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"Knife Fight" Over Administration Jobs; Trump Considering Top Secret Clearance For Kids; President Obama Bringing Reassurance About Trump On Last Foreign Trip; Gwen Ifill Remembered As Pioneer & Role Model; House GOP Hold Leadership Election Today; "Violent Reaction" In Bond Market. Aired 5:30-6a ET
Aired November 15, 2016 - 05:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[05:30:00] CHRISTINE ROMANS, CNN ANCHOR: Transition trouble. The Trump team fighting over key cabinet decisions and questions about who's really in charge.
JOHN BERMAN, CNN ANCHOR: Security clearance for the kids? A source tells CNN that Donald Trump wants to let his adult children in on some of America's secrets.
ROMANS: President Obama's first priority on his final trip to Europe, calming fears about the next president, Donald Trump.
Welcome back to EARLY START this Tuesday morning. I'm Christine Romans.
BERMAN: I'm John Berman. Thirty minutes after the hour. Nice to see you this morning. And later this morning, Vice President-elect Mike Pence -- he goes over to Trump Tower to talk cabinet positions with President-elect Trump. Up for discussion today, the departments of education, commerce, treasury, and state. These picks could come at any time, including today.
The meeting comes amid what one insider calls a "knife fight" over key appointments to the cabinet, west wing, and national security posts. The transition source tells CNN that the sharp split pits traditional Republicans, like party chair and Trump's new chief of staff Reince Priebus, against outsiders like Steve Bannon, who will be Trump's chief strategist. These men will share power inside the White House.
And then there is Trump's son-in-law, Jared Kushner, who played a huge role in the campaign and, apparently, is playing a big role in the transition. It is leading to results that one source calls buffoonery.
I want to bring in CNN's Jim Acosta for the latest on the transition. He is at Trump Tower in New York.
JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: John and Christine, later on today, Vice President-elect Mike Pence will be here at Trump Tower to meet with transition officials to begin the process of narrowing down the names that will be filling some of the most important cabinet positions in the new Trump administration.
Among the names being talked about, former New York mayor Rudy Giuliani for Secretary of State and Alabama senator Jeff Sessions for Attorney General. Meanwhile, top Trump officials are defending the selection of Steven Bannon as chief strategist and senior counselor to President-elect Trump.
Kellyanne Conway, the former Trump campaign manager, says Bannon will make an excellent chief strategist. Here's more of what she had to say.
KELLYANNE CONWAY, FORMER TRUMP CAMPAIGN MANAGER: And I worked very closely with Steve Bannon through the general of this campaign and, frankly, people should look at the full resume. He's got a Harvard business degree, he's a naval officer, he has success in entertainment. I don't know if you're aware of that. And, he certainly was a Goldman Sachs managing partner. A brilliant tactician.
ACOSTA: But the opposition to Bannon is building. A number of House Democrats have begun circulating a letter using Trump's own words against him, noting that the president-elect has called for unifying the country and asking how Bannon fits into that picture -- John and Christine.
ROMANS: All right, Jim Acosta. Thanks, Jim.
New questions this morning about the lines between the Trump family business and America's business. Donald Trump is considering asking for top security clearance for his three grown children, Eric, Donald Jr., and Ivanka, and his son-in-law, Jared Kushner.
According to a source in Trump's transition team, the president-elect has not formally made that request. None of the Trump children have filled out the necessary paperwork. Critics say granting them the clearance raises questions about conflicts of interest since the Trump children would be running their father's corporation.
BERMAN: All right, let us break down all the comings and goings on the Trump team. Joining us, political columnist Greg Valliere. He is the chief strategist for Horizon Investments.
BERMAN: Greg, great to see you this morning. Let's talk about what the markets and what the markets want from the incoming Trump administration because, so far, they're getting mixed signals, right? They get Reince Priebus, the insider's insider, and that may be something of a calming force on the markets and investors. But then, there's Steve Bannon, an outsider. A man who ran Breitbart, a place where anti-Semitism and racism sort of was seemed to be allowed, at least in many of the articles.
GREG VALLIERE, POLITICAL ECONOMIST, CHIEF STRATEGIST, HORIZON INVESTMENTS: Well, my sense, John, is that Donald Trump can do whatever he wants. And for all of us who have underestimated him, we do that at our own peril. And I think, you know, if he does hire some of his kids -- he's got the Bannon controversy.
Trump once said he could walk up Fifth Avenue and shoot people and his supporters would not abandon him. So I think, you know, this is entertaining -- it's background noise. He can do whatever he wants.
ROMANS: So, you said, and I think this is really telling, Donald Trump wants deals, not details.
ROMANS: What Wall Street -- what the markets are telling us with the Dow at a record high, right, with five or six days of gains here now for stocks -- what the markets are telling us is they think on day one he's going to be able to get tax reform, infrastructure, tax cuts. You say that might be too aggressive.
VALLIERE: He'll get it, Christine, but the issue is when, and I would tend to think maybe a little later than sooner. I mean, I think he'll take whatever Paul Ryan sends him, frankly.
[05:35:00] ROMANS: Really?
VALLIERE: He's not -- he's not going to do a deep dive into the weeds on the capital gains rate, so I think he'll agree to whatever he gets from Congress. But, let's just not forget in '09 the shovel-ready jobs weren't ready and it took a while. And we might get an infrastructure bill -- it could be next year at this time before jobs really are created. Same with tax reform. Maybe the effective date is sometime in the second half.
I think '18 -- 2018 will be a very robust year with big interest rate increases. But I think in '17, it's going to take him a while just to find the bathrooms.
ROMANS: He will.
VALLIERE: It's going to be a process.
ROMANS: Finding the bathroom. I think one thing that is a risk here is that the markets have really -- have, really, a very rosy view on things here. I mean, if he says something that could be interpreted as a trade war with China that is something that could really derail the optimism.
VALLIERE: Two things the markets really worry about -- and I understand why the markets are optimistic. There are a lot of reasons to believe that we're going to get a pro-growth agenda. Number one, you're absolutely right -- could we get into a trade war with China?
The other thing I'd watch carefully is his relations with Janet Yellen. If he appoints Jeb Hensarling, a fierce Yellen opponent, as Secretary of Treasury, I think there's going to be some anxiety in the markets about the Fed's authority being challenged. BERMAN: What about his relationship with Congress, Greg, because a lot of people have asked me over the last several days is well, these Republican House chairs and Senate chairs in Congress -- they're going to stand up to Trump on matters that they think are important. What evidence do we have of that? I mean, to me, it seems much more likely that they will cater to his agenda and they'll roll.
VALLIERE: Like I said at the beginning, you underestimated that we've had our own peril. I think members of Congress finally get that so I think they will, basically, do whatever Paul Ryan, Priebus, and Mitch McConnell want. And I think they're all going to be on the same page with Trump.
BERMAN: And what does that mean, then, for things that matter a lot to investors and financiers, like the deficit? I mean, the deficit has been this thing that has been of paramount importance to people for a long, long time, including the Republican Party. Will they just give that up?
VALLIERE: I think the deficit becomes a real problem around the turn of the next decade. We've got two or three years where the markets won't freak out over it.
VALLIERE: But yields are going to go higher. There's no question about it because this is a president who really doesn't care that much about deficits.
ROMANS: It's so interesting because it wasn't very long ago he was saying he could -- he could get rid of the national debt in eight years.
VALLIERE: Right, right.
ROMANS: You know, something that everyone knows is impossible. So the question is, what kind of -- which Donald Trump are you going to get? Are you going to get the candidate Donald Trump or are you going to get this -- as President Obama calls -- this pragmatic Donald Trump? We just don't know yet.
VALLIERE: His majority priority is growth. I think jobs growths, fewer regulations, tax reform. That's going to be the centerpiece, rather than deficit reduction.
ROMANS: He criticized -- he criticized the Obama economy but the Obama economy really is wind in his sails.
BERMAN: Hey, Greg, quickly --
BERMAN: Rudy Giuliani, a lot of people see as the frontrunner right now -- VALLIERE: Yes.
BERMAN: -- for Secretary of State. It's in all the front pages of all the papers today.
BERMAN: What do you make of that possibility?
VALLIERE: I think he would have been an incredible lightning rod at the Justice Department and they decided he just couldn't fit in that job. But, Secretary of State -- like everything else Trump does he'll prevail. If Giuliani's the nominee, he'll get confirmed.
ROMANS: All right, Greg Valliere. So nice to see you bright and early this morning.
VALLIERE: All right.
ROMANS: I've been really following all of your -- all of your writing over the course of this crazy election --
VALLIERE: Thank you.
ROMANS: -- so really appreciate it.
ROMANS: Thanks so much.
VALLIERE: You bet.
ROMANS: All right. The chair of the Securities and Exchange Commission is stepping down before Donald Trump takes office. Mary Jo White said she will leave around the time President Obama exits the White House. Her term wasn't slated to end until June 2019. She did not give a reason for stepping down, but she says it's been a tremendous honor to lead the SEC and she's very proud of the agency's enforcement actions.
But, White has also faced criticism recently. Last month, Sen. Elizabeth Warren wrote a letter to President Obama asking him to remove her because she wasn't doing enough to prevent businesses from pouring cash into politics.
That brings me to my Romans' Numeral this morning. The number, two. Just two of its five commissioner seats at the SEC are filled. Two out of five. Gridlock in Washington preventing the Senate from confirming Obama's two nominees. This is the agency that regulates Wall Street and punishes the bad guys. Another example of a lot of work -- a lot of appointments that Donald Trump will have when he takes over.
BERMAN: Which will be filled, I think, much more easily than they were --
BERMAN: -- under the current administration.
BERMAN: President-elect Donald Trump is the main subject for the current president. President Obama's final overseas trip, that's next.
[05:44:00] ROMANS: All right, just a short time ago Air Force Once landed in Athens carrying President Obama on the last scheduled foreign trip of his presidency. From Greece, he's on to Germany and Peru. One goal of Obama's mission is calming global concerns about President-elect Donald Trump. In a news conference in Washington just before he left, the President indicated he will offer reassurance that campaign rhetoric aside, Trump does back America's relationship with NATO.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: In my conversation with the president-elect, he expressed a great interest in maintaining our core strategic relationships. And so, one of the messages I will be able to deliver is his commitment to NATO.
(END VIDEO CLIP)
ROMANS: And international diplomatic editor Nic Robertson is live for us this morning in Athens with the very latest. Good morning, Nic.
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes, good morning, Christine. That is certainly something that European leaders are going to want to hear from President Obama.
[05:45:00] There's a deep concern, and there has been a great deep concern that President-elect Trump would, in fact, in some way disengage or downscale the importance of NATO at a time when Europe feels Russia's actions in Ukraine, and Crimea, and Syria are particularly threatening for a number of different reasons.
When he gets here -- or his meetings here, at least, today in Greece with the president -- with the prime minister, there will, perhaps, be other issues on the agenda. The issues of the economy here where they're hoping, in Greece at least, that President Obama will speak about debt relief. And if that happens, there's a hope here that President-elect Trump will listen to that and consider that. That's an important issue for the Greeks.
President Obama also expected to talk about the burden of refugees on Europe. It shouldn't be shouldered just by Greece, just by Italy, just by Germany. And, certainly, the idea of security in Europe and security for the United States can find some traction there. Remembering the Paris attacks just a year ago, some of those ISIS members that perpetrated the attacks posed as refugees. Came through Greece on into Europe. So, security for Greece is security for Europe, is security for the
United States and that's a message he'll carry through, as well, to Berlin when he meets the German, British, Spanish, French, and Italian leaders there as well, Christine.
ROMANS: All right, and you'll be covering it all for us. Thank you so much, Nic Robertson, live for us this morning in Athens.
BERMAN: All right. President Obama is set to hold a news conference in Athens in just a short while. We will bring that to you live when it happens.
And if this session holds to form, the current president will face pointed questions about the next president. President Obama has been notably careful not to criticize President-elect Donald Trump. In fact, at the White House, before he left on this current trip, President Obama said he considers the next president to be pragmatic.
CNN's Athena Jones -- she was at this news conference. She has the latest.
ATHENA JONES, CNN CORRESPONDENT: Good morning, Christine and John. President Obama spent much of his press conference here touting his administration's achievements on everything from the economy, to the Iran nuclear deal, to health care and climate change. And after months spent slamming President-elect Trump as unfit to be commander- in-chief, the president declined to continue to question his qualifications. I asked him if he still thought that Trump was unfit to lead. Here's part of what he had to say.
OBAMA: The people have spoken. Donald Trump will be the next president, the 45th President of the United States. And it will be up to him to set up a team that he thinks will serve him well and reflect his policies. And those who didn't vote for him have to recognize that that's how democracy works.
JONES: I also asked the president what sort of message he thinks that President-elect Trump is sending by tapping Steve Bannon, the former "Breitbart News" head, to be a chief strategist and senior adviser in the White House. "Breitbart News" has championed white nationalist themes. Here's part of what the president had to say in response.
OBAMA: Campaigning is different from governing. I think he recognizes that. I think he's sincere in wanting to be a successful president and moving this country forward. And I don't think any president ever comes in saying to himself I want to figure out how to make people angry or alienate half the country. I think he's going to try as best he can to make sure that he delivers, not only for the people who voted for him but for the people at large.
JONES: The president also offered Trump some advice, saying that because of the nature of campaigns and the bitterness and veracity surround the campaign, it's important for Trump to send some signals of unity and to reach out to minority groups or women or any other voters who may not have been Trump supporters and may be concerned about the direction the country is going.
I should say he also sounded a hopeful note, saying that he found Trump, during his 90-minute discussion with him in the Oval Office last week, to be non-ideologue, to be pragmatic. Something that he thinks could serve Trump well. Back to you guys.
ROMANS: All right, Athena Jones. Thanks for that, Athena.
BERMAN: Let's take a look at what's coming up on "NEW DAY". Alisyn Camerota with us right now.
ROMANS: Good morning.
BERMAN: Hello, Alisyn.
ALISYN CAMEROTA, CNN ANCHOR, "NEW DAY": Good morning, guys, great to see you. So, we will be bringing you, on NEW DAY, all of the latest on the Trump transition team. This morning, a few hours from now, VP nominee -- VP-elect, I guess I should say, Mike Pence will be sitting down with Donald Trump to go over the names of the people that they want in their cabinet and to hash it all out. So we'll be bringing you all of the developments and all of the news from that.
Also, we'll be speaking with Congresswoman Debbie Dingell of Michigan. She says that she tried to warn the Democrats and the Hillary Clinton campaign that they were not paying enough attention to Michigan voters. What exactly did she say to the campaign and what response did she get before the election? We will be talking to her live when we see you at the top of the hour.
[05:50:00] ROMANS: All right, Alisyn, can't wait to see you. Thank you.
All right, Warren Buffett takes flight. The billionaire investor buying hundreds of millions of dollars' worth of one industry that he once called a bottomless pit. We'll tell you what he's buying when we get a check on CNN Money Stream, next.
BERMAN: You gave us a hint, though, already.
ROMANS: Yes, I like to give little hints.
ROMANS: Journalism has lost a giant. Gwen Ifill, one of the nation's most prominent and respected political journalists died of cancer Monday at the age of 61. We're told she was surrounded by friends and family.
President Obama called her a powerful role model who did her country a great service. Former President Bill Clinton wrote this. "Gwen Ifill was a trailblazer and a bright light in journalism. She informed and challenged us, and did so with grace. I will miss her." House Speaker Paul Ryan wrote, "I am saddened to learn about the passing of Gwen Ifill, an incredibly talented and respected journalist."
[05:55:00] BERMAN: All right. Paul Ryan -- he is expected to be re- elected as speaker when House Republicans hold their leadership elections today. Ryan is seeking a second term in that post. The Wisconsin lawmaker clashed, sometimes quietly, sometimes not quietly, with Donald Trump during the campaign. But he now wants the Republican Party to unite behind President-elect Trump.
ROMANS: On the Democratic side, Nancy Pelosi faces a potential challenge in her bid for another term as minority leader. A group of House Democrats is seeking a delay in House leadership elections set for Thursday. Nearly three dozen lawmakers have reportedly signed a letter asking Pelosi to give members more time to digest the election results before voting on leaders for the next Congress.
BERMAN: Minnesota congressman Keith Ellison is emerging as the favorite to head up the Democratic National Committee. He announced his candidacy officially, insisting that the party must begin the rebuilding process now. Ellison is the first Muslim elected to Congress. He is backed by Bernie Sanders and outgoing Senate majority leader Harry Reid, and incoming Senate minority leader Chuck Schumer. Top challengers to Ellison for the post, former DNC chair Howard Dean and former presidential candidate Martin O'Malley.
ROMANS: All right, let's get a check on CNN Money Stream this morning. Dow futures pointing higher. The Dow hit an all-time high Monday, driven by bank stocks. Nasdaq and the S&P 500 dropped a little bit. Stock markets in Europe are rising right now. Shares in Asia closed mixed overnight.
Billionaire investor Warren Buffett is betting big on U.S. airlines. This is an industry he called a bottomless pit back in 2007. But during the third quarter, Buffett's Berkshire Hathaway took stakes in American Airlines, United, Continental, and Delta air. That's according to a regulatory filing disclosed Monday. Reports also claim he bought a stake in Southwest more recently. All of those stocks are enjoying a Buffett bounce. They're up as much as seven percent in premarket trading. You could say they're taking flight.
BERMAN: Ah, well done.
ROMANS: Buffett didn't say what caused his change of heart on the airline industry but there's been significant consolidation since he made those comments in 2007. And, of course, a crash in the price of jet fuel.
Stocks are climbing, but bonds -- bonds are getting crushed. The yield on the 10-year Treasury spiking to 2.3 percent Monday, an incredible jump from the 1.7 percent it was before the election. It was as low as 1.36 this summer. One analyst described the move as a violent reaction to Trump's economic plans.
That spike is so big it's only happened three times in the past decade. The move shows that investors think Trump's economic plans will add to America's already massive debt load and cause inflation to rise. It also means borrowing will get more expensive for both the government and the public because of the -- a lot of loan rates are tied to government bonds. You're likely to see mortgage rates start to rise here.
Check out the new CNN Money Stream app. It's business news personalized. Download it now on the App Store or Google Play.
And when you think about it, you look at this near-term growth strategy that many think that Donald Trump's going to have, you've got to borrow the money to do that. That means more bonds. More bonds means the ones that are out there are less valuable.
BERMAN: I think it will be fascinating to see if House Speaker Paul Ryan is as concerned about the debt and deficit --
ROMANS: That's right.
BERMAN: -- under a Trump administration --
ROMANS: That's right.
BERMAN: -- as he has been in the past.
ROMANS: All right, that's EARLY START for today. I'm Christine Romans.
BERMAN: I'm John Berman. The Trump transition team fighting over cabinet picks. A big meeting in just a few hours. "NEW DAY" starts right now.
(BEGIN VIDEO CLIP)
CONWAY: Loyalty is very important to him. He's loyal to people, they're loyal to him.
ROMANS: Knife fight over key appointments to the cabinet.
UNIDENTIFIED MALE: The reality is that Steven Bannon has led one of the major racist websites.
MIKE PENCE (R), VICE PRESIDENT-ELECT: This is all about achieving President-elect Trump's agenda.
OBAMA: Do I have concerns? Absolutely. Of course, I've got concerns.
BERMAN: Donald Trump is considering top security clearance for his three grown children.
DONALD TRUMP, JR., SON OF DONALD TRUMP: We'll be in New York and we'll take care of the business.
UNIDENTIFIED MALE: Are these individuals involved in the national security process or are they involved in the business process? Don't mix those two.
OBAMA: I think it's important for us to let him make his decisions. (END VIDEO CLIP)
ANNOUNCER: This is NEW DAY with Chris Cuomo and Alisyn Camerota.
CAMEROTA: Good morning, everyone. Welcome to your NEW DAY. It's Tuesday, November 15th, 6:00 in the East.
Up first, the president-elect trying to put together his new cabinet. The selection process being described by one insider as "a knife fight". Transition chief Mike Pence is on his way to Trump Tower in New York this morning to hash it all out.
CHRIS CUOMO, CNN ANCHOR: President Obama has just arrived in Greece, a day after his first news conference since the election. The president telling allies President-elect Trump remains committed to NATO. We have reporting on the concerns abroad.
Let's start with Sunlen Serfaty -- Sunlen.
SUNLEN SERFATY, CNN NATIONAL CORRESPONDENT: Good morning to you, Chris. Well, a Trump transition adviser describing today's meeting between Donald Trump and Mike Pence as serious, given that they are nearing final decisions over some of these top cabinet positions. But inside the broader transition team there is already an internal struggle. Disagreement over some of these big decisions between the more traditional Republicans on his team, like Reince Priebus and Steve Bannon, the two power centers in Trump's world.