: Big cutbacks at HP. Hewlett-Packard says it will cut an additional 11,000 to 16,000 jobs after previously announcing plans for 34,000 layoffs. The once mighty computer-maker has run into a rough patch as consumers increasingly shift from PCs to mobile devices. This announcement they just made came during an earnings report where executives said the move will save an additional $1 billion a year.

ROMANS: Two days of protests against McDonald's over worker pay not falling entirely on deaf ears. Thousands of people demonstrated outside company headquarters in Illinois. What they were demanding a wage increase to $15 an hour, that's well above what the president would like for a minimum wage.

CEO Don Thompson responded, he told shareholders, "We respect the fact that they want to challenge us relative to wages. We pay fair and competitive wages and provide job opportunities and training for those entering the workforce."

I mean, these workers are very angry. They, on average, fast-food workers make like $9 an hour. They want $15. That would be a big, big jump. Franchise owners say, no way. With rising cost of ingredients, they can't afford to pay higher wages.

Berman loves this part, where he has to look at me twice.

BERMAN: Yes. Talk to your little self. Have big Romans talk (INAUDIBLE).

ROMANS: More on McDonald's coming up tomorrow on "YOUR MONEY," 2:00 p.m. Eastern here on CNN.

Berman loves -- sometimes I can fill the whole screen of pictures of me just to torture you. Torture you.

BERMAN: Really.

ROMANS: It's time for an EARLY START on your money. Stocks in Europe mixed after kicking off the morning. Slightly lower. Futures here basically flat. You've got the S&P futures up about two points. This follows a great day for U.S. stocks yesterday. The Dow rose 160 points. The S&P almost made a new record.

Meantime, the big company story, GM still the stock to watch. Those shares are down 6 percent since the ignition switch recall was announced in February, but that really doesn't tell the whole story. GM set aside $1.7 billion to pay for the recall last quarter. That essentially wipes out its profit for the beginning of the year. But all that money, that $1.7 billion, at least some of it's going to turn into a stimulus for dealers.

Not only is GM paying their dealers to make costly repairs, they're putting all this foot traffic into the dealerships from people concerned about their cars. Those people then get a loaner, right? They get a loaner while the repair is being done. They can test one of the 35,000 loaner cars GM has sent to the dealers to deal with the recall, and then they benefit from the recall-inspired employee pricing deal. Some of the best deals out there.

Morgan Stanley says if GM can convert even 1 percent of all that new foot traffic into sales, it would more than offset the cost of the recall to GM this quarter.

BERMAN: This is such a fascinating angle.

ROMANS: Isn't that interesting?

BERMAN: But you know, it also shows that safety can be good business for a variety of reasons. ROMANS: Absolutely. And if Mary Barra, the new CEO, can really position the company as the new safety-oriented GM, it could be ultimately good for the company. They have a lot to get through. Don't get me wrong. And I mean, they have a lot of issues and problems right now, but the Wall Street analysts are looking beyond that, saying, wow, sales are up, people still like GM cars, and if the economy keeps improving, it could be a good thing for GM.

BERMAN: All right. 40 minutes after the hour right now. A big question on one of the most disturbing stories out there, did she go willingly and does that even matter? Startling, new developments and accusations in a California kidnapping. Wait until you hear what the suspected abductor is now claiming, next.

(COMMERCIAL BREAK)

ROMANS: A new twist in the case of a California woman found alive 10 years after she was allegedly kidnapped and held captive by her mother's live-in boyfriend. The victim was 15 years old when she says she was drugged and abducted and then systematically beaten, raped, locked in a garage to keep her from escaping.

The suspect, now 41-year-old Isidro Garcia, allegedly forced her to marry him and fathered a child with her. Now his lawyers insist Garcia never hit the victim, never prevented her from leaving, and those claims of abuse are being, quote, "made up" because the couple is going through a typical breakup.

(BEGIN VIDEO CLIP)

CHARLES FRISCO, ATTORNEY FOR ISIDRO GARCIA: Ten years have gone by and she never, ever told one person that something was afoul? Whether it be a neighbor, whether it be an employer, whether it be an employee, whether it be a family friend, whether it be a friend who was a cop? Why is it that she never said anything to indicate that he did something wrong?

FARRAH EMAMI, DISTRICT ATTORNEY SPOKESPERSON: Ten years ago, this victim was 15 years old, and the sexual assault of a child is a sexual assault, whether or not they agreed to it. In this case, we're not talking about consensual sexual contact, we're talking about forcible rape and we're talking about repeated sexual abuse, emotional abuse and physical abuse. And so, it really doesn't change the circumstances of the criminal case, because this is a victim, no matter which way you spin it.

(END VIDEO CLIP)

ROMANS: Prosecutors also say he threatened to go public with her family's immigration status, could get her family deported, and that she was afraid as well. The victim tells a Los Angeles TV station she feels happy and blessed to be back with her family.

Dallas Mavericks owner Mark Cuban may have gone too far in an interview addressing his own bigotry and prejudices in the wake of the Donald Sterling scandal. After remarking that if he sees a black kid in a hoodie late at night, he'll cross to the other side of the street, Cuban took to Twitter to offer an apology. He says, "In hindsight, I should have used different examples. I didn't consider the Trayvon Martin family and I apologize to them for that."

He also said if he saw a white kid with a shaved head and tattoos, he would walk to the other side of the street, addressing, he said, his own prejudices and how we all need to deal with those in the workplace and our families.

This morning the U.S. is threatening to cut off aid after Thailand's military ousted the government. The dramatic coup just hours after meetings meant to solve a political crisis there. We're live in Bangkok with the latest on that, next.

And coming to CNN, a new series from executive producers Tom Hanks and Gary Goetzman. "THE SIXTIES." This is the decade that changed the world. The space race, the cold war, free love, civil rights, a whole lot more. The 1960s reshaped Americans' lives in ways that still affect us today. Be sure to set or watch your DVR for the premiere, next Thursday night, 9:00 p.m. Eastern and Pacific here on CNN.

(COMMERCIAL BREAK)

ROMANS: Welcome back.

Thailand is now under the control of the military. Army officials taking at least 25 political leaders into custody while terminating, terminating most of that country's constitution. Secretary of State John Kerry denouncing this coup, saying there's no justification for it and threatening to suspend $10 million in aid to Thailand.

Let's get the latest from Paula Hancocks, live from Bangkok. And that is a coup by every definition, when they end the constitution and they take over the government.

What's happening now?

PAULA HANCOCKS, CNN CORRESPONDENT: Well, Christine, I'm standing just outside the army club. This is where on Thursday, yesterday, about this time, we watched that coup developing, unfolding in front of our very eyes, when they decided just a few days after saying they wouldn't stage a coup, they will, in fact, stage a coup.

Now inside here right now there are diplomats from around the world. They have been summoned for a briefing by General Prayut, who is now in charge of this country, and we know this for a fact, the U.S. ambassador is not at that meeting, Ambassador Kenney telling us a little earlier that she was going to send someone more junior in her place.

It is obviously a very diplomatically sensitive issue, to be invited to a meeting with a general who's just staged a military coup. So it will be very interesting to hear exactly what happened within that meeting.

The general, though, has been saying he wanted to say that he will actually make sure all foreigners, all tourists and all diplomats are safe in the country. But as for the political scene at this point, we know the former prime minister, Yingluck Shinawatra, who was pushed out of power just over two weeks ago, has now been summoned.

She's met with the military. At this point, we know she's still there. It's not clear if she's being detained or not. The caretaker prime minister, who took over from her, the same situation with him. 150 people have been put under a travel ban on both sides of the political scene here. So an awful lot is going on. Now we do understand that General Prayut is in overall control of the whole country.

One of the civil servants we just met who spoke to him said that he's going to try and find a neutral prime minister for the time being, an interim prime minister, and then hold elections. But obviously, this is coming under criticism from many countries around the world -- Christine.

ROMANS: All right, Paula, thank you for that this morning in Bangkok.

Violence flaring again in eastern Ukraine, just 48 hours before presidential elections. Sixteen people, including 13 Ukrainian soldiers killed overnight in Donetsk when rocket-propelled grenades and mortars struck a military convoy. Elections officials say at least 13 of 34 election sites have now been seized, seized by pro- Russian militias. The election scheduled for Sunday.

Coming up, in the market for a new house? The U.S. cities where you'll get the most bang for your buck, right after the break.

(COMMERCIAL BREAK)

ROMANS: Happy Friday. Let's get an EARLY START on your money. Great day for your 401(k) yesterday, near a record high for the S&P 500. Futures right now up a little bit more. Where does this bring us for the year? It's really important for perspective. The Dow still just slightly lower for the year, down 0.2 percent.

The most profitable airlines in the world are once again American. After a decade of dealing with bankruptcies, mergers, high fuel prices, Delta is now the most profitable airline in the world, followed by American, United and Southwest. This is according to data compiled by Bloomberg.

Just five years ago, Singapore Airlines and Lufthansa were top earners. Now the U.S. carriers have recovered, why? By limiting seating capacity. They're flying smaller planes. They also are adding all those fees. In 2013, the airline industry collected more than $6 billion in baggage and change fees.

You can say that the airlines, the American Airlines have returned to the top by reaching into your pocket to do it.

How much money do you need to afford a house where you live? Well, if you make $30,000, you can afford a home in Cleveland. It's also roughly what you need to make -- to buy a house in Pittsburgh. According to a new study, low interest rates have kept homes affordable through the center of the country, especially the rust belt, but if you want to live in coastal cities, you're going to need a big, fat paycheck. You're going to need at least $90,000 annual salary to buy a house in New York and even more for San Francisco, $137,000 a year. That's some of the most expensive real estate out there in the country.

All right, "NEW DAY" starts right now.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: 601, stop your turn. Stop your climb. Stop your turn for United 601.

(END VIDEO CLIP)

KATE BOLDUAN, CNN ANCHOR: Breaking overnight, too close, too often. Another near collision of passenger jets, this one over Texas. The planes within seconds of hitting each other. We have the dramatic audio from the pilots.

BERMAN: Pressure building. More lawmakers, Republicans and Democrats, now calling for VA Secretary Eric Shinseki to resign as he reaches out to veterans asking for patience. Can he win their support?

MICHAELA PEREIRA, CNN ANCHOR: New details and new questions about the woman authorities say was kidnapped at 15 and finally freed 10 years later. Neighbors and friends now speaking out, saying she didn't seem like she was being held captive, while his lawyer alleges it was a breakup gone bad.

BOLDUAN: Your NEW DAY starts right now.

ANNOUNCER: This is NEW DAY with Chris Cuomo, Kate Bolduan and Michaela Pereira.