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Priebus, Bannon To Be "Equal Partners"; Trump Names His Top Aides; Trump On Obamacare: Keep Best Parts; Trump Speaks With Chinese President; Iraqi Forces Retake Nimrud. Aired 5-5:30a ET

Aired November 14, 2016 - 05:00   ET


[05:00:03] CHRIS FRATES, CNN INVESTIGATIVE CORRESPONDENT: Now Priebus is known in the beltway and has good working relationships with Republicans on Capitol Hill. People like Senator McConnell who is the Senate Majority Leader, and House Speaker Paul Ryan, who's been a longtime friend of Priebus. Those relationships and Priebus' knowledge of how Washington works could be key in helping Trump pass his legislative agenda through Congress.

Now Bannon, who is the Trump campaign CEO, also ran Breitbart news. That news site has been accused of catering to racist, sexist and anti-Semitic audiences.

Bannon has also been critical of the GOP establishment. Now both men will advise the next president, President-elect Donald Trump. Victor, Christine, back to you.

CHRISTINE ROMANS, CNN ANCHOR: All right, Chris, thanks so much.

Hate watch dog groups slamming Donald Trump's choice of Breitbart boss, Steve Bannon, as chief strategist and senior counselor. The Anti-Defamation League released a statement saying, "It is a sad day when the man who presided over the premier website of the alt-right, a loose-knit group of white nationalists and unabashed anti-Semites and racists is slated to be a senior staff member in the people's house."

VICTOR BLACKWELL, CNN ANCHOR: The Southern Poverty Law Center scolded the president-elect for the hire in this tweet, "Trump should rescind this hire. In his victory speech, Trump said he intended to be the president for all Americans. Bannon should go."

ROMANS: And retiring Senator Democratic Leader Harry Reid escalated his attacks on the incoming president with this new statement, "President-elect Trump's choice of Steve Bannon as top aide signals white supremacists will be represented at the highest level in Trump's White House.

BLACKWELL: And the fear of racist harassment following Trump's election appears to have become reality in some communities, one of several incidents reported across the country happened at an episcopal church in a heavily Latino neighborhood just outside of Washington.

Graffiti reading Trump nation whites only discovered Sunday morning on a wall and on a sign advertising Spanish language services. Washington's episcopal bishop, Maryanne Buddy, called on Donald Trump to speak out against this vandalism.

ROMANS: Pretty much what Trump did on Sunday, this first sit-down television interview since becoming president-elect. On CBS's "60 Minutes," Trump addressed directly acts of violence, harassment and vandalism that his supporters have reportedly committed in his name.


DONALD TRUMP, U.S. PRESIDENT-ELECT: I would say don't do it. That's terrible. I'll bring this country together.

UNIDENTIFIED FEMALE: They're harassing Latinos and Muslims.

TRUMP: I am so saddened to hear that. I say stop it, if it helps. I will say this, I'll say it to the cameras. Stop it.


BLACKWELL: All right, let's break down the latest on the Trump transition with CNN politics reporter, Eugene Scott. Eugene, good morning to you.

EUGENE SCOTT, CNN POLITICS REPORTER: Good morning, Victor and Christine.

BLACKWELL: OK, so, you know, we heard from the Tea Party activists over the weekend before this announcement was made, do not put a Washington insider in as chief of staff. He chose Reince Priebus, someone who is obviously -- a Washington insier.

But he picked Steve Bannon. Does this satisfy those activists who wanted someone from the outside in the White House because this will be his Karl Rove? This will be his David Axelrod.

SCOTT: I think they will be somewhat satisfied because they really do respect Steve Bannon and he definitely play a role in getting Trump pass some of those hard weeks, see what's happening following Hillary Clinton nomination.

Bannon came on, I believe, in August. But the reality is this group is not the only group that helped Donald Trump win. We know from the exit polls that he did get some more mainstream Republicans to help him be victories. Reince Priebus is responsible for that to a lot of people.

ROMANS: Priebus is also close with the speaker of the House, Paul Ryan. So a lot of people are wondering if this is going to be an administration -- you kept hearing this weekend comparing this is a transactional president.

This is somebody who wants to get stuff done. Reince Priebus can help you do that. We also heard yesterday on "60 Minutes." This "60 Minutes" interview, you know, a lot of takeaways from that interview.

One of them in particular about what are his policies going to look like. We are seeing who he's appointing, what are his policies going to look like. If he was asked about Obamacare, I want you to listen to this exchange.


UNIDENTIFIED FEMALE: When you replace it, are you going to make sure that people with pre-conditions are still covered?

TRUMP: Yes, because it happens to be one of the strongest assets.

UNIDENTIFIED FEMALE: You will keep that?

TRUMP: Also with the children living with their parents for an extended period. We will very much try to keep that in. It adds cost, but it is very much something we will try to keep.

UNIDENTIFIED FEMALE: And there is going to be a period if you repeal it and before you replace it where millions of people --

TRUMP: We will do it simultaneously. It will be just fine.


ROMANS: So we are going to get rid of Obamacare, get rid of Obamacare, get rid of Obamacare, except what I'm hearing there is the things that make Obamacare Obamacare are staying. He will get rid of the thing that has the president's name on it, but he's going to put the same pieces back in, at least some of them, the most important.

SCOTT: Yes, nearly a week ago today, Trump was calling Obamacare a disaster saying that he was going to get rid of it immediately. But since then, he's made it very clear that there is some aspects of it that he likes and thinks are good and are helpful. That he's going to keep.

[05:05:06]ROMANS: You wonder how much of that was the president talking to him in the oval office when they sat down and said let me explain to you what is so important about Obamacare. Please don't undo these parts of it.

SCOTT: Yes. The president asked him to consider not repealing everything. The president-elect said he would think about it. I think one could argue that perhaps he was thinking about it even before like that he recognized that so many of his supporters relied on some pieces of it.

BLACKWELL: Let's talk about this exchange of Leslie Stahl over his now former opponent, Hillary Clinton, and we remember, of course, that really heated rhetoric. It seems like it was long ago, but it was a couple days. One day seems like a week in this transition. Let's watch that part of the interview.


UNIDENTIFIED FEMALE: You called her Crooked Hillary, said I wanted to get her in jail. Your people and your audiences kept saying lock her up.

TRUMP: She did some bad things.

UNIDENTIFIED FEMALE: I know but a special prosecutor?

TRUMP: I don't want to hurt them. They're good people. I don't want to hurt them. I will give you a very, very good and definitive answer the next time we do "60 Minutes" together.


BLACKWELL: Now the chant at the rallies was not they're good people. It was lock her up. I would imagine would be a surprise to some of his supporters who expected he would hold to that promise.

SCOTT: Absolutely. Literally. They're good people is not something we would have heard a week ago. Also if you recall right after the meeting with President Barack Obama, he wanted to seek counsel from the president. These are things that we would not have expected.

But I think it gives people an idea that being a campaigner is very different from actually being in the seat. You really do want to work with people on the other side who may have expertise in areas that you do not.

ROMANS: That is what is interesting I think about the transition because, you know, there is a former steel executive that's on there, Peter Thiel, (inaudible) is on there, sort of like a contrarian investor and a billionaire in Silicon Valley.

Also the Trump children, some of the Trump children on there. We have been hearing that he was going to turn his businesses over to the kids. He would focus on governing the country.

If the kids are on the transition team, does that suggest they are going to have a different or tighter role in the governing? What does it mean?

SCOTT: A federal statute was passed in 1967 when JFK came to the White House that does not allow presidents to officially hire their children. So the Trump Organization said they were vetting business structures to see how they can transition management over to the kids.

But the reality is we all know that you don't have to have an official staff position to be a highly influential adviser. Some of his children like Jared, his son-in-law, has been very influential. We should really expect them to be around even more.

ROMANS: And Jared Kuschner had his ear on the campaign and a lot on Israel policy and business policy as well.

BLACKWELL: Dennis McDonough took that walk around the White House grounds. He didn't go with any other person. He went with Jared Kushner.

SCOTT: We saw that right? Yes.

ROMANS: All right, thanks. We'll talk to you again very soon. BLACKWELL: This afternoon, President Obama will hold his first news conference since Donald Trump was elected to succeed him. Now this comes just before the president embarks on his final foreign trip in office looking to reassure anxious allies about the stability of U.S. foreign policy despite Trump stated an intent to undo some of the Obama initiatives. The president will travel to Greece, Germany and Peru.

ROMANS: The Dow is set to open at a record high after a string of big gains boosted by Donald Trump's presidential victory. I want you to check out the Dow over the past five days. It is up 5.3 percent or almost 1,000 points.

Remember all those predictions of a big drop if Trump won the election? Dead wrong. Investors now focusing on pro-business policies like tax cuts and deregulation.

The Republicans sweep of Washington means they think that stuff can get done. This will be a transactional president. You can expect more gains today. Dow futures probably higher. The S&P 500 is 1.1 percent away from a record of its own.

In fact, markets in Europe rising. Shares in Asia finishing mixed overnight. One big loser has been gold. It's down 8 percent over the past few days and investors are dumping the metal, dumping gold and buying stocks.

This market reaction coupled with stronger economic growth and solid jobs data over the past month likely give the Federal Reserve the go ahead to raise interest rates in December.

I've also been watching the bond markets, bond yields have been moving higher. That means things like mortgage rates could start to move up a little bit. But it's a sign that people think, investors think the economy is solid.

BLACKWELL: Donald Trump has also said that he plans to renegotiate some of these trade deals. Though, let's talk about trade essentially with China. You'll remember during the campaign, Trump said that China is raping the U.S. What he told China's president during their first call since the election.



ROMANS: President-elect Donald Trump has a first conversation with Chinese President Xi Jinping after months of very tough talk about China on the campaign trail. The phone call proved to be the latest forum for Trump to separate his campaign rhetoric from the likely policies of his administration.

CNN's Matt Rivers is live in Beijing with more on what was said and what might be left for the first face-to-face with these two men. We know it's just a phone call, the first, you know, the very first diplomatic phone call, if you will. But on the campaign trail Donald Trump accused this country in the crudest terms of taking advantage of the United States.

MATT RIVERS, CNN CORRESPONDENT: That's exactly right. It was at a campaign rally in May that Donald Trump said that China was raping the U.S. economically and what China was doing to the U.S. was the greatest theft in the history of the world. That was very, very strong language.

Chinese leaders did not really officially react to here in Beijing, but we heard lots of stuff through state-run newspaper editorials basically calling Donald Trump a big mouth and a bigot.

So that is the lens in which we now need to look at this diplomatic relationship moving forward. So you can imagine that maybe this first phone call between these two men may have been a little bit awkward.

But officially both sides are saying that it was a very good phone call, an introductory phone call. On the Chinese side, President Xi Jinping according to state media said it has proved that you cooperate is the only correct choice between China and the United States.

President-elect Donald Trump releasing a statement saying that he believes the two leaders will have one of the strongest relationships for both countries moving forward.

So really both of them singing the same tune at this point. But what Donald Trump said on the campaign trail cannot be ignored. It's something that might make the diplomatic relationship more tense moving forward.

But maybe the way to get around that is because of the fact that these two countries are so economically intertwined. They have an annual trade value of over $650 billion.

The fact is that despite issues about cyber security and Chinese expansion in the South China Sea and differences over North Korea policy, these two countries need each other moving forward.

Their economies need one another and so the fact is that these two men are going to have to engage one another diplomatically whether they really like each other or not.

ROMANS: You mentioned the size of that trade relationship. One of the issues for Donald Trump and Trump supporters is that the United States imports more than 4 to 1 what it exports to China. The point is that it is a lopsided trade relationship.

It has allowed millions of U.S. jobs go to factories there gutting the middle class and working class. That is why this man was elected. It is the beginning of a long chapter of the next four years of the U.S. and China relations. Matt, thank you so much for that.

BLACKWELL: All right, let's go to New Zealand now where at least two deaths have been reported after a powerful earthquake and aftershock. So first there was the quake, a 7.8 magnitude just after midnight. It was followed hours later by a 6.2 magnitude aftershock. That rattled New Zealand's south island. The country's prime minister surveying the damage from the air described as utter devastation. New Zealand lies on the Pacific ream seismically active ring of fire.

ROMANS: All right, in Iraq, a victory for Iraqi forces and the final push for Mosul. We are going to go live to Irbil, Iraq. That's next.



BLACKWELL: In the battle for Mosul, a big victory for Iraqi armed forces capturing the village of Nimrud, the site of an ancient city overran by ISIS in 2014. Last year, the ancient ruins were destroyed by the terrorists. Nimrud is some 20 miles from Mosul and military officials say that fighting in that area continues.

CNN's Phil Black is following the developments in Irbil for us this morning. What are you hearing about what's left there?

PHIL BLACK, CNN INTERNATIONAL CORRESPONDENT: Victor, the Iraqi authorities say they are thrilled to have this site back. It has long been celebrated as an incredibly significant archeological location. But the truth is we don't know what remains because as you touch on there, ISIS has boasted about destroying, bulldozing a lot of it.

But it is also important, this development, in the context of the ongoing military operation to drive ISIS from Iraq and in particular, the northern city of Mosul. It has been going for four weeks now, this operation.

What it shows is there is still tough fighting going on in the territories and towns and villages surrounding Mosul, not even the city itself. It is only in the east of Mosul that some Iraqi forces, their crack troops have managed to penetrate the built up area.

That is where they are experiencing incredibly tough resistance from ISIS. They knew this was coming. They prepared and they are incredibly motivated. They have been digging tunnels. They've been constructing car bombs. Suicide car bomb attacks are a key part of their defense at this state.

There is snipers. There is mortar flying being used in this built-up area. And so for that reason, the Iraqi forces are advancing a little more every day, but it is such difficult work.

And so the fall of Mosul is not imminent. On top of that, you have this all going on in a populated city. So the humanitarian cost is expected to be very high as this fighting continues -- Victor.

BLACKWELL: Yes, a lot of difficult work ahead. Phil in Irbil for us this morning, thanks so much.

ROMANS: All right, to California now, the suspected killer of the Central California police officer is in custody following a manhunt. The alleged shooter, David Machado, was captured Sunday driving a stolen car. Police say he carjacked someone after fatally shooting Officer Dennis Wallace, the Santa Clause Country Sheriff's deputy was shot twice in the head while investigating a report of a suspicious vehicle.

BLACKWELL: In South Carolina, former North Charleston Police Officer Michael Slager's murder trial is now entering its third week with the defense mounting its case. Slager is accused of fatally shooting Walter Scott, who and you remember this video.

He was running away from the officer when he was shot. This happened last year. The defense claims that Slager was provoked. They say Scott resisted being restrained by a stun gun, which led to a physical altercation. Slager faces 30 years to life in prison if he's convicted.

President-elect Donald Trump is talking about hate crimes, protesters and Hillary Clinton and the wall he promised to build. We'll hear what he has to say. That's coming up next.



BLACKWELL: Donald Trump's first big move as president-elect hiring a Washington insider and a controversial outsider to head up his White House staff. Welcome back to EARLY START. I'm Victor Blackwell in for John Berman today

ROMANS: And I am Christine Romans this Monday morning. It's 29 minutes past the hour. Brand new this morning, one of Donald Trump's first pick of a top White House aide is drawing condemnation.

Trump has chosen GOP Chairman Reince Priebus as chief of staff and campaign CEO, Steve Bannon, as chief strategist. It is the selection of Bannon that has some in an uproar largely because of Bannon's other job as head of alt-right website, BreitbarT News.

All this comes as we are hearing from Trump on a variety of topics including the protests against. He had his first sit-down TV interview since Election Day.

For the very latest on the men who will be running the Trump White House, let's bring in CNN's Chris Frates from Washington.

FRATES: Good morning, Christine and Victor. President-elect Trump has named Reince Priebus as his chief of staff, and Steve Bannon as his chief strategist and senior counselor. Now by naming Priebus as chief of staff, Trump put the head of the Republican National Committee in one of the most powerful positions in Washington.

Well, Priebus' insider cred is balanced out by Bannon's anti- establishment world view.