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EARLY START

Obama Meeting with Texas Governor Rick Perry; Fighting Intensifies between Israel and Hamas; Brazil Loses in World Cup Shocker

Aired July 9, 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: Crisis at the border. Billions of dollars on the line as President Obama tries to stop thousands of children from crossing into the country illegally. Today, he's in Texas to meet with Governor Rick Perry. What's expected next? Ahead.

JOHN BERMAN, CNN ANCHOR: Happening now, is Israel on the brink of war? Dozens dead overnight as rockets fly over Gaza. We are live there with the very latest.

ROMANS: Tornadoes turned deadly in the northeast leaving a trail of destruction. And there could be more violent storms on the way. Indra Petersons with everything you need to know, tracking the risk for you today.

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

BERMAN: Great to see you this morning. I'm John Berman. Thirty-one minutes past the hour right now. And happening today, a big day for the president heading to Texas where he will face mounting questions about the immigration crisis.

The president will meet with leaders including Texas Governor Rick Perry. The president still has no plans to visit the border. That's controversial. He's already facing some hesitation from lawmakers after asking Congress to green light $3.7 billion to help curb the epidemic over the border there.

Our Michelle Kosinski has more now from the White House.

MICHELLE KOSINSKI, CNN WHITE HOUSE CORRESPONDENT: Good morning, John and Christine. Well, today the President Obama will be in Texas to address this issue. And we've seen now the White House lay out what it calls an aggressive plan for dealing with this border situation.

It's a lot of money they're asking from Congress. Nearly $4 billion. Even more than originally expected. About $2 billion of that will be to house and care for these kids awaiting this legal process of asylum that they go through. In some cases it takes years, but that process of asylum that they go through. In some cases it takes years but that process is required by law, even though in reality most will likely just be sent home. Another $1.5 billion will address border security and enforcement.

And the remainder will pay for the lawyers and judges for all these children to go through that process.

The question is, and, you know, the president also wants to expand the authority that the Department of Homeland Security has to speed up the process in general. But will Congress pass this? Already we're hearing pushback from Republicans saying well, it's too much money. It's just a band-aid. Where's the accountability? Here's one.

(BEGIN VIDEO CLIP)

REP. BOB GOODLATTE (R), JUDICIARY COMMITTEE: You don't need that amount of money. The Appropriations Committee is looking at this very carefully. And we need to have very targeted appropriations for very specific purposes to address things that are needed as a part of this. $3.7 billion is a slap in the face of the taxpayers of the United States.

(END VIDEO CLIP)

KOSINSKI: Well, not only is this a difficult situation at the border, in terms of just trying to find solutions. It is now a difficult political situation. There's fodder on both sides. On the one hand, Republicans are saying how did the president and the administration let it get to this point, where were they, why didn't they see this coming?

On the other hand, the White House is saying, well, you guys didn't pass comprehensive immigration reform which would have included significant increases in border security. It managed to get through the Senate in a bipartisan fashion, but house Republicans are still keeping that bill blocked there -- John and Christine.

ROMANS: All right. Michelle Kosinski at the White House. Thanks for that.

Breaking overnight, Israel stepping up its defense efforts in its conflict with Hamas. Israel launched 160 airstrikes targeting militants overnight and is now warning of a possible ground incursion while trying to limit civilian casualties.

It comes after Hamas fired more than 160 rockets towards Israel in just the last day. Several of them were headed to populated area where they were intercepted by Israel's Iron Dome Missile Defense System. Israel also cut down militants there. They are trying to reach out beach in Israeli territory.

Diana Magnay has the latest from -- this morning.

You know, Diana, you're telling us -- we've seen the Iron Dome system still intercepting missiles in the last hour. This conflict, these rockets and missiles and strikes on the other hand, there's no let up in this tension.

DIANA MAGNAY, CNN INTERNATIONAL CORRESPONDENT: There is no let up but yesterday the barrage of rockets coming out from Gaza was very intense indeed. Hamas threatening that if there were more airstrikes on Gaza, it would respond. And it did respond in the sort of middle of the evening with a huge barrage of rockets which went up towards Tel Aviv and beyond, and over Jerusalem, where three of them actually hit in areas that presumably made no difference.

The Iron Dome system, and I'm standing behind one of their mobile battery units, has intercepted most of the rockets that would threaten any of those key areas. But one long-range missile actually went beyond Tel Aviv. And the IDF is saying that they believe that that was part of a shipment supplied by Iran to Hamas. So you see the sort of border ramifications of this conflict here.

Now overnight the barrage of rockets seems to have abated somewhat. There were just four overnight. We saw a few being intercepted above us about 20, 30 minutes ago. Israel is trying to target, they say, especially concealed rocket launchers in Gaza. Perhaps they're having some effect. They targeted 120 overnight. But they believe that Hamas has some 10,000 rockets. Around 100 of them are long-range.

So there is still a very long way to go if they want to seriously damage Hamas' ability to target Israel. And that is why they are talking about ground forces. Their objective seems not to be just to stop the rockets coming over, but to seriously make it difficult to impinge on Hamas' ability to produce and keep firing rockets into Israel.

Not just now but in the coming years. And they didn't achieve that in the last big operation back in November 2012. There was a ceasefire of airstrikes, but clearly Hamas was able to keep on building up its weaponry. Perhaps that is what they are trying to achieve now -- Christine.

ROMANS: And the tension builds and the cycle continues.

Thank you so much, Diana Magnay, for us this morning.

New charges could be on the way for the accused ringleader of the deadly attack on the U.S.-Benghazi mission. That's according to prosecutors handling the case against Ahmed Abu Khattala. He has pleaded not guilty to a conspiracy charge. A new indictment could reach even further. Officials say the government has stated sharing classified information with defense attorneys.

BERMAN: The NSA and FBI reportedly spied on five prominent Muslim Americans from 2002 to 2008. Documents that Edward Snowden provided to the intercept show e-mail addresses of the five were among 7500 being monitored. One of the five served in the Department of Homeland Security in the Bush administration.

ROMANS: More issues now facing the VA after whistleblowers detailed alleged retribution within the agency. At a House committee hearing, four whistleblowers suggested, transfers, harassment, altered records and long breaks between paychecks were payback for raising concerns within a broken system.

(BEGIN VIDEO CLIP)

REP. MIKE MICHAUD (D), MAINE: Talk is cheap. Real solutions are hard to find. It is clear to me that the VA, as it is structured today, is fundamentally incapable of making real changes in the culture.

(END VIDEO CLIP)

ROMANS: The VA trouble came to light earlier this year when CNN exposed dozens of veterans had died, died, while on secret waiting lists for care.

BERMAN: Senate Democrats looking to get around a -- excuse me -- key decision by the Supreme Court. They're drafting legislation to require for-profit companies to provide and pay for contraceptives, essentially in an effort to override the Supreme Court's decision that allows companies to opt out on religious grounds. House Democrats developing a bill as well but it faces near possible odds in the Republican-controlled House.

ROMANS: Meantime, the Republicans, they are taking their 2016 convention to Cleveland, Ohio. That city beat out Dallas for the right to host the convention. The choice is expected to be ratified by the full Republican National Committee. GOP no doubt looking to pick up key votes in this battleground state. No Republican in modern times has won the White House without carrying Ohio.

BERMAN: One of my favorite statistics.

ROMANS: I know.

BERMAN: Cite that. You can cite that every four years and really every two years it's very exciting.

ROMANS: I know.

All right. Time for an EARLY START on your money. European stocks down, futures also pointing slightly lower. Stocks are competing yesterday. Tech stock leading the way down. A stock to keep an eye on this morning, Citigroup. The bank is reportedly close to a $7 billion settlement with the Justice Department over selling bad mortgages before the financial crisis.

A lot of you have been complaining that there has not been enough pain from the banks for what they caused. We will see, we will see full details of that hopefully later today or soon.

Chinese teens meanwhile are smarter about money than you. That's according to a brand-new report out this morning measuring financial literacy of 15-year-olds. They were tested on everything from banking and taxes to how interest rates work. Teens from Shanghai got the highest average score followed by Belgium and Estonia. Americans ranked right in the middle. A nice average, USA. And 20 percent of Americans tested do not have a basic level of proficiency.

This is the bane of my existence.

(LAUGHTER)

ROMANS: It really is.

BERMAN: You should write a book about it.

ROMANS: OK. I will.

(LAUGHTER)

BERMAN: All right. Twenty minutes to the hour right now.

President Obama blowing off a little steam, hitting a night on the town in Denver, Colorado. The president met Colorado Governor John Hickenlooper at a local brewery. They drank some beer before heading to the billiards table. The president also shared some pizza with people who had written to him and shook hands with dozens along a Denver street including some who are wearing a horse's head mask.

(LAUGHTER)

BERMAN: Why? Well, in honor of the Denver Broncos. Makes more sense when you think about that.

ROMANS: I guess.

BERMAN: All right. The death toll rising overnight after tornadoes tore through the northeast. Neighborhoods just broken into pieces there. We will show you the damage and what's threatening millions of people today. That's coming up next.

(COMMERCIAL BREAK)

BERMAN: Breaking overnight, deadly weather stretching from the Midwest all the way to the northeast. And more of the same is on the way. Four people killed near Syracuse when the storm destroyed four homes and damaged many others. That's in upstate New York. You look at the pictures here of the violent winds. They brought down power lines, uprooted trees and some right from the ground. Crews are working to restore power to almost 130,000 customers.

ROMANS: The storm is also responsible for the death of an 8-year-old boy at summer camp in Maryland. Children were on their way inside when the heavy winds snapped branches that collapsed on the group. Eight other kids injured.

BERMAN: Nearly 300,000 customers lost power in western Pennsylvania. A tornado touched down in Mercer County. Gusty winds, heavy rain left trees down. Homes and barns damage. Some people were just running for cover.

ROMANS: Three tornadoes confirmed in Ohio, one of them packing winds near 100 miles an hour. Touched down in Valley City. That's about 20 miles outside Cleveland.

Indra Petersons has a look at your forecast because I think, hmm, as history holds there's more fun in store today. INDRA PETERSONS, AMS METEOROLOGIST: Yes. We're still talking about

those very similar pattern where we're talking about the jet stream kind of dipping down into the eastern half of the country. Meanwhile kind of ridging out to the west where we'll have nicer weather there. But as long as this is looking like this, we're still going to be talking about that threat for some scattered showers as we go throughout the day.

Now speaking of yesterday, take a look at this. We have five reports of tornado damage really around Ohio, even through Pennsylvania. And then as we went through the afternoon and evening hours, that same system that was in Ohio Valley kind of swept all the way through, even to the northeast. But notice behind it. Right now, yes, scattered showers are still out there. But nothing like that main system that kind of cruised through yesterday.

So definitely the potential not as high for severe weather. The bulk of that severe weather today kind of raining out towards the plain. Cold front, though, nonetheless, still hanging out there, kind of sagging and stalling out towards the northeast. So still some scattered showers really particularly in that region.

High pressure building into the northeast, so feeling a lot better each day as we get closer to the weekend. But there is another cold front out there kind of making its way out for Chicago by Friday.

Beautiful today, though, until you get there. Temperatures in fact actually in the 70s. Gorgeous. But heavier rain, of course where that cold front is about two to four inches, maybe around the Charlotte area. That's going to be kind of your bulls-eye. Scattered showers really throughout, even including the northeast. But temperatures milder, cooling about five to 10 degrees over the next several days. So that's the one benefit here.

And when you talk about beautiful in Chicago, starting out even 50s and 60s, 70s by the afternoon.

BERMAN: Oh my.

PETERSONS: There are happy campers somewhere today.

ROMANS: All right.

BERMAN: That's nice. Because it was hot here yesterday. It's like way hot.

PETERSONS: Brutal. Really brutal.

(LAUGHTER)

BERMAN: All right. Thanks, Indra.

Let's take a look at what's coming up on NEW DAY. Kate Bolduan joins us now.

Hey, Kate. ROMANS: Hey, Kate.

KATE BOLDUAN, CNN ANCHOR, NEW DAY: Hey, guys. Of course, we're going to be continuing to follow those deadly storms I know you guys are talking about as well. But we're also following the latest developments surrounding the border crisis. President Obama heading to Texas today. He's going to talk with the governor about the immigration crisis after a bit of back and forth.

And despite criticism, the president, though, still is not planning to visit the border. Says the White House, we'll see if that changes. But they have said that's not going to change. Or billions of dollars that he is asking for from Congress, is it enough, and what will Congress do about it ahead of their August break. We're going to be talking about that throughout the show.

And also, we're going to be talking about that unbelievable -- pause -- World Cup game. Unbelievable. Brazil's astonishing loss to Germany. I was watching yesterday, I was e-mailing -- I was e- mailing you, John, to ask me if you could explain it to me. It was very difficult to comprehend, it looked like there was a practice game. One of the teams thought they were in practice. The other team thought the game was on.

It was historic. And we're going to be bringing in experts to kind of look at it. And what a falling apart. Is that a word? Because --

(CROSSTALK)

ROMANS: That's what I said -- I said my 8-year-old, what's happening here, he said, mom, this is what's called a mess.

BERMAN: Your sons team, by the way --

BOLDUAN: I will say 8-year-old wisdom.

BERMAN: Your son's U-9 team would have done better against Germany perhaps yesterday than Brazil.

BOLDUAN: Unbelievable. I don't mean to laugh because the only other option is crying. It was really hard to watch.

ROMANS: I know.

BOLDUAN: All right.

ROMANS: Thanks, Kate. We'll see you.

BOLDUAN: OK.

ROMANS: Donald Sterling says $2 billion for the Clippers, that's just not enough. Just one thing he said in a court that really raised eyebrows. We're on his day in court. His bizarre day in court and what it means today, after the break.

(COMMERCIAL BREAK) ROMANS: Welcome back. Ten minutes to the top of the hour. More testimony expected today from the college roommate of Dzhokhar Tsarnaev. Andrew Dwinles testified the alleged Boston marathon bomber didn't seem unusually nervous or break his routine in the days after the attack. That testimony came in the trial of Azamat Tazhayakov, one of three friends of Tsarnaev accused of impeding the investigation.

Attorneys for Aaron Hernandez hoping a judge will grant their motion to see work records from the New England Patriots. The judge in the Odin Lloyd murder case will hear arguments today. The papers include psychological and medical records, suggesting Hernandez's lawyers are considering a diminished capacity defense. It's unclear if that could be used in the other murder case involving Hernandez.

ROMANS: Jerry Sandusky's son is opening up to Oprah Winfrey about the sexual abuse he says he endured from his father. Matt Sandusky's interview with be broadcast tomorrow night, Winfrey's Network says Sandusky who was adopted describes methodical control and manipulation by the disgraced football coach.

More testimony expected from Donald Sterling today at the probate trial involves his estranged wife Shelly. Now the first day of testimony for the Clippers owner, the embattled Clippers owner was having I think bizarre is the word to use. He was combative with Shelly Sterling's attorney he accused of doctor of being drunk when she examined him for dementia.

He spent the deal to sell to Steve Ballmer for $2 billion? This is good business then. Despite the drama, Sterling's attorney was pleased with the testimony.

(BEGIN VIDEO CLIP)

MAX BLECHER, ATTORNEY FOR DONALD STERLING: Very sharply, very dramatically, and that the idea that this is $2 billion is an extravagance is wrong. He actually thinks it's going to be worth more than that because of the television contracts down the road. And that's the point he's making.

(END VIDEO CLIP)

ROMANS: Sterling trying to convince the court his wife was not qualified to sell that team from the family trust.

All right. The Netherlands and Argentina doing battle in the World Cup semi-finals today. The winner earns the right to play Germany for the title after the Germans' record-setting upset over Brazil.

Did you see this? The host country obliterated. An epic performance by Germany. Started fast, did not slow down.

Alex Thomas has more on this just amazing historic upset from Rio de Janeiro.

ALEX THOMAS, CNN SPORTS CORRESPONDENT: Sixty-four years after losing the World Cup final on home soil, an event described as a national tragedy, Brazil's dream of lifting football's biggest price in its own backyard has again been crushed. In 1950 it was by Uruguay, this time, it was by Germany.

Brazil's players have vowed to win it for Neymar, their injured star attacker. But it was suspended captain, defender Thiago Silva who was more sorely missed as Thomas Miller was left unmarked from an 11th minute corner, free to give Germany a 1-nil lead.

While that wasn't entirely surprising, what happened in the space of six minutes later in the first half will make this match famous forever.

Miroslav Klose doubled his country's lead with his 16th World Cup goal, more than any player has scored in the tournament's 84-year history. Seconds later, Tony Cruz put Brazil 3-nil down. Instead of a game of football, this was more like the NBA. Each time Germany went up the field it looked like scoring.

Cruz is on target again moments later. And the tears of the home fans began to flow as their hope turned to dismay. By the time Sami Khedira made it 5-nil to Germany the match was effectively over.

The final score of 7-1 made this the most one-sided World Cup semifinal and the biggest loss by a host nation.

Brazil's coach, Luiz Felipe Scolari, took the blame afterwards, although he hasn't offered to resign. He did admit this was the worst day of his life.

He's not the only Brazilian feeling that way. This is a nation in mourning because when the World Cup final is played here at Rio's famous Maracana stadium on Sunday their beloved Selecao will not be competing.

Alex Thomas, CNN, at the Brazil World Cup.

ROMANS: Unbelievable.

All right. They spiked for the holiday weekend, but are gas prices finally going to begin to ease around the U.S.? An EARLY START on your money next.

(COMMERCIAL BREAK)

ROMANS: All right. Let's get an EARLY START on your money this morning.

European shares down, futures in the U.S. pointing lower after yesterday's sell-off. Citigroup we will be watching today. The bank reportedly close to a $7 billion settlement with the Justice Department over selling bad mortgages before the financial crisis. Now that deal would include, according to reports, help for billions for dollars for borrowers. That's right. Reduction in principal for some borrowers. We'll be closely watching to see how this plays out. It's an

aggressive stance by the government following an $8.9 billion deal with the French bank BNP Paribas for a separate issue last week.

More recalls for a faulty airbags. Reports this morning that Honda is recalling about one million more cars. That's on top of the two million that have already been recalled. One of eight automakers recalling cars with Takata airbags.

And gas prices now. Let's talk about gas prices. Really important news here. Gas prices for the year may have finally peaked. Drivers paid $3.57 a gallon on average over the Independence Day weekend. That's the highest for that weekend since 2008. But now prices are starting to ease back. And the current average is $3.65 a gallon.

Experts say price at the pump should keep inching down thanks to falling oil prices. Crude oil reached $107 a barrel last month because of escalating violence in Iraq. But the oil supply it turns out has not been disrupted, and prices, oil prices have fallen. Of course, all of this depends on the hurricane season so got a big caveat. But oil prices and gas prices seem to have peaked at least for now.

All right. A minute to the top of the hour. "NEW DAY" starts right now.